Blair Inc--The Man Behind the Mask

by Francis Beckett

  As well as Maree Gail Glass, Global Counsel also employs Geoffrey Norris, an adviser with a long track record as a Blair adviser. Norris was both a former government adviser close to Tony Blair and later Gordon Brown when he was PM, and a strident advocate of nuclear power. From 1992 to November 1994 Norris advised Robin Cook when he was Shadow Trade and Industry Secretary and before that he advised Cook on health policy. He then moved to become industry policy adviser to Tony Blair when Blair was still Leader of the Opposition.

  In May 1997 Norris was appointed Blair’s special adviser responsible for trade, industry, energy, employment and planning. He has stayed close to Blair ever since. On the Global Counsel website Norris describes himself as an expert in energy and industrial policy, who ‘has been at the heart of business policy-making in the UK for the last decade’ and ‘was one of the key architects of Britain and Europe’s current approach to energy policy and climate change’.

  In 2008 he became a special adviser at the UK Department of Business under Lord Mandelson when Gordon Brown offered the peer a place back in government. When he took up the post at Global Counsel, the Advisory Committee on Business Appointments which approved his move said he could not use any information he had gained inside Whitehall for two years to gain preferential business for his new boss.

  Even for Blair’s special advisers, Norris was considered extremely close to Blair. The closeness rankled with the former Deputy PM John Prescott, who when once asked by the BBC about Norris said, ‘Who’s Norris? Mr Norris is an official in the department. We sometimes call them teenyboppers. You know what I mean?’

  Norris was said to be a strong supporter of nuclear power and pushed the nuclear case extremely hard and, along with the government’s Chief Scientific Adviser, Sir David King, persuaded Blair to back it.

  In March 2005, the Independent on Sunday reported: ‘Within government, Geoffrey Norris, Tony Blair’s special adviser on industry and business, is pressing the nuclear case. It is understood that he was instrumental in the creation of the DTI’s Future for Nuclear team.’ One Whitehall source told the paper: ‘Norris has fought hard to keep nuclear on the agenda.’4

  By 2008 Norris and his colleagues had held at least nine secret meetings at Downing Street with the bosses of nuclear energy companies while the government was formulating controversial plans for nuclear new build. The Independent on Sunday reported that

  no official records were kept of the discussions with the companies, which stand to profit from Gordon Brown’s announcement last Thursday [10 January] that he was approving a new generation of nuclear power plants.

  The Government initially tried to block details of the meetings requested under the Freedom of Information Act. However, last week it revealed that Geoffrey Norris, Gordon Brown’s energy adviser, met bosses from EDF, British Nuclear Fuels (BNFL), E.ON and British Energy at a crucial phase in the Government’s deliberations. Confirmation that there are no official records of the meetings adds to concern that certain advisers can operate outside the rules of government accountability.5

  But, as well as employing true Blairites, Mandelson copied another employment practice by Blair: employing people from Whitehall who were loyal to him in government. Just as Blair employed his trusted aide Ruth Turner from Downing Street in top jobs in the Blair Faith Foundation, Mandelson recruited civil servants who worked closely with him at the Department of Business and in Europe. An example is Duncan Buchanan, who was hired by Peter Mandelson when Buchanan was the twenty-eight-year-old head of the South Asia unit of UK Trade & Investment (UKTI), a government agency. Buchanan, who was responsible for testing the waters for British companies in India, Pakistan, Sri Lanka, Bangladesh and Afghanistan, left the civil service to take up his new position.

  According to the Guardian, the decision to hire Buchanan ‘suggests that Mandelson plans to target Asia. Any suggestion that he is exploiting business opportunities in Afghanistan would be highly controversial, given his close relationship with Tony Blair, the prime minister who took the UK to war against the Taliban.’6

  Buchanan, an Oxford graduate, worked for Mandelson as his private secretary in 2008 and 2009, but he spent the following two years in China and then India, the base from which UKTI monitors trade and investment opportunities in the wider region. He is understood to have sent a round-robin email to colleagues announcing his decision to move into the private sector. In the email, Buchanan said he intended to work in ‘emerging markets’, but refrained from mentioning the name of his new employer.

  Buchanan is described by colleagues as ‘a good operator’ and ‘resourceful’. In 2012 he wrote a blog about his first impressions on arriving in China and the difficulties he faced. ‘I’m reminded of the old truism – anything worth doing takes effort (or, euphemistically, “the juice is worth the squeeze”),’ he wrote.

  A source said: ‘Peter [Mandelson] is happy with how things are going with Global Counsel and is scooping up civil servants who he rated in government and who have the skills and connections to help him in his business.’

  Another is Stephen Adams, now a partner, as previously disclosed. His biographical note on the Global Counsel website says,

  Stephen Adams has a decade of experience in European public policy and regulation, chiefly in the field of international economic policy, European integration and multilateralism. Previously, Stephen was a Vice President in the Executive Office of Goldman Sachs International. He was a senior policy adviser at the European Commission, where he was closely involved in the WTO Doha Round trade negotiation and worked on a wide range of bilateral and multilateral economic negotiation. Prior to this, Stephen was a policy adviser to senior politicians in Brussels.

  What it doesn’t quite say is that Adams was one of the closest people to Mandelson, his speechwriter while he was EU commissioner, and according to a ministry insider one of a group of devoted civil servants to the former Business Secretary. He also tried to set up his own company, Whetstone Partners, from his home address in Reading, which did not come to anything, and then joined Global Counsel.

  Mandelson’s financial expertise is represented by Dan Conaghan, author of a devastating insider book on the Bank of England and a former Telegraph journalist. Neither role is mentioned by Global Counsel. According to its website,

  Conaghan has extensive experience in corporate finance and asset management. Previously, he was a director of Glendevon King Asset Management, a London-based investment management company specialising in fixed income funds. Before joining GKAM, he was a director of KC Capital, a corporate finance company focusing on healthcare and leisure transactions. Prior to this, he was a director and member of the investment committee of NewMedia Spark PLC (now Spark Ventures PLC). In addition to his role as a Senior Adviser he is also a Director of Global Counsel Advisory Ltd.

  What is particularly interesting is where Mandelson does his business and whom he has recruited to do it. One Labour source, a former cabinet minister, definitely believes that the relationship between Mandelson and Blair is now dominated by rival moneymaking dynasties. He has an interesting explanation.

  ‘When Blair was in government he was close first to Bill Clinton and then George Bush. If you look at Blair’s government clients, the vast majority are in the American sphere of influence in the Middle East and the various Stans [e.g. Pakistan, Afghanistan] and Africa. The one area that these people would not want Blair to work for is the Russians.

  ‘If you look at Mandelson’s known clients a lot of them are close to “tame oligarchs” – people who might be fearful of [Vladimir] Putin [of Russia] but support him. This has enabled him to scoop up business in the area that Blair cannot do business.’

  If you look at Global Counsel and some of its private newsletters, such a thesis stands up. For a start Mandelson has recruited people for their Russian expertise.

  One example is Alexander Smotrov who, according to the Global Counsel website, ‘has a background in political, international a
nd business journalism, covering energy, EU–Russian relations and Russian businesses across the globe. Previously, he was chief UK correspondent for the leading Russian news agency RIA Novosti between 2003 and 2013. Prior to this, he worked for RIA Novosti in Moscow.’

  His LinkedIn profile describes him as responsible for delivery of Russian projects; managing specific Russian clients; monitoring Russian political/business developments; support on major international issues; non-UK media and publicity work.

  The other is Miranda Gilbert, who according to the Global Counsel website, ‘researches European and Russian media and political trends. She is also responsible for marketing. Previously she has lived and worked in Moscow and has a degree in Russian from Oxford University.’

  But the real linchpin in the Russian operation is one of Mandelson’s most loyal and longstanding colleagues and friends, Benjamin Wegg-Prosser. Mandelson and Wegg-Prosser have known each other well for nearly twenty years, not long after Wegg-Prosser left Sheffield University in 1995 with a politics degree. Since 1995 Wegg-Prosser has been Mandelson’s research assistant in the Labour Party and his special adviser in the Cabinet Office and the Trade and Industry Department until Mandelson’s resignation in 1998.

  After that he went into publishing, becoming deputy communications director for Pearson. He later purchased Slate, an online US news company from Microsoft and planned an online rival to the Guardian to scoop up lucrative education jobs advertising. This led Alan Rusbridger, editor of the Guardian, to offer him a commercial publishing job, publishing politics on the Guardian Unlimited website and then Education Guardian and Society Guardian. In August 2005 he returned to work for Labour, this time for Tony Blair as director of the Strategic Communications Unit until Blair left government in 2007. The latter has been very useful to boost international business.

  He then went to Moscow, first working for a pro-democracy charity and then going on to work as director of corporate communications for SUP Media, an influential online media group, now with offices in Moscow, Kiev and San Francisco, which claims to be followed by 50 per cent of Russia’s online users for news, blogs and sport. It is co-owned by the Russian oligarch Alexander Mamut, a Putin supporter who now also owns the British bookseller, Waterstones.

  Wegg-Prosser also has a second limited-liability partnership with Slate UK – the UK arm of the US online business – called BYF. It uses the same accountants, MHA MacIntyre Hudson, using their address. It had a healthy £500,000 in its account in 2012, which appeared to have been distributed between Wegg-Prosser and Slate.

  Wegg-Prosser met his wife, Yulia, in Russia – marrying into the Russian elite – and here the links between Mandelson and Russian oligarchs such as Oleg Deripaska become much closer.

  She acts as the main link Mandelson has with the oligarchs and cemented the existing relationship he previously had with them through his longstanding friend, the banker and investor Nat Rothschild, by accompanying Wegg-Prosser when he met Rothschild with Mandelson. Otherwise she has one small company, Peredelkino, which specialises in translation services. The latest accounts for the financial year ending 2014 showed it was a very small business with assets worth around £22,000. Her husband is also a director.

  Oleg Deripaska, a Russian billionaire, is pretty central to Mandelson’s business in that he has business links with Rothschild. How close they are can be seen in a blog written by Yulia while she was staying with her husband, Mandelson and Rothschild in Klosters, Switzerland, before he set up Global Counsel.

  A report in the Mail on Sunday7 described in detail how Mandelson and the Wegg-Prossers stayed in Rothschild’s Klosters villa, boasting about the choice of expensive cars owned by the banking tycoon, including a Ferrari, an Alfa Romeo and a Porsche. She blogged in Russian,

  Nat is begging us to drive in his smart-looking Porsche, Ferrari and Alfa Romeo, but my boring boys seat me in the Jeep and we drive to the Fluela Pass, the mountain pass which Jeremy Clarkson regards as Europe’s most beautiful road.

  The pass only functions from April until October. We are overtaken by unbelievably beautiful old timers and I have a feeling that we irritate their eyes with our s*** Jeep.

  The blog was hastily withdrawn when the Mail on Sunday got hold of it in 2008. It had apparently originally not been thought to have mattered too much, as the original article was in Russian for a Russian audience. Unfortunately, the Wegg-Prossers had forgotten about Google Translate.

  Similarly, a libel action brought by Nat Rothschild against the Daily Mail revealed Mandelson’s close relationship with Deripaska. The libel action came as speculation suggested Mandelson had helped Deripaska obtain favoured tariff deals for his huge aluminium business and to help smooth a £500 million deal with the American company Alcoa for Deripaska. The EU reduced tariffs on the imports of aluminium while Mandelson was Trade Commissioner in 2005. Mandelson strenuously denied both allegations.

  The report8 described a sauna they attended, along with Rothschild and Mandelson’s use of Deripaska’s private jet to fly from Moscow to Siberia to visit his estate and later the use of Rothchild’s private jet to fly from Davos to Moscow.

  The Telegraph reports,

  Cross-examining Mr Rothschild, Andrew Caldecott QC, for Associated Newspapers, said: ‘We say that to take extensive hospitality from Mr Deripaska, who was not a close personal friend of Lord Mandelson’s before he took office, was inappropriate. To put him in a position of accepting hospitality and taking private jet flights exposed him to allegations of inappropriate behaviour.

  Rothschild replied, ‘I disagree. It was a wonderful weekend and he enjoyed it.’ In his witness statement, he added, ‘This invitation was to Lord Mandelson as a personal friend. It never occurred to me that it could constitute any kind of declarable gift or that he might be exposed to allegations of impropriety. I took him on the flight to Moscow as a friend and not for any business reason.’

  Rothschild lost the case. The Independent reported that the judge ruled, ‘So far as Lord Mandelson was concerned the benefit was the trip and the hospitality itself. So far as Mr Deripaska was concerned it was a relationship with the EU Trade Commissioner.’ The judge rejected the notion that Rothschild and Mandelson had flown out as friends, not business associates, and said Mr Rothschild’s behaviour had in part been ‘inappropriate’. ‘That conduct foreseeably brought Lord Mandelson’s public office and personal integrity into disrepute,’ the judge said.9

  The Telegraph also reported the judge’s ruling, saying, ‘Mr Rothschild states that he took Lord Mandelson on the trip as a friend and not for any other business reason. I cannot accept that the position was as simple as that.

  I accept that Lord Mandelson had no role in the joint venture, which is what the trip was arranged to promote. But I do not accept that there is a clear line between the business and the personal sides of Mr Rothschild’s relationship with Mr Deripaska. They have very extensive business relationships.’10

  On another occasion, when Mandelson was back as Business Secretary for Gordon Brown in 2008, Mandelson stayed with Nat Rothschild in Corfu and Deripaska’s yacht was visiting the island. Both Mandelson and then-shadow Chancellor of the Exchequer George Osborne (also a friend of Deripaska) had also stayed on the super-yacht, Queen K – with Osborne revealing Mandelson’s close connections to the Russian oligarch while Rothschild accused Osborne of trying to solicit donations to the Tories there (which was subsequently denied).

  Rothschild is also thought by the Financial Times to have helped Mandelson secure the lucrative post of chairman of Lazard International, a part-time job, for an undisclosed sum. The FT reported that the appointment, whereby Mandelson was expected to travel to sort out cross-border issues for its clients, was announced by neither Mandelson nor Lazard.11

  Probably a better example of Mandelson’s connections with Deripaska’s companies is the circulation list of people receiving a private newsletter sent out by Wegg-Prosser to more than 350 people, including politician
s and clients. The newsletter is said to be a subscriber-only publication, revealing the latest trends and inside information on a variety of political and commercial topics to paying clients. Many of the copies seem to be sent out free of charge, certainly to the people who discussed it with one of the authors, David Hencke.

  The list was leaked to the satirical magazine Private Eye, and revealed a number of prominent Russian oligarchs, including those close to Deripaska. One was Oleg Mukhamedshin, deputy chief executive of Rusal, Deripaska’s aluminium company. Wegg-Prosser declined to disclose to the Private Eye if these oligarchs were clients, though was happy to confirm a friendship.

  More interesting was the content of some of the private newsletters – which are supposed to give strategic advice – that have been leaked to the authors. Two seem to suggest that Global Counsel has to do a delicate balancing act between not offending Putin and offending British firms they may advise.

  One paper was about an oil deal – sanctioned by Putin and between BP and Rosneft – over extracting oil in Russia. The report describes the deal as ‘skewed in favour of the Kremlin and its allies’ – with the aim of the Russian state having more control over its resources but still having access to BP’s technical expertise to extract the oil by having a smaller stake in the oilfield. Given that BP is a subscriber to the newsletter, the analysis highlights the problems facing the company and tries to steer a middle course between Mandelson’s Russian oligarch connections and not offending Putin, while being honest about the problems BP faces.

  It concludes:

  One high profile acquisition in the most prominent sector in the Russian economy cannot be taken as a definitive sign of Mr Putin’s vision for the Russian economy, let alone some kind of evidence for a return to Soviet-style control. Like the furore over the jailing of the Pussy Riot singers, his renewed emphasis on orthodox values and the creation of a new agency to inspire patriotism in young people, the move is part of Putin’s political balancing of his own instincts, his reading of Russian politics and the factions around him. Whether this assertiveness in the economic and social spheres is a product of Mr Putin’s confidence or insecurity is hard to tell.