..and the hidden scandals?

Political self-harm
Is the British body politics about to cannibalise itself.

Lib-Dems aspirant leader Chris Huhne has reported Labour to the police. Will police inquiries become a new arena for party point-scoring ? Other parties will retaliate. Police time will be wasted and the reputation of British Politics will be unjustly dragged through the mud again. It's irritating that every Labour scandal, real or imagined, is exaggerated. Other parties problems are downplayed or ignored.

Elfyn Llwyd MP referred to Labour this morning as having 'their hands in the till.' If true, it's our till. Elfyn has a short term memory problem if he has forgotten that he and two other Plaid immaculates  were found guilty last week of grabbing £5,000 each from the taxpayers' till. There may well be breaches of the law in this piece of shameless  chicanery. Another job for PC Plod?

In 1997 I repeatedly raised the funding of William Hague's leadership campaign. £20,000 came from the managing director of the controversial City Mortgage Corporation, David Steene. The City Mortgage Corporation has been criticised for charging some clients penal rates of interest. The City Mortgage Corporation lends to homeowners who have been turned down by other mortgage lenders under contracts which allow for increased rates if borrowers fail to make a payment. In one case, a man was charged 9 per cent interest until he missed a payment and then it jumped to 18 per cent." This was dirty money that Hague should have repaid. He did not. The media were not interested. Could the police have helped shed a little light?

The role of the Midlands Industrial Council in funding Conservative party activity has not been investigated by the police. In essence, by giving money to the MIC rather than directly to the Conservative party, it has allowed big donors to remain anonymous. The MIC in turn, after receiving these anonymous donations, funds Conservative campaigning. After public pressure, they’ve published a one-off list of their currently active members - but won’t say who else has given money in the past or that they’ll publish names of new donors in the future. Time for the police to probe?

THE Liberal Democrats were criticised from their own ranks   over a decision to accept £2.4 million from a company owned by a Swiss-based financial business. The donor Michael Brown was jailed for two years. The Electoral Commission cleared the LibDems of 'bad faith' but left open the  separate issue which is still under investigation: was the money that Michael Brown gave to the Lib Dems his to give away. Anyone reported this to the police?

 

Lord Ashcroft, the multimillionaire bankrolling the Conservatives' controversial campaign in marginal constituencies is under increasing pressure to explain whether he has honoured pledges, made before he received his peerage, that he would return to the UK and pay income tax. One promise that he would return was made by the then Tory leader, William Hague, in order to secure the peerage more than seven years ago. A similar assurance had already been given by Ashcroft himself when he settled a libel action with the Times newspaper.

However in 2004, five years after the assurances were given, Ashcroft's main residence was declared in the House of Lords expenses register to be the central American tax haven of Belize, thousands of miles beyond the reach of HM Revenue and Customs. Should the police investigate whether any  law has been broken?

Tory peer, Lord Laidlaw, who has taken a leave of absence from the House of Lords after he took no action to change his tax-exile status in Monaco. The House of Lords appointments commission imposed the condition in approving his appointment in 2004 but has no powers to take away this peerage. The Conservative party confirmed that despite Lord Laidlaw's enforced leave of absence, the party had not removed the Tory whip from him. I don't remember any headlines in the Daily Telegraph on this one.

There is bit of suspicion about the Tories' arrangement to sell their HQ in Smith Square. The Party continues to own 32 Smith Square, having recently purchased the freehold of Smith Square and the adjoining 67 Tufton Street, and is continuing to review options on its future use.

The party has been negotiating to sell the freehold to their historic headquarters in Smith Square, together with adjoining offices in Tufton Street, for an estimated £30m. Yet they acquired the freeholds on both properties in March this year for £15.56m, after obtaining a loan from the Allied Irish Bank.    Tory officials have declined to reveal the identities of either the businessmen who sold Smith Square to them in March or any company in the process of purchasing it. Now it is back in the news. In a wide-ranging on Tory fund-raising, the Independent on Sunday names Christopher Moran as one of those involved in the transaction. He was expelled from Lloyds in 1982 for 'discreditable conduct'.


The Sunday Times  article claims that the "party accepts money from a number of unknown or obscure organisations, trusts and companies — devices, it is claimed, that are used to avoid public scrutiny of donors." A Tory spokesman said the party had signed a confidentiality agreement with the new owner at their request, but he said they were not party donors. It is just they have asked for their name not to be disclosed."  The Electoral Commission decided it was a  commercial transaction. Would the police agree?

On June 29th this year a cash for peerages complaint was made to Deputy Commander Yates about Tory cash for peerages. It was disposed of by October 10th without any arrests,  lurid headlines, dawn raids, press coverage of arrests before their were made. The complaint against Labour took 16 moths to resolved. There was never any practical chance of a prosecution. But great damage was done to the reputation of the Labour party and of British politics.

Reform
Opposition parties hellbent on using the police to fight political battles may well themselves be burnt. I am proud that Labour in 2000 introduced the best reform in political funding transparency laws. Irritated, bewildered and ashamed that by our stupidity not our greed, we have embarrassed ourselves.

Comments

[paulflynn]

Tbat's fascinating. The Public Administration Committee is looking at lobbying at the moment. it might be worthwhile inviting the writer or the subject of the above to drop in for a friendly chat with the committee.

[Adam]

It was sent to me by journalist Greg Palast on an e-mail newsletter. He is an American journalist, he does reports for Newsnight and the Gaurdian.

He has a website- Gregpalast.com which I think will have the article.
The article was entitled 'Brown's Fixer Explains How its Done'. It was originally in the Guardian about nine years ago I think.

Here is the article:
----------------------------------

Brown’s Fixer Explains How It’s Done:
Jon Mendelsohn and the Secret Tape

Boasted £11 million donated by Tesco cut tax bill by £20 million
by Greg Palast
For the Guardian On Line

It was a stunning admission. Prime Minister Gordon Brown’s crony explained to the U.S. businessman, in evil detail, exactly how the fix is done in Britain.

Unfortunately, for Jon Mendelsohn and his partners, the “businessman” was, in fact, an undercover reporter for The Observer of London.

Today, Brown’s foes are calling for Mendelsohn’s resignation as chief fundraiser of the Labour Party for his admitted knowledge of £630,000 ($1.2 million) in dodgy, possibly illegal, campaign contributions to Labour.

What’s odd here are the protestations of shock at the behavior of Mendelsohn, described in the Guardian as an “ethical” lobbyist. “Ethical” my arse.

It was exactly nine years ago that Mendelsohn and his lobby firm partners were caught trading cash for access. How this Mendelsohn character ended up heading Labour Party fundraising and how he obtained the sobriquet ‘ethical’ is the real shocker.

I know a few things about this Mendelsohn. The “businessman” with the hidden recorder was me. In June 1998, joined by my recorder and a real US businessman, Mark Swedlund, who designed my elaborate corporate front, I met Mr. Mendelsohn at his tony Soho London office. There Mendelsohn confirmed what was already on tape from his partners in the lobby firm he founded, LLM.

I explained my corporate needs: some environmental rules needed bending. I hinted I was with Enron. Mendelsohn’s partner Neil Lawson told my recorder that, if I paid LLM £5,000 to £20,000 per month, “We can go to anyone. We can go to Gordon Brown if we have to.” Brown was at the time Chancellor of the Exchequer. Could the lobbyist provide concrete examples of a fix?

Easily. Here is a short list of LLM claimed accomplishments:

- Inside information on then-Chancellor Gordon Brown’s budgets.
- Tax avoided by a supermarket chain following millions donated to a New Labour pet project.
- A pass on anti-trust action against client Rupert Murdoch’s media empire.
- And for Gordon Brown, a favor that the Mendelsohn team expected to redeem.

Tesco Goes Tax-Free
LLM, which stands for the founders Lucas, Neil Lawson and Mendelsohn, were about to derail Brown’s plan for a tax on car parks (”parking lots” as we say in the States). This would cost Tesco, the supermarket chain, an LLM client, £20 million annually. LLM was holding secret meetings that week in June 1998 with Tony Blair’s Downing Street Policy Unit to get Tesco exempted from the proposed tax.

The tax threat went away after LLM advised Tesco to drop £11 million into funding for Blair’s odd Millennium Dome project.

[To my US readers: The Dome is a gargantuan tent costing $100 million - no kidding.]

“This government likes to do deals,” Lucas told me.

But this deal was complex, Mendelsohn said, not so simple as cash paid for a tax break. “Tony is very anxious to be seen as ‘green’,” Mendelsohn explained to me and my confederate. “Everything has to be couched in environmental language - even if it’s slightly Orwellian.” So LLM devised a set of cockamamie gimmicks for Tesco, like offering bus services to the elderly, which would paint the retailer green.

It worked. Tesco was spared the tax - though the company denies categorically that its cash dumped into the Dome bought any favors.

Message for Murdoch
The year of my paper’s original investigation (dubbed, “Lobbygate”), anti-trust authorities were looking into Rupert Murdoch’s companies’ alleged predatory pricing practices. LLM carried the word from Downing Street, according to Lucas, that, if Murdoch’s tabloids toned down criticism of new antitrust legislation, the law’s final language would reflect the government’s appreciation. On the other hand, harsh coverage in Murdoch’s papers could provoke problems for the media group in Parliament’s union-recognition bill.

The message to muzzle journalists was not, said Lucas, “an easy one in their culture” - journalists being a trying lot. However, the outcome pleased LLM clientele.

A Peek at the Budget
It also happened that on one of the days I recorded Mendelsohn’s partners, they boasted of informing an LLM client about details of Gordon Brown’s budget plans before the Chancellor’s announcement went public.

A lobbyist competing for my “business,” when asked to match the offer of inside information and deal-making held out by LLM and another New Labour firm said, “It’s appalling. It’s disturbing,” and added that he would refuse to match LLM’s services at any price.

If LLM appeared favored by Brown’s operation, Brown himself received favors from LLM. “Gordon Brown asked us to have our client KPMG [the consultancy] host a breakfast for him where it was pre-arranged that they would praise him for his prudent budgets.” Brown basked in this Potemkin praise-fest - a favor that would be returned with special access (for my own clients, if I paid the retainer).

Whether Mendelsohn, Lawson and Lucas actually pulled off all they claimed, I can’t say. Though just kids in their twenties, LLM had garnered millions in revenue, a lot of loot if for mere advice. No one seriously investigated; no one asked uncomfortable questions of Mr. Brown, Mr. Blair or the man at the center of several of these supposed “deals,” Mr. Peter Mandelson, now an EU Commissioner.

However, that Mendelsohn made these tawdry claims (or grinned at me while his partner made them), and that they were published on page one of every newspaper in the realm - part of an LLM tape broadcast on BBC’s Newsnight - one would think that perspicacious Mr. Brown would have avoided Mendelsohn like the plague.

But the PM embraced Mr. Let’s-Make-A-Deal. The reason was made clear to me by Mendelsohn himself, a man as brainy as he is cynical and wealthy. Those many years ago, at the dawn of the Blair regime, Mendelsohn handed me a confidential manifesto he’d penned for LLM clients only. It was a map of the soul of New Labour.

Here was a chilling combination of Mendelsohn, Mandelson and Nietzsche. “AN OLD WORLD IS DISAPPEARING AND A NEW ONE EMERGING,” he announced in upper case. In the “Passing World” were “ideology” and “conviction” - which would now be replaced by “Pragmatism” and “Consumption.” “Buying” would replace “Belief.”

And ultimately, in this Brave New Labour World, style was all: “WHAT YOU DO,” wrote Mendelsohn, was passé, replaced by, “HOW YOU DO IT.”

So why demand Mendelsohn’s head now? Gordon Brown is a prudent man whom, I suspect, reads a newspaper or two - and knew exactly whom he had positioned to fill his party’s coin sacks. Mendelsohn is just a gun for hire, a forgettable factotum. I wouldn’t place the blame on the hired gun, but on the man whose finger is on the trigger.

[Paul Flynn]

Have not seen this Adam. What's the source? Sounds interesting.

[Adam]

How about the one where Labour Chief Fundraiser Jon Mendelsohn was caught by undercover reporter Greg Palast trying to sell favours to big business for cash
Article: Brown’s Fixer Explains How It’s Done:
Jon Mendelsohn and the Secret Tape

Posing as a business executive, Mendelsohn's company LLM offered a range of services, past accomplishments cited where:
- Inside information on then-Chancellor Gordon Brown’s budgets.
- Tax avoided by a supermarket chain following millions donated to a New Labour pet project.
- A pass on anti-trust action against client Rupert Murdoch’s media empire.
- And for Gordon Brown, a favor that the Mendelsohn team expected to redeem.

[Adam]

How about the one where Labour Chief Fundraiser Jon Mendelsohn was caught by undercover reporter Greg Palast trying to sell favours to big business for cash
Article: Brown’s Fixer Explains How It’s Done:
Jon Mendelsohn and the Secret Tape

Posing as a business executive, Mendelsohn's company LLM offered a range of services, past accomplishments cited where:
- Inside information on then-Chancellor Gordon Brown’s budgets.
- Tax avoided by a supermarket chain following millions donated to a New Labour pet project.
- A pass on anti-trust action against client Rupert Murdoch’s media empire.
- And for Gordon Brown, a favor that the Mendelsohn team expected to redeem.

[Adam]

How about the one where Labour Chief Fundraiser Jon Mendelsohn was caught by undercover reporter Greg Palast trying to sell favours to big business for cash
Article: Brown’s Fixer Explains How It’s Done:
Jon Mendelsohn and the Secret Tape

Posing as a business executive, Mendelsohn's company LLM offered a range of services, past accomplishments cited where:
- Inside information on then-Chancellor Gordon Brown’s budgets.
- Tax avoided by a supermarket chain following millions donated to a New Labour pet project.
- A pass on anti-trust action against client Rupert Murdoch’s media empire.
- And for Gordon Brown, a favor that the Mendelsohn team expected to redeem.

[Peter Black]

Jackie Ballard is now Chief Executive of the RNID.

[Paul Flynn]

Thanks Peter. I have changed it.

[Paul Flynn]

Thanks Chris. Peter Bradley was probably ousted by the CA. So was Jackie Ballard the present CE of the RSPCA. The CA use their unlimited funds to buy influence. A joy see the Lords turning down their appeal against the Hunting Act. I hope it cost them a fortune.

[Paul Flynn]

Thanks Kevin. There has been a vast amount of mis-information on taxpayer funding. I did a phone -in in favour on the Jeremy Vine show a couple of years ago. After I had said my piece and was off the air, Jeremy asked callers "Would you like to pay £30 a year to political parties?" There was no chance to refute this wild exaggeration. 3p would be on the high side. But this is probably the settled will of the people. The Trusts are a real possibility. There are a lot of them, many are very pich and this is a 'pro bono' cause

[Kevin Ward]

The reality is that the funding of politics in this country is an unholy mess - it's one of the reasons why there is so little public trust in our politicians.
This should not be a time for party point-scoring. It should be a time for the party leaders to get together and find a better way forward.
I'm loathe to suggest anything that adds to the tax burden but political campaigns funded by the public purse must be better than the current system. Wealthy individuals and organisations have too much potential influence over policy in all parties.
The process may be more transparent but it's not transparent enough as this week has shown.

[Peter Black]

I know that they are difficult to tell apart but it was Chris Huhne who reported Labour to the police.

[Chris Gale]

The press and media also ignore the support the Tories get from the 'Vote Ok' organisation (Countryside Alliance front organisation) which goes into constituencies and does most of the work,never mentioning who they really are.