Mission to exonerate

["Michael Keaney" <Michael.Keaney@xxxxxx>]

Background:

On 24 January this year Peter Mandelson resigned, for the second time,
from the Blair Cabinet. Unlike the first occasion, however, Mandelson
was the fall guy for a badly conceived scheme involving cash for
passports. While raising money for the grotesque millennium dome,
Mandelson had, with Blair's approval, though with more caution than his
boss it seems, courted the billionaire Hinduja brothers for sponsorship.
Their position was problematic owing to their involvement in the Bofors
arms scandal during the 1980s and the Indian government's concern that
they should pay their taxes. Their desire for British passports was met
thanks to a speeded up process that was whisked along by Jack Straw,
then Home Secretary, and his junior minister Charles Clarke, a
long-standing colleague of Mandelson from the 1970s. Both Clarke and
Mandelson had been involved in the World Festival of Youth in 1978
(Mandelson as Chair of the British Youth Council, an MI6-sponsored
outfit) and Clarke as Chair of the National Union of Students (a
long-standing launch-pad for the careers of New Labour apprentices and
masters alike: Jack Straw MP, Trevor Phillips - pointman against Ken
Livingstone, Jim Murphy MP, Lorna Fitzsimons MP, and Andrew Pakes -
leading light of the New Times Network, bringing "excellence" to
political organisation!). While Clarke was Kinnock's Chief of Staff
during the 1980s, Mandelson became the director of communications. Prior
to that, of course, he was involved in the London Weekend Television
"mission to explain" with John Birt (recently appointed as Blair's chief
of strategy and Whitehall reform), Brian Walden (ex-rightwing Labour MP)
and Michael Maclay (now boss of Hakluyt, a private sector spooks
contractor working for multinationals against bothersome NGOs). As
Mandelson fell on his sword (again), this time to be the sacrificial
lamb for the preservation of New Labour, Blair appointed Anthony Hammond
to head up an inquiry into the Hinduja affair. Hammond exonerated
Mandelson, although there was some criticism of internal Home Office
procedures, and notice of MI6's concerns regarding the would-be British
citizens. Overall, nothing very disturbing (for New Labour/the permanent
government) came out of the affair. And now...

IN THE BACK

That's Spooky:
Hinduja inquiry QC Hammond works for Mandy's mate

Private Eye
No. 1034, 10 - 23 August 2001

Perhaps the most surprising entry in the latest report of the advisory
committee on business appointments is that of Sir Anthony Hammond KCB,
QC, formerly Her Majesty's Procurator General and Treasury Solicitor,
and even more formerly legal adviser to the Home Office, who has become
legal adviser to a new company called Hakluyt.

Hakluyt was the subject of a front page article in the Sunday Times on
17 July, which revealed that the firm had very close links to British
intelligence. One of the firm's main projects, said the report, was to
seek out employees of Greenpeace, Friends of the Earth and the Campaign
for Nuclear Disarmament who could be persuaded for a suitable fee to
pass on information about their organisations to client firms of Hakluyt
such as BP.

Eye 1031 noted that Michael Maclay, a director of Hakluyt, left the
Foreign Office in the mid-1980s and teamed up with the band of "mission
to explain" journalists at London Weekend Television, including Peter
Mandelson. Maclay, the Eye reported, worked closely with Mandelson,
until he set up Hakluyt with the special permission of Sir David
Spedding, the late director of MI6.

The appointments committee gave "unconditional approval" to Sir
Anthony's new post at Hakluyt, and he took up his job in February this
year. At the time he was working on a project specially commissioned by
the prime minister: "A Review of the Circumstances Surrounding an
Application for Naturalisation by Mr S P Hinduja in 1998." The principal
boy in this drama was, of course, Peter Mandelson, former LWT mate of
Michael Maclay of Hakluyt.

One of the issues to which Sir Anthony applied his mind was the
involvement of the intelligence services when the Hindujas first applied
for British nationality in 1990. A number of press leaks had suggested
that intelligence reports at that time had revealed some of the truth
about the Hinduja brothers' involvement in the Bofors arms scandal in
India, and that this information had helped to persuade the Tory
government of the time to refuse the brothers' application for British
citizenship. If that were true, it would reflect rather badly on the New
Labour government's decision to grant nationality to applicants who,
less than 10 years earlier, had had the same applications rejected by
the Tory government on the grounds of intelligence reports about their
business dealings.

Fortunately for Labour ministers, Sir Anthony dismissed the claim. He
wrote (5.193): "During the period when the naturalisation applications
by Mr G P and Mr S P Hinduja was being handled, the secret intelligence
service (SIS) had accumulated a certain amount of intelligence about the
Hindujas' business activities abroad. It would not be appropriate for me
to describe in detail the nature of this material. Suffice to say that
it raised the possibility that they had been involved in a number of
dubious practices, in some cases amounting to illegal activities, but
that none of the indication of such involvement was conclusive. The
material covered, but was not confined to, the Bofors scandal."

That looked pretty bad, but the next paragraph (5.194) cleared the
matter up: "None of the material was seen by the Home Office, nor was
the security service aware of it at the time when the Home Office made
their routine checks in the course of their consideration of the
Hindujas' naturalisation applications. This was because the material had
been gathered by SIS in response to a request in a different context."
And para 5.195 settled the matter once and for all. "Having inspected
the intelligence material personally, my own view is that because of its
speculative and inconclusive nature, the conclusion would probably have
been that its existence did not of itself justify a refusal to grant
naturalisation." Phew! What a relief! One arm of government, the SIS,
knew all about the Hindujas' dodgy dealings including the Bofors
scandal, but none of this leaked out to the Home Office in time to
affect the Hindujas' application for citizenship, which was turned down
for quite different reasons.

It now emerges that at the time he was writing his report, Sir Anthony
Hammond was starting his job as legal adviser to a company whose
boardroom was full of former intelligence spooks and Foreign Office
civil servants, at least one of whom had worked alongside Peter
Mandelson. The Eye asked the Cabinet Office, which publishes the
biennial report of the Advisory Committee on Business Appointments,
whether in the circumstances the appointment of Sir Anthony Hammond to
conduct the Hinduja inquiry had been appropriate. The reply was
predictable: "We don't have any comment."

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Michael Keaney
Mercuria Business School
Martinlaaksontie 36
01620 Vantaa
Finland

michael.keaney@xxxxxx