Lowry's lawyers deny he paid off associate

LAWYERS FOR Michael Lowry TD have rejected any suggestion of a link between a £65,000 payment to a business associate and a blackmail plot against businessman Denis O’Brien and his family.

Barrister Rossa Fanning told the Moriarty tribunal that evidence given earlier yesterday about a payment by Mr Lowry to associate Kevin Phelan had been “mischaracterised”.

“My client categorically refutes that monies were paid on foot of some blackmail plot.”

He said his client’s solicitors, Taylor Walton, had written to the tribunal last December emphatically rejecting any suggestion that there was anything untoward about a payment of £65,000 to Mr Phelan in 2002.

Mr Fanning was responding to earlier evidence concerning comments attributed to Mr Lowry’s solicitor, Christopher Vaughan, in 2002.

In a note taken of their conversation that year, London solicitor Kate Macmillan recorded Mr Vaughan saying that Mr Lowry had “paid off” Mr Phelan and that Mr Phelan was a “total crook”.

Denis O’Brien snr had contacted Ms Macmillan over an alleged attempt to blackmail him in relation to the purchase by the O’Briens of Doncaster Rovers FC.

In Ms Macmillan’s note, headed “blackmail 1”, she records Mr Vaughan as saying “KP orchestrates all of this” and, later, “I think he’s been paid off by ML/DO”. Mr Vaughan agreed yesterday DO referred to Denis O’Connor, Mr Lowry’s accountant. Around this time, Mr Phelan, who has not given evidence to the tribunal, was involved in a dispute with the O’Briens over money from property deals in the UK.

Mr Lowry paid Mr Phelan the £65,000 in four payments in March/April 2002, but his lawyers, Taylor Walton, have told the tribunal these monies were legitimate fees and expenses due in respect of Mr Phelan’s involvement in a property deal in Makerfield, northern England.

In Taylor Walton’s letter, in which they respond to the provisional findings of the inquiry, the firm says the money paid to Mr Phelan was a normal business expense. It says it has “absolutely no doubt” about the bona fides of Vineacre, the property company involved in the deal, which was owned by Mr Lowry and Liam Carroll. The letter concludes: “Any finding to the effect that the payments were made to ‘delay, hinder and obstruct the work of the tribunal’ are not founded on fact and nor [sic] grounded in reality”.

Jerry Healy SC, for the tribunal, said the inquiry, in its questioning of Mr Vaughan, was examining the improper use by Mr Phelan of documentation connected with property transactions in Cheadle and Mansfield so as to cause money due to him in other transactions, including the Vineacre transaction, to be paid.

The tribunal is investigating whether Mr O’Brien jnr gave financial support to Mr Lowry, a former minister for energy, transport and communications. It is also inquiring into whether Mr Lowry was involved in Mr O’Brien’s purchase of Doncaster Rovers. Both Mr O’Brien and Mr Lowry deny that he was.

The tribunal has already heard that Mr O’Brien snr made an allegation that he was being blackmailed by the owners of Doncaster Rovers, who, he said, were threatening to leak a letter suggesting Mr Lowry was involved in the deal.

Mr Vaughan yesterday questioned the production of Ms Macmillan’s note at the inquiry. “This was a private phone conversation between two solicitors, in the realms of privilege, and this is Kate Macmillan, who is a solicitor, talking to me, another solicitor, and we are talking about a serious criminal offence of blackmail.” He said the document should not be in the public domain as it clearly enjoyed legal privilege. In such a private conversation you would use words, expressions and nicknames that you wouldn’t necessarily put down in a formal statement.

He told counsel the note was made a long time ago and that he had not had the opportunity of checking with Ms Macmillan as to whether what she wrote was correct.

Mr Vaughan will give further evidence at a future date.