Murky world of property, arson, money and blackmail

A down-at-heel football club, a businessman jailed for seeking to have the club's stadium burned down, a dodgy politician, millions…

A down-at-heel football club, a businessman jailed for seeking to have the club's stadium burned down, a dodgy politician, millions of pounds and blackmail.

These are just some of the ingredients that are in the stew in which millionaire entrepreneur Denis O'Brien finds himself this week, after Wednesday's opening of the Moriarty Tribunal's latest module.

The roots of the mess lie back in the late 1990s, when everything was going swimmingly for Mr O'Brien. The entrepreneur with a few radio stations under his belt was transforming himself into a significant telecoms mogul.

Meanwhile, over in Doncaster, the local team was in the doldrums and the man who owned the lease on the Doncaster Rovers' stadium, English businessman Ken Richardson, was about to be sent to jail for trying to burn it down.

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The ex-SAS solidier who lit the fire dropped his mobile phone while still in the stadium, but not before ringing Richardson and leaving a message: "The job's been done".

The reason Richardson wanted the stadium levelled was because there was an opportunity to make some money if the team could be moved to a new stadium and the city-centre site on which the old stadium was situated developed for offices or retail or both.

The site's development potential was noted by Kevin Phelan. Mr Phelan is a businessman based in Northern Ireland who is involved in spotting property development opportunities in the UK, which he then brings to the attention of Irish clients. Clients who take up the opportunities are charged a fee.

Aidan Phelan, no relation of Kevin Phelan, is a Dublin accountant and businessman who, in the late 1990s, was acting as accountant and adviser to Denis O'Brien. During the period he was actively looking for opportunities for investments by Mr O'Brien and was approached by Kevin Phelan about the possibility of his buying Doncaster Rovers Football Club Ltd (DRFC), the company that had the lease on the Doncaster Rovers grounds.

DRFC was bought in August 1998 by Westferry Ltd, an Isle of Man company owned by an Isle of Man trust that holds assets for the O'Brien family.

The deal was fronted by Aidan Phelan. The shares in DRFC were bought from companies owned by Mr Richardson and an associate of his, Mark Weaver. The price paid was £3.7 million (€5.45 million) but further sums were to be paid depending on how certain other matters played out, such as players' contracts, a lease on a car park, etc.

Some £700,000 was placed in a retention fund that would be paid in part, or in full, to the vendors, depending on how these outstanding issues developed.

The solicitor acting for Westferry in the DRFC deal was Christopher Vaughan of Northampton.

Another much smaller deal brought to an Irish purchaser's attention by Kevin Phelan in the late 1990s concerned a property in Mansfield. In this instance, the purchaser was former communications minister Michael Lowry.

Mr Lowry was helped fund the Mansfield property by Aidan Phelan, who sourced the few hundred thousand needed from an account belonging to Mr O'Brien.

It was money Aidan Phelan said he was owed by Mr O'Brien. The solicitor who handled the Mansfield deal was Mr Vaughan. Mr O'Brien says he was not told about it.

The same people again, Kevin Phelan, Aidan Phelan, Mr Vaughan and Mr Lowry were involved in another property transaction, again involving a few hundred thousand pounds, a year or so later. This time the property was in Cheadle.

When the tribunal discovered the UK property deals involving Mr Lowry, it was told the Doncaster deal belonged to the O'Brien family trust, and it accepted the evidence and testimony presented.

Meanwhile, however, Kevin Phelan, Mr Richardson and Mr Weaver were looking for money.

Mr Phelan was looking for fees that he was claiming he was owed for his work with Doncaster. Mr Richardson and Mr Weaver were looking for more out of the retention fund than the O'Brien side was prepared to agree to. The two sides of the retention issue couldn't reach agreement and the row was heading towards the High Court in London.

Meanwhile, the tribunal has been told that, behind the scenes, threatening noises were being made that Mr O'Brien and his colleagues should cough up or else.

Around this time The Irish Times came into possession of copies of letters from Mr Vaughan concerning the Mansfield and Cheadle transactions that differed from the versions of the same letters that had been given to the tribunal. It seemed someone was trying to obscure Mr Lowry's involvement in the Mansfield transaction.

Then, in January 2003, this newspaper was shown another letter from Mr Vaughan, this time one that had never been shown to the tribunal. In the letter, dated September 1998, and addressed to Mr Lowry, Mr Vaughan said that, up until then, he had not appreciated Mr Lowry's "total involvement" in the Doncaster deal.

Mr O'Brien and Mr Lowry, who had both been contacted prior to the publication of the article, immediately wrote to the tribunal stating that the Doncaster deal was exclusively Mr O'Brien's and that Mr Lowry had had nothing to do with it. Mr Vaughan, for his part, told this newspaper and the tribunal that he had written the letter while under a misapprehension.

The tribunal, involved in lengthy public hearings into the awarding of the State's second mobile phone licence to Esat Digifone in 1996, began to make private inquiries into the Doncaster issue.

Mr Vaughan was written to and replied in March 2003. He accepted that he had written the September 1998 letter to Mr Lowry. He said that, at the time, there had been a number of matters outstanding from the DRFC deal and he had been seeking a meeting with Aidan Phelan. He had been pressing Kevin Phelan to arrange such a meeting and when Kevin Phelan arranged to meet Mr Vaughan in Northhampton on September 24th, 1998, Mr Vaughan presumed the meeting had to do with Doncaster and that Aidan Phelan would be attending.

In the event, Kevin Phelan turned up with Mr Lowry to discuss progress in the Mansfied deal. Mr Lowry says the three men met in a hotel in Northhampton and discussed matters over drinks. Mr Vaughan says they met in his office. The discussions broadened out and came to include matters outstanding in the Doncaster deal.

Mr Vaughan told the tribunal, in his letter: "Michael Lowry was present throughout the whole of those discussions and I formed what I subsequently discovered to be a totally incorrect view that, because of the frank manner in which Kevin Phelan was discussing the outstanding issues relating to Doncaster, Michael Lowry was in some way involved in the project."

Mr Lowry and Kevin Phelan went out for a meal and Mr Vaughan went home. The next day Mr Lowry came to Mr Vaughan's office to discuss the Mansfield deal.

Mr Lowry had a medical appointment in the BUPA hospital in Leicester (apparently arranged for him by Kevin Phelan) and Mr Vaughan offered to give him a lift. During the 30-mile journey the two men discussed the UK property market, sport and Irish politics.

"Due to my incorrect assumption from the previous day's meeting, the outstanding issues relating to Doncaster were again touched on by me. It is my recollection that Michael Lowry offered to assist me in resolving those outstanding issues by agreeing to try to arrange a meeting with Aidan Phelan, whom he led me to believe he knew." This led to the letter.

A few days later, Mr Vaughan said, when discussing the Doncaster matter, Kevin Phelan told Mr Vaughan that he was wrong, and that Mr Lowry was not involved in the transaction.

Somehow Mr Richardson and Mr Weaver managed to get their hands on the September 1998 letter to Mr Lowry. They recognised its potential significance given the tribunal's ongoing inquiries, and began to use it in the context of their trying to get more money out of the Doncaster deal. A numberof ships were entering murky waters.

After Mr Lowry's fall from grace over the Ben Dunne payments, his accountant and friend, Mr Denis O'Connor, began to help him sort out his affairs. Mr O'Connor began to have dealings with the Moriarty tribunal and the Revenue. He did an assessment of Mr Lowry's assets but was not told about the Mansfield or Cheadle transactions.

Mr O'Connor is a friend of his fellow accountant, Aidan Phelan, and once sourced a mobile phone from Mr Phelan for Mr Lowry, a move that created a bit of a stir when the facts emerged in the newspapers.

Furthermore, Mr O'Connor knew Kevin Phelan and Kevin Phelan knew that Denis O'Connor had clients who owned property in the UK. No one told Mr O'Connor, however, about the Mansfield and Cheadle transactions until they were discovered by the tribunal.

In England, efforts were being made to settle the dispute with the vendors of Doncaster. Aidan Phelan dropped out of the picture during 2002 and Mr O'Brien's father, Denis O'Brien senior, took on management of the project. Westferry engaged a firm of solicitors in London, Carter Ruck, to deal with the dispute.

When the tribunal started asking questions about Doncaster, it discovered that Mr Lowry's adviser and accountant, Mr O'Connor, had become involved in trying to settle the dispute with Mr Richardson. Furthermore, a note taken by solicitor Ruth Collard, a partner in Carter Ruck, quoted Mr O'Connor as indicating that Mr Lowry was in some way involved in the Doncaster deal.

The note - taken during a September 2002 meeting between Ms Collard, Mr O'Connor and Craig Tallents, an accountant advising Westferry - records Mr O'Connor saying he had been trying to sort out the dispute with Kevin Phelan, and had been doing so on behalf of Mr O'Brien snr.

Mr O'Connor told Ms Collard that Kevin Phelan had been making various threats to cause trouble for Mr Lowry. He said that, at the request of Mr O'Brien snr, he had met with Mr Richardson and Mr Weaver. He expressed the view that mediation would not work and the matter would go to court.

Mr Richardson and Mr Weaver "wanted to cause the maximum embarrassment for Denis O'Brien and for others, including Michael Lowry."

Ms Collard asked how they could cause embarrassment to Mr Lowry, who was not connected to the Doncaster deal.

Her note continues: "Denis O'Connor said that Michael Lowry did have a connection and that he had been in the room when discussions had taken place between Kevin Phelan and Ken Richardson regarding the \ lease. Ruth Collard said no one had suggested this to her previously."

Mr O'Connor has told the tribunal that he believes Ms Collard's note is mistaken where he is recorded as saying Mr Lowry was in a room with Mr Richardson and Kevin Phelan.

He says that he became involved with Doncaster after being contacted by Mr O'Brien senior in May or June 2002. Mr O'Brien invited Mr O'Connor to come see him in his offices. Discussions of the dispute over the retention funds led to his attending the meeting with Ms Collard to see if he could help settle the matter.

In the event, Mr O'Connor did not take part in mediation hearings, which were eventually successful. Mr O'Brien snr reported the use of the Vaughan letter to the police in London. In his initial statement, he said he and his family were being blackmailed.

He also said he had been informed at one stage that, if he did not make a "friendly and generous offer", the letter would make its way to the tribunal or the newspapers. Details of a further statement made to the police by Mr O'Brien have not yet been furnished to the tribunal.

The letter was shown to The Irish Times in January 2003. Until this time, its existence had not been disclosed by anyone to the tribunal. Mr O'Connor said he had not told Mr Lowry about his role in the mediation hearings or of the existence of the letter.

"Mr Lowry himself has told the tribunal that he is at a total loss as to what was going on," counsel for the tribunal, Mr Jerry Healy, SC, said on Wednesday.

Mr O'Connor's involvement is just one issue to be examined in public hearings by the tribunal into the Doncaster deal. Denis O'Brien's counsel, Eoin McGonigal SC, said on Wednesday that his client is furious that the Doncaster deal is to become the subject of public hearings on the basis of the evidence available.

"It is abundantly clear that Mr Weaver and Mr Richardson are leading the tribunal and others by the nose to conclusions which they wanted at the time to benefit them \ that have absolutely no reality in truth," said Mr McGonigal. He was speaking after Mr Healy had finished the tribunal's opening statement on the Doncaster issue.

"And if the tribunal had for once been able to take a decision correctly, they would have realised they should not be going into Doncaster Rovers" because it will "unnecessarily damage the interests of O'Brien and his family".

All the legal documents available showed the Doncaster deal was owned exclusively by the O'Brien trust, he said. There was not a judge in the land who would let the matter go to court.

"And that is the state of play that this tribunal is fiddling around with," said Mr McGonigal. "It is prepared to damage the reputation, rather than vindicate, as the constitution calls upon it to do."

Mr McGonigal asked would the tribunal not "for once in its life" be prepared "to vindicate Mr O'Brien's interests in a proper fashion". He threatened to go to the High Court to seek to have the Doncaster inquiry stopped.

Mr Justice Moriarty said he was "far from unaware of aspects of frailty, of witnesses of possibly dubious provenance who were lurking in the background".

However, he had considered all of the facts available and decided that it was warranted that the tribunal should proceed to examine the matter in public.

Denis O'Connor is to give evidence on Tuesday.

Colm Keena

Colm Keena

Colm Keena is an Irish Times journalist. He was previously legal-affairs correspondent and public-affairs correspondent