Tax-evading Irish lawmaker loses defamation case

DUBLIN – A lawmaker at the heart of Ireland's first major corruption scandal lost a defamation claim Monday against the journalist who broke the story of his illicit gifts, a revelation that has inspired mammoth state probes into the scale of under-the-table lobbying in Irish politics.

A Dublin Circuit Court judge ruled that journalist Sam Smyth had reasonable grounds of evidence to describe lawmaker Michael Lowry as both a liar and a tax dodger.

Lowry's lawyers had sought a judgment that Smyth, one of Ireland's most prominent journalists, had no reasonable defense for his claims and had defamed Lowry as "a thief." They cited Smyth's appearance on an Irish current-affairs show in 2010 during which he described Lowry as the first of many politicians to be caught with his "hand in the till," or cash register.

But Judge Margaret Heneghan said Smyth had provided ample affidavits — including of Lowry's initial 1996 denials of any impropriety in parliament, followed by his later exposure as a tax evader — to suggest his descriptions were based on well-documented evidence.

During his testimony last month, Smyth said the evidence compiled by state fact-finding probes into Lowry "leads inevitably to the conclusion that he is indeed corrupt, dishonest, untrustworthy and both unfit and unsuitable to be a minister and a (lawmaker)."

Smyth and Lowry both declined comment. Lowry's lawyers said they might pursue a fuller hearing of their complaint in a higher court.

In 1996, Smyth revealed in the Irish Independent newspaper that supermarket baron Ben Dunne had provided secret gifts to Lowry and former Prime Minister Charles Haughey. Lowry, a Cabinet minister in the mid-1990s, also owned a commercial refrigeration company that had contracts with Dunnes Stores, Ireland's biggest supermarket chain.

Lowry denies a growing list of allegations from a series of judicial probes since 1997 that he traded favors with businessmen in exchange for secret gifts and investment privileges.

But two taxpayer-financed probes into Lowry's business dealings and personal investments have determined that Dunne did pay, as Smyth reported, for construction of a new euro500,000 ($700,000) wing on Lowry's family home. Lowry and his company in 2007 paid euro1.4 million ($1.9 million) in unpaid tax and penalties linked to that undeclared gift as well as two offshore bank accounts.

Lowry denies providing any political favors for Dunne, who admits he also gave Haughey — Ireland's prime minister in 1979-82 and 1987-92 — at least euro1.65 million ($2.25 million).

Lowry is continuing to fight a 13-year investigation into his alleged dealings involving Irish telecoms tycoon Denis O'Brien and multimillion property purchases in Ireland and Britain.

Secret gifts to politicians were not explicitly illegal under Ireland's ill-drafted corruption laws until 1997, when the government drafted new rules and restrictions in response to public uproar over Haughey's gross profiteering while in office. Haughey died in 2006 after paying euro6.5 million ($9 million) in overdue tax and penalties on his 1980s and 1990s gifts from businessmen.

Lowry was forced out of Ireland's Fine Gael party in 1997. But voters in his North Tipperary district have re-elected him to parliament as an independent for the past three elections.

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Online:

Current corruption probe, http://bit.ly/dWAuQz

Lowry's political site, http://www.michaellowry.ie/

(This version CORRECTS Adds full quote from journalist's testimony. Corrects that case involved alleged defamation, not libel; the name of court; and the judge's title. Rewrites headlines. This story is part of AP's general news and financial services.)