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As Peter Mandelson prepares to be ennobled today and re-enter the Cabinet after his two enforced departures, questions are being asked about the extent of his relationship with Russia’s richest man.
In his first week back in British politics, Mr Mandelson has avoided offering a clear account about his contact with Oleg Deripaska, the Russian aluminium oligarch, at a social gathering in Corfu this summer.
Asked ten days ago about the gathering, Mr Mandelson’s spokespeople in London and Brussels said that the former European Trade Commissioner only had drinks with Mr Deripaska aboard the Russian’s £80 million superyacht, the Queen K.
Mr Mandelson then told The Times that he had last seen Mr Deripaska at a dinner hosted by Rupert Murdoch in Corfu. However, well-placed sources insist that Mr Mandelson, who will become Lord Mandelson of Foy and Hartlepool today, was actually staying on board the Queen K.
He told other guests that he had been “billeted” on the yacht because Nat Rothschild, the financier, had run out of room in his five homes on the island.
Other sources have said that Mr Mandelson has also visited Mr Deripaska, who had an estimated fortune of £16 billion before the recent stock market turmoil, at home in Russia.
Concern over the extent of the acquaintance has arisen because of a potential conflict of interest between Mr Mandelson, who was the European Trade Commissioner until last week, and Mr Deripaska.
While he was Commissioner, Mr Mandelson promoted a plan to reduce EU tariffs on imported raw aluminium. After a vote by the European Council, the tariff was reduced last year from 6 per cent to 3 per cent, and mechanisms are in place to remove the tax completely from next year.
Mr Deripaska’s company, Rusal, the world’s largest aluminium producer, is a leading exporter to Europe, selling about one million tonnes within the trading bloc each year. At current aluminium prices the reduction will save Mr Rusal about £117 million a year.
Alan Duncan, the Shadow Business Secretary, said: “Now that Peter Mandelson is back in the Cabinet we need to see the track record of any associations and links that he might have had as a commissioner.”
Mr Mandelson’s friendships with the rich and famous has caused him problems before. He was forced to resign from the Cabinet in 1998 after receiving a £373,000 interest-free loan from Geoffrey Robinson, who at the time was Paymaster General.
He resigned again in 2001 after allegations surfaced that he had helped to get Srichand Hinduja, the Indian businessman, a British passport, although he was cleared of any wrongdoing by an official inquiry.
Mr Mandelson’s acquaintance with Mr Deripaska goes back two years, and he has said that they have met socially numerous times.
EU rules say that commissioners should avoid potential conflicts of interest. Mr Mandelson denied yesterday that there had been a conflict of interest and insisted that he had never discussed aluminium tariffs with Mr Deripaska. He told The Times: “The tariffs are determined by the EU member states, not by me, and the member states are going to be governed not by their desire to please a Russian businessman but by what is in their interests and those of their businesses.
“I am satisfied that I have never been presented with any conflicts of interest among those I have met. If you take the example of Mr Deripaska, a man I last met at dinner with Rupert Murdoch at a birthday party with his daughter, he did not at that occasion or any previous occasion ever raise the issue of aluminium duties and nor would I expect him to do so.”
A spokesman for Mr Deripaska said: “Mr Deripaska does not comment on his private meetings.”
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Presumably, when they were together, they talked about the British weather, the monarchy, the price of Beluga caviar, fresh oysters and lobsters....
Victor, Moscow,
What odds can I get on Mandelson having to resign again?
Kate, Newcastle , England
Brown wants to tackle obscene pay structures in the banking system whilst he & his cronies hypocritically enjoy similar benefits. The fact that Mandelson will be paid £75,000 a year for 3 years by the EU is simply theft from the taxpayer!
Christine, London, UK
Absolutely disgusting that a man as bent as him should be elevated to the House of Lords. It makes our political system look as dodgy as some eastern european democracies. I hope the man gets kicked out of government immediately another bad era of judgement from dithering Brown!
Alexander Grant, Ross on Wye, UK
Having read this article, I ask myself, am I surprised?, no, is the answer.
brian keating, agde, france
Perhaps we should assume that they were discussing knitting patterns,
Lezli Taubler, London, UK
Oh, how the return of Mandelson brings back memories.
Nothing changes.
jon dee, N.warks, GB
Poor old 'Mendy', can nothing be right about his selection in the scheme of things....by the way, that 'pension' thing was agreed a long time ago and, as a condition of contract, is stuck.....well, what would YOU do....turn it down?
ONLY AN HONOURABLE MAN WOULD DO THAT!
Derek Clifton, Andover, Hampshire, England
It is curious that , in order to boost its image, the Government had to bring back a twice disgraced politician from Brussels. Perhaps,the PM ought to have asked the French President the reasons as to why the President had lost confidence in the man as an European Commissioner.
Sepala Munasinghe, Maraussan, France
How do we stop the excesses seen at Westminster? A gravy train of expenses and now Mandy is brought back costing all of us taxpayers a fortune
Tim, Sherborne, England
Mac in Manchester - one of the biggest donors to the Labour party is the co-founder of one of the largest hedge funds in this country - check the government's books before you worry about the opposition (after all it's Gordon who has his mits on the levers of power not Dave).
Huw Sayer, London, England
Transparency, transparency, transparency. The new creed. Start with the Corfu Kopeks by all means, but then the Reykjavik Rubles and the Dublin Dengi...
Gordian Brain, Chippenham,
MAC I think the Labour Party heve equally benefited from Hedge Fund Dealings. Read Guido Fawkes
Zara, London, England
Has anyone in government considered Peter Mandelson's parliamentary record before deciding on ennoblement?
Is he the kind of replacement that the House had in mind when sweeping aside hereditary peers thought unfit for our democracy?
I. Silver, Farnham, England
Rumour has it that Mandelson's recipe for our economic recovery is to have the Bank of England produce £3 notes with his face on it.
A B Robertson, Dunoon, Argyll
'Mr Mandelson denied yesterday that there had been a conflict of interest....'
Along with certain other public figures, he still doesn't get it. A 'conflict of interest' isn't necessarily about what actually transpires between parties but may include how outsiders perceive matters.
m collins, Leeds,
So what is new? No doubt he has been playing the same game in Europe. The EU commission is no stranger to such maneuvering. And the same old tricks back now in the Cabinet and House of Lords. Yuck
M. Cawdery, Craigavon, Co. UK, EU Courtesy Brown
How can someone as dicey as Mandelson be given such priveliged regard? Has he got some kind of hold on these dubious politicians? Three weeks ago he was viciously attacking Brown. He leaves his job in the EEC and gets obscene benefits, picks up honours and now -Aluminium ?
Don't normal laws apply?
alan burden, mijas pueblo, España
We can all take a reasonably good guess at what he was likely doing in the company of Deripaska, but what in God's name has he ever achieved to justify a seat in the House of Lords?
Richard Crow , Warsaw, Poland
Remember the great American satirist, Tom Lehrer, claimed he was forced into retirement when he heard Kissinger had been given the Nobel Peace Prize. He claimed satire was no longer possible.
Mandleson being parachuted in to help us keep a roof over our heads is like finding out Hannibal Lecter has just invited you to a dinner party.
All that can be said in it's favour is Brown has managed to find the only guy on the planet who is even more loathed than he is.
Paul Mack, Paisley, Scotland
champagne socialism
christopher, manama, bahrain
This is nothing. How about the millions of pounds that the Tory front bench have personally and the party funds have also made from the dodgy hedge fund managers who are partly to blame for the current financial crisis?
mac, Manchester, UK
Mandy back,. allegation of corruption...plus ca change
Keith, Grantham,
Already!
Sally Philip, Edinburgh,
Good links with powerful Russian businessmen may prove useful when negotiating repayment of UK deposits from Russian, oops! sorry, I meant Icelandic banks.
Go go go Mr. Mandelson.
PS: If you think doing away with the 'old boys' system is a good idea you must be crazy! REAL democracy? How?
NDG, Tokyo, Japan
Peter Mantelson and his beloved other half Tony Blair are the worst duo ever to enter british politics.Unfortunately is Brown who will pay the price of these two bent politicians.Brown has made a big mistake bringing him back to his government.
Nicholas, Larnaca, Cyprus
Obscene!
LR, London
len reynolds, london,
Poof power prevails again, seems its the only way to get on these days, unless you area scot, then you can get a job ruining the English economy by keeping interest rates low, encouraging excessive borrowing and being prudent...
russ, valencia, spain
Mandelson is, like Bliar, a NuLabour politician with a strange relationship with the concepts of truth, honesty & integrity. The only NuLabour politician with less right to be enobled than Mandelson is the great Bliar himself. The Times: keep digging - we have a right to know HOW dishonest they are
Donna Walker, Effingham, England
£117 million pounds of taxation, struck from the books in an instant.
But then again, yachts are expensive things, not quite as expensive as politicians, it seems.
Bill, Carmarthen, Wales.
Is that what having Communist beliefs does for you? I thought it was about planting rice in the paddy fields/making tractors to a plan, and wearing the same dull suits. Not moving (via the P45) jobs, each one better paid than the next.
Rob Bain, Derby,
Why exhume this consummately political Blairite?
We face an economic/banking crisis.
Tony Blair has now got US experience working for J P Morgan, also Zurich, etc.
Why not just get Blair back? He was a better PM than Brown (not difficult), and now has more relevant experience and contacts.
Pat, Coromandel, NZ
Hello,hello, hello. He we go again.
Rodney S. Barker, Gainsborough, England UK
All men are created equal; all politicians are created honest. But most men end up more equal than others and most policiticians can be trusted more (or less) than others.
james, Leeds,
Does anyone believe Mandelson the man is
bent as a cork screw, I find it hard to believe
that Brown has brought this corrupt individual into the government and how did he worm his way into the gravy train as EU trade commissioner. No need to answer it was his other suspect friend Tony Blair.
Baz, Christchurch,
I cannot believe you cannot see what is obviously happening here... here's brokering the deal for the acquisition of Hartlepool United as a global super-power !! Watch out Abramovich - we're coming !!
Paul Freeman, Pollington, East Riding of Yorks
Could not agree more with Bill Adams, Delhi, India:
''Shouldn't the UK introduce thorough public vetting for public positions that are offered to political friends and cronies?''
K. Urban, London, UK
Shouldn't the UK introduce thorough public vetting for public positions that are offered to political friends and cronies?
Bill Adams, Delhi, India
Dogged by his association with a billionaire is the least of our problems. Someone somewhere should be dogging him and the sytsem which lets a public servant, to allegedly walk away with a £1m payout after he has jacked in his luxurious euro job!
How many more of these people are out there waiting?
Mike O Connor, Plymouth,
Mandelson back in Cabinet - Gosh, do they never learn? You would think after two forced resignations they would not let him in the front door of No.10!
Adrian Chandler, Nelson, New Zealand
It may be a new case of dodgy dealings with the rich and powerful, but it's the same old Comical Mandy.
Simon, Northallerton,
Snout, Trough... Same old story...
Martin, Poole, UK