The man in the velvet smoking-jacket and black cravat, holding a giant storybook on his lap, looks straight at the camera, shifting slightly in his leather armchair. "Once upon a time," he says, confidentially, "there was a kingdom, and for many years it was ruled by two powerful kings. But they wouldn't have been in power without a third man. "They called him the Prince of Darkness," he says, adding with a smirk: "Don't know why." Peter Mandelson's TV advert for his about-to-be-published memoirs may be a magnificent new landmark in ex-ministerial camp. But from the king of spin, it would probably be unwise to expect full disclosure. An investigation has uncovered several alleged aspects of the Mandelson story which seem most unlikely to feature in the pages of this week's authorised version. It is a tale of a rich friend, inside information, allegations – denied – of a dubious oil connection and the apparent concealment of financial interests in breach of Parliamentary rules. It starts in one of London's most expensive streets, at the heart of the Nash terraces around Regent's Park. On it lies a beautiful peach-stucco villa, and a long-standing mystery. There is no puzzle about the owner of the house: Lord Mandelson. There is no secret about its value: Land Registry records show that in 2006 he bought the place for £2.5 million, including stamp duty. The mystery has always been how he could possibly have afforded it. The price was around 16 times his then-income as a European Commissioner, a mortgage which, even in pre-credit crunch days, no lender would have contemplated. Sources close to the then Mr Mandelson suggested at the time that he used a bequest from his late mother, Mary, and sold his shares in an advertising agency. But probate files show he received only £452,000 from his mother's estate; a search at Companies House disclosed he sold the shares a year after buying the house; and Land Registry records of his previous property dealings in London and his former constituency of Hartlepool show that he could have amassed no more than around £1.15 million in equity to put towards the purchase. Added together, all that would still have left Mr Mandelson at least £1 million short. He did take out a mortgage – reportedly for £750,000 – to cover most of the gap. But in a 2009 interview he let slip that he had paid it off completely after just one year. The normal place to look for politicians' earnings is the declarations of interests they are obliged, under the rules, to make. Mr Mandelson's declarations list only modestly-paid work for newspapers and magazines, and a number of speaking engagements. The Telegraph has been told, however, that Mr Mandelson had at least one paid interest which he has not declared, or not declared fully. The most important, it is alleged, was with a company called Medley Global Advisors (MGA), founded by Richard Medley, the former chief adviser to the financier George Soros. Mr Medley, an American, met Mr Mandelson in 1993/4 when they both attended the "global transatlantic young leaders' programme" of the Aspen Institute, a think-tank. "We've been good friends since the early nineties," said Mr Medley from New York last night. "He was here at my house probably three weeks ago, and he and I have met many times." But according to nearly a dozen current or former employees of MGA, spoken to by The Sunday Telegraph, the relationship was more than personal. Mr Mandelson, they say, was paid by the company, whose job is to provide "inside information" for its clients, principally hedge funds – information they can act on before it becomes public. Mr Mandelson, according to the MGA sources, delivered "intelligence" on the plans of the British Government. "It was on economic policy, fiscal policy, what they were planning with Europe – and what the Bank of England were telling them internally," said one source. That much, if usually from people at lower levels, was the firm's bread and butter – they had, according to Mr Medley, hundreds of "consultants," including journalists, academics and policy-makers, on the books – and there is no evidence that Mr Mandelson disclosed official secrets, or information acquired in his on-off role as a minister. But the atmosphere of secrecy rang alarm bells in the company. Mr Mandelson, said one MGA source, was referred to internally by a code word. "What distressed me about it was that he was very cagey," the person said. "It was the behaviour of a man who wanted to hide what he was doing. "One time I was in the office he came in and did a conference call," where clients were invited to call in to speak to him. "He was absolutely paranoid about knowing who was on the call. He wanted all the names of the people who had been invited to call in. "Richard would tell us: 'Peter's very sensitive about this and you've got to be very sensitive about this.' I was truly disgusted – it just felt wrong." The company was based in New York and London. Another MGA source said: "He said he didn't want to talk to any British employees, presumably because he was worried his relationship with the company would get out." Mr Mandelson's relationship with the company, the sources said, extended over a number of years, and he was paid over at least two years. Some of the sources with access to the records say that there is documentation relating to discussions and meetings with him in March, June and July 1999, three in June 2001, and two in February and June 2002. Mr Mandelson, who twice had to resign from office, was not in government on any of those dates. He served as a minister from May 1997 to December 1998, and again from October 1999 to January 2001. However, some of the sources say his relationship, though not necessarily the payments, continued during his periods of ministerial office. Even if he was only paid while a backbench MP, Mr Mandelson would have been obliged to record any payments in the Commons' register of members' interests. However, Mr Mandelson's register entry shows no payments from MGA, apart from a single one-off fee for a "speaking engagement" in New York on 30 January 2002. The amount was not disclosed. "His relationship was much more extensive than that," said an MGA source. Another, who had access to the company's financial records, said: "I can confirm he was paid. I cannot remember the specific amounts, but the normal fee to consultants was one to two thousand dollars a month." Mr Medley, who sold MGA in 2005 and now runs another business, said last night: "I am absolutely not saying I didn't pay him, I'm just saying I can't remember." After also initially saying that Lord Mandelson "could not remember" any payment from MGA, his spokesman issued a statement last night saying: "Peter has known Richard Medley and his family for nearly twenty years. "He has seen and spoken to him on countless occasions during that time at home, on the phone and in his office. But he has never acted as a paid consultant to Richard or his company." The Sunday Telegraph investigation has also raised questions about whether Mr Mandelson had an undeclared relationship with Friedhelm Eronat, a secretive millionaire oil-industry fixer then based in London. Mr Eronat's former company, Cliveden Group, was awarded a concession to drill for oil in the Darfur region of Sudan. He was also named by US federal prosecutors as an alleged conduit for bribes in the 1990s between Mobil Oil and the then prime minister of Kazakhstan, Nurlan Balgimbayev. Eronat was never prosecuted for any alleged offence. In 2005, Cliveden's former chairman, Peter Felter, took Mr Eronat to an employment tribunal in London. The alleged link with Mr Mandelson, hitherto undisclosed, emerged in the context of those tribunal proceedings. Dr Felter stated during the case that Mr Mandelson had been hired by Mr Eronat in part because of his "very good contacts" with another oil firm, BP. "Eronat told me we've got Peter Mandelson as a consultant," Dr Felter said, in remarks not reported at the time. "He was hired while he was out of office, later in 2001 or the beginning of 2002." Dr Felter also stated at the time that Mr Mandelson was paid, though he did not know how much. "Eronat took pride in having this connection," he said. The employment tribunal was settled. Dr Felter, who has now signed a confidentiality agreement as part of the settlement, yesterday refused to comment further. It is not clear what, if anything, Mr Mandelson did for Mr Eronat. There is no suggestion that he was involved in the Sudan or Kazakhstan deals. At around the time Mr Mandelson was hired, Mr Eronat, an American, renounced his citizenship to avoid being caught by a US ban on its nationals doing business with the Sudan regime. He subsequently acquired a British passport. Lord Mandelson insisted last night that the reason he had not declared a relationship was that he had no relationship to declare. "He has never acted as a consultant to Friedhelm Eronat and has no knowledge of the man in question," his spokesman said. There is one last, potentially very lucrative, paid interest which Mr Mandelson did declare: his work for the French business "fixer," Alain Minc. Minc's firm, AM Conseil, employs only three staff. But in the last year Mr Mandelson declares a relationship with it, 2004, the company turned over £5.5 million. According to Mr Minc's biographer, Stephane Marchand, Mr Minc charges up to £150,000 per consultation to favoured clients and "earns his money selling intelligence and influence". It has never been clear what Mr Mandelson, who does not speak French, did for AM Conseil, or how much he earned. But both Mr Minc and Mr Mandelson, as a Euro-commissioner, spoke out strongly in favour of the hugely controversial takeover of the French steelmaker, Arcelor. The successful bidder was Lakshmi Mittal, a friend of Mr Mandelson's and a major donor to the Labour Party. Also involved in the deal was Nat Rothschild, a close Mandelson friend on whose yacht the former business secretary has famously sailed. Yesterday, in an interview to promote his memoirs, Lord Mandelson defended himself against the charge that he was too keen on the company of rich people. "Do you know what I say to that?" he said. "Good for me. I mean, I'm not going to be governed by Labour Party political correctness about who I should meet or talk to or where I should spend my time." With its disclosures about Messrs Brown, Blair and Campbell, the Mandelson book may be working Westminster into a lather over the settling of political scores. But the former business secretary knows some rather more obscure power-brokers, too, and the story of his money is just as interesting as the story of his politics. Brown Anger At Mandelson's 'Treachery' Over Euro Role Mandelson Put Boot Into Blair In 'Hatchet' BookThe mystery of Lord Mandelson's finances
Peter Mandelson is about to publish his political memoirs, but they are unlikely
to tell the full story of the politician's business dealings.
Andrew Gilligan and Adrian Gatton investigate.
Monday, 12 July 2010
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