The Corruption of New Labour: Britain’s Watergate?

[Guest David Guyatt]

Do you recall the name of the journalist and in which media outlet the story originally broke?

I first read about the story in last week's Sunday Times. However, it was based on a story written by an unnamed journalist. This journalist is refered to in today's Sunday Times, but again he is not named. Interestingly, the article points out that the Tories have been investigating Labour donors for a couple of years (Operation Underwater). However, they did not come up with David Abrahams' name.

Quite apart from the gravity of the scandal itself, I wonder who it was that leaked the information to that newspaper journalist -- who unlike all his (her) colleagues is unduly timid about identifying himself. This doesn't quite ring true to me.

In view of the continuing and damaging stories that have dogged Gordon Brown since moving into No. 10, I get a sense that somebody is out to get him. That the Sunday Times is owned by Murdoch, and the fact that Murdoch's rise to fortune has not been properly accounted for (rumours of CIA funding him spring to mind), might it be that Brown's decision to withdraw british troops from Iraq has caused greater fury in Washington than is made public and that there is a campaign to bring him down -- as the CIA brought down Harold Wilson 30 years ago?

Might it be Murdoch himself who is the unnamed journalist in question?

[John Simkin]

Do you recall the name of the journalist and in which media outlet the story originally broke?

I first read about the story in last week's Sunday Times. However, it was based on a story written by an unnamed journalist. This journalist is refered to in today's Sunday Times, but again he is not named. Interestingly, the article points out that the Tories have been investigating Labour donors for a couple of years (Operation Underwater). However, they did not come up with David Abrahams' name.

Quite apart from the gravity of the scandal itself, I wonder who it was that leaked the information to that newspaper journalist -- who unlike all his (her) colleagues is unduly timid about identifying himself. This doesn't quite ring true to me.

In view of the continuing and damaging stories that have dogged Gordon Brown since moving into No. 10, I get a sense that somebody is out to get him. That the Sunday Times is owned by Murdoch, and the fact that Murdoch's rise to fortune has not been properly accounted for (rumours of CIA funding him spring to mind), might it be that Brown's decision to withdraw british troops from Iraq has caused greater fury in Washington than is made public and that there is a campaign to bring him down -- as the CIA brought down Harold Wilson 30 years ago?

Might it be Murdoch himself who is the unnamed journalist in question?

Brown is very friendly with Rupert Murdoch. Paul Dacre, the editor of the Daily Mail is also a friend. Brown poses no real problem for the right-wing press. As long as he follows Blair's pro-American foreign policy, continues with PFI and does not increases taxes on the rich, they will not try to remove him. I don't agree that the media is out to get Brown. They are currently repositioning themselves as Brown is dead in the water. However, they are in a difficult position. The Tories are unlikely to have an overall majority in the next election. The Liberal Democrats are likely to hold the balance of power. Of the three major parties, they are the only ones to question Murdoch's power. Will Brown or Cameron be willing to do a deal with the Lib Dems over parliamentary reform in order to take power?

[Guest David Guyatt]

Do you recall the name of the journalist and in which media outlet the story originally broke?

I first read about the story in last week's Sunday Times. However, it was based on a story written by an unnamed journalist. This journalist is refered to in today's Sunday Times, but again he is not named. Interestingly, the article points out that the Tories have been investigating Labour donors for a couple of years (Operation Underwater). However, they did not come up with David Abrahams' name.

Quite apart from the gravity of the scandal itself, I wonder who it was that leaked the information to that newspaper journalist -- who unlike all his (her) colleagues is unduly timid about identifying himself. This doesn't quite ring true to me.

In view of the continuing and damaging stories that have dogged Gordon Brown since moving into No. 10, I get a sense that somebody is out to get him. That the Sunday Times is owned by Murdoch, and the fact that Murdoch's rise to fortune has not been properly accounted for (rumours of CIA funding him spring to mind), might it be that Brown's decision to withdraw british troops from Iraq has caused greater fury in Washington than is made public and that there is a campaign to bring him down -- as the CIA brought down Harold Wilson 30 years ago?

Might it be Murdoch himself who is the unnamed journalist in question?

Brown is very friendly with Rupert Murdoch. Paul Dacre, the editor of the Daily Mail is also a friend. Brown poses no real problem for the right-wing press. As long as he follows Blair's pro-American foreign policy, continues with PFI and does not increases taxes on the rich, they will not try to remove him. I don't agree that the media is out to get Brown. They are currently repositioning themselves as Brown is dead in the water. However, they are in a difficult position. The Tories are unlikely to have an overall majority in the next election. The Liberal Democrats are likely to hold the balance of power. Of the three major parties, they are the only ones to question Murdoch's power. Will Brown or Cameron be willing to do a deal with the Lib Dems over parliamentary reform in order to take power?

If not Murdoch, then who? Supposing, of course, that the manifold problems dogging Brown are not just coincidence. Possible but how likely is that?

It could be the Tories but they have a great deal of past funding misdemeanours to their credit... notably the "Three Rivers" account at Rothschilds AG, Zurich, that could never be brought onshore - so I seem to recall anyway - because the funds in it arose from criminal enterprise (backhanders from the Saudi-Bae Al Yamamah deal). Current funding may also be problematical for them. Didn't they use to receive money from a Macao based Chinese drug baron once upon a time?

On the other hand, Brown could just be like President Ford...inclined to trip over every matchstick laying in his path.

But I'm still not convinced all of the problems dogging Brown are coincidental.

[Guest Gary Loughran]

Do you recall the name of the journalist and in which media outlet the story originally broke?

I first read about the story in last week's Sunday Times. However, it was based on a story written by an unnamed journalist. This journalist is refered to in today's Sunday Times, but again he is not named. Interestingly, the article points out that the Tories have been investigating Labour donors for a couple of years (Operation Underwater). However, they did not come up with David Abrahams' name.

Quite apart from the gravity of the scandal itself, I wonder who it was that leaked the information to that newspaper journalist -- who unlike all his (her) colleagues is unduly timid about identifying himself. This doesn't quite ring true to me.

In view of the continuing and damaging stories that have dogged Gordon Brown since moving into No. 10, I get a sense that somebody is out to get him. That the Sunday Times is owned by Murdoch, and the fact that Murdoch's rise to fortune has not been properly accounted for (rumours of CIA funding him spring to mind), might it be that Brown's decision to withdraw british troops from Iraq has caused greater fury in Washington than is made public and that there is a campaign to bring him down -- as the CIA brought down Harold Wilson 30 years ago?

Might it be Murdoch himself who is the unnamed journalist in question?

Brown is very friendly with Rupert Murdoch. Paul Dacre, the editor of the Daily Mail is also a friend. Brown poses no real problem for the right-wing press. As long as he follows Blair's pro-American foreign policy, continues with PFI and does not increases taxes on the rich, they will not try to remove him. I don't agree that the media is out to get Brown. They are currently repositioning themselves as Brown is dead in the water. However, they are in a difficult position. The Tories are unlikely to have an overall majority in the next election. The Liberal Democrats are likely to hold the balance of power. Of the three major parties, they are the only ones to question Murdoch's power. Will Brown or Cameron be willing to do a deal with the Lib Dems over parliamentary reform in order to take power?

If not Murdoch, then who? Supposing, of course, that the manifold problems dogging Brown are not just coincidence. Possible but how likely is that?

It could be the Tories but they have a great deal of past funding misdemeanours to their credit... notably the "Three Rivers" account at Rothschilds AG, Zurich, that could never be brought onshore - so I seem to recall anyway - because the funds in it arose from criminal enterprise (backhanders from the Saudi-Bae Al Yamamah deal). Current funding may also be problematical for them. Didn't they use to receive money from a Macao based Chinese drug baron once upon a time?

On the other hand, Brown could just be like President Ford...inclined to trip over every matchstick laying in his path.

But I'm still not convinced all of the problems dogging Brown are coincidental.

I still believe that Blair's hand is all over this. I'm convinced also that any investigation, if there is one, will be contemporary and not over past donations. Blair likely, with good reason, feels the investigation into his own corruption has passed and IMO highly unlikely to resurface.

I am convinced that the duplicitous Blair holds much unbrage towards Brown.

[John Simkin]

I still believe that Blair's hand is all over this. I'm convinced also that any investigation, if there is one, will be contemporary and not over past donations. Blair likely, with good reason, feels the investigation into his own corruption has passed and IMO highly unlikely to resurface.

I am convinced that the duplicitous Blair holds much unbrage towards Brown.

If Peter Watt was guilty of this offence, what about the two previous general secretaries who received money via Abrahams: David Triesman (2001-2003) and Matt Carter (2004-2005)? All three men served under Blair/Levy. I do not think they have a very good case to be left out of this inquiry. Even so, I suspect you are right and the investigation will concentrate on Watt. He will be paid to keep quiet and will end up as the only one punished.

Matt Carter is an interesting character. He used to be Labour Party organiser for Teesside and Durham. While General Secretary Carter organised the legal aspects of loans from individuals to the Labour Party that were central to the Cash for Honours political scandal.

Below is a photograph of David Triesman looking very much like Lord Levy.

[John Dolva]

John, a Q : In Oz major contributors contribute to both major Parties (hedging their bets). Is it the same in the UK. Can some of those also have contributed to Tory? If not, then other intersting observations may be drawn.

[John Simkin]

John, a Q : In Oz major contributors contribute to both major Parties (hedging their bets). Is it the same in the UK. Can some of those also have contributed to Tory? If not, then other intersting observations may be drawn.

A large number of large companies switched from giving money to the Conservative Party to the Labour Party in 1997. Most of these companies were involved in bidding for PFI and privatization contracts. At the time the Labour Party was committed to bringing an end to what was clearly a corrupt system. Surprise, surprise, Blair changed this policy and as a result these companies who were donating money to New Labour got these contracts. Some ministers like Alan Milburn even found it more rewarding to resign their office and work as “advisors” to these companies.

[Guest David Guyatt]

Personally, I suspect that funding of parties in the UK could run along simillar lines to the way parties have been funded in Europe in the past -- namely institutional cross-party financing, with the largest share going to the party in power, but with opposition parties receiving "maintenance" payments.

A good case study - for me anyway - was the so called "Band of Seven" that funelled a percentage of the revenue it earned from playing rigged financial markets to the "starving of the parties" (see: http://educationforum.ipbhost.com/index.php?showtopic=11712) for more details.

Since it is abundantly clear that Parties, once in power, do not represent the interests of the voting public who put them there, but rather pay heed to their donors, then some form of institutionalised financing arrangements for major business - along the lines of the Band of Seven model - makes sense.

In that light we might observe the way over the last couple of decades, how major business has received special treatment beneficial to its interests. For example, the de facto dismantling of sectors of commercial criminal law in favour of civil law remedies, where the responsibility now lies with the individual to seek redress (if they can afford to) rather than the state.

This grew out of Thathler's ideology that "the market will regulate itself" ( a complete nonsense and twaddle obvious to all) but has continued to grow and develop to the point where the ordinary individual can be unlawfully ripped off on a daily basis. Although small court claims actions can be succesful in this regard the time expnaded, effort and costs involved can very often be disproportionate to the possible benefit (not to mention the required "nouse" of learning one's way around civil law proceedings to begin with).

Quite apart from such unlawful activities (where civil law applies) there are a number of cases where even breaches of criminal law these days appear to go unpunished, such is the power of the business sector.

[John Simkin]

In March, 1994, Tony Blair was introduced to Michael Levy at a dinner party at the Israeli embassy in London. Levy was a retired businessman who spent his time raising money for Jewish pressure-groups. The following month, John Smith, the leader of the Labour Party died of a heart attack. Levy now raises money for Blair's attempt to become Labour's next leader. According to Robin Ramsay (The Rise of New Labour, page 64), Levy raised over £7 million for Blair election campaign. It is not known what happened to the money he did not spend on this venture.

Once he became prime minister Blair appointed Levy as chief fundraiser and David Triesman as Labour Party's general secretary. From this point on, David John Sainsbury became Labour's largest donor. He was also the man who provided £2 million in loans to the Labour Party. After denying it, he confessed he forgot he had given it. Levy, Triesman and Sainsbury are long-time members of the pro-Israel lobby. As is David Abrahams, the man behind the proxy donations.

Gordon Brown told his friends that he intended to sort out the shady donations to the Labour Party. However, the man he appointed to do this was Jon Mendelsohn, Lord Levy protégé and also a member of these pro-Israeli organizations (Labour Friends of Israel, Trade Union Friends of Israel, etc.). Was Brown fooled into this appointment or did he want someone who would not disclose this corruption? Anyway, what we do know is that Mendelsohn kept quiet about what he found: or did he tell Brown and he decided not to take action?

[John Simkin]

It is interesting that a significant amount of bribe money is paid in the form of election expenses (a method used by Lyndon Johnson). It all started with the £7 million raised by Lord Levy for Blair's election as leader in 1994. This year Gordon Brown received a large sum of money for his non election campaign. The deputy leader campaign is an interesting one. David Abrahams gave £5,000 to Hilary Benn. He was beaten by Harriet Harman to the post. Harman was elected on 24th June. On 5th July she received 5,000 from Abrahams via Janet Kidd to help with her election expenses. People like Abrahams give money to those in power. In this case he originally backed someone who failed to win so he then gives money to the woman who did win. This seems like a bribe to me. What is more, Harman is married to Jack Dromey, the Labour Party Treasurer. The man who claims he did not know Abrahams or anything about the loans to the Labour Party that were given for honours.

I believe Harriet Harman was turned along with Patricia Hewitt by MI5 when they both worked for the NCCL (see the Cathy Massiter case in in 1984). Harman's rash behaviour made her an easy person to turn. For example, she persuaded her sister Sarah, a lawyer and part-time judge, to pass her confidential papers when she was Solicitor General. Harriet Harman got away with it but her sister was found guilty of contempt of court and "conduct unbefitting a solicitor" and was ordered to pay £25,000 costs.

I believe it is possible that Harriet Harman is being blackmailed. Despite their very high joint-incomes the Harman's are heavily in debt and took out a £40,000 loan that was not declared at the time she was involved in the deputy leader election.

[John Simkin]

According to a report in today's Guardian, Labour Party officials helped lawyers acting for David Abrahams to draw up complex convenants that allowed the millionaire businessman to pay up to £650,000 indirectly to the party. This arrangement was drawn up in 2003 by John McCarthy, the Newcastle solicitor acting for Abrahams. At the time, the Labour Party officials concerned sought and got approval from senior figures in the party. The Guardian did not name these senior figures but the article did include a denial from Lord Triesman, who was general secretary at the time. Lord Levy, Tony Blair, Jon Mendelsohn, Gordon Brown and Peter Watt all refused to answer questions about this arrangement because of the ongoing police investigation.

[John Simkin]

When Tony Blair became leader of the Labour Party he decided he no longer wanted to be under the control of its membership and of the trade unions. He therefore set about redistributing power within the organization. Members lost all policy making power and understandably large numbers left the party. The trade unions also began to reduce its donations. Blair therefore had to get his money from other sources. The man he employed to do this was Lord Levy. He was the man who originally provided him with the £7m in March 1994. However, there was a limit that the Jewish lobby could provide in exchange for a pro-Israel foreign policy. Blair/Levy was forced to resort to other donors. Of course, they all wanted back something in return.

The wealthy are united in their hostility to paying high-rates of tax. Therefore, Blair/Brown kept the top-rate of tax of 40% that they inherited from the Conservative government. That in itself was the lowest it had been for nearly 100 years. However, they wanted more than this in order to give money to “New Labour”. Much of the money given to the Conservative Party came from businessmen born abroad but living in the UK. Brown had promised in opposition to remove these loopholes. In exchange for donations this policy was dropped and the loopholes remained.

The other major source of funding for the Thatcher/Major governments came from companies who had been awarded Public Finance Initiative (PFI) and privatization contracts. PFI (introduced by John Major in 1994) and privatization had been condemned by Blair/Brown in opposition. However, once in power, they continued with these policies and as a result these companies switched their funding to the New Labour government. As a result these companies were then awarded these contracts.

What is PFI? It was first introduced by the John Major government in 1994. PFI specifies a method to provide financial support for "Public-Private Partnerships" (PPPs) between the public and private sectors. This has now been adopted by parts of Canada, France, Spain, the Netherlands, Portugal, Ireland, Norway, Finland, Australia, Japan, Malaysia, the United States (reference the Trans Texas Corridor highway development project and Singapore (amongst others) as part of a wider reform program for the delivery of public services which is driven by the WTO, IMF & World Bank as a part of their 'deregulation' and privatization drive.

These projects aim to deliver all kinds of works for the public sector, together with the provision of associated operational services. In return, the private sector receives payment, above the price that the Public Sector could have achieved the work, linked to its performance in meeting agreed standards of provision. However, as we have found in the UK, these standards are meaningless.

PFI is used in central and local government. In the case of projects procured by local government authorities, the capital element of the funding enabling the local authority to pay the private sector for these projects is given by central government in the form of what are known as PFI "credits". The loans are paid back over the period of the PFI scheme by the service provider. The local authority then procures a partner to carry out the scheme and transfers detailed control, and in theory the risk, in the project to the partner. The cost of this borrowing as a result is higher than normal government borrowing but does not all appear as borrowing in public accounts.

Not only does the system encourage corruption, it borrows money that will have to be paid back by future generations. It is not clear where they will be getting the money from to build their schools, hospitals, etc.

A report published this week shows that current PFI contracts show that future governments will have to pay back £170 billion by 2032 to banks and private entrepreneurs for more than 800 schemes for new hospitals, schools and prisons. In over a third of these contracts, there were only two bidders. These companies work together in this. For example, their pair up, to get two different contracts. In one case they put in an outrageously high bid and the other company gets the contract. In the second case, the other company puts in the high bid and you get the contract.

[John Simkin]

Wang Lam is a financial trader from London who was arrested in Switzerland and charged with the murder of an 86-year-old man, Allan Chapelow. He is due to appear on trial at the Old Bailey. However, what is strange about the case is that MI6 is applying pressure on the Brown government to try the case in secret. The Crown Prosecution Service has gone along with this request. Why? One clue could be that Lam’s defence is being organized by Kirsty Brimelow and Geoffrey Robertson. They were also the people who were involved in the Matrix Churchill case. In that case defendants were cleared of charges of arms dealings with Iraq, after disclosure of their links with British intelligence. Is it possible that Wang Lam has been involved in negotiating arms deals for the British government? Maybe he is threatening to disclose information about Blair’s relationship with BAE Systems?

[Guest David Guyatt]

Just curious, how many pennies would I have to save up to buy a knighthood? It would look very good on my CV. What is the current market price - or was is under Blair? I'd also note that Murdock is like a siamese twin with the intelligence apparatus of both US and UK, as most of you gents [even if not yet beknighted] well know. It is quite amazing how the UK and US governments now mirror each other, despite having 'seemingly' different structures and 'forms' of government, histories, etc.

It must be more than the common language.

A genuine British knighthood is beyond your means, Peter.

But you could go the route of others who obtain genuine sounding knighthoods and call themselves "Sir" thereafter, simply by buying drinks for out of power European royals who can still bestow titles. Much cheaper. Or buy a Scottish castle and estate and be festooned with the title "Laird".

Still expensive, however.

Corruption is both cheap and expensive over here at the same time. People like Peter Hain are cheap. He accepted £5000 "donation" - which he kept secret - (i.e., whoops! Forgot to report!) towards his war chest for his deputy leader's campaign (must be good grazing in the deputy's office eh). But the guidelines seem to be tailored along the lines of the bigger the "favour" the bigger the "bung".

[John Simkin]

Just curious, how many pennies would I have to save up to buy a knighthood? It would look very good on my CV. What is the current market price - or was is under Blair? I'd also note that Murdock is like a siamese twin with the intelligence apparatus of both US and UK, as most of you gents [even if not yet beknighted] well know. It is quite amazing how the UK and US governments now mirror each other, despite having 'seemingly' different structures and 'forms' of government, histories, etc. 

It must be more than the common language. 

Since the publicity the Labour Party is having difficulty selling honours and is £17m in debt. I suspect the money is now going directly into the politicians foreign bank accounts.