Money talks: Twelve angry men and one shame-faced Prime Minister
The wealthy businessmen who loaned the Labour Party millions are turning the heat up on No 10, none more so than Sir Gulam Noon, as he tells Francis Elliott in his first interview since the scandal broke
Sunday 26 March 2006
Should the Metropolitan police detectives investigating the "cash for peerages" affair call on Sir Gulam Noon's London home this weekend, they will find an angry man. "I am absolutely devastated," he says, "because I have done nothing wrong. I have done exactly what they asked me to do."
Speaking for the first time since his peerage was blocked, the Indian food magnate says he has rejected Downing Street's attempts to apologise. " They are very sad about this - they are concerned, but it should not have happened to me," Sir Gulam told The Independent on Sunday.
"I have been here for the last 37 years. I have built up my businesses. I created wealth and jobs and I have never borrowed so much as £5 without repaying it with interest."
The ready-made meals entrepreneur, initially cleared by the House of Lords Appointments Commission but rejected after it was discovered he had lent £250,000 to Labour, says he wanted to give the cash openly.
"They asked me for a loan. I would have given them money but they wanted to do the loan."
Sir Gulam reveals more details about the role played by Lord (Michael) Levy in soliciting the loans before the election. "We meet socially, we chat on the telephone. I said: 'Listen Mike, I can only give this much.' But he insists that there was never any mention of an honour in return. "There was no pressure, no promises." He jokes: "If I wanted a promise I would have gone to Tony Blair."
Sir Gulam, who has openly supported Labour for about 12 years, is most upset about what his business partners here and in India think of him after weeks of negative publicity. A similar sense of bitter dismay is likely to be felt by all 12 of the lenders revealed under intense pressure by Labour last week.
One, Rod Aldridge, has lost his job over the affair, stepping down as chairman of the IT support firm Capita to counter "spurious" claims his financial support helped to win contracts. Another two, Andrew Rosenfeld and Sir David Garrard, have endured publicity surrounding their firm, Minerva, after its application to build the City's tallest tower was waved through by John Prescott in the face of objections from English Heritage and others. Other rich and powerful men such as Professor Sir Christopher Evans, known as the "Biotech King", know that their links with the Government will be subject to scrutiny by hostile parties.
The "cash for peerages" row has turned into a firestorm that threatens to incinerate reputations established over many decades - reputations that often include signal acts of philanthropy. It would be surprising if the lenders' anger at becoming embroiled in Labour's funding scandal was not all the more keenly felt because of their charitable works. Indeed assessing the links between Labour's lenders, philanthropy is a common thread and three charities in particular crop up with startling regularity.
By coincidence - or not - the three, Community Service Volunteers, NSPCC and Jewish Care, are all favoured by Lord Levy, Mr Blair's chief fundraiser. For example, Lord Levy is president of CSV, and five of Labour's lenders are connected to the charity in some way. Fundraising professionals protest that there is nothing surprising in this: after all, where should political parties look for donations if not among wealthy individuals proven to be generous to other causes.
But there are other intriguing connections: that between one of the lenders and the man who runs Mr Blair's personal blind trust, for instance. Barry Townsley, the millionaire stockbroker who lent Labour £1m and was nominated for a peerage, is a friend of Martin Paisner, one of two trustees of the Manchester Trust in which the Blairs' personal wealth is held and the existence of which came to light after Cherie Blair's controversial purchase of two flats in Bristol. Mr Townsley and Mr Paisner are listed as trustees of the Wolfson Townsley Charitable Trust and are fellow governors of the Weizmann Institute of Science. Mr Paisner is a respected senior partner in the legal firm Berwin Leighton Paisner, which often carries out consultancy work for government departments.
It is this matrix of Whitehall, the City and philanthropy that Deputy Assistant Commissioner John Yates must negotiate as he leads his team of detectives investigating any alleged breaches of the Honours (Prevention of Abuses) Act 1925.
Section 1 (1) of that, until now arcane, legislation states: "If any person accepts, obtains or agrees to accept or obtain from any person, for himself or for any other person, or for any purpose, any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person or otherwise in connection with such a grant, he shall be guilty of a misdemeanour."
When police come to ask Lord Levy about his role in this affair they are likely to concentrate on any help he gave the lenders who were nominated for peerages to fill in forms then sent to the House of Lords Appointments Commission. Dr Chai Patel, the healthcare boss who lent the party £1.5m and saw his peerage nomination blocked, today names Lord Levy as the man who advised him not to declare the loan on the form sent to the watchdog.
"The people in the Labour Party told him he did not have to declare it, " Dr Patel's spokesman told the IoS. When pressed who, precisely, had advised him, the spokesman added: "Michael Levy was Chai's source of advice."
Could Lord Levy, the man dubbed "Lord Cashpoint", be regarded as having assisted the procuring of an honour by advising lenders not to declare their loans? As pressure mounts there are increasing signs of tensions building within Mr Blair's inner circle over who was to blame for the original decision to drop a ban on secret loans before the last election. One senior aide has been quoted as saying: "We needed to convince each other." Others go further and claim it was Mr Blair himself who overruled Lord Levy's objections about raising secret loans.
Meanwhile Alan Milburn, Labour's general election supremo, has told the IoS he found out about the covert operation "about halfway through the campaign". His knowledge - in stark contrast to the ignorance of Jack Dromey, the party treasurer, and other senior officials - will further fuel claims that Mr Blair is running "a party within a party".
But he and other Blair loyalists are unembarrassed about Labour's need to raise significant sums quickly in order to counter a slick, well-funded, targeted Tory operation masterminded by the Australian spin doctor Lynton Crosby. Mr Milburn says accounts released by the Electoral Commission this Wednesday will show Labour was forced to spend heavily on telephone canvassing and direct mail operations in the last few weeks of a campaign that cost around £17m. The veteran Labour MP Dennis Skinner also made an impassioned defence of the party's right to raise funds at Tuesday's stormy meeting of Labour's ruling National Executive Committee.
This weekend the party's leadership is doing its best to shift attention to the "double standards" that allow the Conservatives to conceal loans of around £20m while Labour's disclosure risks bankrupting the party as its lenders demand their cash back. But while he may succeed in deflecting some of the political heat, Mr Blair still faces the attentions of Mr Yates's detectives from the Specialist Crime Unit.
It was reported yesterday that two civil servants in the Cabinet Office and Downing Street had received letters from the police asking them to assist in their inquiries. Mr Yates, reputed to possess the Met's safest pair of hands, is also said to have asked for the postponement of a parliamentary investigation that could prejudice the policy inquiry. The MPs who sparked the investigation, Angus MacNeil, SNP, and Elfyn Llwyd, Plaid Cymru, professed themselves "delighted" at the developments.
In No 10, by contrast, the mood is grim. Mr Blair knows he has enraged 12 previously loyal and friendly businessmen, four of whom can expect a knock on the door from the police sometime over the coming weeks.
The shroud of secrecy under which the Prime Minister has courted the rich and powerful is about to be yanked aside. He must hope that nothing yet more damaging is found beneath.
Wife of foreign arms dealer channels £100,000 to the Tories
The Conservative Party's efforts to conceal its secret lenders unravelled yesterday after The Independent on Sunday identified one its mystery backers. It was also reported that the Tories accepted £100,000 from the wife of a foreign arms dealer barred from making political donations in this country.
Rosemary Said, who is the British wife of Wafic Said, a Syrian-born Saudi, is said to have bid the sum in a charity fundraiser last month, the first in aid of the Cameron-led Tories. In return she got an eight-person dinner provided by Albert Roux. Nicholas Soames was supplied as the wine waiter.
The couple are said to have channelled at least £550,00 at Conservative fundraising auctions in recent years, exploiting a loophole in laws designed to stop foreign funding of political parties. Said was the middleman in Britain's biggest arms deal, the "al-Yamamah" contract, with Saudi Arabia completed under Margaret Thatcher.
The mystery backer was revealed as Michael Hintze, an Australian hedge fund manager reported to have received a £60m pay packet last year. He channelled £2m to Tory coffers via an offshore account a week before the election.
Asked about the loan, a spokesman said: "Mr Hintze is a long-term supporter of the Conservative Party."
It was reported yesterday that Michael Howard was lent cash by the Jersey-based Morain Investments, a trust set up on 28 April last year. Tory officials privately confirmed that Mr Hintze was the businessman behind the offshore trust which tax experts say would help provide trustees anonymity.
Frequently described as "secretive", Mr Hintze is a former captain in the Australian army who became a star trader in Goldman Sachs before setting up his own hedge fund, CQS Management, in 1999. Press reports around the time of the publication of the fund's last accounts suggested Mr Hintze may have made £60m in 2005.
A notable philanthropist, he was recently made Knight Commander of St Gregory by Pope Benedict XVI.
Although there is nothing improper in Mr Hintz's loan arrangement the disclosure is the first major breach in the Conservatives' attempts to protect donors' identity. David Cameron's decision not to follow Labour's lead in revealing past lenders was publicly questioned by one of his leading frontbenchers, last week. Dominic Grieve, the shadow Attorney General, called for "utter transparency" in the party accounts.
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