ANALYSIS:Michael Lowry and his associates – members of the professions – tried to hide his dealings with businessman Denis O'Brien and to mislead the tribunal, its chairman found
THE CHAIRMAN of the Moriarty tribunal, Mr Justice Moriarty, found that certain people went to great lengths to conceal the sensitive transactions involved in payments from Denis O’Brien to Michael Lowry.
One payment identified by the judge was £147,000, given to Lowry in 1996, the year O’Brien’s Esat Digifone got the State’s second mobile phone licence from Lowry’s department.
Acting on O’Brien’s instructions, accountant Aidan Phelan moved £407,000 belonging to O’Brien from Dublin to the Isle of Man, to an account in Phelan’s name. Phelan made a number of payments from the account, including £150,000 to the late David Austin. Austin put the money in an account opened for the purpose in Jersey. In October, he forwarded £147,000 to an account opened by Lowry in the Isle of Man. A year later, the board of Esat became concerned that O’Brien might have made a payment to Lowry, because of comments made by O’Brien himself to Esat executive Barry Maloney.
As part of an Esat inquiry into the matter, solicitor Owen O’Connell of William Fry Solicitors interviewed O’Brien and Phelan. He looked at all debits of amounts greater than £25,000 from a number of O’Brien accounts. Phelan did not direct O’Connell to the account from which the transfer to the Isle of Man had been made, nor did he tell him about the transfer. Neither did O’Brien.
Mr Justice Moriarty found that the money transferred from O’Brien to Lowry, via Austin, was a payment to Lowry. The failure to tell the 1997 Esat inquiry about the transfer was a factor in this finding.
By the late 1990s Lowry had been criticised by the McCracken (Dunnes Payments) tribunal and was the subject of inquiries by the Moriarty tribunal.
In December 1998, he placed a stg£25,000 deposit on a property in Mansfield, England, using an English solicitor, Christopher Vaughan. In March 1999, Phelan moved stg£300,000 from a Crédit Suisse First Boston account belonging to O’Brien to Vaughan’s client account. Most of it was used on the Mansfield deal.
In September 1999 Lowry contracted to buy a property in Cheadle for stg£445,000. Money left in the Vaughan client account was used as a deposit, and the money to close the deal was lent by GE Capital Woodchester. The judge found that the Dublin bank issued the loan because it believed O’Brien stood behind it. Phelan was involved.
As part of its inquiries into the English deals, the tribunal was provided with Vaughan’s files and with the files of Omagh-based land agent Kevin Phelan (no relation of Aidan Phelan). Kevin Phelan had been involved in locating the two English deals.
However, the tribunal later learned that some of the letters it had been given had been altered to suppress Lowry’s true involvement in the land deals.
In July 2002 the tribunal was shown other versions of these letters by this reporter and in time it decided that these were the original, authentic versions. Vaughan and Kevin Phelan refused to attend public hearings held to investigate these matters.
However, Vaughan did give the tribunal correspondence between him and Kevin Phelan, which provided an innocent excuse for what had been discovered.
The tribunal later discovered that at around the time Vaughan had given the tribunal Kevin Phelan’s “innocent explanation” letter, the Omagh businessman had been paid stg£65,000, by Vineacre, a firm in which Lowry had an interest. The letter was “a choreographed falsehood” that was “orchestrated by [Denis] O’Connor and Lowry with the objective of misleading the tribunal”, the judge said. O’Connor was Lowry’s accountant.
Mr Justice Moriarty decided that Kevin Phelan would not have written his “innocent explanation” letter if he had not received this payment.
In 2009, after the tribunal’s confidential provisional findings had been issued, Vaughan came to Dublin and gave evidence. He said he had left his files with Aidan Phelan in 2001, following a meeting between the two men in Dublin at a time when it was clear the tribunal was about to learn about the Cheadle transaction.
Mr Justice Moriarty decided the falsification of Vaughan’s files occurred at or after this meeting and that it was a course “decided upon and implemented with the full knowledge of Aidan Phelan, Michael Lowry, Christopher Vaughan and Kevin Phelan”. The motive was “a desire to obscure from the tribunal a clear financial connection between Mr Denis O’Brien and Mr Michael Lowry”.
In January 2003 a series of articles in The Irish Times disclosed the existence of a 1998 letter from Vaughan to Lowry in which Vaughan referred to Lowry’s involvement in a deal in Doncaster. The tribunal had been told that O’Brien was behind this deal and that it had nothing to do with Lowry.
Meanwhile, Kevin Phelan was looking for more money, saying he was owed fees from the Doncaster deal. During contacts over this matter in 2002, the Omagh man sent a copy of a fax to William Fry Solicitors, who were acting for the O’Brien company, Westferry, which by then owned the Doncaster property. The fax, dated August 1999, was from Kevin Phelan to Aidan Phelan and referred to “ML”, and how all queries regarding Doncaster should go to Aidan Phelan.
O’Connor, an accountant with Brophy, Butler Thornton, was acting for Lowry in his dealings with the tribunal, but in 2002 he began talks with Kevin Phelan aimed at settling his dispute with Westferry. “O’Connor was aware that Kevin Phelan was in possession of information which could be damaging, principally to Denis O’Brien and Michael Lowry, if it came to the attention of the tribunal,” Mr Justice Moriarty said in his report. Kevin Phelan had a copy of the Vaughan letter to Lowry, and O’Connor knew he had given it to the vendors of the Doncaster property, who were also in dispute with Westferry.
In August 2002, Kevin Phelan provided a letter saying the “ML” in the 1999 fax was a reference to Lowry but that the fax should have mentioned Mansfield and not Doncaster. At the same time O’Connor settled his negotiations with Kevin Phelan, who was paid £150,000 by Westferry.
“While queried in the course of private inquiries by the tribunal about his role in these negotiations, Mr O’Connor repeatedly insisted that he had no role whatsoever. Following the delayed production of the files concerning the negotiations it became clear that he in fact played a central role in negotiations with Kevin Phelan on Westferry’s behalf,” the chairman wrote.
Colm Keena is Public Affairs Correspondent