John M. Shanahan: Hooked on Sexual Harassment

[Moxley Confidential] The Newport Beach businessman pays $1.7 million after asking his employee for rough sex

Fate has undoubtedly blessed John M. Shanahan—no more evidence is needed than what happened on Sept. 10, 2001. That day, the colorful Orange County businessman canceled his scheduled Boston-to-Los Angeles flight for the next morning. Shanahan then watched in horror when al-Qaeda terrorists hijacked what would have been his jet and crashed it into the World Trade Center in New York City, killing everyone onboard.

But that kind of luck has charmed Shanahan before and after that terrible event. He's a genuine self-made millionaire on the strength of a rare, wide-ranging creativity and keen entrepreneurship. He's a gourmet chef, accomplished composer, author, historian and owner of more than half a dozen corporations. Thanks in large part to his masterpiece marketing creations—the Dr. Laura radio show and Hooked On Phonics, a reading program for kids—he owns gorgeous estates on both coasts, including a Harbor Island home in an exclusive gated section of Newport Beach.

Shanahan isn't shy, either. He calls himself a "true Renaissance man," flamboyantly greets women with face-cheek kisses, doles out wildly generous bonuses for on-the-ball employees and in 1999 edited a book, The Most Brilliant Thoughts of All Time. Among quotes from William Shakespeare, Nietzsche, Ernest Hemingway and Abraham Lincoln, Shanahan placed his own lesser-known utterances, such as "If you don't bring Paris with you, you won't find it there."

A few other choice phrases of his that didn't make it into that book can be found in the files of two recent court cases. For instance: "Don't you want me to fuck your brains out? Isn't that what you want? Don't you want to go away with me somewhere and have me fuck your brains out? Isn't that what you want?"

Those propositions from the married Shanahan were directed at his also-married then-corporate lawyer, Cheryl Alison Skigin, according to her sworn June 2007 deposition. Shanahan's not-so-brilliant thought, allegedly spoken at a 2003 Christmas party, and other actions—repeatedly squeezing Skigin's buttocks, making graphic comments about her body, lewdly suggesting they have intercourse, and begging her to abandon her husband and her five children to live in a proposed Newport Beach love pad—have cost Shanahan at least $1.7 million. (Apparently, Dr. Laura Schlessinger's stern on-air lectures championing the sanctity of marriage, monogamy and manners failed to temper his desire for extramarital pursuits.)

Upset and disgusted, Skigin—who is an accomplished corporate attorney with a passionate hobby, horseback riding—quit in 2006, filed a lawsuit and, after Shanahan's new lawyers failed to rattle her, collected a $700,000 pretrial settlement. Shanahan also spent $1,026,568 in lawyer fees, then deciding to end the case before it reached a jury.

That might have been a wise move. In court records, Skigin recounted tales of Shanahan being "drunk as a skunk" at public events (including a Dr. Laura birthday party at the Disneyland Hotel in Anaheim), acting excessively friskily with women and harboring anti-Semitic sentiments. Because of his alarming conduct and a secret settlement with one employee, corporate officials debated the need to have good-looking female employees sign waivers stating they had not been "sexually discriminated against or harassed" if they'd been alone in Shanahan's presence.

Perhaps worse, after once failing to lure Skigin to a Paris hotel for sex after the pair had flown to Ireland on business, Shanahan sent flowers and a card to the home Skigin shares with her husband. When she declined his offer for intimacy, he asked her to get drunk with him to reduce her inhibitions, according to court records. Skigin said in her deposition that when that didn't work, he blamed menopause or, absurdly, lesbianism. He also repeatedly noted that she is Jewish, describing her as someone whose opinions should be dismissed because she is from the "desert tribe."

Shanahan declined my interview requests. But in court filings, he has consistently maintained he's done nothing inappropriate and that there are innocent explanations for Skigin's allegations. For example, he claims he sent flowers not as a romantic gesture, but because she had been sick at the time. He inserted into the case file an unchallenged assertion that Skigin herself liked to cuss at work and her favorite word was "fuck." He also says he wasn't drunk at certain events, but rather on powerful prescription drugs for medical issues.

Whatever the truth, Shanahan's feisty attitude likely prompted him to send the $1.7 million bill for the case to State Farm Insurance Co., which held a $5 million homeowners' liability policy on him. State Farm officials, however, determined the issues in the case were exempt from coverage.

In response, Shanahan suggested his alleged conduct with Skigin—for example, grabbing her butt—could be considered "false imprisonment," an idea he apparently believed would trigger the provisions of his policy and require them to pay the bill. Again, the company said no. But rather than let the embarrassing matter die quietly, he filed a lawsuit against the insurance giant. Orange County Superior Court Judge Franz E. Miller eventually granted State Farm's summary-judgment argument that its policy didn't cover "sexual battery."

Shanahan didn't accept that outcome, either. He appealed to a higher court, claiming his "alleged" groping of Skigin and "alleged" attempts to screw the lawyer should be considered unintentional acts. His umbrella insurance policy covered such behavior, he argued.

On March 8, a California Court of Appeal based in Santa Ana considered Shanahan's stances and in an 11-page ruling rejected them all.

"We fail to see how grabbing Skigin's buttock, squeezing it and telling her that its firmness must be the result of all her horseback riding could have been accidental," wrote appellate Justice Eileen Moore on behalf of a three-justice panel that included Richard Fybel and Raymond Ikola. "Speech is intentional."

In a final blow, the justices then ordered Shanahan to pay all of State Farm's legal expenses. The wealthy businessman could roll the dice one more time on his losing proposition. After all, in his book, he celebrated this Oscar Wilde line: "Moderation is the last refuge for the unimaginative."

But does Shanahan really think the California Supreme Court will join his cause?

This column appeared in print as "Hooked On Sexual Harassment: A Newport Beach businessman pays $1.7 million after asking his employee for rough sex."
 

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