Ken Livingstone's campaign to be re-elected Mayor of London has suffered a serious setback after one of his closest allies was suspended amid allegations of financial irregularities.
Lee Jasper said he had asked police to examine "unfounded and poisonous" accusations about grants paid out by the London Development Agency (LDA). He was forced, in line with City Hall rules, to stand aside as the Mayor's equalities and policing director.
Mr Livingstone insisted Mr Jasper would be exonerated, but the surprise development will pile fresh pressure on the Mayor as he battles to rebut claims over cash paid to black community organisations.
The controversy centres on claims that hundreds of thousands of pounds have been paid to projects linked to Mr Jasper with little or nothing to show for the money. The LDA, which is run by the Greater London Authority, has already asked the police to investigate six grants and is scrutinising several more.
The Mayor had thrown his weight behind Mr Jasper after an internal LDA inquiry cleared him of wrongdoing, insisting his adviser was the target of a "racist smear campaign". But the Tories and Liberal Democrats claimed Mr Jasper's position was untenable and the London Assembly has been holding a series of hearings into the use of LDA cash.
Mr Livingstone announced yesterday that his aide had himself requested the police investigate the claims and was therefore being suspended in the meantime. The Mayor said: "I want to make completely clear the police have made no approach to me to refer these allegations. We are seeing an attempt at a trial by the media, with the London Assembly not merely refusing to scrutinise, but also preventing Lee Jasper answering these allegations even when he volunteers to do so. A police investigation will put a stop to this disgraceful political charade."
Mr Livingstone challenged Mr Jasper's accusers to take their evidence to the Metropolitan Police so a full investigation could be conducted. "In agreeing Lee's request, I have also made the extremely difficult decision that – like any GLA officer subject to a police investigation – Lee Jasper will be suspended pending the outcome of the police investigation," he added.
Mr Jasper accused the Assembly of prolonging its hearings for political reasons. He said: "The deliberate aim of this delay is not to achieve clarity but to string out a series of unfounded and poisonous allegations in the media, and investigation by the police will clear my name and put a stop to this."
The issue looks set to continue throughout the run-up to the mayoral election on 1 May. His Tory challenger, Boris Johnson, said: This is an outrageous attempt to avoid scrutiny. It was only 12 hours ago that the Mayor informed us that he had full confidence in Mr Jasper. What has changed his mind? Mr Jasper has been suspended – presumably on full pay – until after the election, in the hope that the full facts will not come out. It is clear the Mayor's handling of City Hall is descending into sleaze, chaos, and now cover-up."
A spokesman for Scotland Yard said police will examine any material that is handed to it on any subject where there are claims of a criminal act in London.
The influence of Mr Livingstone's circle of advisers has been a long-running subject of controversy at City Hall. Last month Mr Jasper's deputy, Rosemary Emodi, resigned after being caught lying about taking a free luxury weekend break in Nigeria. She denied visiting a £200- a-night resort in November, but was forced to quit after she was confronted with evidence about the trip.
The case against Lee Jasper
The claims include:
The LDA channelled more than £3m to 12 companies linked to Lee Jasper.
Hundreds of thousands of pounds are missing or unaccounted for.
Some companies were dormant or had gone out of business and several were based in the same small room at a business centre.
Brixton Base, run by a close associate of Mr Jasper, received £280,000 to pay rent, even though the LDA is its landlord, as well as £230,000 to stage three short arts courses.
Diversity International, a web-based company run by a friend of Mr Jasper's, was given a £295,000 contract without going through the tendering process.
Ethnic Mutual, a company of which he is a director, was bailed out by a £18,000 handout.