In our editorial last week (‘Return of the Prince of Darkness’), we mentioned that the UK’s new Secretary of Business, Peter Mandelson – or Lord Mandelson as he is now known – was already attracting unwelcome attention for having been entertained on a Russian oligarch’s yacht in August, while still European Union Trade Commissioner.
It has been alleged that Lord Mandelson’s relationship with the aluminium tycoon, Oleg Deripaska – possibly Russia’s richest man and certainly one of the world’s richest – had given rise to a potential conflict of interest, as the Trade Commissioner had had oversight of European Commission decisions relating to aluminium import tariffs in the EU and Mr Deripaska had benefited from trade concessions worth up to £50 million a year.
Coincidentally, at the time of writing, it was emerging in the UK media that Mr Mandelson, as Trade Commissioner, also had at least two previous dinners with Mr Deripaska in Moscow.
The revelations have led to further questions over Lord Mandelson’s integrity and his seeming infatuation with the mega-rich, including Lakshmi Mittal, the Indian steel tycoon, the Hinduja brothers, the Indian billionaire businessmen whose British passport applications caused Mr Mandelson to resign his Cabinet post in 2001, and Nathaniel Rothschild, scion of the famous banking family and a wealthy financier in his own right.
But just as the British opposition and Lord Mandelson’s enemies within his own Labour Party were drooling at the prospect of a nice, juicy scandal early in his dramatic return to the Cabinet, it emerged that the Conservative Party Shadow Chancellor George Osborne and the Conservative Chief Executive Andrew Feldman had also enjoyed Mr Deripaska’s entertainment on board his yacht while they were on their summer holiday in Corfu.
Nothing inherently wrong with that, you might say. Except that one of the subjects of their cocktail chat was apparently a possible donation to the party coffers, even though it is illegal for persons not on the UK electoral roll to make donations to British political parties. Mr Osborne and Mr Feldman have however claimed that they discussed the possibility of a donation by Leyland DAF, a UK company that just happens to be controlled by Mr Deripaska.
Indeed, just as the Conservative Leader David Cameron was sharpening his knife to plunge it into Prime Minister Gordon Brown and Lord Mandelson, he has been forced to defend Mr Osborne, his close friend, right-hand man and political confidant, to counter allegations about Tory sleaze.
Mr Osborne, due to a serious failure of judgment, is now fighting for his political life, even as the Conservatives try to turn the spotlight back on Lord Mandelson. They will find this a particularly difficult task, as the calls are getting louder for Mr Osborne and Mr Feldman to be sacked.
But one man who probably warrants closer attention in all this is Nathaniel Rothschild.
Mr Rothschild and Lord Mandelson are friends. Mr Rothschild and Mr Osborne were friends as undergraduates together at Oxford University. Mr Rothschild’s mother is a major donor to the Conservative Party and one of the contributors to the funding of Mr Osborne’s parliamentary office. As a hedge fund manager for the exclusive Atticus Capital, Mr Rothschild has a select list of ultra rich clients, prominent among them being Mr Deripaska, whom he advises on his financial investments.
It can be no coincidence that Mr Rothschild was reportedly present at the first of Mr Mandelson’s two dinners with Mr Deripaska in Moscow, as well as playing host to both Lord Mandelson and Mr Osborne at his villa in Corfu in the summer, before taking them on board Mr Deripaska’s yacht. Just why Lord Mandelson and Mr Osborne, from opposing sides of the political spectrum, should find themselves together in Corfu and just what Mr Rothschild was up to is anyone’s guess.
However, what really caused the brown stuff to hit the ventilating equipment was when Mr Osborne breached confidence and rather foolhardily made public the fact that Mr Mandelson had “dripped pure poison” about Gordon Brown, while they were Mr Rothschild’s guests. Presumably he did this to score political points, cheap though they were.
In retaliation, the embarrassed host, Mr Rothschild, encouraged by Lord Mandelson, it is suspected, issued a statement implicating Mr Osborne in the discussions with Mr Deripaska about the possible donation.
It really is a bit of a tangled, but banal web of political intrigue and personal relationships in the murky world of politics and big business.
Mr Osborne’s behaviour in Corfu does not appear to have been illegal; improper and unethical, quite possibly. But it was most definitely ill-advised, if not downright stupid, especially for someone aspiring to be Chancellor of the UK.
The heat, for the time being, is off Lord Mandelson, who, no stranger to controversy and political intrigue, appears to be weathering this particular storm.
Hopefully, the truth, or most of it, will come out in due course and a final reckoning will be made. But one thing is sure.
This soap opera, dubbed “Yachtgate” by the British media, has once again exposed the foolhardiness of politicians playing Russian roulette with their careers, as they gamble away whatever principles and common sense they might have in the quest for political advantage and personal advancement.
