Libyan link oligarch funded Blair initiative

Oleg Deripaska spent £300,000 funding Mr Blair's organisation

Πηγή: The Telegraph
By Robert Mendick and Edward Malnick

Oct 1 2011

Fresh questions emerged last night over Tony Blair’s relationship with Col Muammar Gaddafi and a Russian oligarch who sought a multi-billion dollar loan from Libya.

Oleg Deripaska, one of Russia’s richest men, spent £300,000 co-funding a little known project run by Mr Blair, which lobbied governments over climate change.

Mr Deripaska’s support for Mr Blair’s organisation – Breaking the Climate Deadlock – came a few months before his company’s negotiations with the Libyan Investment Authority (LIA) over a £3 billion financing deal. The deal was being brokered by JP Morgan, the US investment bank which pays Mr Blair £2 million a year as a senior adviser.

Contents of an email – disclosed in The Sunday Telegraph last week – showed how a secret visit by Mr Blair to Gaddafi in Jan 2009 was linked to the deal being put together by JP Morgan. In the end, the bank pulled out of the negotiations – a source said the Libyans were difficult to do business with – although the LIA subsequently bought about $300 million worth of shares in Mr Deripaska’s company Rusal.

Both JP Morgan and Mr Blair have insisted that the former prime minister was unaware of the negotiations. Mr Deripaska is a controversial figure who was once banned from entering America over alleged links with organised crime, which he denies.

His sale of two of his Russian plants to an American firm, Alcoa, was blamed for subsequent job losses in Alcoa’s UK operations. Breaking the Climate Deadlock was a joint venture between Mr Blair and a not-for-profit organisation

The Climate Group, which was formed in 2004 with Mr Blair’s backing while he was still prime minister. Breaking the Climate Deadlock was started in December 2007, about six months after Mr Blair quit Downing Street.

Mr Deripaska, who is chief executive of Rusal, the world’s largest aluminium producer, is listed as one of three main supporters of Breaking the Climate Deadlock on The Climate Group’s website. No mention of Mr Deripaska is made on any of Mr Blair’s websites.

The Climate Group said last week that Mr Deripaska had never attended any of its events. Mr Deripaska, whose fortune was estimated at its peak at £17 billion, famously hosted a lunch party on his yacht in the summer of 2008 in Corfu, attended by Lord Mandelson and George Osborne.

“Yachtgate” led to a political storm over claims – vehemently denied – that Mr Osborne had tried to solicit a £50,000 donation for the Conservative party. Lord Mandelson, who at the time was EU Trade Commissioner, was forced to deny any conflict of interest over cuts to European aluminium import duties, of which Rusal was one of the main beneficiaries.

A Climate Group spokesman said last week: “Mr Deripaska was one of a number of contributors to the [Breaking the Climate Deadlock] project. Negotiations over funding were run directly between The Climate Group and Basic Element, Mr Deripaska’s investment group. Funding began early in 2008 to the amount of £300,000 and was publicly recognised in all project reports. Neither Mr Deripaska nor Basic Element have continued funding The Climate Group.”

In 2008 and 2009, Rusal was in financial difficulties, mired in its attempts to restructure about £4.5billion of debt owed to foreign banks. A vice-chairman at JP Morgan wrote to the LIA in Dec 2008 “to finalise the terms of the mandate concerning Rusal before Mr Blair’s visit to Tripoli which is scheduled to take place on around 22 January”.

A JP Morgan spokesman said Mr Blair was never made aware of the negotiations although the bank knew of Mr Blair’s travel plans. As revealed last week, Mr Blair made at least six private trips to meet Gaddafi in Libya after leaving office. On two occasions he was flown in and out of Tripoli on a private jet paid for by the dictator’s regime.

Mr Blair has been widely criticised for blurring the boundaries between his various business and charitable ventures, a claim he denies. He has also been accused of using contacts made in Downing Street to further his commercial worth. Mr Blair, whose fortune is estimated at £20million to £60million and who admitted last week he employed 150 staff, denies any conflict of interest.

A spokesman for Mr Blair said it was ''false innuendo’’ to suggest any link between JP Morgan’s attempt to arrange a loan between Libya and Rusal and Mr Deripaska’s funding of Breaking the Climate Deadlock. He added: “Mr Blair has no commercial, advisory or business relationship with Mr Deripaska or any of his companies. Neither Mr Blair or his staff have ever acted for Rusal, either directly or indirectly.”

A spokesman for Mr Deripaska refused to say if Mr Blair had ever met the oligarch. Mr Deripaska is a friend of Lord Mandelson, the former Business Secretary. There is no suggestion that Lord Mandelson is involved in any way with the oligarch’s dealings with Mr Blair or JP Morgan.

Mr Deripaska has been glowing in his admiration for Mr Blair. Breaking the Climate Deadlock has published three reports. Mr Deripaska said in a press release issued on the back of one of them – A Global Deal for our low Carbon Future: “This report is unquestionably a very important contribution Tony Blair is making to the post-Kyoto discussions.”

According to the Climate Group website, “Breaking the Climate Deadlock is a joint initiative of former UK Prime Minister Tony Blair and The Climate Group. Launched in March 2008, its objective is to help build support for an ambitious new global climate deal in Copenhagen in December 2009 and its subsequent implementation.

“Combining the high-level advocacy of Mr Blair, with a suite of expert reports, briefing papers and public engagement activities, the initiative has highlighted how a fair and effective global deal can be build [sic] and the benefits that it would provide.”

Breaking the Climate Deadlock was wound up in Dec 2009, although Mr Blair’s website continues to display its logo prominently on its front page.

Besides their mutual friendship with Lord Mandelson, there are other links between Mr Blair and Mr Deripaska. Philip Lader, the former US ambassador to London in the early years of Mr Blair’s premiership, sits on the board of Rusal while his wife Linda LeSourd Lader is a trustee of the American branch of the Tony Blair Faith Foundation.

Editor's note

For the connection between Mandelson, Deripaska, George Osborne and Nat Rothschild see "Brown denies Mandelson 'did a final favour for Russian oligarch Deripaska'

On the desert trail of Tony Blair's millions

A bit rich: Mr Blair has said that he is worth 'considerably less' than £20 million

Πηγή: Telegraph
By Peter Oborne

Sep. 23 2011

One of the first letters arranging Tony Blair’s 2008 visit to Colonel Gaddafi, the now deposed Libyan despot, was written on the notepaper of the “Office of the Quartet Representative” – the formal title of the former British prime minister, reflecting his role as Middle East peace envoy.

Mr Blair flew into Tripoli in a jet arranged by the Libyan government, and was met by British diplomats. Yet a well-placed source has told The Daily Telegraph that his visits were little to do with Middle East peace, saying instead that the “visits were lobby visits for banking deals with JP Morgan” – the US investment bank that pays Mr Blair a consultancy fee of a reported £2 million a year. However, Mr Blair’s official spokesman categorically denied that Blair lobbied Saif al-Islam, Gaddafi’s son, on behalf of the bank, insisting that the visits were largely to do with African affairs.

Much remains mysterious about Mr Blair’s repeated visits to Tripoli over the past few years. But they display the essential characteristic of the jet-setting billionaire lifestyle he has enjoyed ever since leaving Downing Street in June 2007: an extraordinary confusion of public duty and private interest.

Was Mr Blair in Libya – as the headed notepaper would suggest – to discuss Middle East peace with Gaddafi? Was he working on behalf of his Governance Initiative, which claims it “pioneers a new way of working with African countries”? Was he sounding out deals for J P Morgan, as the well-placed Telegraph source insists? Or was he there on behalf of his own very lucrative money-making concern, Tony Blair Associates (TBA), whose professed objective is to provide “strategic advice” on “political and economic trends and government reform”?

This confusion of motive and identity follows Mr Blair almost everywhere he goes, as we found when researching our forthcoming Channel 4 Dispatches film, The Wonderful World of Tony Blair.

Let’s take the example of Mr Blair’s visit to the Emir of Kuwait, part of a wider Middle Eastern tour, made on January 26, 2009. He was introduced to the Emir – who is said to feel a profound sense of gratitude to the former British prime minister because of his role in deposing Kuwait’s greatest enemy, Saddam Hussein – in his capacity of Quartet Representative. And, indeed, Blair is charged by the Quartet with raising Middle Eastern funds to plough into Palestinian projects.

Yet, puzzlingly, by his side was a figure who has nothing to do with the Quartet whatever: Jonathan Powell. Mr Powell, who used to be Downing Street Chief of Staff when Mr Blair was prime minister, today has a new role as senior adviser to Tony Blair Associates, the vehicle through which Mr Blair channels many of his money-earning interests. Mr Powell was perched on a sofa during the meeting.

Shortly afterwards, the Emir handed Tony Blair Associates a lucrative consultancy deal to provide advice on the future of the Kuwaiti economy. Nobody knows how much this deal – which was kept secret for two years – is worth. Because the TBA contract was handled by the Emir’s personal office, it is exempt from scrutiny by Kuwait’s normally rigorous financial regulatory body.

Few Kuwaitis are prepared to speak out publicly, because it is illegal to criticise the Emir. But Nasser Al Abolly, a leading Kuwaiti pro-democracy campaigner, said he had heard from good sources that Mr Blair had been paid 12 million dinars, about £27 million. “I believe this amount is exorbitant,” Abolly told us, adding that much of Blair’s eventual report was not original and had come up with many of the same recommendations as earlier reports on the future of Kuwait – an observation echoed by other Kuwaiti politicians. A spokesman for Mr Blair insists that the sum involved was far less than £27 million, though declined to say how much TBA had been paid.

Mr Blair’s job as representative for the Quartet – the international diplomatic group that represents the US, Russia, the United Nations and Europe in their common attempt to forge peace in the Middle East – is riddled with this type of very troubling ambiguity.

Let’s take the example of the deal trumpeted by Mr Blair as one of his greatest achievements in his role as Quartet Representative – his success in persuading the Israeli government to open up radio frequencies so that the phone company Wataniya Mobile can operate in the West Bank.

Wataniya Mobile’s chief executive officer Bassam Hanoun cannot praise Mr Blair too highly. He told us that the Wataniya network had been built, “but it was dead, not operational” – until Mr Blair’s forceful intervention with Israeli ministers.

Yet Wataniya’s owner, the Qatari telecoms giant QTEL, is a major client of one of the former prime minister’s most significant paymasters, JP Morgan. When QTEL bought Wataniya Mobile’s parent company, Wataniya International, in 2007, the company did so with a $2 billion loan that JP Morgan helped to arrange, and the bank stood to make huge profits once the radio frequencies were released.

A near identical conflict involves a second major Palestinian project for which Mr Blair is lobbying heavily – the development of a huge gas field off the shore of Gaza worth more than $6 billion. Once again, he is fighting to overturn an Israeli edict blocking development, and again there is a potential conflict of interest. British Gas, which owns the rights to operate the field, is a major client of, yes, you guessed it, JP Morgan.

JP Morgan insists it has never discussed either the Wataniya or the British Gas deal with Mr Blair – while the former prime minister insists that in both cases he was, in any case, wholly unaware of the JP Morgan connection.

Nevertheless, the conflict is glaring – and Mr Blair would be unable to get away with this kind of confusion if he were a public servant in Britain, or working for an international organisation such as the World Bank or the IMF.

Dr Nicholas Allen, a senior politics lecturer at the University of London, specialising in parliamentary ethics, told us: “It is not altogether clear that Blair is separating very clearly his work as the representative of the Quartet and his business interests. Clearly, if he was holding a ministerial office in Britain, that kind of conflict – even the appearance of that kind of conflict, the appearance of that influence – wouldn’t be tolerated.”

Dr Allen says that no fewer than six out of seven of the Nolan principles – the code of ethics for public servants enforced by Mr Blair when he was prime minister – “appear to be undermined by Blair’s conduct”.

This immunity from ordinary standards comes despite the fact that Mr Blair is partly funded by the British taxpayer and gets the support of British civil servants. It all sounds uncannily similar to the notorious so-called “sofa government” – the confusion of formal roles and identities in the run up to the Iraq invasion for which, as prime minister, Mr Blair was censured by the former cabinet secretary Lord Butler.

It must be acknowledged that Mr Blair does much philanthropic and public spirited work through his Africa governance initiative, his Faith Foundation, and also for the Quartet (even though we found very few Palestinians who were prepared to speak well of him). However, these admirable objectives have been compromised and tarnished by his apparent drive to make money.

The Quartet cannot occupy more than one week a month of Blair’s schedule, perhaps less. He has earned a reported £6 million – though some in the City insist the real figure may be much higher – from JP Morgan since his consultancy started in 2008. Add in an estimated £1.5 million from advising the insurance group Zurich Financial services on its climate initiative.

He has advised Mubadala, one of Abu Dhabi’s most prominent sovereign wealth funds, and the luxury goods concern LVMH. In the television programme, we calculate that the Blair family property portfolio alone – with seven houses ranging from his manor house in Buckinghamshire to his London house in Connaught Square – is worth over £14 million. And then comes a further reported £9 million or more from speeches.

It is impossible to tell how much Tony Blair Inc is worth exactly because his finances are carefully hidden behind complex financial structures. Mr Blair himself is on record as saying that he is worth “considerably less” than £20 million. There is some reason to be sceptical of this claim.

Mr Blair insists that his conduct since stepping down as prime minister has been honourable, above board and beyond reproach. But this much can surely be said: when Blair joined the Quartet, he was handed a priceless opportunity to earn a place in history by making a genuine commitment to world peace. He has made some progress. Yet he seems to treat his post as envoy for the Quartet as a part-time post, by allowing his private commercial interests to merge with his public duty. And – as ever – the old maestro is getting away with it.

First Federal Reserve Audit Reveals Trillions in Secret Bailouts

Πηγή: The World News
By Matthew Cardinale

Monday, 29 August 2011

ATLANTA, Aug 28 (IPS) - The first-ever audit of the U.S. Federal Reserve has revealed 16 trillion dollars in secret bank bailouts and has raised more questions about the quasi-private agency's opaque operations.

"This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for
everyone else," U.S. Senator Bernie Sanders, an Independent from Vermont, said in a statement.

The majority of loans were issues by the Federal Reserve Bank of New York (FRBNY).

"From late 2007 through mid-2010, Reserve Banks provided more than a trillion dollars. in emergency
loans to the financial sector to address strains in credit markets and to avert failures of individual
institutions believed to be a threat to the stability of the financial system," the audit report states.

"The scale and nature of this assistance amounted to an unprecedented expansion of the Federal
Reserve System's traditional role as lender-of-last-resort to depository institutions," according to the
report.

The report notes that all the short-term, emergency loans were repaid, or are expected to be repaid.

The emergency loans included eight broad-based programmes, and also provided assistance for certain
individual financial institutions. The Fed provided loans to JP Morgan Chase bank to acquire Bear Stears,
a failed investment firm; provided loans to keep American International Group (AIG), a multinational
insurance corporation, afloat; extended lending commitments to Bank of America and Citigroup; and
purchased risky mortgage-backed securities to get them off private banks' books.

Overall, the greatest borrowing was done by a small number of institutions. Over the three years,
Citigroup borrowed a total of 2.5 trillion dollars, Morgan Stanley borrowed two trillion; Merryll Lynch,
which was acquired by Bank of America, borrowed 1.9 trillion; and Bank of America borrowed 1.3
trillion.

Banks based in counties other than the U.S. also received money from the Fed, including Barclays of the
United Kingdom, the Royal Bank of Scotland Group (UK), Deutsche Bank (Germany), UBS (Switzerland),
Credit Suisse Group (Switzerland), Bank of Scotland (UK), BNP Paribas (France), Dexia (Belgium),
Dresdner Bank (Germany), and Societe General (France).

"No agency of the United States government should be allowed to bailout a foreign bank or corporation
without the direct approval of Congress and the President," Sanders wrote.

In recent days, 'Bloomberg News' obtained 29,346 pages of documentation from the Federal Reserve
about some of these secret loans, after months of fighting in court for access to the records under the
Freedom of Information Act.

Some of the financial institutions secretly receiving loans were meanwhile claiming in their public
reports to have ample cash reserves, Bloomberg noted.

The Federal Reserve has neither explained how they legally justified several of the emergency loans, nor
how they decided to provide assistance to certain firms but not others.

"The main problem is the lack of Congressional oversight, and the way the Fed seemed to pick winners
who would be protected at any cost," Randall Wray, professor of economics at University of Missouri-
Kansas City, told IPS.

"If such lending is not illegal, it should be. Our nation really did go through a liquidity crisis - a run on
the short-term liabilities of financial institutions. There is only one way to stop a run: lend reserves
without limit to all qualifying institutions. The Fed bumbled around before it finally sort of did that,"
Wray said.

"But then it turned to phase two, which was to try to resolve problems of insolvency by increasing Uncle
Sam's stake in the banksters' fiasco. That never should have been done. You close down fraudsters,
period. The Fed and FDIC (Federal Deposit Insurance Commission) should have gone into the biggest
banks immediately, replaced all top management, and should have started to resolve them," Wray said.

Renewed questions about the Federal Reserve have inspired some young activists to organise grassroots
protests across the U.S.

"Since its creation by the U.S. Government in 1913, the Federal Reserve has created so much new
money out of thin air that it has destroyed 95 percent of the dollar's value," Joseph Brown, a college
student and one of the organisers of a recent protest of the Federal Reserve Bank of Atlanta, said.

"This hidden inflation tax benefits Wall Street and the government, but hurts the poor and those living
on fixed incomes, such as senior citizens, the most," Brown said.

The U.S. Government Accountability Office (GAO) audit itself was the result of at least two years of
grassroots lobbying. IPS reported in June 2009 a wide bi-partisan coalition of Members of Congress had
co-sponsored legislation to audit the Federal Reserve.

The audit was ordered as an amendment by Sanders as part of the Dodd-Frank Wall Street Reform and
Consumer Protection Act - a major banking overhaul passed by President Barack Obama and the U.S.
Congress in 2010.

"I think this (the first ever GAO audit) was a good start to uncovering what the Fed did so that we can
begin to determine whether similar actions should ever be permitted again," Wray wrote, adding, "my
preliminary answer is a resounding no."

The GAO also found existing Federal Reserve policies do not prevent significant conflicts of interest. For
example, "the FRBNY's existing restrictions on its employees' financial interests did not specifically
prohibit investments in certain non-bank institutions that received emergency assistance," the report
stated.

The GAO report noted on Sep. 19, 2008, William Dudley, who is now the President of the FRBNY, was
granted a waiver to let him keep investments in AIG and General Electric, while at the same time the
Federal Reserve granted bailout funds to the same two companies.

"No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit
on the Fed's board of directors or be employed by the Fed," Sanders said.

The GAO is currently working on a more detailed report regarding Federal Reserve conflicts of interest,
which is due on Oct. 18, 2011.