By John Helmer, Moscow
Turning modestly paid public office into extravagant personal wealth isn’t provably criminal, particularly not if there’s a decent interval of time between performing the first and scoring the second.
It may be indecent for elected politicians or officials on the taxpayer’s payroll to intend to turn the one into the other. But prying open the intentions of such people for investigation, prosecution, or accountability at election time isn’t easy. Policemen don’t like the job; accountants go shy of it; newspaper reporters may relish it, but lack the means.
These days, though, there is one way to peer into the minds of men on the make – that is to see what they do in their private getaways – houses, boats, aeroplanes. It can also be informative to count how many suitcases they carry at the start of their journeys and how many they have at the terminus.
Media reporters and their editors can be easily deterred from counting suitcases by the watchdogs employed to bark around private property and deter forensic investigation. The extra-legal hacking of telephones and computers, which the Murdoch media have been caught employing in the UK, hasn’t been applied, for example, to examining where ex-prime minister Tony Blair goes on the private jet trips he has revealed to Inland Revenue, the UK tax authority; in a series of reports this month starting with Private Eye and the Daily Mail, the Blair travel logs have been counted as part of ₤8 million in unexplained tax offsets he claimed for last year.
A count of 61 publicly identifiable plane trips in 2011 appeared here.
What has also been intimated is that Blair is hiding something somewhere; for at the costly headquarters of his businesses he maintains in Mayfair, he spends almost no time at all. If he were Russian, it would be natural to guess that he’s been investing his newly earned receipts into residences at locations where the sun almost always shines, and there are minimal taxes for the non-domiciled.
The media interest in Blair Societe Anonyme has been stymied so far in identifying where the money is coming from, and how much, because of an intricate scheme of private partnership structures organized into two parallel holdings with a multiplicity of similar-sounding names. Through these, Blair can invoice his clients and collect fees, but close the accounting to the open records required for filing at the UK company registry. The open books show only consolidated revenue and expenditure totals, with minimal itemization, and a tiny bottom-line. That’s where Blair’s businesses pay their UK tax. Among the foreign governments and corporations known to be paying for Blair’s services, no Russian has been identified yet.
Blair’s political ally, Lord Peter Mandelson (image, left rear), lost his last public office when the Labor Party was defeated in the UK election of May 2010. He then started a publicly registered private business called Global Counsel LLP in November 2010. Investment and operating infrastructure, including London offices, for Mandelson’s Global Counsel come from WPP, one of the world’s largest public relations and advertising conglomerates. WPP owns London PR firms like Finsbury, whose past and current clientele includes Nathaniel Rothschild and Oleg Deripaska (image, right), Rothschild’s investment vehicles Atticus and Vallar, and Deripaska’s Rusal and Basic Element. The non-executive chairman of WPP, an American politico named Philip Lader, is a board director at Rusal.
The clientele for Mandelson’s business has been reported by WPP as “companies with global ambitions in the new emerging markets, as well as forming partnerships in the developed world with businesses who want to move into the new high-growth economies.”
If that sounds like Russia, Mandelson’s long history with Deripaska makes it likely that he’s a potential client, if not already an actual one. So are the connexions of Mandelson’s partner at Global Counsel, Benjamin Wegg-Prosser, whose resume refers to his having been recently “co-founder and Director of Corporate Development of SUP Fabrik, a Moscow-based new media company.” That company’s ownership is also reported to be divided in roughly equal stakes between Alexander Mamut and through Kommersant, Alisher Usanov.
WPP, with a combined ₤7.2 billion ($11.1 billion) in revenues for the nine months to September 30, 2011, growing at almost 6% per annum, reports that it expects decelerating growth in the US and Western Europe to be more than offset by accelerating revenues and profit margins in Eastern Europe, the BRIC countries (Brazil, Russia, India, China), and stock market promoters in the London market like Finsbury.
If Mandelson is climbing aboard the WPP corporate jet to fly to his new clients, he’s probably safe from public scrutiny if WPP buries the cost in its multi-billion dollar operating expenses ($6.4 billion reported for the first half of 2011). Unlike Blair, Mandelson’s offices and luxuries may not have to appear on the Global Counsel balance-sheets in London, so long as they remain offshore and in WPP’s books. And everything’s kosher there.
But what of jet-plane trips Mandelson has taken with Deripaska and Rothschild, before Mandelson Societe Anonyme was registered as Global Counsel LLP; that is, when Mandelson was the European Union’s trade commissioner between November 2004 and October 2008?
In the normal run of his personal affairs, Mandelson would not have to provide fresh public record of when he climbed on, when he climbed off, what he was carrying, and what reason he had for flying in the first place. But Mandelson is a witness in a UK High Court case, which Rothschild has brought against the Daily Mail and its owner, Associated Newspapers. If that isn’t settled this week and buried in confidentiality agreements, the trial opens next Monday, January 23. The witness lists were finalized on January 11.
The direct witnesses to the facts of the case so far identified in the preliminary proceedings include Rothschild himself, because he’s the claimant and because he flew Mandelson on his private jet to Moscow to meet Deripaska on January 30, 2005, and then flew him from Abakan, Siberia, to Brussels on February 1, 2005. In the intervening day, it appears from the court records that Mandelson may have sat in Deripaska’s private jet for a trip between Moscow and Abakan.
Deripaska has also been identified as a principal in the case claims and counter-claims. He was in London very recently, according to Kamal Ahmed, business editor of the Sunday Telegraph. Apart from promoting his views to the Telegraph, Deripaska was reported by Ahmed as saying he was in London to support a Moscow Conservatory student ensemble on a concert tour. Was Deripaska in London to discuss with his lawyers and with Rothschild and Mandelson the impending cross-examination of their business together back in 2005? “Could well have been,” responds the Telegraph editor. Deripaska’s spokesman will not say if he has had recent contact with the two men. At Finsbury, Rothschild’s spokesman Ed Simpkins says there is no comment on the court case details.
Lawyers representing the Daily Mail say they will not release their witness list before the trial begins next week – if the trial begins.
Meanwhile London lawyers for Deripaska, Rod Christie-Miller (image, front left) and Allan Dunlavy of Schillings – who are doubling as the lawyers for Rothschild against the Daily Mail – have been instructed by Deripaska to despatch threat letters to media with the purpose of deterring publication of the results of police and court investigations.
Christie-Miller, Schillings’s managing partner, has dropped bones at the feet of newspaper editors before. Here is one for the South China Morning Post:
From: Rod Christie-Miller [mailto:Rod.Christie-Miller@schillings.co.uk]
Sent: Friday, January 15, 2010 4:43 PM
Subject: United Company Rusal
Not for publication
United Company Rusal
We act for United Company Rusal and understand that the South China Morning Post is considering repeating allegations made by blogger and journalist John Helmer that our client was involved in a plot to threaten or assassinate him. We are aware that your client has provided you with a copy of our client’s formal response, stating on-the-record that such claims are entirely unfounded.
It is harder to imagine more serious allegations, nor ones that, in addition to obviously damaging our client’s general reputation, could have more serious negative ramifications for our client’s business, profitability or corporate activities.
We trust that the SCMP will not allow its pages to be used in this way, and ask that you confirm by return that you do not intend to publish these allegations.
The allegations emanate from Mr Helmer himself. There has been limited repetition of them and several other respectable newspapers have considered the story and not re-published it. The London Evening Standard carried a report on it yesterday and – in confidence – have offered to carry an apology and retraction.
Other than Mr Helmer (who, as can be seen from his blog is a colourful writer, somewhat outside mainstream journalism) our client is unaware what purported verification there can be, or what verification you could believe you have, to support Mr Helmer’s claims.
If you do intend to publish, we ask that you provide our client with full details of the exact allegations that you intend to publish and the verification for the same. You can provide that information through us or via Ms Vera Kurochkina (Vera.Kurochkina@rusal.com).
We look forward to hearing from you.
At the time, when Christie-Miller and his colleagues were asked to say if their threats were intended to prevent lawful investigation of criminal activity – corroborated by government and court documents after the bone was dropped – the Schillings lawyers said nothing.
As the client and the modus operandi of the lawyers are familiar, it is unclear what Deripaska and Schillings gain from the clarifications or retractions they demand. And if Rothschild takes Mandelson and Deripaska with him into the witness-box in the High Court next week, the evidence will speak publicly for itself. Now that’s a barking dog of quite another quality.