‘If you look at Mandelson’s known clients a lot of them are close to “tame oligarchs” – people who might be fearful of [Vladimir] Putin [of Russia] but support him. This has enabled him to scoop up business in the area that Blair cannot do business.’

– A FORMER LABOUR CABINET MINISTER.

One of Tony Blair’s closest friends was Peter (now Lord) Mandelson. He is credited by Blair himself as one of the three architects of New Labour. As Blair wrote to him when he resigned from his first government over the home-loan scandal in 1998, ‘It is no exaggeration to say that without your support and advice, we would never have built New Labour.’

Now, nearly two decades on, the two longstanding friends are no longer that close and it is Mandelson who is distancing himself from Blair, not vice versa. Sources say that Peter is becoming increasingly disillusioned with Tony’s pursuit of wealth by advising repugnant dictatorships and corrupt regimes with terrible human-rights records. He is said to believe that these actions are toxic for the New Labour project, since it puts its principal architect in an appalling light.

One source suggested that Mandelson had returned to his old tricks of secretly briefing journalists – but this time against Blair for seeking to advise the new authoritarian Egyptian government of General el-Sisi. Mandelson had previously supported the deposed Egyptian President Mubarak. A report in the Telegraph revealed the connection.1 It said that he wrote to the Egyptian ambassador in London, Hatem Seif El Nasr, who contacted the then-Minister of Foreign Trade in Cairo, Rachid Mohamed Rachid, on 31 January 2011 outlining Mandelson’s offer.

El Nasr’s letter, written in Arabic and bearing the Egyptian government seal, stated that Lord Mandelson was

establishing a new international company of his own for economic advisory to render support and economic consulting for businessmen and enterprise.

The new company aims at renewing and reintroducing the commercial franchises to new communities, and helping grand agencies and organisations to accomplish new goals and make use and adapt with the globalisation consequences on these companies.

The article also points out that

On Feb 1, Lord Mandelson wrote to the Financial Times in support of the Egyptian regime as it clung on to power in the face of mass demonstrations and violent clashes which left at least 846 dead. Mubarak was ousted on Feb 11, 2011.

In the letter, he defended ‘reformers’ in the regime, including the president’s son, Gamal, saying the president was a ‘civilian façade’ for the security forces while his son was ‘the leading voice in favour of change’.

Now Blair is advising el-Sisi, who overthrew the elected Mohamed Morsi and the Muslim Brotherhood as reported in the Guardian.2 The same article quotes a source as saying,

Others speak of Mandelson resenting that he never got one of the top jobs in a Blair cabinet because he felt he had to sacrifice himself to save the government from embarrassment – particularly with his second resignation over whether he had helped the Hinduja brothers obtain a British passport.

What is officially clear is that the main lobbying and strategic-advice company behind Peter Mandelson’s wealth, Global Counsel, wants to distance itself from Tony Blair Associates, the driving force of Blair’s business activities. And that is even though it employs some ex-Blairites itself.

Maree Glass, chief operating officer of Global Counsel, put the difference clearly when this question was put to her: ‘As you’ll see from our research we help our clients understand global political and regulatory trends. You should also note, as has been explained to many journalists, that Global Counsel does not work for governments.’

The big question is whether such a rift is motivated by genuine anger that Blair has moved from his original New Labour project just to make money; jealousy that he has been more successful than Mandelson; or a row generated by rival business strategies clashing like Titans across the globe. What is obvious is that there are similarities in their operations, lifestyles and some of the structures of their different organisations.

Mandelson has also, like Blair, never shied away from wanting to be wealthy. As he said in a famous quote, he was ‘intensely relaxed about people getting filthy rich as long as they pay their taxes.’

More recently, in an age of austerity for the masses, he has tried to row back. Speaking on BBC Radio 4’s Today programme in 2012 after the publication in Davos of a think-tank report on the future of globalisation, Mandelson said, ‘I don’t think I would say that now. Why? Because amongst other things we’ve seen that globalisation has not generated the rising incomes for all.’

 

Mandelson’s Global Counsel does strategic lobbying and is backed by the international communications giant WPP.

‘The company will focus on establishing a client base among 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,’ said a WPP press release on 9 December 2012.

WPP was set up by Sir Martin Sorrell in 1985 (its original title was Wired and Plastic Products Ltd) and is now an international marketing company employing 170,000 people worldwide. It includes brand advertising names such as JWT (J. Walter Thompson), Ogilvy and Mather, Young and Rubicon and lesser known ones in Latin America such as Gringo, as well as having a stake in Today Advertising in Burma. Its parent company is now in the offshore tax haven in Jersey, though it moved its HQ back to the UK from Ireland in 2013.

Sorrell is a somewhat controversial businessman who has defended huge salaries for top executives (his was £6.77 million in 2011, up from £4.23m in 2010). His total package, according to 2103 accounts, was worth £29.9 million; this includes his salary, pension, short-term and long-term incentives and benefits including a company car, private health insurance and a housing allowance. This obviously fits in well with Mandelson’s definition of being ‘relaxed about people getting filthy rich’. His peerage and his only two government posts, ambassador for British business and membership of a government advisory committee on management excellence, all came during Blair’s first term of office. He also has a link with Bernie Ecclestone – the man who controversially donated £1 million to New Labour under Tony Blair just at the point when the government was looking at banning tobacco advertising on motorsports – as he is a non-executive director of Formula One. WPP employed people with long-term links to both Blair and to Mandelson in Whitehall.

Global Counsel was founded by Mandelson. Benjamin Wegg-Prosser (his old special adviser in Whitehall) became its managing partner. He has recruited former senior civil servants from the business department to work with him at the lobbying company and one of them, Stephen Amos, became a partner in March 2013. The company’s latest filed accounts for 2013 show that it has assets of just under £1 million.

Mandelson’s financial arrangements and his business dealings ape Blair: convoluted, secretive and aimed to avoid public scrutiny. He has two companies – one for his personal finances and another for his business activities. Both hide details of his income. What is interesting is that the structure of his companies, while not as obtuse as the structure set up by Blair to cover his business dealings, still prevents people from finding out his clients and sources of income.

He has also resisted all attempts by the House of Lords to make him disclose his clients in its register of interests, claiming he is providing strategic advice, not acting as a lobbyist, which would require him to declare them. When this was challenged, he said he would still not declare the clients because his business was part of remunerated employment. And so far he has got away with this.

 

The first company is Willbury. It has two directors, Mandelson himself and his longstanding Brazilian life partner Reinaldo da Silva. But Mandelson is the sole shareholder, suggesting that the money that comes into the firm is entirely from him. The company takes advantage of all the ploys to hide wealth and maintain privacy. It has to file only abbreviated accounts – so none of the details of the fees he receives have to be disclosed, whether it is for his speeches or his book.

His accountants are MHA MacIntyre Hudson. This is an old-established but rapidly growing company acquiring firms through a series of aggressive mergers, with international clients.

Mandelson channels all the money he makes from his speeches and trips he has to declare to Parliament into this company. In 2012, most of his speeches were to bankers and investors such as the London Metal Exchange, Barclays Capital and the Asset Based Finance Association. These have to be declared in the House of Lords register of interests. His latest entry in 2015 does not include payments for any speeches.

The accounts show that his income has been substantial. Over the two years 2010–11 and 2011–12 it was in excess of £1 million. Mandelson seems to have drawn out some £274,000 from the firm. By 2013–14 it was still in excess of £1 million and the accounts show that it made Mandelson a £400,000 advance during that financial year.3 The purpose of the loan is unclear, but it was not paid back in the year and would, according to tax adviser Richard Murphy, legitimately lessen his tax bill as he does not have to pay tax on the loan if he pays interest at a rate specified by HM Revenue and Customs.

His memoirs, The Third Man, are alleged to have netted him £500,000. The accounts suggest that speculation that he may have got £150,000 are nearer to the mark, and, if The Times paid £350,000 for the serialisation, it suggests much of the money would have gone back to the publisher against the advance, leaving Mandelson with about £350,000.

The company has one other very interesting member, who links Blair and Mandelson. The company secretary is Maree Gail Glass, who, as we have already seen, is the COO to Global Counsel. Between 2008 and 2010, she worked as personal assistant to Mandelson in the Department of Business. But also significant is that she worked in the private office team for Tony Blair. She could not be a more trusted person to keep details of Mandelson’s finances discreet and is another link to Blair.

 

Mandelson established Global Counsel with his old special adviser and longstanding friend Benjamin Wegg-Prosser. Originally set up as a limited company by both of them with 4,505 shares on 29 May 2010, twenty-three days after Labour’s defeat in the 2010 general election, it had, by 23 November that year, been dissolved and transformed into a far more secretive and less disclosing limited-liability partnership.

Its accountants and official registered office were, again, MHA MacIntyre Hudson and, again, both Mandelson and Wegg-Prosser register their official addresses with the company, to avoid disclosing their home addresses. Indeed Wegg-Prosser’s Russian wife Yulia, has also registered her address there to avoid people finding out where they live.

As well as Maree Gail Glass, Global Counsel also employs Geoffrey Norris, an adviser with a long track record as a Blair adviser. Norris was both a former government adviser close to Tony Blair and later Gordon Brown when he was PM, and a strident advocate of nuclear power. From 1992 to November 1994 Norris advised Robin Cook when he was Shadow Trade and Industry Secretary and before that he advised Cook on health policy. He then moved to become industry policy adviser to Tony Blair when Blair was still Leader of the Opposition.

In May 1997 Norris was appointed Blair’s special adviser responsible for trade, industry, energy, employment and planning. He has stayed close to Blair ever since. On the Global Counsel website Norris describes himself as an expert in energy and industrial policy, who ‘has been at the heart of business policy-making in the UK for the last decade’ and ‘was one of the key architects of Britain and Europe’s current approach to energy policy and climate change’.

In 2008 he became a special adviser at the UK Department of Business under Lord Mandelson when Gordon Brown offered the peer a place back in government. When he took up the post at Global Counsel, the Advisory Committee on Business Appointments which approved his move said he could not use any information he had gained inside Whitehall for two years to gain preferential business for his new boss.

Even for Blair’s special advisers, Norris was considered extremely close to Blair. The closeness rankled with the former Deputy PM John Prescott, who when once asked by the BBC about Norris said, ‘Who’s Norris? Mr Norris is an official in the department. We sometimes call them teenyboppers. You know what I mean?’

Norris was said to be a strong supporter of nuclear power and pushed the nuclear case extremely hard and, along with the government’s Chief Scientific Adviser, Sir David King, persuaded Blair to back it.

In March 2005, the Independent on Sunday reported: ‘Within government, Geoffrey Norris, Tony Blair’s special adviser on industry and business, is pressing the nuclear case. It is understood that he was instrumental in the creation of the DTI’s Future for Nuclear team.’ One Whitehall source told the paper: ‘Norris has fought hard to keep nuclear on the agenda.’4

By 2008 Norris and his colleagues had held at least nine secret meetings at Downing Street with the bosses of nuclear energy companies while the government was formulating controversial plans for nuclear new build. The Independent on Sunday reported that

no official records were kept of the discussions with the companies, which stand to profit from Gordon Brown’s announcement last Thursday [10 January] that he was approving a new generation of nuclear power plants.

The Government initially tried to block details of the meetings requested under the Freedom of Information Act. However, last week it revealed that Geoffrey Norris, Gordon Brown’s energy adviser, met bosses from EDF, British Nuclear Fuels (BNFL), E.ON and British Energy at a crucial phase in the Government’s deliberations. Confirmation that there are no official records of the meetings adds to concern that certain advisers can operate outside the rules of government accountability.5

But, as well as employing true Blairites, Mandelson copied another employment practice by Blair: employing people from Whitehall who were loyal to him in government. Just as Blair employed his trusted aide Ruth Turner from Downing Street in top jobs in the Blair Faith Foundation, Mandelson recruited civil servants who worked closely with him at the Department of Business and in Europe. An example is Duncan Buchanan, who was hired by Peter Mandelson when Buchanan was the twenty-eight-year-old head of the South Asia unit of UK Trade & Investment (UKTI), a government agency. Buchanan, who was responsible for testing the waters for British companies in India, Pakistan, Sri Lanka, Bangladesh and Afghanistan, left the civil service to take up his new position.

According to the Guardian, the decision to hire Buchanan ‘suggests that Mandelson plans to target Asia. Any suggestion that he is exploiting business opportunities in Afghanistan would be highly controversial, given his close relationship with Tony Blair, the prime minister who took the UK to war against the Taliban.’6

Buchanan, an Oxford graduate, worked for Mandelson as his private secretary in 2008 and 2009, but he spent the following two years in China and then India, the base from which UKTI monitors trade and investment opportunities in the wider region. He is understood to have sent a round-robin email to colleagues announcing his decision to move into the private sector. In the email, Buchanan said he intended to work in ‘emerging markets’, but refrained from mentioning the name of his new employer.

Buchanan is described by colleagues as ‘a good operator’ and ‘resourceful’. In 2012 he wrote a blog about his first impressions on arriving in China and the difficulties he faced. ‘I’m reminded of the old truism – anything worth doing takes effort (or, euphemistically, “the juice is worth the squeeze”),’ he wrote.

A source said: ‘Peter [Mandelson] is happy with how things are going with Global Counsel and is scooping up civil servants who he rated in government and who have the skills and connections to help him in his business.’

Another is Stephen Adams, now a partner, as previously disclosed. His biographical note on the Global Counsel website says,

What it doesn’t quite say is that Adams was one of the closest people to Mandelson, his speechwriter while he was EU commissioner, and according to a ministry insider one of a group of devoted civil servants to the former Business Secretary. He also tried to set up his own company, Whetstone Partners, from his home address in Reading, which did not come to anything, and then joined Global Counsel.

Mandelson’s financial expertise is represented by Dan Conaghan, author of a devastating insider book on the Bank of England and a former Telegraph journalist. Neither role is mentioned by Global Counsel. According to its website,

Conaghan has extensive experience in corporate finance and asset management. Previously, he was a director of Glendevon King Asset Management, a London-based investment management company specialising in fixed income funds. Before joining GKAM, he was a director of KC Capital, a corporate finance company focusing on healthcare and leisure transactions. Prior to this, he was a director and member of the investment committee of NewMedia Spark PLC (now Spark Ventures PLC). In addition to his role as a Senior Adviser he is also a Director of Global Counsel Advisory Ltd.

What is particularly interesting is where Mandelson does his business and whom he has recruited to do it. One Labour source, a former cabinet minister, definitely believes that the relationship between Mandelson and Blair is now dominated by rival moneymaking dynasties. He has an interesting explanation.

‘When Blair was in government he was close first to Bill Clinton and then George Bush. If you look at Blair’s government clients, the vast majority are in the American sphere of influence in the Middle East and the various Stans [e.g. Pakistan, Afghanistan] and Africa. The one area that these people would not want Blair to work for is the Russians.

‘If you look at Mandelson’s known clients a lot of them are close to “tame oligarchs” – people who might be fearful of [Vladimir] Putin [of Russia] but support him. This has enabled him to scoop up business in the area that Blair cannot do business.’

If you look at Global Counsel and some of its private newsletters, such a thesis stands up. For a start Mandelson has recruited people for their Russian expertise.

One example is Alexander Smotrov who, according to the Global Counsel website, ‘has a background in political, international and business journalism, covering energy, EU–Russian relations and Russian businesses across the globe. Previously, he was chief UK correspondent for the leading Russian news agency RIA Novosti between 2003 and 2013. Prior to this, he worked for RIA Novosti in Moscow.’

His LinkedIn profile describes him as responsible for delivery of Russian projects; managing specific Russian clients; monitoring Russian political/business developments; support on major international issues; non-UK media and publicity work.

The other is Miranda Gilbert, who according to the Global Counsel website, ‘researches European and Russian media and political trends. She is also responsible for marketing. Previously she has lived and worked in Moscow and has a degree in Russian from Oxford University.’

But the real linchpin in the Russian operation is one of Mandelson’s most loyal and longstanding colleagues and friends, Benjamin Wegg-Prosser. Mandelson and Wegg-Prosser have known each other well for nearly twenty years, not long after Wegg-Prosser left Sheffield University in 1995 with a politics degree. Since 1995 Wegg-Prosser has been Mandelson’s research assistant in the Labour Party and his special adviser in the Cabinet Office and the Trade and Industry Department until Mandelson’s resignation in 1998.

After that he went into publishing, becoming deputy communications director for Pearson. He later purchased Slate, an online US news company from Microsoft and planned an online rival to the Guardian to scoop up lucrative education jobs advertising. This led Alan Rusbridger, editor of the Guardian, to offer him a commercial publishing job, publishing politics on the Guardian Unlimited website and then Education Guardian and Society Guardian. In August 2005 he returned to work for Labour, this time for Tony Blair as director of the Strategic Communications Unit until Blair left government in 2007. The latter has been very useful to boost international business.

He then went to Moscow, first working for a pro-democracy charity and then going on to work as director of corporate communications for SUP Media, an influential online media group, now with offices in Moscow, Kiev and San Francisco, which claims to be followed by 50 per cent of Russia’s online users for news, blogs and sport. It is co-owned by the Russian oligarch Alexander Mamut, a Putin supporter who now also owns the British bookseller, Waterstones.

Wegg-Prosser also has a second limited-liability partnership with Slate UK – the UK arm of the US online business – called BYF. It uses the same accountants, MHA MacIntyre Hudson, using their address. It had a healthy £500,000 in its account in 2012, which appeared to have been distributed between Wegg-Prosser and Slate.

Wegg-Prosser met his wife, Yulia, in Russia – marrying into the Russian elite – and here the links between Mandelson and Russian oligarchs such as Oleg Deripaska become much closer.

She acts as the main link Mandelson has with the oligarchs and cemented the existing relationship he previously had with them through his longstanding friend, the banker and investor Nat Rothschild, by accompanying Wegg-Prosser when he met Rothschild with Mandelson. Otherwise she has one small company, Peredelkino, which specialises in translation services. The latest accounts for the financial year ending 2014 showed it was a very small business with assets worth around £22,000. Her husband is also a director.

Oleg Deripaska, a Russian billionaire, is pretty central to Mandelson’s business in that he has business links with Rothschild. How close they are can be seen in a blog written by Yulia while she was staying with her husband, Mandelson and Rothschild in Klosters, Switzerland, before he set up Global Counsel.

A report in the Mail on Sunday7 described in detail how Mandelson and the Wegg-Prossers stayed in Rothschild’s Klosters villa, boasting about the choice of expensive cars owned by the banking tycoon, including a Ferrari, an Alfa Romeo and a Porsche. She blogged in Russian,

Nat is begging us to drive in his smart-looking Porsche, Ferrari and Alfa Romeo, but my boring boys seat me in the Jeep and we drive to the Fluela Pass, the mountain pass which Jeremy Clarkson regards as Europe’s most beautiful road.

The pass only functions from April until October. We are overtaken by unbelievably beautiful old timers and I have a feeling that we irritate their eyes with our s*** Jeep.

The blog was hastily withdrawn when the Mail on Sunday got hold of it in 2008. It had apparently originally not been thought to have mattered too much, as the original article was in Russian for a Russian audience. Unfortunately, the Wegg-Prossers had forgotten about Google Translate.

Similarly, a libel action brought by Nat Rothschild against the Daily Mail revealed Mandelson’s close relationship with Deripaska. The libel action came as speculation suggested Mandelson had helped Deripaska obtain favoured tariff deals for his huge aluminium business and to help smooth a £500 million deal with the American company Alcoa for Deripaska. The EU reduced tariffs on the imports of aluminium while Mandelson was Trade Commissioner in 2005. Mandelson strenuously denied both allegations.

The report8 described a sauna they attended, along with Rothschild and Mandelson’s use of Deripaska’s private jet to fly from Moscow to Siberia to visit his estate and later the use of Rothchild’s private jet to fly from Davos to Moscow.

The Telegraph reports,

Cross-examining Mr Rothschild, Andrew Caldecott QC, for Associated Newspapers, said: ‘We say that to take extensive hospitality from Mr Deripaska, who was not a close personal friend of Lord Mandelson’s before he took office, was inappropriate. To put him in a position of accepting hospitality and taking private jet flights exposed him to allegations of inappropriate behaviour.

Rothschild replied, ‘I disagree. It was a wonderful weekend and he enjoyed it.’ In his witness statement, he added, ‘This invitation was to Lord Mandelson as a personal friend. It never occurred to me that it could constitute any kind of declarable gift or that he might be exposed to allegations of impropriety. I took him on the flight to Moscow as a friend and not for any business reason.’

Rothschild lost the case. The Independent reported that the judge ruled, ‘So far as Lord Mandelson was concerned the benefit was the trip and the hospitality itself. So far as Mr Deripaska was concerned it was a relationship with the EU Trade Commissioner.’ The judge rejected the notion that Rothschild and Mandelson had flown out as friends, not business associates, and said Mr Rothschild’s behaviour had in part been ‘inappropriate’. ‘That conduct foreseeably brought Lord Mandelson’s public office and personal integrity into disrepute,’ the judge said.9

The Telegraph also reported the judge’s ruling, saying, ‘Mr Rothschild states that he took Lord Mandelson on the trip as a friend and not for any other business reason. I cannot accept that the position was as simple as that.

I accept that Lord Mandelson had no role in the joint venture, which is what the trip was arranged to promote. But I do not accept that there is a clear line between the business and the personal sides of Mr Rothschild’s relationship with Mr Deripaska. They have very extensive business relationships.’10

On another occasion, when Mandelson was back as Business Secretary for Gordon Brown in 2008, Mandelson stayed with Nat Rothschild in Corfu and Deripaska’s yacht was visiting the island. Both Mandelson and then-shadow Chancellor of the Exchequer George Osborne (also a friend of Deripaska) had also stayed on the super-yacht, Queen K – with Osborne revealing Mandelson’s close connections to the Russian oligarch while Rothschild accused Osborne of trying to solicit donations to the Tories there (which was subsequently denied).

Rothschild is also thought by the Financial Times to have helped Mandelson secure the lucrative post of chairman of Lazard International, a part-time job, for an undisclosed sum. The FT reported that the appointment, whereby Mandelson was expected to travel to sort out cross-border issues for its clients, was announced by neither Mandelson nor Lazard.11

Probably a better example of Mandelson’s connections with Deripaska’s companies is the circulation list of people receiving a private newsletter sent out by Wegg-Prosser to more than 350 people, including politicians and clients. The newsletter is said to be a subscriber-only publication, revealing the latest trends and inside information on a variety of political and commercial topics to paying clients. Many of the copies seem to be sent out free of charge, certainly to the people who discussed it with one of the authors, David Hencke.

The list was leaked to the satirical magazine Private Eye, and revealed a number of prominent Russian oligarchs, including those close to Deripaska. One was Oleg Mukhamedshin, deputy chief executive of Rusal, Deripaska’s aluminium company. Wegg-Prosser declined to disclose to the Private Eye if these oligarchs were clients, though was happy to confirm a friendship.

More interesting was the content of some of the private newsletters – which are supposed to give strategic advice – that have been leaked to the authors. Two seem to suggest that Global Counsel has to do a delicate balancing act between not offending Putin and offending British firms they may advise.

One paper was about an oil deal – sanctioned by Putin and between BP and Rosneft – over extracting oil in Russia. The report describes the deal as ‘skewed in favour of the Kremlin and its allies’ – with the aim of the Russian state having more control over its resources but still having access to BP’s technical expertise to extract the oil by having a smaller stake in the oilfield. Given that BP is a subscriber to the newsletter, the analysis highlights the problems facing the company and tries to steer a middle course between Mandelson’s Russian oligarch connections and not offending Putin, while being honest about the problems BP faces.

It concludes:

One high profile acquisition in the most prominent sector in the Russian economy cannot be taken as a definitive sign of Mr Putin’s vision for the Russian economy, let alone some kind of evidence for a return to Soviet-style control. Like the furore over the jailing of the Pussy Riot singers, his renewed emphasis on orthodox values and the creation of a new agency to inspire patriotism in young people, the move is part of Putin’s political balancing of his own instincts, his reading of Russian politics and the factions around him. Whether this assertiveness in the economic and social spheres is a product of Mr Putin’s confidence or insecurity is hard to tell.

MANDELSON IN CHINA

Other newsletters are more partisan. One paper, on China’s refusal to cut aluminium production, is heavily sympathetic to Deripaska’s attempt to enter the market and contains critical coverage of the failure of rival Rio Tinto Zinc in another deal, which ended with the departure in January 2013 of its chief executive Tom Albanese. The briefing on Albanese’s sacking is interesting, given Wegg-Prosser’s and Mandelson’s close connections to Deripaska, Deripaska’s own company Rusal, and his interest in the aluminium company Alcoa. Albanese’s sacking was widely reported in the press and attributed to a bad deal in Mozambique. The briefing covers and analyses part of the information found in the Daily Telegraph and elsewhere.

The new information in the briefing paper talks of how China’s heavily state-subsidised aluminium production affects all commercial aluminium companies worldwide – including Russian interests. It provides a lot of detail but is basically a sophisticated rant about China using its nationalist self-sufficiency interests to have overcapacity, preventing ‘a new source of demand for western and Russian producers’:

By shielding Chinese producers from failure, or even from the sharp capacity cuts that producers in the US, Europe and Russia are undertaking to sustain profitability, the Chinese system is absorbing losses that are falling on private market players elsewhere. All the major global producers including Rusal, Rio Tinto Zinc, Alcoa and BHP Billiton have announced production cuts of between 6–8 per cent of their total aluminium production since mid 2011 and called a halt to or scaled back large capital projects.

A rather similar but more detailed analysis in another newsletter looks at the solar-panel trade wars between China, the US and the European Union. It is highly critical of China. Here again the row between the EU and the US about China subsidising production and China challenging EU subsidies for solar panels has all the makings of a trade war, and the pitch is aimed at European commercial producers fearful of Chinese subsidies.

The report warns,

The European solar industry arguably has bigger problems than China, in the form of its own changing subsidy regime and overcapacity problem. But Europe standing aside to allow Chinese goods to exacerbate the pain will fuel a deep neurosis in the EU about Chinese industrial competition and European policy passivity in the face of it. The fact that the Chinese system is wasteful and unsustainable and that its own internal debate on it is suppressed in an unhealthy way will not console anyone.

Curiously, this savage criticism of China postdates Mandelson’s losing one of his key Chinese contacts, the once-rising star, Bo Xilai, now jailed for life for bribery and corruption. Mandelson’s connections with Bo Xilai go back to a few weeks after he became EU Commissioner for Trade on 22 November 2004. On 24 February 2005 he arrived in Beijing for a four-day visit to hold talks with Chinese foreign trade officials, including Vice-Premier Wu Yi, Minister Bo Xilai and Chinese businesspeople. It was his first visit to China in his capacity as the Trade Commissioner. This meeting led to a series of detailed negotiations with the Chinese over textiles, and it is clear the two had a good working relationship.

In an interview with a Chinese news website12 on 25 February 2005 he describes Bo Xilai in glowing terms:

I find him a good interlocutor, a good person to do business with. We both had much more to say than we had planned. We met before during the EU–China Summit at the Hague in December 2004 and there’s so much going on internationally in the WTO and the Doha Round where China has an important part to play. I am glad he is exercising China’s responsibility as a leading member of the WTO … I regard Bo Xilai as a very able and very conscientious trade minister.

Nowadays, sources say if you ask him about Bo Xilai he says ‘Who?’

However, this is not the case with the Russian oligarchs. Mandelson has strengthened his position by joining the board of directors of Sistema, which is controlled by the billionaire tycoon Vladimir Yevtushenkov. The company has invested in major Russian oil firms, telecoms, radars and aerospace, and the mass media and healthcare sectors, among others.

In an interview with the Russian edition of Forbes, the oligarch indicated he was happy with the then impending return of Vladimir Putin to the presidency. ‘I’m an optimist. I don’t see any dramatic scenarios for my business in our country [Russia] whoever is in charge,’ he said. ‘We have worked with him [Putin] for a long time, we know him well and many of his traits impress us. I don’t see any threat to business – be it small, medium or large … I think the combination of wisdom built up over the years with analysis of the mistakes that have been made will allow Putin to make his third term a successful one.’

Yevtushenkov showed little sympathy for Mikhail Khodorkovsky, saying the oil tycoon – who clashed with Putin – fell prey to his ‘ambitions’ and was too politicised. ‘Business should be separate from politics,’ he said.

That has not entirely saved him, however, from Putin’s wrath. In September 2014 he was under house arrest over alleged money laundering charges. Bloomberg reported: ‘The accusations stem from a probe into the alleged theft of shares in oil assets in Russia’s Bashkortostan region in which Yevtushenkov’s AFK Sistema gained control in 2009, according to the Investigative Committee. Sistema called the accusations groundless and said it would to use [sic] all possible legal means to make their case.’

By November 2014 there were contradictory reports – one saying he had been released and another saying he was still under house arrest.

The list of 350 people who receive the newsletter suggests the Global Counsel has a number of other clients, some of them apparently employing them for specific advice on a particular problem.

One company, Betfair, an international betting firm based in the Gibraltar tax haven, admitted to Private Eye that it was a client. And, as the Eye commented, the firm was ‘facing tricky questions over licences in European countries such as Italy and Greece and for whom Mandelson’s experience as an EU trade commissioner must have looked attractive.’

Once Betfair confirmed its role, Global Counsel obviously made it clear through Benjamin Wegg-Prosser that the list was not all clients, and other firms refused to confirm whether they were.

The list includes a number of companies that seem to have multiple entries – suggesting they may well be clients. They include the banker JP Morgan, for whom Tony Blair acts as a consultant; Glencore, for whom Blair acted as a go-between to settle a dispute with the Qatari royal family; Vodafone; the drug firm Novartis; Nomura; the banker HSBC; the drinks group Diageo; Unilever; the insurer Prudential; the energy firms BP, Shell and E.ON; and the aluminium group Alcoa.

There are also some big players on the list including Sir Martin Sorrell of WPP, who we have seen owns part of Global Counsel; Jeff Tannenbaum, managing director of the Bank of America; and Jeffrey Rosen, managing director of Lazard. Others include Ken Costa, who runs the evangelical Christian Alpha courses and is a former chairman of Lazard International; and Jonathan Kewley, a corporate lawyer with Freshfields and a member of the Business, Innovation and Skills department’s professional and business services group.

In Whitehall recipients of the newsletter include Thea Rogers, adviser to Chancellor George Osborne; Martin Donnelly, permanent secretary at the business department; Nick Baird, UKTI chief executive; Sir Kim Darroch, David Cameron’s national security adviser; Moscow diplomat Denis Keefe; and the director of the European and global issues secretariat at the Cabinet Office, Angus Lapsley.

The political connections are more interesting, as they span the main two parties. On the list are shadow Chancellor Ed Balls; party chairman Douglas Alexander (twice through his office staff and on a private email); and shadow Education Secretary Tristram Hunt, who in 2013 praised Mandelson in Total Politics magazine: ‘Peter is … a force for progressive politics in Britain and around the world.’

Also, there are Liam Byrne, shadow Education Minister and a member of Policy Network with Mandelson; and Lord (Andrew) Adonis, shadow Infrastructure Minister. He is also linked via his researcher to former minister Pat McFadden. Former Labour MP and City spokeswoman, now a lobbyist with Portland, Kitty Usher is on the list. And Will Straw, son of Jack Straw and prospective Labour parliamentary candidate for Darwen, is also a recipient. He is linked to Mandelson through a project for the Institute of Public Policy Research and is also working for Ed Balls one day a week.

Jonathan Powell, who, as we have seen, is one of the key Blairite advisers and well connected to Blair’s businesses, is also on the list.

Mandelson’s list extends to Tories as well. Ed Vaizey, the Culture Minister, is a recipient as well as Zac Goldsmith, through his researcher. And so is Jo Johnson MP, brother of Boris and head of Cameron’s policy unit in No. 10.

Among Liberal Democrats who are on the list is Giles Wilkes at BIS, special adviser to Business Secretary Vince Cable. And there is one independent peer, Lord Owen, plus Mandelson’s long-term friend Lord Birt. Blair’s biographer, Anthony Seldon, the master of Wellington College public school, is there too.

However, checks with some of the people appear to suggest that the list is partly a vanity project – particularly among some politicians, one of whom said the newsletter ended up in his spam queue. None of the politicians contacted appeared to pay for it, while some of the business advisers did not seem to value its content much.

One said, ‘Basically, the information is not much more than you could get by an intelligent reading of The Economist. It joins up the dots and crosses the t’s, but it isn’t much more than that.’

Some of the advice also appeared plain wrong.

A document on future developments of the European Union says little more than Peter Mandelson’s known pro-EU position says in public with a lot more detail of how it is justified. And, if Global Counsel were so well connected, it would have realised that the strength of Eurosceptism was much more powerful inside the Conservative Party than it suggests in the briefing. This is paralleled by the list of subscribers. It is not going to known Eurosceptics such as Chris Grayling and Theresa May, and therefore has no feedback from them.

Written prior to Cameron’s commitment to an in/out referendum on Britain’s EU membership and the EU budget settlement, it warns of bad relations between Britain and the EU. It falsely predicts that Britain won’t be able to get a budget settlement that limits the growth in EU spending, and talks about the EU wanting a new treaty when in fact it decided to create a stronger eurozone without one.

But Global Counsel’s view on the referendum announcement is to quote what must be a minority of Tory ministers, to the effect that a referendum would be ‘divisive and suicidal for the Conservative Party’. In fact, the Tories are now committed to one, and this issue has been overtaken by the rise of the United Kingdom Independence Party (UKIP) alongside the issue of whether Cameron should recommend that Britain quit the EU if he does not get what he wants.

It also predicts – and this is still to be settled – that in the end Britain will be disadvantaged if it does not become part of the eurozone for the simple reason that banks that trade in large euro-denominated positions will want to be backed by the European Central Bank as part of the eurozone rather than the Bank of England. Altogether the drift of the argument is that, in the end, London’s big banks will decide that it is more logical to be located in the eurozone than in the sterling area and will leave the City.

 

What is clear from Mandelson’s business interests, which may not rival those of Blair, is that, by linking to both pro-Putin oligarchs and getting the financial backing of WPP, he has been able to make himself rich. He has also added a portfolio of clients to tackle specific issues – such as Betfair – and also, as revealed in the Guardian, got involved with a dispute over APP and the destruction of the rainforest.13

APP is a controversial Chinese–Indonesian company owned by the Wijayas, a rich dynasty. In 2012, APP had come under growing pressure after it was accused of illegal logging in Indonesia and damaging the habitats of rare animals such as the Sumatran tiger. A year-long Greenpeace investigation, published in March, alleged that endangered trees, known as ramin, have been chopped down and sent to factories to be pulped and turned into paper. The trees grow in peat swamps in Indonesia, where the dwindling number of surviving Sumatran tigers hunt.

Greenpeace alleged that it found ramin logs in a paper mill belonging to APP on nine occasions over a year. Chopping down ramin trees, a protected species under an international treaty, has been illegal under Indonesian law since 2001. Wood from the rainforests is being turned into everyday products around the world, such as photocopying paper, tissues and paper packaging, according to Greenpeace.

APP, part of the Sinar Mas conglomerate, denied any wrongdoing, saying in a statement that it ‘maintains a strict zero-tolerance policy for illegal wood entering the supply chain and has comprehensive chain of custody systems to ensure that only legal wood enters its pulp mill operations. APP’s chain of custody systems are independently audited on a periodic basis.’ It said it welcomed the Greenpeace report, as it would help ‘identify and act on any weaknesses in its chain of custody systems.’

Three large companies said that they were going to stop buying paper products from APP, either forever or until they were satisfied that the products were being produced sustainably. At least sixty-seven companies worldwide, such as Tesco, Kraft Foods and the office suppliers Staples, had boycotted APP since 2004, according to a Greenpeace list produced at the time.

In response to the allegations, Global Counsel said, ‘Global Counsel are advising APP on how to ensure that the new voluntary partnership agreement on legal and sustainable timber trade between the European Union and Indonesia is a success … As companies in emerging economies grow across the globe meeting high European and American standards is one of their key challenges.’

Since then, Mandelson contacted Zac Goldsmith, the Conservative MP for Richmond, who has high-level connections with environment campaigners, and was able to broker a deal between Greenpeace and APP to protect part of the Indonesian forest. This is still being monitored. But, again, this appeared to be a one-off arrangement.

 

In 2010 Mandelson moved to an upmarket property inside Regents Park, which he bought for a staggering £7.6 million in his own name. He obtained a mortgage from HSBC Private Bank – a lender favoured by the wealthy; Francis Maude, the Tory Cabinet Office minister and ex-banker, has a similar mortgage. In January 2015, estate agents Zoopla estimated the property to be worth £11.483 million – no wonder Mandelson appeared on BBC Newsnight in January 2015 to condemn Labour’s new mansion tax, levied on all properties over £2 million.

The home is among an exclusive group of buildings in the park and boasts a wine cellar, a two-storey atrium, elegant reception rooms and views directly onto a park. A conservatory extends into the large, landscaped garden and the master bedroom occupies the entire second floor. There are three bathrooms and two dressing rooms. In 2014, he was able to rent a renovated detached house in Wiltshire from his friend Nat Rothschild so he could enjoy the country life close to Rothschild’s estate.

Benjamin Wegg-Prosser has certainly moved up in the world as well. On 5 March 2012 he moved into a Georgian, Grade II-listed, three-bedroom home round the corner from Tony Blair in Connaught Square in London. According to the Land Registry, he paid £1.925 million for the home and took out a mortgage from Barclays. The property had been on the market through Cluttons for £1,999,995. This property’s value has risen more modestly, with Zoopla estimating it to be worth £2.64 million in January 2015.

But neither compares to the wealth of the Blairs and neither has quite the scope to rival Blair’s business interests – probably because the name Blair still counts in the American sphere of influence for much more than Mandelson does in the world of Vladimir Putin.

Notes

1 Daily Telegraph, 17 December 2011: http://www.telegraph.co.uk/
news/politics/8963427/Lord-Mandelson-courted-
Mubaraks-dying-regime.html

2 The Guardian, 2 July 2014: http://www.theguardian.com/
politics/2014/jul/02/tony-blair-advise-egypt-
president-sisi-economic-reform

3 The Guardian, 2 October 2011: http://www.theguardian.com/
politics/2011/oct/02/peter-mandelson-asia-business

4 Independent on Sunday, 13 January 2008: http://www.independent.co.uk/
news/uk/politics/secret-nuclear-
talks-held-at-no-10-769989.html

5 The Guardian, 2 October 2011: http://www.theguardian.com/
politics/2011/oct/02/peter-mandelson-asia-business

6 Ibid.

7 Mail on Sunday, 26 October 2008: http://www.dailymail.co.uk/
news/article-1080660/Use-Ferrari-Mandy-
told-Rothschild-Klosters-holiday.html

8 Daily Telegraph, 25 January 2012: http://www.telegraph.co.uk/
news/politics/9036927/Nathaniel-Rothschild-says-sauna-
with-Lord-Mandelson-was-purely-pleasure-not-business.html

9 Independent, 11 February 2012: http://www.independent.co.uk/
news/uk/home-news/rothschild-loses-libel-case-and-
reveals-secret-world-of-money-and-politics-6720015.html

10 Daily Telegraph, 10 February 2012: http://www.telegraph.co.uk/
news/politics/9073717/Nathaniel-Rothschild-
loses-High-Court-libel-battle.html

11 Financial Times, 18 November 2012: http://www.ft.com/cms/s
/0/6a7f9d88-3180-11e2-92f0-
00144feabdc0.html#axzz2d43qGI3p

12 www.caijing.com.cn, 22 June 2005: http://english.caijing.com.cn/
2005-06-22/100013763.html

13 The Guardian, 10 May 2012: http://www.theguardian.com/politics/
2012/may/10/mandelson-advises-company-rainforest