Tessa Jowell financial allegations

The Tessa Jowell financial allegations are a series of allegations surrounding Tessa Jowell, the then United Kingdom Secretary of State for Culture, Media and Sport. They arose when her husband David Mills came under investigation by Italian authorities who suspected him of corruptly receiving £340,000 from Silvio Berlusconi. Some newspapers have termed the accusations the 'Jowellgate' scandal [cite news |url=http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/03/10/ujowelltime.xml&sSheet=/portal/2006/03/10/ixportaltop.html
publisher=The Telegraph
title=Jowellgate timeline
date=10 March 2006] .

The case has been cited as a further example of 'sleaze' which is commonly used to refer to inherent corruption when large sums of money come together with the world of politics and politicians.

Accusations

Tessa Jowell married international corporate lawyer David Mills in 1979. In the early 1990s, Mills acted for Silvio Berlusconi, then a high-profile businessman and former Prime Minister of Italy [cite news
url=http://observer.guardian.co.uk/politics/story/0,6903,896698,00.html
publisher=The Observer
title=Labour link to Berlusconi cash probe.
date=16 February 2003] . During his work for Berlusconi, Mills received $600,000 (£340,000) [ [http://www.timesonline.co.uk/article/0,,200-2058985,00.html "Focus: The minister and the £350,000 gift"] , Times, 26 February 2006] ; the precise source of the money and the reason for its payment is under dispute, with Mills claiming that the money was part of a larger amount paid indirectly to him by another Italian client, Diego Attanasio, although Attanasio has denied this claim when found in London on 2 March (between custodial sentences for bribery and corruption) [ [http://politics.guardian.co.uk/labour/story/0,,1721429,00.html "Alleged source of cash found in London"] , Guardian, 2 March 2006] .

The Italian state prosecutors believe that instead Mills was being paid for giving false or misleading evidence in court for Berlusconi in the early 1990s (an accusation denied by Mills). Mills wrote a letter to his accountants in February 2004 which appears to be describing a payment; he claims he was inventing a scenario to get tax advice, using the euphemism "Mr B".

No indictments have yet been brought, and there is a time-limit for such charges which were established by laws recently passed by the Berlusconi government. Prosecutors submitted 15,000 pages of documents to the preliminary hearing judge who will determine whether the case should go to full trial. Mills is being investigated in Italy for money laundering and alleged tax fraud and on 10 March 2006 Italian prosecuting magistrates decided that they had evidence that is sufficient to ask a judge to indict Berlusconi and Mills [cite news
url=http://news.bbc.co.uk/2/hi/europe/4793070.stm
publisher=BBC
title=Italy bid for PM corruption trial
date=10 March 2006] .

Jowell's involvement comes under scrutiny

Jowell was herself implicated when it was revealed that she had, in September 2000, co-signed a mortgage application on the house in North London which she and Mills jointly owned. In a statement on 2 March she said that Mills had wanted to make an investment and they took out a loan using their London home as security, and she had therefore signed the relevant papers. Mills had a number of investments and she knew there would be no difficulty in repaying the loan. She added that she knew nothing more about the nature of the investment. The loan was repaid shortly after it was taken out in September 2000. Jowell said that she was not aware of this redemption until the newspaper speculation surrounding this affair in early 2006.

The significance of the mortgage is that it has been alleged that taking it out, and then subsequently repaying it, was a means for Mills to convert the money he had received, which had previously been placed on Mills behalf into a hedge fund, into a more accessible form of cash. Jowell subsequently stated in a letter to the Cabinet Secretary that she first became aware of her husband's receipt of a large sum of money as a gift in August 2004. The money was paid in September 2000, and the Ministerial Code requires that money received as a gift be declared. By the time that Jowell became aware of the money, Mills had already agreed with the Inland Revenue that it should be classified as earnings on which tax, which may have included a penalty, was paid. (The Inland Revenue will never confirm in public the tax affairs of private people.) In reviewing these events, Jowell argues that she was cleared of any wrongdoing by the Cabinet Secretary [ The Independent, 18 Aug 2008 ] . In fact, the Cabinet Secretary made it clear that it was not for him to sit in judgement on ministers: the Prime Minister should adjudicate on propriety.

Ministerial code

With accusations that Jowell was implicated in questionable financial dealings, in early March 2006 the Prime Minister invited the Cabinet Secretary Sir Gus O'Donnell to investigate the circumstances, in particular whether there was a conflict of interest between her personal life and ministerial duties (the Ministerial Code requires a minister to avoid such clashes and to report all such potential interests to the Permanent Secretary of the department, in the case of the DCMS, Dame Sue Street). After receiving Sir Gus' [http://www.cabinetoffice.gov.uk/propriety_and_ethics/documents/tm_letter.pdf report] , the Prime Minister announced that he did not consider that Jowell had broken the Ministerial Code.

The Conservatives and many other MPs have raised questions about whether the senior civil servants, who are otherwise responsible for implementing ministerial policy and for advising ministers - and who therefore work closely with them on a day-to-day basis, are the appropriate people to be performing monitoring or investigative functions. Explicitly avoiding any impugning of the integrity of the civil servants, critics have argued that some form of outside body should be responsible for such functions.

Blair's personal friendship and political alliance with Silvio Berlusconi [cite news | url=http://news.bbc.co.uk/1/hi/uk_politics/3574048.stm | title=Blair and Berlusconi's Iraq talks | publisher=BBC | date=August 17, 2004] , a right-wing politician, have also been highlighted as a cause for unease and as the context in which Mills' actions (and Jowell's apparently-unquestioning acceptance of them) were not challenged earlier from within government [ [http://www.guardian.co.uk/comment/story/0,,1731932,00.html "Martin Jacques: "New Labour must recognise that Berlusconi is the devil"] , Guardian, 16 March 2006] .

Parliamentary rules

On 6 March 2006, following a meeting with the Parliamentary Commissioner for Standards to discuss her entry in the Register of MPs' Interests, Sir Philip Mawer the standards watchdog, told Jowell that she did not need to give any more details about her husband's financial dealings. Questions had been raised about her returns for the register, which had not declared the receipt of the money.

eparation

On 4 March 2006 it was announced that Jowell and Mills were to separate after their marriage was "put under strain" following the allegations [ [http://www.timesonline.co.uk/article/0,,2-2069928,00.html "David Mills statement"] , Times, 4 March 2006] ; the timing prompted some commentators to suggest that it was a cynical case of Jowell laying down her marriage to save her political career. However, Jowell's claim that she had not known about the circumstances of the financial payment has been cited by her political allies in her defence.

Other allegations

The concern over Jowell and Mills' financial dealings with the money from Berlusconi has led journalists to investigate their other activities.

Dubai

It was revealed that Mills had written to the Dubai authorities seeking permission to practice law, and had cited the personal support of the Prime Minister. Jowell is said to have been angered when she discovered the contents of this letter [ [http://news.scotsman.com/politics.cfm?id=333212006 "Jowell dumps husband over his boasts of access to Blair"] , The Scotsman, 5 March 2006] . The application was rejected by the Dubai authorities because Mills had sought to conceal the fact that Italian prosecutors were investigating his business affairs.

Old Monk pub chain

Some newspapers claimed Mills made a £67,000 profit in Struie Holdings, an offshore share venture in the Virgin Islands, which involved a pub chain controlled by the Old Monk Company. At the time of the deal the government was considering changes to licensing policy (with Jowell closely involved), which raised concerns that her husband may have profited by knowing what changes were proposed. However, when challenged by a Conservative MP, Jowell said that she "had never heard of this company or the transactions until this weekend" (4/5 March) and added "I understand the shares were never owned by my husband".

On 8 March it was reported that court documents show that while Mills was never the owner of Struie Holdings, he did receive the profits from its investments, including the one made in Old Monk. The documents also include a claim by the company's owner, Renault F1's Flavio Briatore, that Mills had assured him that all the investments were "his personal assets" [ [http://www.guardian.co.uk/guardianpolitics/story/0,,1725862,00.html "Testimony links pub chain profit to Mills"] , Guardian, 8 March 2006] . Despite the renewed controversy presented by the Old Monk shares, on 8 March a government spokesman announced that Jowell would not be facing a further investigation, adding "the contents of the letter do not constitute a need for an inquiry" [ [http://today.reuters.co.uk/news/newsArticle.aspx?type=topNews&storyID=2006-03-08T185100Z_01_L0812654_RTRUKOC_0_UK-BRITAIN-JOWELL.xml "No new Jowell probe"] , Reuters, 8 March 2006] .

Iran

On 12 March 2006 the "Sunday Mirror" revealed that as a consequence of her husband's involvement in an ultimately unsuccessful deal for Iranian airline Mahan Air to buy a fleet of BAe 146 from British Aerospace, Jowell has been excluded from Cabinet discussions and papers on Iran since 2003 [ [http://www.sundaymirror.co.uk/news/tm_objectid=16803871%26method=full%26siteid=62484%26headline=tessa%2dbanned%2dfrom%2dcabinet%2diran%2dtalks%2dbecause%2dof%2dhusband%2d-name_page.html "Tessa banned from cabinet Iran talks because of husband"] , Sunday Mirror, 12 March 2006] .

Procedural changes

Sir Alistair Graham, Chairman of the Committee on Standards in Public Life, has said the controversy over Jowell has highlighted the problem that public trust is being undermined by the way alleged misconduct by ministers is policed. He stated that he is "puzzled" by the Prime Minister's reluctance to change the rules [ [http://www.bloomberg.com/apps/news?pid=10000102&sid=aTiXT_FbBkuI&refer=uk "U.K. Panel Attacks Blair's Power to Judge Ministerial Conduct"] , Bloomberg, 8 March 2006] ; the Committee has proposed that independent figures, rather than senior civil servants, should investigate claims that the ministerial code has been broken [ [http://news.bbc.co.uk/1/hi/uk_politics/4788102.stm "Blair criticised on sleaze probes"] , BBC, 9 March 2006] .

On 16 March, 2006 Blair announced that a new independent figure will advise ministers on potential clashes between their public duties and private affairs and investigate potential breaches of the ministerial code of conduct. The Prime Minister will continue to have the final say on taking action [ [http://news.bbc.co.uk/1/hi/uk_politics/4814460.stm "Rules for ministers face shake up"] , BBC, 16 March 2006] .

ee also

*List of scandals with "-gate" suffix

References