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Anyone who needs reminding how effortlessly corruption can occur in the highest - as well as the lowest - reaches of society and politics should watch next week's `Secret Lives' documentary. Startling new evidence, presented here for the first time by the Kray twins' official biographer, shows that an extraordinary establishment cover-up resulted in London's most notorious villains being given the freedom of the city. Thanks to what took place, the Krays became `untouchables', who over four long years were allowed to create the most elaborate crime ring this country has ever seen. More than 30 years on, the true story of Lord Boothby and the Krays can finally be told - it is a

story that today's politicians might do well to ponder

By 1964, Robert John Graham Boothby, first - and last - Baron Boothby of Buchan and Rattray Head, had become famous but not in quite the way that he had expected. As a Conservative politician his background was impeccable - rich father, Eton and Oxford - and, on entering parliament at the age of 24, he became the type of young MP who gets tipped as a future premier. He became the friend and follower of Winston Churchill who, in 1939, gave him his first big chance as Minister for Food in the wartime government.

But Boothby had certain flaws in his character. In the first place he was an addicted gambler and something of a liar - and it was for lying to a parliamentary committee over a financial deal by which he had hoped to pay his debts, that Churchill sacked him. He was also a promiscuous bisexual. At Oxford he relied on men for pleasure, but later was also inclined to women and, as a young MP, he started a long affair with Lady Dorothy Macmillan, wife of his friend and fellow MP Harold Macmillan and daughter of the Duke of Devonshire.

Besides a daughter, this affair produced some curious results. Harold Macmillan wouldn't agree to a divorce, and to divert himself from domestic misery, put all his energies into politics - which could be why he and not the more flamboyant Boothby finally became Prime Minister. It was towards the end of the affair that Prime Minister Macmillan, in a show of absurdly stylish condescension, offered his wife's old lover a life peerage.

A vain man, Boothby loved his title, and it coincided with a period of remarkable success for him on television. Never at a loss for an anecdote or an aphorism, Boothby with his battered looks and maverick charm was a natural for the medium, and rapidly became a celebrity. But then, in July 1964, his enviable life seemed suddenly derailed by a front-page story in the Sunday Mirror.

Under the headline "Peer and a Gangster: Yard Probe", the story claimed that Scotland Yard had virtually completed an investigation into a homosexual relationship between a peer "who is a household name" and a notorious London gangster. The following week, the paper repeated its allegations and this time effectively libelled Boothby by stating that it had a photograph of the gangster and the peer taken together in the latter's Mayfair flat. By now photographs were circulating in Fleet Street of Ronnie Kray, the gangster, decorously perched on a sofa with Lord Boothby in his flat in Eaton Square. In Germany, Stern had run an article actually naming him in its headline: "Lord Bobby in Trouble".

Boothby was on holiday in France when the story broke, and claimed to have been puzzled initially by the peer's identity. It is interesting that when he was back in London, the first person he rang to find out who it was, was his friend, the journalist and former Labour party chairman Tom Driberg. According to Boothby, Driberg's reply was brief and to the point:

"I'm sorry Bob, it's you."

For a man of his exalted situation, this placed Boothby in a tricky position. While admitting that somebody called Ronnie Kray had visited his flat to discuss a business deal, he emphatically denied the rest of the Sunday Mirror allegations. This left him two alternatives. By doing nothing he would tacitly accept the Sunday Mirror's accusations. On the other hand, to sue for libel would mean facing lengthy and expensive court proceedings which could ruin him financially - apart from whatever revelations the Sunday Mirror could produce to support its story.

According to a friend, he was on the point of suicide when help appeared from an unexpected quarter. It came in the shape of two of the Labour party's legal heavyweights - Gerald Gardiner, QC, who would become Lord Chancellor in that autumn's newly elected Labour government, and Harold Wilson's portly "Mr Fixit", the overweight solicitor Arnold Goodman, who was soon to join Gardiner in the House of Lords. They offered to represent him.

At their appearance Boothby's troubles vanished as if by magic. Sir Joseph Simpson, the Commissioner for Police, denied ordering the Yard investigation that the Sunday Mirror mentioned. The Sunday Mirror suddenly discovered that it had no evidence to support its story. And, advised by Gardiner, Boothby penned a famous letter to the Times specifically denying all of the Mirror's allegations. He firmly stated he was not a homosexual and that he had met the man "who is alleged to be king of the underworld, only three times on business matters and then by appointment in my flat, at his request and in the company of other people ... In short, the whole affair is a tissue of atrocious lies."

Backed by this letter, Goodman jumped into action, and by winning a swift agreement from the International Printing Corporation, owners of the Sunday Mirror, saved Boothby from the court case he was dreading. He did more than that. Like the tough negotiator he was, Goodman won his client a record out-of-court settlement of pounds 40,000 and a grovelling public apology signed by Cecil Harmsworth King, the chairman of IPC.

At the time it seemed that justice had been done, and that Boothby had indeed deserved this massive sum - over half a million pounds in today's inflated currency. It also seemed as if this settlement would put an end for ever to the doubts and queries raised by the Sunday Mirror article. In fact, they were just beginning.

I GOT to know the Krays in l967 when, in a fit of investigative zeal, I agreed to write their joint biography with the promise of their full co-operation. This was nine months before they were arrested, and the more I saw of them the more worrying I found them. These were emphatically not the cheery cockney villains of popular perception, keen to help old ladies and steer clear of honest citizens. Ronald, a homosexual, was seriously psychotic, and his identical twin brother, Reginald, was living on his nerves - and Gordon's gin. Both were palpably dangerous. But despite, or possibly because of this, the twins were extraordinarily successful in their chosen line of business. In their dark blue suits and chauffeur- driven cars they were essentially early figures of the enterprise culture, criminal entrepreneurs who made large amounts of tax-free money from a vast and efficiently administered protection racket, mostly operated with other criminals.

They were the enforcers of the underworld, "Percentage Men", whose reputation was so fearsome that hardened criminals obeyed them. Much of the Krays' money came from the arsonists, gamblers and fraudsters they saved from trouble. They had connections with the American Mafia, "protecting" their gambling interests in London together with the sale of stolen bearer bonds in Europe. Many West End clubs paid them to keep out of trouble, and the Krays had a knack of getting money out of any crime they heard of either by threats or extortion. They could be useful if expensive allies - and lethal enemies.

Like the big businessmen they were, they were always anxious to expand their operations. One of the last discussions I had with Ronnie Kray, a night or two before he was arrested, was over whether he should get involved with some stolen uranium on offer in Switzerland - and I remember him adding that "the Firm" would soon be moving into sophisticated drugs. He knew someone in the Pakistani Embassy who could use his diplomatic immunity to bring heroin into Britain, and clearly saw this as only the beginning.

The Krays also murdered people. How many was a matter for speculation. The rumours of their gangland killings were an important part of their mystique, for what particularly impressed the underworld was the way they seemed to murder with impunity. Bodies were rarely found, no one dared give evidence, and the police evinced no eagerness to catch them.

The twins were expert in what they termed "propaganda"; spreading the rumours round the underworld which formed the basis of the fear they marketed. Much of this fear depended on the sense of their invulnerability. I was impressed by it myself. The press steered clear of them. So, it seemed, did the police, and they claimed to have protectors and informants in the highest places - "even in the House of Lords," as Ronnie said to me on one occasion. Certainly their inside knowledge was uncanny. Some thought Ronnie Kray was psychic but I suspected more prosaic sources of protection.

FROM ALL that I could gather, the twins' immunity had started at around the time of their "victory" over the press and the police in the Boothby case in 1964, but this was something they would not discuss. So I interviewed Lord Boothby on the subject in his flat in Eaton Place.

Despite his celebrated charm, it was not the easiest of conversations. Unsurprisingly Boothby was very guarded on the subject of the twins. He insisted that he barely knew them, and that "the truth about my relationship with the Krays is contained in my letter to the Times".

Boothby added one thing that I've always remembered. I asked him why, as a lifelong Conservative, he was assisted in his troubles by important members of the Labour party. "That was all down to the little man," he said.

"What little man?" I asked him.

"Harold Wilson," he replied. "He was always one of my admirers."

I took his word for it, and there the matter rested until July 1968 when, in a series of dawn raids across London, a great policeman, Commander Leonard "Nipper" Read, arrested the Krays and their henchmen in their beds. Their years as criminal "untouchables" were over.

When dealing with gangsters it's advisable to get on with their mothers. I genuinely liked the Kray twins' mother, Violet, and a few days later, when I visited her in her top-floor tower-block flat in Moorgate, she said she wanted me to have a small, brown suitcase "which might be useful for your book". Along with old newspaper cuttings of the twins, it contained a personally inscribed copy of Lord Boothby's memoirs, and a photograph. The picture was of Ronnie Kray and Boothby and a pair of criminals I recognised, sitting with a teenage boy in Jermyn Street's Society Club - now Tramp.

There were also some letters to Ronald Kray from Boothby, written on headed paper from the House of Lords, which began, "Dear Ronnie". One of them thanked him for the gift of an expensive vase. Another proposed to call to see him at his Knightsbridge club, Esmeralda's Barn. The letters were dated 1963, the year before the three brief business visits to the flat in Eaton Place which he had specifically stated were the only times they'd met. These letters made it clear that in his letter to the Times, Lord Boothby had lied.

This lie had important implications for the book that I was writing, but it was made apparent by lawyers on both sides that if I mentioned it, I could face a libel action that would ruin me for ever. I was also coming up against another wall of silence from a different quarter. Lord Goodman refused to see me, as did Cecil King and Lord (Hugh) Cudlipp of the Mirror. It was explained to me that when Goodman had made the deal with IPC, he had insisted on a clause forbidding anyone involved from subsequently discussing it in public. This meant that when my book about the Krays, The Profession of Violence, was published, it lacked what I knew to be a crucial section of the story.

But once the Old Bailey trial of the Krays was over, people around them talked more freely, and I found out more about the curious relationship between Ronnie Kray and Robert Boothby. There was considerably more to it than I suspected. Not only did they share a love for teenage boys, which Ronnie Kray provided, but Boothby clearly had a fascination for dangerous company, coupled with a reckless disregard for its consequences. There was evidence that when he dined Ronnie Kray in the House of Lords and took him for a drink at White's Club in St James's, members of Scotland Yard's Intelligence section already had him under surveillance.

There was also evidence that, in return, Ronnie Kray could offer Boothby something more exciting than dinner at the Lords. As well as boys there were East End orgies and sex shows involving criminals. One account described Boothby lying under a glass-topped table while boys were made to defecate above him. Another described him sitting naked in a room with a number of criminals and boys around him, and "love beads" protruding from his anus.

Normally such behaviour would have been Lord Boothby's own affair but for someone so famous - and so recognisable - it was madness, and one must wonder if he was seeking self- destruction. Certainly it made him subject to blackmail by the Krays. More to the point, it raised again the crucial question of why, in that early summer of 1964, distinguished members of a future Labour government should have let themselves become involved in saving such a character from a disaster of his own making.

From what I knew of Harold Wilson, Boothby's suggestion that "the little man" had done it from the kindness of his own heart appeared unlikely. The heart of Harold Wilson didn't operate like that, and the idea of two top legal members of the Labour high command taking on a case like this on their own initiative - and on the eve of a general election - struck me as improbable.

From what I finally discovered, the answer seemed to lie with Cecil Harmsworth King, who had eagerly insisted on running the original story in the Sunday Mirror, in the hope of impressing the Labour leader with what he thought would be an election-winning scandal. But Wilson and his close adviser Arnold Goodman felt otherwise. Just the year before, during the Profumo affair, Wilson followed Goodman's wise advice not to make party capital from scandal, and enhanced his image as a statesman. Now it was even more important for Labour not to spoil its chances in the election by exploiting an even murkier affair. It was an awkward situation. But, not for the first or the last time in his life, Harold Wilson's clever Mr Fixit came to the aid of the party.

In 1994 a further twist was given to this extraordinary saga when cabinet papers, released under the 30-year rule, showed that back in June 1964 members of the Conservative government led by Alec Douglas Home had been even more alarmed at the prospect of a Boothby scandal on the eve of the election than their Labour counterparts. This was not because they thought their man was innocent and had been cruelly libelled by the Sunday Mirror. Quite the contrary. Only a few weeks earlier, two Conservative back-benchers had reported to the chief whip that they had seen Lord Boothby at a dog track importuning boys with none other than his friend Tom Driberg. The Tories were so shell-shocked from Profumo, that the situation called for a crisis meeting at Chequers to decide what to do. As no one apparently had the least idea, the Conservatives must have felt extremely grateful when Arnold Goodman inadvertently saved them - even if pounds 40,000 for a rogue like Robert Boothby did strike some of them as a touch excessive.

The most interesting fresh evidence to come to light, and in its way the most pathetic, is the story of how Boothby met the Krays. This was through Leslie Holt, a young, good-looking cat burglar, with whom Boothby fell in love after meeting him at a gambling club in 1963. Holt was also one of Ronnie Kray's drivers and lovers, and Ronnie clearly used him as a lure for Boothby, who was all too willing to be caught. To his credit, Boothby tried to save Holt from the dangers of the life he was living, and it was not the fault of Boothby - or the Krays - that Holt was later murdered by a Harley Street anaesthetist.

There is also new and probably conclusive further evidence of why Labour's high command moved so swiftly into action on behalf of Robert Boothby. This involves yet another future member of the House of Lords, Boothby's fellow enthusiast for boys and dog tracks, Tom Driberg - just as Boothby became involved with the Krays through Leslie Holt so Driberg got to know them through "Mad" Teddy Smith, a good-looking psychopathic gangster who was a friend and occasional enemy of the Krays. Driberg, described as a "voracious homosexual", is said to have given Smith the addresses of his rich acquaintances, whose houses he might burgle in return for sexual favours. Knowing Driberg, this is not unlikely, but if Boothby was self- destructive, Driberg had a famous knack of getting out of trouble. As Boothby's friend he was very much aware of his situation from the start. He knew that if the case went to court he would almost certainly be named and ruined along with Boothby. But as an important member of the Labour executive, Driberg had a lot of influence, particularly over Harold Wilson, and he would certainly have used it to encourage Arnold Goodman's rescue operation which would save Boothby and himself.

All of which undoubtedly explains why, after the settlement, there was not a squeak in parliament about the case - and why instead there seemed an overwhelming cross-bench willingness to let sleeping dogs, however dirty, lie - and go on lying. Which Lord Boothby did until he died in 1986.

WHATEVER the reasons for the rescue of Lord Boothby, what can never be disputed is the dire effect it had upon the three great institutions which are meant to protect us from dangerous criminals like the Krays.

First in responsibility were the politicians in parliament who had previously been concerned about the growth of organised crime and protection rackets but who now fell silent. To have mentioned the Krays would have meant reviving their involvement with Lord Boothby, and who could tell where that would lead?

The press fell silent, too; pounds 40,000 was a lot of money, and there was little point in risking a similar performance with such tricky characters. The press, once so vociferous against the Krays, found other targets.

But the worst effect was on the police. Here, the crucial point was that the Sunday Mirror story was correct. A Scotland Yard investigation had been observing and reporting on the obvious relationship between Boothby and the Krays. It had been conducted by the Yard's Intelligence section, on the initiative of its then commander, Detective Superintendent John E Cummings. But, worried by the prospect of trouble from the politicians, the Commissioner, Sir Joseph Simp-son, had chosen to deny it, and from then on there was no real incentive at the Yard to catch the Krays. What Sir Joseph wanted was a quiet life.

An Old Bailey trial against the Krays for criminal protection foundered - thanks partly to the way they interfered with members of the jury, and also because of a lack of commitment from the top.

It was while the Krays were on remand that Boothby infamously felt obliged to ask a question on their behalf in the House of Lords. For the next three years the police would leave the Krays alone. Even when they turned to murder, there was no attempt to catch them, and when "Nipper" Read finally obtained permission for a full-scale offensive from a new police Commissioner, Sir John Waldron, in 1967, he wisely insisted on conducting the entire operation away from Scotland Yard itself.

It could be argued that, as political scandals go, the Boothby case was an exception. But scandals are exceptional by their very nature, and now that it is part of history, the Boothby case should be remembered for what it was - an exemplary and most extraordinary cause celebre among British political scandals. It embodied almost everything that makes us cynical about politicians - the neat manipulation of events, the bland suppression of the truth, and the way the establishment protects its own. It is also a fascinating demonstration of the way the fault lines of corruption run in our society, how the law can be manipulated, how class solidarity is exerted, how secrecy becomes a curse and how power corrupts.

The lessons are endless and I recommend them to a new and - we hope - less gullible generation of British politicians. It would be good to think that Lords Boothby, Driberg, Goodman - and the Krays - could not have got away with it today.

! `Secret Lives: Lords of the Underworld', presented by Lord Boothby's cousin Ludovic Kennedy, is at 9pm on Monday 23 June, C4. John Pearson's `The Profession of Violence: the Rise and Fall of the Kray Twins' is published by HarperCollins at pounds 5.95.