Further issues concerning Denis O’Brien and his dealing with the former minister for communications, Michael Lowry, arise from revelations in the Sunday Independent about a conversation between Lowry and a person involved with O’Brien in a controversial property deal in the UK.
These revelations give a further edge to the significance of the editorial charter that the board of Independent News and Media wishes to impose on the journalists at Independent Newspapers.
Central to this proposed charter is a demand that journalists get the written approval of the managing editor before writing any “sustained or repeated adversarial material concerning individuals or organisations”. The most prominent person who could be said to have been subjected to “sustained or repeated adversarial material” concerning him/her is O’Brien, the largest shareholder in INM and, arguably, now controlling one.
If that edict were to be formalised within INM, then it is likely that as far as the largest commercial media corporation in the country, INM, is concerned the issues arising from the latest revelations are unlikely to be pursued. But not just that issue, and hardly not just in INM for why would the same requirement not apply also to the radio stations controlled by O’Brien, including Newstalk?
On day four of his libel action against the Irish Daily Mail there was the following exchange between O’Brien and counsel for that newspaper, Oisín Quinn:
DO’B: I’m not a tax exile, Mr Quinn. And what was described is actually libellous. A tax exile is someone who doesn’t pay their taxes. As I described to you this morning, I paid all my taxes in Ireland, all PAYE. And I would be one of the larger taxpayers in the country at this time.
OQ: A tax exile, Mr O’Brien, is someone who is moved offshore to reduce their tax liability. You live in a flat in Malta, away from your family, to reduce your tax. That is a tax exile.
DO’B: No, a tax exile, Mr Quinn, technically is somebody who went away not to pay income tax in Ireland. I pay income tax in Ireland. Thank you.
The issue of O’Brien’s alleged “tax exile” status has to do primarily with his avoidance of capital gains tax on the gain he made on the sale of Esat to BT in 2000.
O’Brien biography
In a biography of O’Brien, A Mobile Fortune: The Life and Times of Denis O’Brien, by Siobhán Creaton, published in 2010, the issue of his tax status is addressed. She wrote about an appearance he made on the Late Late Show on RTÉ with Pat Kenny shortly after the sale of his company, Esat, to BT in January 2000. Kenny remarked that the Revenue Commissioners would be rubbing their hands in anticipation of a big cheque from O’Brien on the €317 million fortune he had made personally on the sale of Esat (this would have been a 20 per cent tax on his capital gain, which would have been €63 million).
Denis O’Brien responded by remarking how the government had recently cut the capital gains tax rate to 20 per cent, an initiative of which he approved – the impression he left was that he anticipated paying the capital gains tax.
Siobhán Creaton wrote (page 169): “Despite his comments on the Late Late Show, O’Brien did not want to have to pay tax on his fortune to the Irish revenue authorities. Before the sale he had told his advisors to find a way for him to take the full €317 million without paying any tax at all. … They came up with a scheme whereby if he moved to Portugal he could avoid paying any tax on his spoils and still be free to travel in and out of Ireland to oversee his radio and other businesses. He would become a tax exile.”
She went on to record that this decision took some of his friends by surprise. She quoted one of his closest friends and his personal lawyer, Paul Meagher.
Siobhán Creaton says Paul Meagher urged O’Brien to reconsider his decision to avoid the payment of capital gains tax. “I gave him my views. He didn’t agree with me. It was a short conversation. His view is very different. He felt he was entitled to every penny of it. He created a huge amount of jobs, directly and indirectly, and created a lot of wealth for others. I thought at the start, it was fundamentally wrong. You pay your taxes if you want to live in Ireland and you want to be a citizen of the state. I think you have got to contribute, but Denis takes a fundamentally different view and he is entitled to it.”
I asked Siobhán Creaton if either Denis O’Brien or Paul Meagher had objected to this account. She replied they had not.
In correspondence with me last summer O’Brien claimed: “I had moved to Portugal some time before the sale of Esat Telecom to British Telecom and did so for perfectly valid and legitimate personal and business reasons.”
Isn’t it surprising that his own lawyer, Paul Meagher, was unaware of these “perfectly valid and legitimate personal and business reasons” aside from any wish to avoid paying capital gains tax when he spoke to Creaton and that O’Brien himself didn’t seem to think these were relevant when he spoke on The Late Late Show?