- It was a stunning admission. Prime Minister Gordon Brown's
crony explained to the U.S. businessman, in evil detail, exactly how the
fix is done in Britain.
-
- Unfortunately, for Jon Mendelsohn and his partners, the
"businessman" was, in fact, an undercover reporter for The Observer
of London.
-
- Today, Brown's foes are calling for Mendelsohn's resignation
as chief fundraiser of the Labour Party for his admitted knowledge of £630,000
($1.2 million) in dodgy, possibly illegal, campaign contributions to Labour.
-
- What's odd here are the protestations of shock at the
behavior of Mendelsohn, described in the Guardian as an "ethical"
lobbyist. "Ethical" my arse.
-
- It was exactly nine years ago that Mendelsohn and his
lobby firm partners were caught trading cash for access. How this Mendelsohn
character ended up heading Labour Party fundraising and how he obtained
the sobriquet 'ethical' is the real shocker.
-
- I know a few things about this Mendelsohn. The "businessman"
with the hidden recorder was me. In June 1998, joined by my recorder and
a real US businessman, Mark Swedlund, who designed my elaborate corporate
front, I met Mr. Mendelsohn at his tony Soho London office. There Mendelsohn
confirmed what was already on tape from his partners in the lobby firm
he founded, LLM.
-
- I explained my corporate needs: some environmental rules
needed bending. I hinted I was with Enron. Mendelsohn's partner Neil Lawson
told my recorder that, if I paid LLM £5,000 to £20,000 per
month, "We can go to anyone. We can go to Gordon Brown if we have
to." Brown was at the time Chancellor of the Exchequer. Could the
lobbyist provide concrete examples of a fix?
-
- Easily. Here is a short list of LLM claimed accomplishments:
-
- - Inside information on then-Chancellor Gordon Brown's
budgets.
- - Tax avoided by a supermarket chain following millions
donated to a New Labour pet project.
- - A pass on anti-trust action against client Rupert Murdoch's
media empire.
- - And for Gordon Brown, a favor that the Mendelsohn team
expected to redeem.
-
- Tesco Goes Tax-Free
-
- LLM, which stands for the founders Lucas, Neil Lawson
and Mendelsohn, were about to derail Brown's plan for a tax on car parks
("parking lots" as we say in the States). This would cost Tesco,
the supermarket chain, an LLM client, £20 million annually. LLM was
holding secret meetings that week in June 1998 with Tony Blair's Downing
Street Policy Unit to get Tesco exempted from the proposed tax.
-
- The tax threat went away after LLM advised Tesco to drop
£11 million into funding for Blair's odd Millennium Dome project.
-
- [To my US readers: The Dome is a gargantuan tent costing
$100 million - no kidding.]
-
- "This government likes to do deals," Lucas
told me.
-
- But this deal was complex, Mendelsohn said, not so simple
as cash paid for a tax break. "Tony is very anxious to be seen as
'green'," Mendelsohn explained to me and my confederate. "Everything
has to be couched in environmental language - even if it's slightly Orwellian."
So LLM devised a set of cockamamie gimmicks for Tesco, like offering bus
services to the elderly, which would paint the retailer green.
-
- It worked. Tesco was spared the tax - though the company
denies categorically that its cash dumped into the Dome bought any favors.
-
- Message for Murdoch
-
- The year of my paper's original investigation (dubbed,
"Lobbygate"), anti-trust authorities were looking into Rupert
Murdoch's companies' alleged predatory pricing practices. LLM carried the
word from Downing Street, according to Lucas, that, if Murdoch's tabloids
toned down criticism of new antitrust legislation, the law's final language
would reflect the government's appreciation. On the other hand, harsh coverage
in Murdoch's papers could provoke problems for the media group in Parliament's
union-recognition bill.
-
- The message to muzzle journalists was not, said Lucas,
"an easy one in their culture" - journalists being a trying lot.
However, the outcome pleased LLM clientele.
-
- A Peek at the Budget
-
- It also happened that on one of the days I recorded Mendelsohn's
partners, they boasted of informing an LLM client about details of Gordon
Brown's budget plans before the Chancellor's announcement went public.
-
- A lobbyist competing for my "business," when
asked to match the offer of inside information and deal-making held out
by LLM and another New Labour firm said, "It's appalling. It's disturbing,"
and added that he would refuse to match LLM's services at any price.
-
- If LLM appeared favored by Brown's operation, Brown himself
received favors from LLM. "Gordon Brown asked us to have our client
KPMG [the consultancy] host a breakfast for him where it was pre-arranged
that they would praise him for his prudent budgets." Brown basked
in this Potemkin praise-fest - a favor that would be returned with special
access (for my own clients, if I paid the retainer).
-
- Whether Mendelsohn, Lawson and Lucas actually pulled
off all they claimed, I can't say. Though just kids in their twenties,
LLM had garnered millions in revenue, a lot of loot if for mere advice.
No one seriously investigated; no one asked uncomfortable questions of
Mr. Brown, Mr. Blair or the man at the center of several of these supposed
"deals," Mr. Peter Mandelson, now an EU Commissioner.
-
- However, that Mendelsohn made these tawdry claims (or
grinned at me while his partner made them), and that they were published
on page one of every newspaper in the realm - part of an LLM tape broadcast
on BBC's Newsnight - one would think that perspicacious Mr. Brown would
have avoided Mendelsohn like the plague.
-
- But the PM embraced Mr. Let's-Make-A-Deal. The reason
was made clear to me by Mendelsohn himself, a man as brainy as he is cynical
and wealthy. Those many years ago, at the dawn of the Blair regime, Mendelsohn
handed me a confidential manifesto he'd penned for LLM clients only. It
was a map of the soul of New Labour.
-
- Here was a chilling combination of Mendelsohn, Mandelson
and Nietzsche. "AN OLD WORLD IS DISAPPEARING AND A NEW ONE EMERGING,"
he announced in upper case. In the "Passing World" were "ideology"
and "conviction" - which would now be replaced by "Pragmatism"
and "Consumption." "Buying" would replace "Belief."
-
- And ultimately, in this Brave New Labour World, style
was all: "WHAT YOU DO," wrote Mendelsohn, was passé, replaced
by, "HOW YOU DO IT."
-
- So why demand Mendelsohn's head now? Gordon Brown is
a prudent man whom, I suspect, reads a newspaper or two - and knew exactly
whom he had positioned to fill his party's coin sacks. Mendelsohn is just
a gun for hire, a forgettable factotum. I wouldn't place the blame on the
hired gun, but on the man whose finger is on the trigger.
-
- ********************
- The series "Lobbygate: Cash for Access" was
originally published by The Observer (UK) in July 1998 by Greg Palast and
Antony Barnett. For a complete history of the scandal, read, "Blair
and the Sale of Britain" in The Best Democracy Money Can Buy (Penguin/Constable
& Robinson 2004). Excerpt at www.GregPalast.com
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