The deal: Denis O'Brien is fighting to stop the Moriarty tribunal holding public hearings into the purchase of the Doncaster stadium, but a large amount of material has been put into the public domain, writes Colm Keena, Public Affairs Correspondent.
The story of what exactly went on in England in the late 1990s in a number of property deals set up by Northern Ireland businessman Kevin Phelan continues to take up the time of the Moriarty (Payments to Politicians) tribunal.
At the heart of the matter is the question as to whether any of the transactions being looked at involved telecoms entrepreneur Denis O'Brien conveying a financial benefit to the former minister for communications, Michael Lowry.
For almost a year now O'Brien has been fighting in the courts to stop the tribunal holding public hearings into one of these transactions, the purchase of the Doncaster Rovers stadium in August 1998 for in excess of £4 million. He argues that an O'Brien family trust owns the stadium, that he has shown the tribunal documentation to this effect, and that there is no evidence available to the tribunal to show any involvement by Lowry.
The matter was argued out in the High Court last week and earlier this week and judgment has been reserved. However, in the course of the hearing the tribunal, while outlining its argument for why public hearings should occur, put into the public domain a large amount of the material it has gathered on the matter in private investigative work over the past two years.
Included in this material is documentation indicating that Denis O'Brien and his father, Denis O'Brien snr, have been in contact with two key potential witnesses who live outside the jurisdiction and who are refusing to appear before the tribunal. These people are English solicitor Christopher Vaughan and the Northern Ireland businessman Phelan.
Furthermore, the documentation indicates that money has been paid recently to one - if not both of these men - by O'Brien.
TWO OTHER CENTRAL CHARACTERS in the Doncaster affair are Dublin accountants Aidan Phelan (no relation to Kevin Phelan) and Denis O'Connor. Phelan was in the 1990s a close business associate and adviser to O'Brien. O'Connor is an accountant with Brophy Butler Thornton, Dublin, and Lowry is one of his clients. Phelan and O'Connor know each other and in January 1997 had their first known dealing involving Lowry.
Lowry had just fallen from the sky like Icarus. One day a senior government minister, then, following the publication of an article concerning his receiving money from Ben Dunne, a political pariah and the focus of a high profile tribunal. It was around the time of Lowry's plummet that O'Connor started working for him, first on the accounts of his business, then on his personal finances. In the midst of all this trauma, Lowry told O'Connor that he wanted a new mobile phone, one that journalists would not have the number for, and O'Connor said he would get one for him. He didn't just go out to the shops.
According to evidence given to the Moriarty tribunal some years ago, O'Connor raised the matter with Phelan and Phelan sourced a phone from a distribution company he worked for. O'Connor says he did not know at the time that Phelan's main client was O'Brien, nor did he tell Lowry that he had approached Phelan. Phelan sourced the phone in his own name and, when the bills started to arrive, sent them on to O'Connor. In time the Sunday World found out about the matter. "O'Brien's money man gives phone to Lowry", shouted the headline. Obviously, connections between Lowry and O'Brien, by way of Phelan and O'Connor, could be used to create a suggestion of clandestine dealings between the telecoms mogul and the former minister, with resultant damage to the reputations of Lowry and O'Brien. Despite this, connections between O'Connor, Phelan and Lowry not only increased but became increasingly complex over the coming few years.
Most surprising of all, new details revealed last week show that up to relatively recently and after the tribunal had begun to dig into the UK property deals, O'Connor was getting involved in matters that directly concerned O'Brien.
DENIS O'BRIEN'S Esat Digifone consortium won the competition for the State's second mobile phone licence in 1995. The company launched its operations in 1997. That same year, in September, O'Brien set up a family trust on the Isle of Man, called the Wellington Trust.
Phelan has told the tribunal that one of his functions at around this time was to look for investment opportunities for O'Brien, who was seemingly on something of a spending spree. Phelan began to have dealings with Kevin Phelan concerning possible property investments in the UK that had been identified by Kevin Phelan.
Also during 1997, by way of O'Connor, Aidan Phelan became involved in discussions with Lowry concerning possible commercial developments for Lowry's refrigeration company, Garuda, which was in difficulty. The talks came to nothing.
In the 1997 to 1999 period - during which the Moriarty tribunal was investigating payments to Lowry by Ben Dunne - a number of people were involved in a number of property transactions in the UK. Aidan Phelan was involved in all but one of them. Kevin Phelan was involved in all of them as was the English solicitor, Christopher Vaughan. Vaughan would act for the purchaser, and Kevin Phelan sought to gain by way of fees for introducing the purchaser to each property.
The tribunal has been told that in relation to properties in Mansfield and Cheadle, Lowry was the purchaser, receiving financial assistance from Aidan Phelan. In relation to a property in Luton, the purchasers were Aidan Phelan and O'Brien. In relation to Doncaster, by far the largest purchase, the purchaser was O'Brien's trust, but with Aidan Phelan fronting for O'Brien. Finally, in relation to a property in Wigan, the purchaser was Lowry and a business associate, and Aidan Phelan was not involved.
The tribunal was not told of the Mansfield and Cheadle transactions by Lowry. They were brought to its attention in 2001 by a bank that had acted in the transactions and became concerned about a possible connection between Lowry and O'Brien. O'Connor has said he did not know about the transactions until they came to the attention of the tribunal.
In relation to the Mansfield and Cheadle transactions, some of the money used came from a bank account belonging to O'Brien. O'Brien says Aidan Phelan was due the money in relation to work done for him. He has said he knew nothing of the property transactions at the time.
THE TRIBUNAL accepted the evidence it was given some years ago that Lowry had no involvement in the Doncaster deal. However in January 2003 The Irish Times published the content of a letter dated September 25th, 1998 and apparently written by Vaughan to Lowry. The letter refers to meetings between Lowry and Vaughan over the previous two days, aspects of the Doncaster deal and to the fact that Vaughan had not, until then, understood Lowry's "total involvement" in the Doncaster deal. O'Connor was contacted prior to the publication of the article and said he had never seen any letter linking Lowry to Doncaster Rovers.
Following publication of the letter the tribunal immediately got in contact with Vaughan, who said he had indeed written the letter but that it had been written when he was under the mistaken impression that Lowry was involved in the Doncaster deal, and that he no longer believed that to be the case.
The tribunal set about investigating the matter, seeking statements from relevant parties and "discovery" - legal access to - their confidential documentation concerning Doncaster. The huge ongoing tussle between O'Brien and the tribunal was about to reach a new level.
THE COMMERCIAL idea behind the Doncaster deal was that the purchaser would buy Doncaster Rovers Football Club Ltd (DRFC), hive off the actual team, organise the building of a new stadium for the team at a new location, and then redevelop the city centre site on which the stadium is currently located. That the site has potential seems to be generally accepted. Indeed, the vendor of the site, Ken Richardson, was in jail at the time O'Brien was buying DRFC from him in relation to a failed attemptto burn the stadium down. Most of the "running" for Richardson at this period was done by an associate called Mark Weaver.
According to Aidan Phelan, Kevin Phelan first approached him in January or February 1998 to get him interested in buying DRFC. From documents revealed to the court it seems the transaction involved a number of companies and share transfers. Kevin Phelan established a company called Westferry Ltd and held the shares in this company by way of other vehicles he controlled. The shares in DRFC were transferred to Westferry and the shares in Westferry transferred to Walbrook Trustees, acting for the Wellington Trust.
One of the companies Kevin Phelan made use of at the time was called Gameplan and his partner in this company was an English businessman called Paul May. May has refused to cooperate with the tribunal and when contacted a number of years ago by The Irish Times, refused to comment. UK Companies House records show that May is or has been a director of a large number of companies in the UK, including companies involved in the cashing of cheques, the fitness and leisure business, and electrical services companies. He is still involved with the Doncaster team.
May is variously described in the files as an electrical contractor and company director. He was a director of Cash a Cheque Holdings Great Britain plc, having been appointed to the board on October 14th, 1997. Vaughan was appointed to the board of the company on the same date and was appointed company secretary. He resigned from both positions six days later, on October 20th, 1997.
May, Vaughan, Aidan Phelan and his business partner Helen Malone have all served as directors of a UK company, Draftclip. May resigned from the company on September 24th, 1998, co-incidentally the day before the letter referred to above was seemingly sent by Vaughan to Lowry. Aidan Phelan and Malone joined the board on the same date. Vaughan joined the board a month earlier. Draftclip has since been struck off the register and dissolved.
The Doncaster transaction was completed in August 1998 but some matters were due to be dealt with down the line and a retention fund was created. In time this was to create a lot of difficulty between the vendors and the purchaser.
The Mansfield and Cheadle transactions were closed subsequent to the Doncaster one, in the December 1998 to December 1999 period.
When the September 25th letter was published in The Irish Times, the tribunal got on to Lowry. In time he replied that he knew nothing of the letter. He said he travelled to England in September 1998 to visit a BUPA health assessment centre. He'd not been feeling well and Kevin Phelan had suggested the assessment and made the appointment for Lowry. Lowry said he was collected at Birmingham airport by Kevin Phelan and brought to a hotel in Northampton, where he had a meeting with Vaughan over drinks. The next day there was a meeting in Vaughan's office and later Vaughan drove Lowry to the BUPA centre. The meetings involved the Mansfield property but Kevin Phelan broadened the discussion to include other deals he was involved in. If this led Vaughan to believe Lowry was involved in the Doncaster deal, then Vaughan was wrong in that belief, Lowry told the tribunal. Lowry said he had no recall of ever seeing the September 25th letter and had no knowledge of it until its publication in 2003.
Vaughan, in his written response to the tribunal, gave an outline of events that agreed with Lowry's but did not mention where the men met on the day Lowry arrived in England, or at what time they met. He said that a few days after he'd written the letter, he raised the matter with Kevin Phelan and Kevin Phelan told Vaughan that he was wrong, and that Lowry was not involved with Doncaster. He said he had a copy of the letter on his files.
IN THE WAKE of the Doncaster deal a lot of people fell out with each other. Kevin Phelan fell out with Aidan Phelan and the O'Briens in a row over fees the Northern businessman claimed he was due. Richardson and Weaver began rowing with the O'Briens over the retention funds. Aidan Phelan stopped working for O'Brien and Denis O'Brien snr took over management of the Doncaster project. Then Lowry's accountant, Denis O'Connor, became involved in the Doncaster row, seemingly at the invitation of O'Brien snr. Furthermore, O'Connor also became involved in trying to settle a row relating to Mansfield and Cheadle involving Kevin Phelan and Aidan Phelan. Lowry's accountant was taking up a position centre stage.
The O'Briens engaged a firm of London solicitors called Carter Ruck. One of that firm's solicitors, Ruth Collard, took a note of a meeting she had with O'Brien snr on June 20th, 2002, concerning the row with Kevin Phelan. Reg Ashworth acted for the vendors of DRFC and the reference in the quote below to Kevin Phelan being a witness concerns proceedings then pending in the London courts where the vendors of DRFC were suing Westferry.
"DOB said they were currently in this position with Kevin Phelan and had a letter from Reg Ashworth to him. DOB said he refused to speak to KP himself but through an intermediary had asked KP what the current position was following that letter and whether he was going to be a witness. RC said what DOB was mentioning made her extremely uncomfortable. She asked if the letter he was referring to was one from RA to KP. DOB said it was and he could fax it through. RC said she did not want to see it. She asked how it was we had got hold of such a letter and said it was privileged. In addition what DOB had said about KP being a witness concerned her Any payment made which could be represented to be in connection with KP's evidence in this matter would be improper and a serious matter. DOB said it was not to do with him being a witness but he was not going to reach a settlement with him on the outstanding fees when it appeared that KP was going to give hostile evidence. RC said this concerned her and she was concerned about how it could be presented."
In 2004 O'Connor's solicitor told the tribunal in correspondence that in May or June 2002 O'Connor was contacted by Kevin Phelan, who said he was aware O'Connor was in contact with O'Brien snr. Phelan said that O'Connor might usefully intervene in the dispute over fees relating to Doncaster. "It is Mr O'Connor's recall that Denis O'Brien snr advised that the matter should be referred to William Fry Sols and Denis O'Connor believes that he had some contact with Owen O'Sullivan in Frys in this regard." O'Connor said he did not become involved in the dispute but that on occasion Phelan "insisted on updating him", seemingly in the expectation that O'Connor would relay these contacts on to O'Brien.
In August 2002, the row between Kevin Phelan and Westferry/O'Brien, was settled. Documents shown to the court last week indicate Phelan was paid £150,000 but the deal almost fell through because the solicitors for Westferry were insisting on a narrative statement from Phelan outlining his involvement in the Doncaster deal.
Woodcock Solicitors, Lancashire, were acting for Phelan and William Fry, Dublin, for Westferry. Frys sought a narrative statement from Phelan and received in return correspondence which included a copy of an August 1999 fax from Kevin Phelan to Aidan Phelan, on Gameplan notepaper and headed The Doncaster Project. The note contained a list of seven items, the last of which read: "ML Kevin Phelan to refer all queries regarding Doncaster to Aidan Phelan." The note was signed by Kevin Phelan.
Owen O'Sullivan, in Frys, was keeping O'Brien snr abreast of developments. In July he informed him of the ML reference and of the solicitor's view that the matter would have to be followed up. "Since Denis O'Connor understood the ML reference was to a Michael Lloyd with whom Kevin Phelan had had business dealings for a number of years, we should ask Denis O'Connor to follow up on what Michael Lloyd's role might have been in relation to Doncaster. I understand Denis O'Connor is making further enquiries in this regard today." It was also suggested that Aidan Phelan might be asked who he thought the ML referred to. Aidan Phelan has since told the tribunal he does not recall what he understood the reference to be.
A few days later, in a letter to Woodcocks, Frys stated they understood the respective clients had been in contact and "that your client is prepared to give an explanation for that reference (as to its referring to someone other than Michael Lowry or to some other matter) and/or to confirm in any event that Mr Lowry had and has no interest in or connection to the Doncaster Rovers matter.
"We confirm that our client will complete the terms of settlement on receipt."
A reply the next day from Woodcocks noted a few matters including the fact that O'Connor, Kevin Phelan and the author of the letter had had a recent meeting. Woodcocks complained about the request being made by Westferry. "Due to the very serious implications of the request that is now being made by your client we have been specifically instructed by our client to terminate negotiations."
Frys, in response, said it could not see how the request was unreasonable and confirmed that £150,000 sterling was available for settlement once the explanation sought was provided. The settlement duly went ahead in August, with Woodcocks stating to Frys: "We confirm that we have received written instructions from our client Kevin Phelan/Gameplan International Ltd that the reference to ML within the aforesaid document was to Michael Lowry but that this related to a project in Mansfield in which Michael Lowry was a shareholder. We trust that this clarifies the position."
The 2004 correspondence to the tribunal from O'Connor's solicitor also said that in August/September 2001 O'Connor had been contacted by Kevin Phelan who asked him to help settle his dispute over fees with Aidan Phelan in relation to the Mansfield and Cheadle properties. He said the latter discussions came close to agreement but then collapsed. At Kevin Phelan's request he, O'Connor, left his files at the reception to his office, to be collected, and they were so collected.
MEANWHILE, the row between the Doncaster vendors and the O'Briens was heading towards the High Court in London. Both parties agreed to try mediation first.
O'Connor has told the tribunal, in correspondence, that in April or May of 2002, Denis O'Brien snr contacted him and asked if he was familiar with the DRFC project. O'Connor said he was not familiar with it and, in response to O'Brien, said he had not heard rumours of any connection between Doncaster and Lowry. Three or four months later, O'Connor said he was again contacted by O'Brien, who wanted to meet him. At a meeting in O'Brien's office, O'Connor was told about the row with Richardson and offered to help. Shortly thereafter, a meeting was arranged in London between O'Connor and Ruth Collard, from Carter Ruck.
The meeting took place on September 10th, 2002. Craig Tallents, an English accountant, was also present. A note of that meeting drawn up by Collard has since come into the possession of the tribunal. The references to DOB are understood to be references to O'Brien snr.
"DOC said he would explain how he had become involved in the matter. He had been trying to sort out, on Denis O'Brien's behalf, the position with Kevin Phelan." He also said he represented Michael Lowry and that Kevin Phelan had made various threats to cause trouble for Lowry.
O'Connor was noted as saying that Richardson and Weaver were determined to cause maximum embarrassment for Denis O'Brien and others, including Lowry. "RC asked how they could cause any embarrassment to ML, as, so far as she was aware, he had no connection with the proceedings. DOC said that ML did have a connection and that he had been in the room when discussions had taken place between KP and KR regarding the lease. RC said no one had ever suggested that to her previously."
As the meeting was winding up the following was recorded: "DOC said that one good thing was that KP would now be a witness for us. RC said it might be helpful that he would not be available to the other side but he would be a much discredited witness and she was far from sure we would want to use him."
O'Connor has told the tribunal that there is clearly a "considerable misunderstanding" involved in Collard's note and that he had never understood Lowry to be involved in Doncaster. Nor does he believe Lowry ever met with Richardson or Weaver.
Lowry has said he is "at a total loss as to what is going on" and that he never had any interest in DRFC and never met or had discussions with Richardson or Weaver.
The documents released to the High Court indicate that some confusion arose at this stage within Westferry as to who exactly O'Connor was acting for. Tallents went to Dublin to see an accountant working for O'Brien and Westferry called John Ryall. On September 16th, Collard took a note of a phone call she got from Tallents as he was waiting for his flight in Dublin Airport.
"He had learned that DOC was not, as he and RC had understood, acting for the O'Briens. In fact, the clients had asked him what he thought DOC was trying to get out of the whole thing. CT said his response had been to the effect that he presumed they were paying DOC and they had said that they were not."
Collard recorded her extreme concern and that of Tallents. "CT said he had told the clients that he felt they had put someone else into play without telling us of his indentity." Collard said she would contact Ryall.
Collard telephoned Ryall and took a note: "She said she had understood from JR that DOC was acting for the O'Briens. JR said that that was not the case and they had been puzzled about why DOC had wanted to become involved."
