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The Corruption of New Labour: Britain’s Watergate?


John Simkin
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But from its inception, New Labour contained within it what were profoundly corrosive tendencies. Blair's election as leader was a coup d'etat conducted with the connivance of the Labour party against itself. The party had lost all self-belief and conviction: it was anybody's. Blair was neither one of them nor part of it. His was an alien body in a party demoralised by defeat. The anomalous nature of Blair's position was celebrated by most of the media: but it contained the seeds of disaster. The party felt utterly dependent on him, prepared to do his bidding whatever that might be, while he felt no sense of accountability whatsoever towards it. The party was his punchbag. He was a free agent.

Then there was New Labour in office. From the outset, it invested an extraordinary importance in the media and in the consequent need to control the news agenda. Advisers - which almost invariably meant spinmeisters - were liberally dispersed around the ministries. The civil service, another potential check on overweaning government power, found itself relegated and demeaned by Blair's political appointees. Figures such as Peter Mandelson and Alastair Campbell, masters of the dark arts, emerged as decisive figures within New Labour. The message was everything, substance a pliant handmaiden, truth the first casualty. Spin, of course, held the people in contempt. If the media could be squared, then so could the public. It was the antithesis of accountability. New Labour was, from the beginning, a control freak. It was true of Blair, as it was true of most of his acolytes and advisers: that was the way they did politics. It all stemmed from a hugely exaggerated belief in the power of the media, in the idea that controlling the media agenda would deliver the country.

Blair, as a political leader, and as a product of the media age and post-60s confessional honesty, traded in trust. He told it like it was, he was one of us, he could be trusted. But trust in the hands of a politician is a double-edged sword. There is a suggestion of affinity, but also the implication that things could safely be left in his hands, that we should not concern ourselves unduly, that we should leave things to him. Blair's notion of trust is a bespoke product of the era of personal politics, where a sense of emotional authenticity has supplanted older notions of ideology and political principle. Accountability depended on trust rather than policy, on style rather than content. This was the Blair appeal: but in time its vacuous and implicitly authoritarian character came to be exposed, most brutally in his contempt for the public over Iraq. By trust, Blair meant personal empathy, but in practice this was merely a cloak for accentuating his own power: paradoxically, trust implied a growing loss of unaccountability.

Blair is not a loose cannon. His political course has been more or less entirely predictable. He has been a loyal proponent of the neoliberal agenda and a slavish supporter of the US, whatever the hue of the president. What could be more conventional than that? But his style of political leadership has been highly unusual. He has consistently turned on the party that he led, often displaying antagonism bordering on contempt. He has been consumed by a desire to be apart from it, and to be in no way constrained by it. And this served to nurture a lack of accountability, a belief that he could do whatever he wanted. The same went for his relationship with the civil service and the use of his spinmeisters as a praetorian red guard. And, ultimately, it was also true of his relationship with the public. His contempt for them was evident in his belief in the all-consuming power of the media and his own ability to control it. Control freaks never trust the people, nor do they feel properly accountable to them.

Seen in this light, the latest turn of events that has led to more than 90 people being questioned by the police, four of them while under arrest, is not entirely surprising. Blair believed that he could play fast and loose with the Labour party (he didn't even bother telling its treasurer about the loans) and - to the party's eternal shame - has got away with it (with barely a whimper of opposition even on Iraq). He believed that he could control the media by playing fast and loose with the truth through spin, and managed to get away with that, at least until some point in his second term. And it would appear that No 10 believed that it could somehow replenish the party's coffers to fight the last general election by playing fast and loose with the law. It may still get away with whatever it did, but in the mind of the public it will be forever condemned as guilty. There was always something rotten at the heart of New Labour: the police investigation marks the moment of its recognition. It is a sad comment that so many people were taken in by New Labour for so long. And the price? The party could yet implode and find itself condemned to opposition for many years to come.

It is indeed one of the strangest stories in history. It is hard to understand how Blair has managed to do this. It is even more difficult to grasp why other senior figures in the Labour Party have gone along with this NeoCon agenda.

Blair reminds me of LBJ. He was also extremely corrupt. He managed to survive because he had close links with the FBI and CIA and was in a position to blackmail anyone who caused him any trouble. Recently, a former MI5 agent claimed that Blair was originally recruited to spy on the Labour Party. However, he made such quick progress in moving up the ladder they decided to use him to take control of the organization. I know it sounds far-fetched but it could be true.

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Tony Blair has just purchased his fifth property. His latest purchase is a £800,000 Georgian mews house that backs on to the £3.65m townhouse in London’s Connaught Square. Blair also owns a house in Sedgefield and two flats in Bristol. He rents out three of his properties (estimated at £8,000 a month income) but has to find £20,000 a month in mortgage repayments.

Blair earns £115,000 a year after tax. His wife is reported to earn £250,000 a year. Even so, it is impossible to make these repayments on their current income. Clearly, he has some other source of income.

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In Australia, Labor is widely perceived (within the ADF) as being 'detrimental' to Defence. Rightly or wrongly, they are seen by many to cut the Defence budget too severely. Even so, there are many personnel within the ADF who will not be voting for Mr Howard.

Is the UK Labor party seen in a similar light?

The Labour Party used to be seen in this way. During previous periods of government: 1945-51, 1964-1970 and 1974-9, Labour governments tried to reduce the defence budget in order to increase welfare spending. These periods also saw increases in the higher-rates of income-tax.

Tony Blair's policy since 1997 has been very different. Income-tax rates have been kept low and as a result the gap between rich and poor has grown (in previous Labour administrations the opposite happened). Defence spending has increased rapidly. This is why BAE Systems pulled out of the Airbus project, it claimed that more money could be made by producing war planes than passenger planes.

The UK does not like to believe its politicians are corrupt. The media is always telling us we have the most honest democracy in the world. It is of course not true. It is not "honest" or democratic". Blair has taken corruption to a new level and hopefully this will eventually be recognised and we can then start to reform this deeply flawed political system.

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A new public opinion poll was published yesterday.

Only 16% of those polled believe that Blair is “honest” whereas 65% are convinced he is “dishonest”.

The main reasons for this belief he is dishonest concerns the cash for honours investigation and the Iraq War.

Only 13% of those questioned believe that Blair has not given peerages in return for party donations and loans whereas 56% believe he is guilty of this offence.

Virtually everyone agrees that Blair lied about the reasons why we invaded Iraq. They are also pretty sure why he took this action. 64% said that under Blair, Britain is “taken for granted and pushed around by the US” and 59% agreed with the proposition that the Iraq War was “an irresponsible US action, which Britain should never have got involved with.”

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There is a state within a state in the United Kingdom, a small but untouchable domain that appears to be subject to a different set of laws. We have heard quite a bit about it over the past two months, but hardly anyone knows just how far its writ runs. The state is BAE Systems, Britain's biggest arms company. It seems, among other advantages, to be able to run its own secret service.

This week, Campaign Against Arms Trade (CAAT) hopes to obtain a court order against BAE. The order would allow it to discover how the arms company obtained one of its confidential documents. CAAT instructed its lawyers, Leigh Day & Co, to seek a judicial review of the government's decision to drop the corruption case against BAE, which is alleged to have paid massive bribes to members of the Saudi royal family. Leigh Day sent CAAT an email containing advice on costs and tactics. The email ended up in the hands of the arms company.

How? Correspondence between a plaintiff and his lawyers couldn't be more private. The last people you would show it to are the defendants in the case. But somehow the letter found its way to BAE's offices.

The arms company argues that it was the unwitting and unwilling recipient of the email. So why does it refuse to tell CAAT who sent it? Why, far from assisting CAAT's attempt to explain this mystery, has it threatened the group with costs for seeking to reveal BAE's source?

CAAT has good reason to be suspicious. In 2003, the Sunday Times revealed that BAE had carried out a "widespread spying operation" on its critics. "Bank accounts were accessed, computer files downloaded and private correspondence with members of parliament and ministers secretly copied and passed on." The paper said the arms company made use of a network run by a former consultant for the Ministry of Defence called Evelyn Le Chene. "Le Chene recruited at least half a dozen agents to infiltrate CAAT's headquarters at Finsbury Park, north London, and a number of regional offices." They provided BAE with advanced intelligence on CAAT's campaign against the sale of its Hawk aircraft to the Suharto dictatorship in Indonesia. The arms company also obtained CAAT's membership list, its bank account details, the identity of its donors, its letters to ministers, even the contents of private diaries belonging to its staff.

After the story was published, CAAT asked a team of investigators to examine the messages sent from its offices. They found that one of the group's most senior members of staff, the national campaigns and events coordinator, had sent 181 emails to an unfamiliar address. Many of them contained extremely sensitive information.

The coordinator, Martin Hogbin, denied that he was an agent of Le Chene's. He claimed that the mysterious email address belonged to a former CAAT volunteer, and that he had been sending him this information because he might find it interesting.

The investigators contacted the former volunteer, who told them that he had not received any messages from Hogbin, and did not recognise the address. CAAT took the case to the United Kingdom's Information Commissioner, who found that the email address belonged to "a company with links to Evelyn Le Chene". Both Le Chene and Hogbin refused to assist the investigations. If it was true that Hogbin was working for Le Chene, it would be a tremendous coup for her and her clients. As campaigns and events coordinator, he knew more than anyone else about CAAT's plans. If BAE were to obtain and make use of such intelligence, it could anticipate and outmanoeuvre the Campaign's attempts to expose or embarrass it.

BAE's spying operations represent just one way in which the company looks like a parallel state. It also appears to enjoy crown immunity. Last August, this column suggested that the Saudi corruption case might be dropped, in order to protect a new order for 72 BAE jets. It was not a hard prediction to make - Saudi Arabia had made the new deal conditional on the abandonment of the case. But I could not have guessed that both the attorney general and the prime minister would make such a show of squashing the investigation. They seemed to go out of their way to demonstrate to BAE's clients that they would do whatever it took to protect the new order, even if it meant exposing themselves to allegations of collusion.

The prime minister has never taken such a risk on behalf of one of his departments, let alone his ministers or officials (witness how Lord Levy and Ruth Turner have been left to swing). There are just two friends for whom he will put his legacy on the line: George Bush and BAE.

In 2001, Blair overruled Clare Short and Gordon Brown to grant an export licence for BAE's sale of a military air-traffic control system to one of the world's poorest countries, Tanzania. The World Bank had pointed out that the contract was ridiculously expensive - Tanzania could have bought a better system elsewhere for a quarter of the price. In January the Guardian revealed that BAE Systems allegedly paid a $12m (£6.2m) "commission" to an agent who brokered the deal.

In 2005, Blair made a secret visit to Riyadh to expedite BAE's deal with the Saudi princes. He then sent both John Reid and Des Browne to clinch the order. Ministers in the UK have always acted as unpaid salesmen for the arms companies, but seldom has a prime minister muddied his hands this much. Blair pushed the order through by promising the Saudis that they could have the first 24 planes ahead of schedule. How? By selling them the jets already allotted to the RAF. BAE's interests, in other words, trump the requirements of our own armed forces.

Blair has also broken his government's pledge to publish the report by the National Audit Office on BAE's dealings in Saudi Arabia. It remains the only NAO report never to have been made public. We can only guess why the prime minister needs to protect it.

It could be argued, with some force, that this government has always had a special relationship with big business, rather like its special relationship with George Bush (it gets beaten up and thanks him for it). But the special favours it grants BAE are deeply resented by other corporations. After the suppression of the Saudi case, F&C Asset Management, a very large institutional investor, wrote to the government to complain that its decision undermined the rule of law and the predictability of the investment climate. Hermes, Britain's biggest pension fund, said that it threatened the UK's reputation as a leading financial centre, and the chairman of Anglo-American wrote that the abandonment of the case "damaged the reputation of Britain".

At what point does the government conclude that this company has got out of control? That it presents a danger to national interests, to the reputation of the prime minister, to the privacy and civil liberties of its opponents? Why does it appear to be above the law? For how much longer will it be permitted to run what looks like a parallel secret service? Of all the questions we might ask of our ministers, these are the least likely to be answered.

http://www.guardian.co.uk/commentisfree/st...2011751,00.html

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Last week, Sir Ken Macdonald, director of public prosecutions, was reported to be having an affair with a female barrister. Macdonald’s boss, Lord Goldsmith, the Attorney General, defended him by saying it was a “private matter”.

The Sunday newspapers today have revealed that Goldsmith has also been having an affair Kim Hollis, a lawyer who was the first Asian woman to reach the rank of Queen’s Counsel. When interviewed by journalists, Goldsmith admitted the affair but claimed it was a “private matter”.

What we do know is that on two occasions in the past, the legality of the invasion of Iraq and the non-prosecution of BAE Systems, Goldsmith was reluctant to go along with Blair’s wishes. However, in both cases, Goldsmith changed his mind and gave into pressure from Blair.

Goldsmith and Macdonald are going to play important roles in the prosecution or non-prosecution of Tony Blair and his mates over the “cash for honours” scandal.

Is it possible that the reason that Goldsmith and Macdonald have given into Blair is because they were being blackmailed over their secret affairs? Lyndon Johnson always made sure he had people in key positions who could be blackmailed.

Is it possible that enemies of Tony Blair have leaked these stories? After all, they can no longer be blackmailed by Blair.

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It is absolutely beyond my ken why Tony Blair is still in power.

Don't the normal processes of caucus operate any more in the Labour Party?

Can't his fellow Labour MPs terminate Blair's leadership with a no-confidence vote?

If they can do that, why don't they?

Forgive my ignorance. These days, I mainly rely on the BBC to keep me informed about Britain.

Like Labour Caucus, the BBC doesn't seem to work any more either - not, at any rate, to inform people about British politics.

These days it specializes in hatchet jobs on the '9-11 Truth Movement' and whipping up hyteria to support the latest and next USraeli wars.

Edited by Sid Walker
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It is absolutely beyond my ken why Tony Blair is still in power.

Don't the normal processes of caucus operate any more in the Labour Party?

Can't his fellow Labour MPs terminate Blair's leadership with a no-confidence vote?

It is not in the interest of the Labour Party to dump Blair now. The Labour Party will do very bad in the local and regional elections in May (they will lose control of most of the councils under its control, including Scotland and Wales). The plan is to blame Blair for these results. When he resigns in June the future leader will start with a clean slate. It is hoped that by the time the next General Election takes place, Labour will be in a position to win. This might be true if an "outsider" wins the leadership battle. However, I suspect, that if someone closely identified with Blair becomes leader, they are likely to lose their majority. I believe it is impossible for the Tories to win an overall majority in the next election.

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It is absolutely beyond my ken why Tony Blair is still in power.

Don't the normal processes of caucus operate any more in the Labour Party?

Can't his fellow Labour MPs terminate Blair's leadership with a no-confidence vote?

It is not in the interest of the Labour Party to dump Blair now. The Labour Party will do very bad in the local and regional elections in May (they will lose control of most of the councils under its control, including Scotland and Wales). The plan is to blame Blair for these results. When he resigns in June the future leader will start with a clean slate. It is hoped that by the time the next General Election takes place, Labour will be in a position to win. This might be true if an "outsider" wins the leadership battle. However, I suspect, that if someone closely identified with Blair becomes leader, they are likely to lose their majority. I believe it is impossible for the Tories to win an overall majority in the next election.

Thanks John. That kinda makes sense.

I still cannot understand, however, why Labour decided to abandon these local and regional elections so long in advance.

They affect the party's base for national elections and have significance in their own right. Labour strategists can't relish yet more of a wipe-out at local level.

Why not put in a new face with sufficient time to get an electoral bounce up by May?

I speculate, but it seems to me this is really about ensuring Britian's continuity of policy in the Middle East, from Palestine to Iran (not forgetting Iraq), at least over the next few months.

Of course, that would not be the overt reason prsented to Caucus.

Keeping Blair in place would have to be sold to Caucus using different arguments - perhaps along the lines you've suggested.

Not for the first time, Labour's troopers in Parliament vote for an absurb strategy that is not in their real interests, because taking orders from above (as long as the orders are sanctioned by the mass media ) is something they really do excel at.

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I still cannot understand, however, why Labour decided to abandon these local and regional elections so long in advance.

They affect the party's base for national elections and have significance in their own right. Labour strategists can't relish yet more of a wipe-out at local level.

Why not put in a new face with sufficient time to get an electoral bounce up by May?

I speculate, but it seems to me this is really about ensuring Britian's continuity of policy in the Middle East, from Palestine to Iran (not forgetting Iraq), at least over the next few months.

A significant percentage of the Labour Party did want Blair removed 6 months ago in order to save Labour councils in the elections. However, Blair refused to go quietly. It is generally believed that the sort of events needed to remove Blair would damage the electoral prospects for many years to come. Therefore the elections in May would have been lost anyway.

There is no doubt that Blair was desperate to stay in office. This might be partly due to vanity but I suspect that he is under orders to try and get certain policies through before he leaves.

Foreign policy is clearly an important factor. As you suggest, this is about Iran as well as Iraq. Blair is also under the control of the Israelis. Remember, Blair was first introduced to Lord Levy at the Israeli Embassy in London before he became leader of the Labour Party. Levy arranged the funding of Blair’s campaign. All this money came from Jewish businessmen who were active in pro-Israel politics. To quote myself:

In 1986, the newly elected Tony Blair took a “freebie” tour of the United States. At the time he was a member of CND. While in Washington he announced he had changed his mind and that that the “visit had persuaded him of the value of nuclear weapons”. The intelligence services always prefer their placements to have been a former “left-winger” because they rarely move back again after they have been “converted”.

In March, 1994, Blair was introduced to Michael Levy at a dinner party at the Israeli embassy in London. Levy was a retired businessman who now spent his time raising money for Jewish pressure-groups. After this meeting, Levy acquired a new job, raising money for Tony Blair. According to Robin Ramsay (The Rise of New Labour, page 64), Levy raised over £7 million for Blair).

In an article by John Lloyd published in the New Statesman on 27th February, 1998, the main suppliers of this money included Sir Emmanuel Kaye (Kaye Enterprises), Sir Trevor Chin (Lex Garages), Maurice Hatter (IMO Precision Group) and Maurice Hatter (Sage Software).

In April, 1994, John Smith died and Blair won the leadership contest. With Levy’s money, Blair appointed Jonathan Powell as his Chief of Staff. A retired diplomat, Powell was not a member of the Labour Party. In fact, his brother, Charles Powell, was Margaret Thatcher's right hand man.

Alastair Campbell was the other man brought into his private office with Levy’s money. Powell and Campbell were later to become key figures in the later invasion of Iraq. It is of course a pure coincidence that this decision reflected the thinking of Israel’s government.

Blair has also been trying to persuade parliament to accept a new Trident nuclear weapons system before he leaves office. All the experts have said that this matter does not have to deal with this issue for another ten years. What is the big hurry? If the new missiles are built in the UK, they will be made by BAE Systems, the company that Blair appears to be working for as its leading salesman.

Other unpopular policies he is trying to get through parliament before he leaves includes the privatization of certain areas of the health and education systems.

Most commentators suggest that Blair is obsessed with his legacy. This is of course true of all politicians. What is so strange is that Blair appears to be keen to create an appalling legacy. Clearly, the people behind Blair have a terrible hold over him. He now has a terribly haunted look. He already knows how the history books will portray him. However, there is nothing he can do about it.

If he does not end up in prison, Blair will spend his time travelling the world giving well-paid lectures on the need to save the planet but will have no answers to the question: “Why did you do nothing about it when you were in power?”

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The BBC was banned last night from broadcasting fresh allegations in the cash for honours investigation. Lord Goldsmith, the attorney general, obtained an injunction to stop the BBC proceeding with a news story for the 10 O'Clock News after a two-hour hearing in chambers at the royal courts of justice in London. The BBC could only say last night that it had been prevented from broadcasting a story which it believed was a "legitimate matter of public interest" about an hour before the bulletin went on air.

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It seems that the BBC have obtained details of the emails sent by people close to Tony Blair about the cash for honours cover-up. Lord Goldsmith has justified the gagging order on the grounds that it might make it more difficult for the police to charge these people with criminal offences. I suspect that the emails have been leaked by someone involved in the police investigation who fears they will not be allowed to arrest and charge senior members of the Labour Party.

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If he does not end up in prison, Blair will spend his time travelling the world giving well-paid lectures on the need to save the planet but will have no answers to the question: “Why did you do nothing about it when you were in power?”

An observation from afar.

By comparison with other world leaders, Tony Blair has run a strong line on climate change. This is to his credit and to the credit of the British Government. Whether the rhetoric has been turned into action within Britain is another matter - but at least he has been a positive voice for change on the 'world stage'. One might make a similar comment about Blair and the issue of African debt relief.

I suspect that when the controllers of this pathetic character began to turn the screws and push him in directions he knew were very, very wrong, such as attacking Iraq, Blair was also told he could continue to push hard on other issues, notably climate change.

This would have helped salve his conscience - and gien him a lifeline of hope that history will vindicate him.

I expect that, in a few years time, Blair plans to be like a latter-day Al Gore, stomping the world stage and puffing himself up in support of good causes.

That's if he doesn't take the Major alternative retirement path: fast bucks and a quiet life.

It's a route I see was recently taken by ex-Tory leader Michael Howard, in a deal one might think was invented by "conspiracy theoriists" if it wasn't, apparently, true.

As it appears the original aticle about Howard's 'diligence' is no longer visible online in the Independent's archives (fast loss, guys!), here's a copy for the record...

Michael Howard and spooks on brink of Rothschild funding deal

Independent on Sunday , 18 February 2007

Diligence, the corporate intelligence firm founded by former spies and chaired by the one-time Conservative leader Michael Howard, is close to striking a major investment deal with a member of the Rothschild banking dynasty.

The company, thought to be valued at around £30m, is understood to be in talks with an investment business called JNR, run by Nathaniel Rothschild, son of Lord Jacob Rothschild.

Under the proposed deal, Diligence's majority shareholder - a South American private equity firm - will sell part of its 60 per cent stake. It is also thought that group chairman Richard Burt, the former US Assistant Secretary of State and chief arms control negotiator in the first Bush administration, will sell his 12 per cent holding and then leave the company. Mr Howard is European chairman.

Diligence declined to comment. However, sources close to the situation believe a deal could be struck within weeks.

Diligence was founded in 2000 by Nick Day, a former MI5 spy who also served in the Special Boat Service, and ex-CIA agent Mike Baker, who no longer works for the company.

Mr Howard joined on a part-time basis last year. He also sits on Diligence's advisory board beside Judge William Webster, a former director of the CIA and FBI, and Edward Mathias, a managing director of private equity group Carlyle, among others.

Diligence describes itself as an "intelligence gathering and risk management" firm. Like its larger rival Kroll, it has built a reputation advising clients on a range of sensitive issues, such as investigating fraud and money laundering, vetting potential overseas partners and providing security.

The business has grown rapidly since its inception, and now boasts offices around the world, including London, Washington, Moscow and Hong Kong. The new investment, should the Rothschild deal go ahead, will allow it to continue expanding its operations. It is particularly focused on growing its presence in Asia.

However, the group is not without its controversial side. Clients are understood to have included Halliburton, US Vice-President Dick Cheney's former firm, while heavyweight Republican lobbying outfit Barbour Griffith & Rogers has invested in the business in the past.

Diligence settled a dispute with accountancy giant KPMG out of court last year. The legal row centred on claims that Diligence staff had impersonated MI6 officers in order to steal information.

Edited by Sid Walker
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It seems that the BBC have obtained details of the emails sent by people close to Tony Blair about the cash for honours cover-up. Lord Goldsmith has justified the gagging order on the grounds that it might make it more difficult for the police to charge these people with criminal offences. I suspect that the emails have been leaked by someone involved in the police investigation who fears they will not be allowed to arrest and charge senior members of the Labour Party.

At another court hearing today the BBC was allowed to report the email was sent by Number 10 aide Ruth Turner. It was sent to Tony Blair's chief of staff, Jonathan Powell, and concerned Labour's chief fundraiser Lord Levy.

However, according to a source at the Crown Prosecution Service: "We believe the leaks are coming from government sources who are trying to disrupt the inquiry."

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This morning the Guardian published the story that the Attorney General stopped the BBC from broadcasting over the weekend.

http://politics.guardian.co.uk/funding/sto...2027421,00.html

The Guardian last night successfully resisted an attempt by the attorney general, Lord Goldsmith, to prevent the publication of today's lead story.

The attorney's lawyers had wanted to stop the paper from running an article which they argued was similar to the story they prevented the BBC running last Friday.

They demanded an undertaking that the paper would not publish this story, though the Guardian was given no explanation as to why this was necessary, or the nature of the legal problem.

The attorney's office also threatened to apply to the court for an injunction that would have stopped the story. The Guardian resisted.

A high court judge then heard an urgent telephone application from a Treasury solicitor for an injunction. The attorney general's lawyer said that although the Guardian story would not breach the existing court order, it may prejudice a possible criminal prosecution. The paper would therefore be in contempt of court.

The Guardian's QC, Mr Andrew Nicol, argued that it would be highly unusual for an injunction to be granted under those terms when no charges had been brought.

He said that the judge would have to be satisfied there was a substantial risk of serious prejudice to court proceedings. Prosecutors have yet to receive the final files from Scotland Yard.

The judge said the case was finely balanced, but she refused to accede to the attorney's request.

Alan Rusbridger, the Guardian's editor, said: "The Guardian was today given a significant story about the cash for honours inquiry which we checked both with Lord Levy and with the police. Our story was referred to the attorney general's office, who told us it was "similar" to another story which was the subject of an injunction. We asked to see the court order and were told it was confidential to the parties to the original action.

"The story was well-sourced and clearly in the public interest. In this country there is a well-established principle that the state cannot exercise prior restraint on newspapers. If the attorney general - who may be a player in this action - is seeking to gag newspapers he must give the precise reason for doing so. In the absence of any specific details we decided to publish.

"Secret orders and prior restraint on the press have no place in an open society."

The story published by the Guardian:

http://politics.guardian.co.uk/funding/sto...2027366,00.html

Patrick Wintour

Tuesday March 6, 2007

The Guardian

Detectives are investigating whether Lord Levy, Labour's chief fundraiser, urged one of Tony Blair's most senior aides to shape the evidence she gave to Scotland Yard, the Guardian has learned.

Police have been investigating whether Ruth Turner, the prime minister's director of external relations, was being asked by Lord Levy to modify information that might have been of interest to the inquiry. Officers have been trying to piece together details of a meeting they had last year. Ms Turner gave an account of it to her lawyers and this has been passed to police.

It is this legal document and the exchange between Ms Turner and Lord Levy that has been at the heart of the inquiry in recent months, and which prompted the focus to shift from whether there was an effort to sell peerages to whether there has been a conspiracy to pervert the course of justice.

A spokesman for Lord Levy said he was unable to comment. He has consistently denied any wrongdoing.

Ms Turner has also protested her innocence and her conduct has been defended by Downing Street.

During the inquiry both have been arrested and interviewed on suspicion of trying to pervert the course of justice, which is an imprisonable offence.

Their meeting is understood to have taken place in the summer, at the start of the police inquiry.

Sources have said the two had a difficult conversation. The police are attempting to establish whether this could be interpreted as Lord Levy having asked Ms Turner to adjust the evidence she was preparing to give the Metropolitan Police, whose inquiry has led to senior members of Downing Street staff - including the prime minister, Tony Blair - being questioned by detectives.

The Guardian does not know in what way evidence was to be adjusted, or indeed if he asked her to do so in any significant way.

The BBC said yesterday that Ms Turner sent an email to the chief of staff, Jonathan Powell, but other sources available to the Guardian suggest there was no such email. Lord Levy and Ms Turner are central to Labour's system of fundraising, with Ms Turner liaising with the Lords appointments commission and party donors.

At the request of the police the attorney general, Lord Goldsmith, was granted a blanket injunction on Friday evening by the courts stopping the BBC making any reference to its story, the alleged email, its sender, recipient or its contents. The contents of the injunction were not relayed to the rest of the media. The injunction was partially lifted yesterday to allow the BBC to claim the email concerned Lord Levy, and was sent to Mr Powell by Ms Turner.

The attorney general's office said: "The BBC and the attorney general today agreed to a variation of the injunction obtained on Friday concerning a particular document relating to the 'cash for honours' police investigation. In agreeing to this variation, the attorney general was not intending to indicate or confirm that any particular document was in fact sent or received."

Over the weekend Downing Street was accused of being responsible for the leak, something No 10 denied yesterday.

The Crown Prosecution Service issued its own robust statement that it was not involved in the leak.

The police have continued to deny responsibility for the various leaks that have marked the inquiry, a claim that is treated with extreme scepticism in parts of Downing Street.

The prime minister's official spokesman said: "Suggestions that we leaked or were trying to leak this information are just plain wrong - and that's not based on my personal hunch. It's because there are inaccuracies in reports which mean it can't have come from No 10."

Mr Blair's spokesman went on: "I can't get into what those [inaccuracies] are because our approach all the way through is we are against all leaks and speculation. Leaking in the past has been unhelpful, just as this leak has been unhelpful."

Ms Turner has been the subject of two interviews under caution, and is still on bail. One of her interviews led to a dawn raid of her house where she was forced to dress in front of a policewoman.

The mood in Downing Street remains that Ms Turner has done nothing wrong.

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