Ashcroft knew of 'culture of immorality', court told

Lord Ashcroft, the billionaire Conservative peer, knew companies he controlled were doing business with corrupt politicians on the Turks and Caicos Islands but did nothing to stop them, the Court of Appeal was told yesterday.

David Price QC, who is defending The Independent's former publishers Independent News and Media (INM) in a libel action brought by the former Tory deputy chairman, told a panel of judges the company's case is that Lord Ashcroft was controlling firms which profited from a short-lived construction boom on the islands fuelled by corruption.

The boom has since turned to bust and the islands, a British overseas territory, are now receiving a substantial portion of the UK's overseas aid budget to restart their economy. The Prime Minister, Michael Misick, was removed from office in 2009, leaving the islands under direct British rule.

Lord Ashcroft has denied being the ultimate boss of Johnston International, which was the biggest construction firm on the island before it went bust in 2010, leaving a trail of debt.

INM's case is that he knowingly profited from "a culture of immorality" on the islands, through Johnston and through the British Caribbean Bank, run by his son, Andrew, the court was told. "What is being stated about him is that he funded this boom, he constructed this boom, through Johnston, knowing this boom was being created through systematic corruption," Mr Price said.

"He was not the corrupt one. The corrupt one was Michael Misick, but it was facilitated by BCB and Johnston," he added, before accusing Lord Ashcroft of being "party to a culture of political immorality".

The billionaire Tory peer is seeking damages over two articles which appeared in The Independent in 2009 about his alleged business links in Turks and Caicos. The judges are hearing an appeal by the paper against a ruling by Mr Justice Eady which prevents the newspaper from seeking to prove that the allegations made in the original articles are true. Lord Ashcroft's lawyers argued the allegations in the defence were so vague they were impossible to refute.

However, Mr Price told the judges that it was illogical for Lord Ashcroft to claim he could not understand what was being alleged about him and yet to demand damages on the grounds that the same words were defamatory.

He described Mr Justice Eady's decision to strike out the entire defence of justification as "draconian". The hearing is scheduled to end today.