Denis O’Brien and his defamation lawsuit in California
April 2, 2013 by namawinelake
[The originating lawsuit is here, the respondent’s answer is here, and this is what the American’s call a “report” for the court which is supposed to assist the court with managing the case and focuses on the issues involved]
There doesn’t appear to have been much reporting in the old media in Ireland about a defamation case initiated last November 2012 by controversial businessman, Denis O’Brien and his telecoms company Digicel, in a Californian district court. The Sunday Times did cover the case in a report in early December 2012 – not available without subscription – but the general absence of reporting is remarkable given the fascinating detail that has so far emerged in court filings.
The case was initiated last November 2012 in California by Denis and his telecoms company, Digicel. Denis and his company are claiming that an individual named Donald MacAllister has made a series of falsehoods in written statements and Denis’s lawsuit says “the purpose and effect of this pattern of misconduct is to (a) expose Denis O’Brien to hatred, contempt, ridicule and disgrace, (b) threaten that unless Mr. O’Brien pays Mr. MacAllister millions of dollars, Mr. MacAllister will continue to attempt to wrongfully connect him to criminal conduct and/or expose him to disgrace or contempt, and ( c) interfere with the prospective economic advantage to be gained by Mr. O’Brien and his company, Digicel”. For his part, Donald is denying the central allegations, and is saying that Denis owes him money from an investment a decade ago of €100,000 in Digicel.
Denis is represented by Neal Potischman of Californian law firm Davis Polk and Wardwell and Donald is presently representing himself.
There are a number of aspects to the case, but one of the main accusations is that Donald has contacted people with allegedly false information about two matters (1) the Moriarty Tribunal – the tribunal set up by the Irish government in 1997 to investigate the finances of former Taoiseach Charlie Haughey and telecoms minister, Michael Lowry, and which reported its findings in March 2011 – and (2) the decision by the Supreme Court in October 2012 which allows unsuccessful bidders, including Declan Ganley’s Cellstar, for the 1996 mobile phone licence to be allowed present their case to the High Court where they are alleging wrongdoing in the award of the phone licence to Denis. By the way, the latest from justice minister, Alan Shatter, on the Garda investigation following publication of the Moriarty report was included in a response to a parliamentary question on 12thMarch 2013, when Minister Shatter stated “the Report of the Moriarty Tribunal has been examined by the Garda authorities and the advice of the Director of Public Prosecutions has now been sought by them, with a view to determining whether or not a full Garda investigation should now be commenced.”
Donald is accused by Denis in the Californian lawsuit of sending emails containing falsehoods to an array of Irish, American, Jamaican and Burmese politicians and media including Fianna Fail leader Micheal Martin, Fianna Fail senator Diarmuid Wilson, #vinb himself Vincent Browne and Burmese Opposition leader Daw Aung San Suu Kyi.
There was supposed to have been a case management hearing last week in California which would schedule a date for the full hearing, but we are still awaiting confirmation of the order from that. We do know that both sides believe the matter will required a 2-3 day hearing, and that Donald is looking for a jury hearing.
He’s a first cousin of Denis O’Brien, his mother Maureen was the sister of Denis O’Brien’s father, Denis Senior. Donald’s father, from whom his mother was divorced, was an American physician, Dr Niall MacAllister. It is claimed in the lawsuit that Donald is now a resident of Orange County, California. Then Amazon website where his self-published e-book about the death of his mother is available, says of Donald: “Despite the extraordinary challenges Donald MacAllister faced as a orphaned child, foster youth and homeless young adult, he founded and directed the non-profit organization America Works for Kids, which became the United States leading employment-readiness training organization for foster youth. Over the course of 15 years he achieved a record over 10,000 trained foster youth. In addition to his two Congressional recognitions and testimonies, he also received personal commendations from U.S Secretary of State Hillary Rodham Clinton and former Chairman of the U.S Securities Commission Christopher Cox. MacAllister’s goal is to help as many foster youth as possible avoid the plight he faced.”
The 1972 car crash
The 9-year old Donald was travelling by car , a Hillman Hunter owned by Denis O’Brien senior, in Foxrock, south county Dublin on 31st August, 1972 with his mother Maureen driving and brother Niall in the back seat when they collided with a Daimler driven by the then 36-year old Michael Smurfit, now one of Ireland’s richest men. In 2011, Donald wrote an ebook about the crash; the book is available from Amazon here. In his reply to the present lawsuit in California, Donald writes that a report – commissioned by Donald from an outfit called Crash Team Inc, and which apparently had input from a “Mr Finn, the former Head of Ireland’s Forensic Crash Investigation Unit” – said “it is our opinion that Maureen O’Brien (MacAllister) was not speeding, and was not initially on the wrong side of the road. Her motion to the incorrect side was an attempt to avoid the oncoming Daimler which was in her lane when she first detected it. We have concluded this fatal accident occurred as a result of Michael Smurfit speeding, and driving on the incorrect side of center”. There is no corroboration of the claim made by Donald in his answer, and Michael Smurfit has been exonerated by Gardai of fault in the tragedy, though Donald is now saying that he has been discussing a fresh inquiry with Gardai. Sunday Times reporting in 2011 suggests that Michael Smurfit didn’t know until 2011 that the woman killed in the 1972 car crash was Denis O’Brien’s aunt.
Denis O’Brien and Michael Smurfit (pictured together here)
Donald claims in his reply to the lawsuit, that, in 2009, Denis O’Brien told Donald that Michael Smurfit had financed the first of Denis O’Brien’s forty radio stations.
Denis O’Brien and the Clinton Foundation
Denis’s lawsuit remains silent on a statement by Donald that Denis is the largest contributor to President Bill Clinton’s Foundation; the lawsuit states
“In a 1 November 2012 email, sent to Mr O’Brien and apparently copying, on information and belief an Irish government minister and an Irish Senator, Daw Aung San Suu Kyi, a U.S. State Department employee, and members of the Irish and American media, Mr. MacAllister stated: “I will now prepare to send a letter to the US Congress, the US Senate and the US President informing them the largest contributor to the Clinton Foundation who is now on trial for Criminal Bribery and Corruption before Irelands [sic] Supreme Court has apparently asked US Secretary of State Clinton to NOT report to Myanmar Law Enforcement and Authorities that the largest contributor to her husbands [sic] Foundation is apparently attempting to apply for a Telecom License in Myanmar while on trial for Criminal Bribery and Corruption before Irelands [sic] Supreme Court.” This statement is false. Mr. O’Brien is not and has never been on trial facing a criminal charge, much less a criminal charge being heard by the Supreme Court of Ireland.”
The Clinton Foundation lists contributors to the Foundation and lists just five contributors who’ve donated more than USD 25m and they are “Bill & Melinda Gates Foundation, Fred Eychaner, Frank Giustra, Chief Executive Officer, The Radcliffe Foundation, The Children’s Investment Fund Foundation and UNITAID. There is a “Denis J O’Brien” who contributed between USD1-5m, and Digicel’s Denis’s second name is “John” but that donation, although significant, wouldn’t be enough to qualify Denis as the “largest contributor” to the Clinton Foundation.
Digicel and Burma
The lawsuit states
“Digicel has an existing prospective relationship with the country of Burma. Digicel has presented a technical and commercial assessment for the process of expanding Burma’s existing telecom network to the Burmese government, and is now preparing to engage in a tender process for a mobile telecom license. Digicel has already made substantial investments to further its expected business relations with the country of Burma, including providing multi-year sponsorships to Burmese sports organizations, and is prepared to make an initial investment of in excess of [US] $1 billion to improve Burma’s telecom infrastructure. These efforts have resulted in brand awareness within Burma. Digicel is well-positioned as a competitive candidate for a telecom license. There is a significant probability of future economic benefit from a business relationship between Digicel and Burma because the potential mobile telecom market in Burma is extremely large. Burma has 60 million residents, less than two percent of whom are reported to currently have access to mobile phone and Internet services. Neighboring countries have usage rates varying from 57 to 100 percent, suggesting that a telecom license in Burma could result in Digicel’s acquiring tens of millions of new customers and potentially doubling the size of its worldwide customer base”
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Of the 450 “high wealth” individuals, 54 are resident abroad for tax purposes.
This is the first time the tax authorities have released figures relating to how many Irish tax exiles are in the super-rich league.
Revenue said that last year its “high wealth” section dealt with 450 individuals who have net assets worth more than €50m and non-residents with “substantial economic interests” in Ireland.
It said the “number of non-resident individuals that are considered by Revenue to be high-wealth individuals is currently 54”.
Membership of the “54” club is confidential. But some of Ireland’s biggest business figures are known to have moved their bases to generous foreign tax shelters. This means they only have to pay tax on Irish earnings and not on their worldwide income.
Denis O’Brien, the telecoms entrepreneur and significant stakeholder in Independent News & Media (INM), is tax resident in Malta. Dermot Desmond, the founder of NCB stockbrokers and another shareholder in INM, is tax resident in Gibraltar.
Michael Smurfit, the paper packaging tycoon, has moved to Monaco while the racehorse magnates JP McManus and John Magnier are both tax resident in Switzerland. The supergroup U2 moved part of their business from Ireland to Holland after the Government capped the tax exemption scheme for artists.
In contrast, Michael O’Leary, the Ryanair chief executive whose wealth is estimated at €438m by rich lists, famously said he is happy to pay his taxes here.
While the official number of “tax exiles” is 10,781, some are people who moved abroad, rent their homes and pay tax here on the rental income. Others are foreigners working for multinationals here, or who have investments here.
Collectively they generated €49m in tax last year although it’s not clear how much the super-rich club of 54 contributed.
The issue of tax exiles has riled the taxpaying public, according to recent research by the Labour Party which showed that tax exiles were one of the main issues exercising voters. The Government plans to examine the issue of tax exiles in the Budget, with Labour pressing to tighten up the residency rules.
To qualify as “non-resident”, they must spend less than 183 days a year in Ireland, or 280 days over two years.
Michael Noonan, the Finance Minister, has been lobbied by business interests claiming that any attempt to tighten tax exile rules would scare off investors. A “domicile levy” of €200,000 imposed on wealthy Irish citizens living abroad for tax purposes raised just €1.6m in 2010.
Gerald Nash, a Labour TD for Louth, said: “While it is a fact that Ireland now has a taxation system that is considered by international standards to be among the fairest in the world, the system at the higher end needs to be radically altered to ensure that exacting standards are applied to so-called tax exiles in terms of their treatment for tax purposes.”