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Monday, 22 August 2011

Mandelslime: the saga continues

So a man who little more than 10 years ago was living in a £250,000 flat, who secured an inheritance of £450,000 and a windfall from some shares of about the same, who has never been paid more than £150,000 in the last 10 years (anything else would have to be registered), on which one would presume tax would be payable and living costs deducted, is somehow able to buy an £8 million house.

In 2005, Corporate Europe Observatory, a pressure group funded by Sigrid Rausing, a member of the billionaire Tetra Pak dynasty, Christian Aid and the Joseph Rowntree Charitable Trust, requested details of Mandelson’s meetings with industry lobbyists representing the financial services industry and transatlantic multinational firms. The group was concerned about the lobbyists’ influence over European trade policy that it had been studying.

At the time Mandelson was regarded as being close to the financial services lobbyists who are pushing for the liberalisation of rules around the world.

Mandelson released documents about the meetings that he had held in Brussels and at the World Economic Forum in Davos, Switzerland. However, substantial passages and the names of lobbyists were blacked out. Other commissioners have released similar information in full. After the ombudsman’s investigation began, Mandelson’s office claimed that it was protecting the “privacy” of individuals and the commission’s decision-making process.

The ombudsman’s report states: “The commission took the view that there is no added value from a transparency point of view in disclosing the names of these [lobbyists]. The reality is, however, that there is a very significant added value in disclosing the names of individual lobbyists, both in general and in this specific case.”

It added: “The blanking out of names also contradicts the commission’s proposal in the green paper on the European Transparency Initiative.”

In 2010 an investigation by the Daily Telegraph uncovered a dubious oil connection and the apparent concealment of financial interests in breach of Parliamentary rules. It starts in one of London's most expensive streets, at the heart of the Nash terraces around Regent's Park. On it lies a beautiful peach-stucco villa, and a long-standing mystery. There is no puzzle about the owner of the house: Lord Mandelson. There is no secret about its value: Land Registry records show that in 2006 he bought it for £2.5 million, including stamp duty.

The mystery has always been how he could possibly have afforded it. The price was around 16 times his then-income as a European Commissioner, a mortgage which, even in pre-credit crunch days, no lender would have contemplated. Sources close to the then Mr Mandelson suggested at the time that he used a bequest from his late mother, Mary, and sold his shares in an advertising agency.

But probate files show he received only £452,000 from his mother's estate; a search at Companies House disclosed he sold the shares a year after buying the house; and Land Registry records of his previous property dealings in London and his former constituency of Hartlepool show that he could have amassed no more than around £1.15 million in equity to put towards the purchase.

Added together, all that would still have left Mr Mandelson at least £1 million short. He did take out a mortgage – reportedly for £750,000 – to cover most of the gap. But in a 2009 interview he let slip that he had paid it off completely after just one year. The normal place to look for politicians' earnings is the declarations of interests they are obliged, under the rules, to make.

Mr Mandelson's declarations list only modestly-paid work for newspapers and magazines, and a number of speaking engagements. So to ask again, how does a man who 15 years ago owned a £250,000 flat, who has never worked outside government, get to buy a flat that costs 50 times the highest post tax salary he has ever earned?


Demetrius said...

Were you to read my blog of 25 August 2010 on the man doing a "Who Do You Think You Are" you might discover that he had an ancestor called Sykes at the time of Dickens. In that period there was another who did time in Newgate Gaol. It is a longish post but you might like the idea of him in a kilt.

Steven_L said...

One possibility is that they claim the things the rest of us have to pay on expenses, get hospitality, free holidays etc.

So they can pretty much save 100% of their salaries I expect.