Bernie Ecclestone

by Terry Lovell

  Two days later, on Thursday 6 November, a journalist on the London-based broadsheet, the Daily Telegraph, phoned David Hill, the Labour Party’s chief press spokesman, at its headquarters in south London to ask whether Ecclestone had ever given money to the Labour Party. Hill said he had no idea. He called the newspaper back a short while later to say that he had been unable to check it out because the position of treasurer had been vacated and his replacement had yet to take up office. By then Downing Street had been alerted and a hurried closed session of Blair and his closest advisers agreed in principle that Tom Sawyer, the Labour Party’s general secretary, should seek the guidance of Sir Patrick Neill QC, chairman of the independent Whitehall watchdog, the Committee on Standards in Public Life. The next day other newspapers had picked up the story but, as the Labour Party headquarters became almost paralysed by a general state of panic, they, too, were stonewalled. Downing Street decided to proceed to seek Neill’s guidance.

  That Friday night Sawyer faxed a letter to Neill for his ‘clear guidance’. But although it referred to ‘a substantial personal donation’ from Ecclestone towards its general election campaign expenses, its emphasis was on whether or not the Labour Party should accept a second donation (the £500,000) which, stated the letter, had been discussed with Ecclestone since the election – ‘where an appearance of a conflict of interest might be thought to arise’. It added: ‘The Prime Minister has decided that in the light of our approach to the Directive [in proposing an exemption for Formula One] and to avoid any possible appearance of a conflict of interest, we should consult you on whether it may be properly accepted.’

  Over that weekend the storm clouds were beginning to gather. Reports in several Sunday papers carried speculative and damaging stories about a financial link between Ecclestone and the Labour Party, while its media machine continued to insist it was all mischievous fiction. By mid-day the following Monday, Sawyer had received the benefit of Neill’s guidance. While he believed criticism of the £1-million donation to be ‘wrong and unfair’, in the interests of ‘openness and transparency’ the Labour Party should decline the proposed second donation and return the first. That evening, in the House of Commons’s lower reporters’ press gallery, David Hill held a briefing which acknowledged for the first time that Ecclestone was on a list of donors who had given more than £5000. When the news reached Ecclestone, he was incandescent with anger.

  He had been given no warning of Hill’s announcement. Suddenly he was isolated, uncertain of what was going on. Just hours before Hill’s press briefing, his solicitors, Herbert Smith, the law firm which represented Ecclestone and the FIA in their competition law dispute with the European Commission, repeated a statement they had issued over the weekend on their client’s instructions – that he had not made any donation to the Labour Party. However, a couple of hours later, he was made to appear a liar. As a result of Hill’s briefing, he was forced to admit that, in fact, he had.

  Ecclestone was confronted by the media pack as he left, with Max Mosley, an FIA disciplinary hearing at the RAC’s Motor Sports Association’s premises in Colnbrook, Berkshire, where Michael Schumacher had his second listing in the 1997 World Championship removed for his part in a controversial accident involving Jacques Villeneuve at the Spanish Grand Prix in Jerez. Ecclestone was in a corner. When asked to comment on what was now being said by Downing Street, he replied between gritted teeth: ‘Well, if Mr Blair said that, he wouldn’t lie, would he?’

  The clumsy way in which it had all been handled – ‘If they [the Labour Party] dealt with this in that way, one wonders how they deal with other things you don’t hear about’ – caused Ecclestone to believe, not without good reason, that he was being set up as the villain of the piece. He was particularly concerned about how it might appear overseas, where he conducts 90 per cent of his business. ‘Blair dropped me in it. It was very embarrassing. I was suddenly the bad guy. People thought I was trying to bribe the government, when it was a donation to the Labour Party before they were elected. I like to think I can walk into the offices of people without that sort of thing hanging over me. I don’t need it.’ He said he would have been ready to respond to the media when, as part of the Labour Party’s anti-sleaze initiative to show greater accountability of financial sources, the names of donors who contributed more than £5000 were to be published in its annual report the following October. ‘It would have been all right if they had done what they said they were going to do. We could have all said the same thing.’

  He also believed that a decision by Blair to set up a wide-ranging inquiry headed by Neill to look at the whole issue of party funding also reflected badly on him. ‘They only did that to cover themselves,’ he said. ‘But it made it worse for me… I was suddenly put over again as the one behind it all.’ He refused an invitation to appear before the Neill inquiry the following April – the only witness to do so – to answer questions about what he expected in return for his million pounds. After the contemptuous way in which he believed he had been treated by Blair, he was unwilling to be questioned, suspecting a political agenda behind the invitation: ‘If you appear, you get yourself involved.’ He believed he had also been portrayed in no less a bad light by the alleged second donation, which, in his letter to Neill, Tom Sawyer stated Ecclestone had offered.

  Contrary to what had been claimed, he had made no such offer, he insisted. As an affirmation of his innocence, he swore the truth of his denial on the lives of his two daughters, Tamara and Petra, which to Ecclestone is a deadly serious oath. Indeed, he hadn’t made a second offer – at least, technically. He was aware that discussions were going on between David Ward and Millbank but they got no further before the balloon went up. At that stage no firm figure had been mentioned to Ecclestone or agreed by him. ‘I didn’t play a part in any of that. At that stage it was all talk.’ Ecclestone believes he had every reason to have felt much maligned on two fundamental counts. On the first count, he insists, the £1 million donation had had nothing to do with the tobacco issue but his tax affairs. And on the second, he and Mosley hadn’t sought an exemption for Formula One but a period of phased reduction. Blair had granted them something that they had never wanted.

  The Government faced fresh round of criticism when it became known that Tessa Jowell’s husband, David Mills, was a legal adviser and non-executive director of the company which ran the Formula One team Benetton until his resignation the previous May, when the new Government took office. Mills had been a close associate of its former managing director, the flamboyant Italian, Flavio Briatore, who boasted of his close friendship with Ecclestone. Their business association was renewed in 1998 when Mills joined a London-based sports management and venture capital company which assisted in the administration of a company based in Holland supplying Mecachrome engines to Formula One teams and run by Briatore. Jowell dismissed scathing innuendo from political opponents as a vile and politically motivated slur campaign.

  She and her husband, she added, had acted with absolutely integrity throughout to avoid a conflict of interest. Because of his former connection with Benetton, she had sought clearance to handle the policy review from Dobson and Sir Graham Hart, permanent secretary at the Health Department, as well as notifying the office of Lord Nolan, the former chairman of the Committee on Standards in Public Life. The long-running affair had become so damaging to the squeaky-clean image of the New Labour Government that Blair felt it necessary to go on television on 17 November to apologise for the way the story had been handled and to deliver his you-can-trust-me-I’m-the-Prime-Minister message. But 11 days later, just as the heat was beginning to cool down, two Labour-dominated Commons select committees put the episode back on the front pages when it roundly rejected the Government’s intention to exempt Formula One.

  The day after Jowell appeared before the Select Committee on Health to defend the Government’s decision, it issued a report stating that Formula One should be placed under the same pressure as any other tobacco-s
ponsored sport. The committee recommended that the Government should reconsider its position. Its chairman, Labour MP David Hinchliffe, said: ‘I think the Government have had the wool pulled over their eyes by Formula One. It is a case that could have been made similarly by other sports but they had the integrity not to make that case.’ The Government’s proposal was received with equal hostility by the Commons committee which scrutinises European legislation. It believed it could wreck the European Union’s directive and that it was unfair to other sports, and warned that it might breach European anti-discrimination rules.

  But the Government’s embarrassment was not over even then. Three months later, following a complaint lodged by Tory MP Andrew Robathan, Blair came in for personal criticism from the Committee on Standards and Privileges over the visit with his wife, Cherie, and three children to the British Grand Prix. It was estimated that the cost of the hospitality was £300 per head – £75 more than the figure allowed for MPs or their spouses before it needed to be registered under the Commons rules. Sir Gordon Downey, the Commissioner for Standards, rejected an explanation by Blair that it had been an official duty undertaken as leader of the Opposition. Conceding that there was undoubtedly some confusion over the rules governing official visits, he nevertheless noted that six other Members of Parliament who were also at the Grand Prix had registered their attendance. Downey’s judgement put Blair in the history books as the first Prime Minister to be rebuked for breaching the Commons rules on disclosures of gifts and hospitality.

  The credibility of Jonathan Powell, Blair’s chief of staff, was also seriously damaged. He had played a pivotal role in securing the donation from Ecclestone, and had failed to advise Blair against meeting Ecclestone in Downing Street, a high-profile event that naturally attracted the attention of the media. It would seem astonishingly naïve of him not to have realised the vulnerable position in which he was placing Blair, and that, in his world of mischievous leaks and spin, the worst possible interpretation would be placed on Ecclestone’s £1 million donation and the Formula One exemption.

  On 22 June 1998 the European Union adopted the directive banning all forms of tobacco advertising and sponsorship, although, in line with the argument put forward by Mosley and Ward, it would be short-lived. In the meantime, it decreed that tobacco sponsorship of sports in Europe would end by 30 July 2003 – except for certain global sporting events such as Formula One which depend on a high level of tobacco sponsorship. They would be given a three-year extension, until 1 October 2006, to find other sponsors, provided there were reductions in both the sums involved and visible advertising. In March, Mosley, at least publicly, appear to welcome the proposed directive and reciprocated by announcing that it would act immediately to eliminate tobacco advertising and sponsorship from Formula One ‘if presented with evidence of a direct link between tobacco advertising/sponsorship and smoking’1, indicating that it could mean a worldwide ban at Formula One events as early as 2002, a decision that could be included in the 1998 Concorde Agreement, which was shortly to be signed.

  The FIA said the proposed directive ‘provides the sport with the flexibility and time it needs to take decisive action in this area. The FIA therefore intends to study evidence produced by the British Government, among others, and is discussing the issue with the World Health Organisation.’ However, while evidence was available to show a direct link between smoking and sport sponsorship, it wanted proof that tobacco sponsorship was a direct cause of young people taking up smoking, rather than encouraging smokers merely to switch brands, as the manufacturers claimed. It then moved the goalposts by redefining the grounds on which it would agree to an early ban. In December 1998 it announced that it required ‘evidence of anyone taking up smoking as a result of tobacco sponsorship in Formula One who would not otherwise have smoked … in particular young people taking up smoking’.

  With research by health authorities and anti-tobacco campaigners focused exclusively on the connection between tobacco and sports sponsorship in general, the evidence for a much narrower causal connection to any particular sport simply didn’t – and doesn’t – exist, as Mosley might well have suspected. In the absence of such evidence – ‘at the same time we received wheelbarrow loads of documents from the tobacco industry purporting to show no link’ – the 1998 Concorde Agreement was signed two months later at the Monaco Grand Prix. In a terse statement Mosley said: ‘The 2002 date has slipped with the signing of the 1998 Concorde Agreement, which prevents us from introducing such a ban before 2006.’

  But it seems that Mosley was in no position to hold out the hope of an early ban anyway. He later admitted that ‘it would quite obviously have been an untenable position for the FIA to refuse to sign the 1998 Concorde Agreement unless the teams agreed to give up tobacco sponsorship in 2002’. He added: ‘As I said to Padraig Flynn [the EU’s Commissioner for Employment, Industrial Relations and Social Affairs] in private, “It’s difficult to go in front of the teams and say to them, ‘You’ve got to give up $200–300 million worth of income without any evidence that you are doing any harm at all.’”’ Yet as Mosley would have been aware of the teams’ position from the beginning, why did he hold out hope of an early self-imposed ban? It was suspected that he did so in an attempt to scupper the EU directive itself.

  His offer in March came at a time when the more progressive members, particularly the Nordic countries, were furious by what they saw as the UK’s back-pedalling on the agreed directive to ban all sports-related tobacco sponsorship from 2003. It raised the obvious question: why was the British Government seeking a three-year exemption for Formula One when Mosley himself was now indicating it could, in fact, be achieved by 2002, a year ahead of the deadline? Clive Bates, director of Action on Smoking and Health (ASH), a British lobbying group actively involved, along with the Department of Health and the World Health Organisation, in supplying the earlier evidence required by Mosley, believes it was done to encourage opposing countries to reject Britain’s compromise amendment to the directive, which, without a qualified majority agreement – enough supporting member states weighted by size – would have seriously threatened its further progress. The balance of voting was very fine. Germany and Austria opposed the directive and Spain abstained. The switch of any other member state would have broken the qualified majority in favour of the ban.

  ‘Germany and the tobacco companies were pressing for voluntary action rather than legislation,’ said Bates, ‘and we believed the FIA’s offer was intended to support that initiative. Of course, once the legislative threat had subsided the voluntary ban would have been quietly forgotten. It was skulduggery and mischief designed to wreck the EU directive.’ Not so, Mosley insisted. As he was fully confident that the proposed directive was contrary to EU Treaty law and would, if passed, lose on appeal, there was no need to do so.

  The ‘cash-for-ash scandal’, as it became known, continued to haunt Blair. Three years later, newspapers were full of allegations that he and Chancellor Gordon Brown, who had claimed to have had no prior knowledge of Ecclestone’s donation, had lied. The allegations were referred to the Committee on Standards in Public Life, but went no further. In October 2000 the committee decided that it was not within its remit to investigate specific complaints. That same month, though, Liberal Democrat European Member of Parliament Chris Davies tabled a question in Brussels asking the Council of Ministers to hold an investigation to establish whether any of Ecclestone’s companies had made ‘tobacco-related’ donations to political parties in Europe. It was aimed, by innuendo, at Ecclestone’s friend Helmut Kohl, who had been forced to resign as honorary chairman of Germany’s Christian Democratic Party after he refused to name the sources of illegal cash donations.

  However, Davies, as he readily conceded, had no evidence to support such an investigation. He agreed to table the question following a call from a Sunday Express journalist trying to stand up a line implying that Ecclestone’s financial influence in promoting the interests of Formula O
ne reached beyond the shores of Britain. It was a kite-flying bit of nonsense about Ecclestone that ended up as a two-page spread in the newspaper under the headline: ‘Is this man the most powerful tycoon in Europe?’2

  If the affair was continuing to haunt Blair, so it was for Ecclestone, who, of all the cast of characters involved, was, for once, an innocent party, as Mosley and Ward readily concede. He had been persuaded, if not manipulated, to make the donation, which had nothing to do with the tobacco-sponsorship interests of Formula One. Even a letter to The Times, published in his name shortly after the storm clouds broke, in which he explained that the £1 million donation was a no-strings-attached gift to help Tony Blair keep the country ‘free from the old-fashioned interests’, a reference to trade unions’ influence on the Labour Party, was actually suggested and written by Mosley in a skewed effort to put the record straight.

  In fact, it served only to raise suspicions. To the many who knew Ecclestone, within and without the media, it stretched credulity beyond reason to accept that someone who was politically slightly to the right of Genghis Khan was in any way concerned by the influence the trade unions might have had within the Labour Party. Ecclestone isn’t a political animal outside of Formula One. As long as he has the freedom and independence to run Formula One, it is the only governance he is interested in. In any event, at the time of his donation in January 1997 the introduction of the one member-one vote rule in 1993 and the modernising Clause 4 in 1996 to the Labour Party’s constitution had already substantially removed the unions’ influence; their financial support over the years also had substantially diminished, which was why, ironically, Labour Party fund-raisers had found it necessary to cultivate a new source of cash, namely donors such as Ecclestone.