L'affaire Berlusconi

For those of you who don't live here and who are not au fait with the latest scandal to wash like a tide of sewage over the political class of this benighted nation, I'll try to sum it up as succinctly as possible.

Tessa Jowell, Culture Secretary is married to David Mills, a sleazy lawyer who allegedly took a £344,000 bribe from Berlusconi (a former client/associate), the PM of Italy in exchange for testimony that would help exonerate Berlusconi from corruption charges he is facing.

So first the bribe, sorry, the 'gift', went through around half a dozen different bank accounts/companies scattered around the planet before ending up in the UK. But how to get it into the grasping hands of Jowell's husband? They (or, according to Mills, just him) decide to take a second mortgage out on their north London house for £400,000, pocket the cash and use the bribe, sorry, 'gift', money to pay off the loan.

Brilliant except the Italian lawyers are not only investigating Berlusconi but also Jowell's sleazy lawyer-husband and they leak a bunch of incriminating documents to the press about Mills' activities including a written admission by Mills' that he had lied like crazy to try and get Berlusconi off the hook.

Mills calls the 344,000 big ones a "gift" and says that he only described it as a bribe in order to "get tax advice" from his accountants. Believe that and you'll also believe the following 'explanation' of the original letter he wrote as sounding

"completely ridiculous", adding: "It's excruciating - you couldn't make it up."

The problem is, he did. Prosecutors in Milan allege the payment was to ensure Mr Mills kept quiet during two Berlusconi corruption trials.

In part, the original letter to his accountants said

"I kept in close touch with the B[erlusconi] people... they also knew quite how much the way in which I had been able to give my evidence (I told no lies, but I turned some very tricky corners, to put it mildly) had kept Mr B out of a great deal of trouble I would have landed him in if I had said all I knew." 'Jowell's husband in gift row,' February 19, 2006. [Guardian story]

(As a 'media' aside, the BBC claims to have published the full text of this letter, but this and other sections are missing from the BBC story. Go figure. See 'Full text: David Mills' letter', 27 February, 2006. [BBC story] and compare to the Guardian story above)

When the story broke, Jowell's problem was that she had show that she had no involvement with her hubby's dirty dealings as the house is in both their names. Questions of conflict of interest arose.

She maintains that she signed documents on the mortgage but apparently without asking her old man where the £344,000 came from. One has to imagine them sitting around and her old man slips her a bunch of documents and casually asks her to put her John Hancock on them, 'Sure, she says, no problem, where do I sign?'. No questions asked. Gives a whole new meaning to the phrase 'ships passing in the night'. Under government rules, ministers should declare any "gifts" made to their spouses, to avoid any appearance of conflict of interest.

It emerged that Mr Mills regularly took it upon himself to inform the permanent secretary at the DCMS of changes in his business positions, including his range of up to 60 directorships.

He did not, however, think it necessary to inform civil servants of the mortgage he took out jointly with his wife that was then swiftly paid back by cash from an offshore trust.

The couple took out five separate mortgages on their home in what looks like a device to raise cash quickly to capitalise on investment opportunities. [guardian story]

Last week, in an effort to clear Jowell's name, she was 'investigated' (I use the word extremely loosely) by the Cabinet secretary who then handed over his 'investigation' to Blair, who cleared her of any wrong-doing. Talk about the fox guarding the hen-house!

The Ministerial Code, for what it's worth, says in part

"Ministers are personally responsible for deciding how to act and conduct themselves in the light of the Code and for justifying their actions and conduct in Parliament. The Code is not a rulebook and nor is it the role of the Secretary to the Cabinet or other officials to enforce it or to investigate Ministers although they may provide Ministers with private advice on matters which it covers".

The so-called code is a complete farce. The Cabinet secretary had around 24 hours to 'investigate' l'affaire Berlusconi. Imagine trying to track the movements of money through a slew of front companies, that experienced forensic accountants would be hard-pressed to follow and then to link it to Jowells' knowledge or lack thereof, of where the money came from and whether she knew about it.

But not surprisingly, the dirt would not wash off Jowell, so this weekend, Jowell and her hubby decided to 'part ways' and he buggered off to parts unknown.

And again, not surprisingly, Mills says that "he is disgusted by claims the marriage split is a sham," telling the Times that "The idea that people could decide on a separation for contrived reasons - it's just not how human beings behave." Oh really?

Various and sundry Labour government hacks have jumped to her defence including the awful Margaret Beckett who said that Jowell should "tough it out" as she is facing a "witch-hunt". Strong words indeed.

Perhaps worse still are the actions of the Home Office who were approached by the Italian prosecutors about getting Mills extradited to Italy to face tax fraud and money-laundering charges. Instead, they passed all the information on to the Italian Embassy in London! On the face of it, it looks like the Home Office are complicit in an attempt to derail the investigation. Remember that Blair and Berlusconi are real buddies.

The Home Office said

"In late 2004 the Serious Fraud Office received a request from the Milan prosecutor for legal advice about the circumstances in which David Mills could be extradited under UK law, based upon possible charges against him. The request was passed to the Crown Prosecution Service who took legal advice which was passed by the Home Office to the Italian embassy in May 2005 since extradition requests are normally handled on diplomatic channels."

The Home office, when asked about why it been passed on to the Italian Embassy in London said that if prosecutors could request extradition it would lead to

"to circumstances no one would tolerate," No 10 said. - 'Jowell inquiry will not extend to Home Office' [Guardian story]

You bet! Understandably, the Italian prosecutors were pretty pissed off with what they saw as Home Office interference in their attempts to extradite Mills. They allege that Home Office officials had "spread reserved information among a large number of people" and thus compromised their investigation, an allegation that the Home Office of course denies.

L'affaire Berlusconi is just the latest in a long list of sleazy goings-on that reveals a cynical ruling class that long ago abandoned any pretence at representing the citizens and a labour government that is in bed with big capital in a big way. Cosy relationships such as the one Blair has with Berlusconi, darling of the Italian neo-fascists, typify a government that knows that by and large the British electorate have turned off mainstream politics almost entirely, judging that no matter what their views are (unless they coincide with Blair's neo-liberal position), they'll be completely ignored.

Rest assured, that what we have learned over the past two weeks is only the tip of the iceberg but don't hold your breath for the MSM to dig too deeply into the cesspit that is the Labour government.

InI Newsletter via William Bowles

Blair clears Jowell of wrongdoing

Tony Blair has cleared Tessa Jowell of breaching ministers' code of conduct - because her husband did not tell her about a £344,000 gift he had received.

Cabinet Secretary Sir Gus O'Donnell said the culture secretary accepted her husband should have told her about it.

She would then have told her top civil servant about the gift - so complying with the code - Sir Gus's report says.

Prime Minister Mr Blair said: "She is not in breach of her obligations... I have full confidence in her."

Mortgage loan

Ms Jowell, the minister in charge of the winning London Olympic bid, issued a statement saying: "I have always discharged my responsibilities under the ministerial code in good faith."

Despite the report, the furore over Mr Mills' financial dealings is unlikely to go away.

Italian prosecutors have been examining claims the £344,000 payment was made to Mr Mills, an international lawyer, in return for helpful testimony in a corruption probe into Italian premier and media magnate Silvio Berlusconi in 1997. Mr Mills denied that the money came from Mr Berlusconi, saying it was from another client. Both he and Ms Jowell have denied any wrong-doing.

Ms Jowell was drawn into the affair after it emerged that she had co-signed a £408,000 loan taken out against the value of their house, which was paid off just weeks later, apparently using the Italian money. She said it was not "unusual, improper or illegal" for her to take out a mortgage with her husband, and categorically denied that the money came from Mr Berlusconi.

'Full support'

The ministerial code says that gifts to ministers or their families should be notified to the permanent secretary - senior civil servant - in their department.

Ms Jowell told Sir Gus she had first become aware in August 2004 that her husband had received a sum of money in September 2000 "which he thought he had reasonable grounds to believe was a gift".

Sir Gus's investigation came after shadow Commons leader Theresa May asked him to look into whether Ms Jowell's alleged involvement had breached the ministerial code of conduct.

Meanwhile, BBC correspondent Christian Fraser, in Italy, said Italian prosecutors had released documents showing Mr Mills had used his wife's cabinet position and his friendship with Tony Blair to seek approval in Dubai. In an application to practise in the United Arab Emirates, sent four months ago, he tried to reassure financial authorities they had no reason to worry about the ongoing investigation in Italy.

The letter reads: "You will know that I'm married to a minister in the government of this country and that in itself has caused a great deal of unwelcome publicity about this case. "But I also want you to know, I have a lot of support and sympathy from very many people in public life, from the prime minister down." BBC

Police Quiz Health Ministers Husband - (the Blood Trail?)

Foreign Affairs News Keywords: BLOOD TRAIL

Source: www.lineone.net

Published: 7-29-99 Author: Michael Gillard, David Connett and Lucy Johnston

THE husband of Health Minister Tessa Jowell is to be questioned by Scotland Yard as part of an investigation into a shipment of blood infected with the deadly HIV virus. Solicitor David Mills is to be interviewed, possibly next month, at the request of the Italian authorities who have asked for help from the Home Office.

Italian magistrates are investigating a London-based company which was behind the planned shipment of 25 tons of blood plasma worth up to £2million from a port in Italy. Plasma is used to make blood products for treating haemophiliacs and burns victims. It is rumoured that there is a thriving traffic in these products, which are sold cheaply to Third World countries where doctors are unaware of the fact that they are infected with HIV.

The Italians want to interview Mr Mills to see if he can assist in identifying the owners of the company at the centre of the inquiry. Called Padmore, it was formed and run by another company known as CMM Corporate Services. Mr Mills owned and ran CMM until 1994 and remained a non-executive director until 1995.

Italian investigators are expected in London next week. They are keen to question several individuals connected with CMM. Company documents for Padmore passed to the Italians show that it was run out of CMM's offices in London. Mr Mills is expected to be interviewed under oath only as a witness in the Italian inquiry. It is not suggested that he or CMM knew the blood shipment was HIV-infected.

Last night Mr Mills confirmed that he had been "informally" contacted by both the Italian authorities and Scotland Yard and was aware that a formal request had been made for assistance to the Home Office. "I told them I had no knowledge of the company or its activities," he said. "I had no connection with Padmore. I was not a director. I have no papers. I am happy to be interviewed by anyone. If it is lawful to help I will."

As a solicitor, Mr Mills's dealings with his clients are confidential. But he is expected to be interviewed under the powers of the Criminal Justice Act used for assisting foreign criminal investigations which allow him to give evidence about facts relevant to an inquiry.

Mr Mills declined to say whether he knew the Italian family which it is suggested may be behind Padmore and the infected blood deal. "I do not discuss my clients," he said.

It is understood that he has indicated to Italian investigators that he was not involved in the forming or running of Padmore, which could have been incorporated after he sold or left CMM or was handled by another CMM executive without his knowledge. Padmore was formed in the Caribbean tax haven of the British Virgin Islands where no information is provided as to the real owners of companies. The firm is now believed to be in liquidation. The Italians began their inquiries in 1995 after the blood, which had come from the US, was found in a warehouse in the northern port of Trento. Suspicions were raised when it was discovered the blood was past its use-by date.

This is not the first time the Italian connection has caused Mr Mills embarrassment.

CMM specialised in Italian business. Mr Mills is a fluent Italian speaker and has acted for some of the most powerful and wealthy people in Italy.

The political career of his wife Tessa, a former social worker, has been dogged by the business world inhabited by her rich husband and his even richer clients. Ms Jowell, 51, is the country's first public health minister, charged with improving the health of Britain's poorest people. She was a child care worker in Lambeth, London, before winning the seat in Dulwich and West Norwood in 1992. She had also worked as an official with the mental health charity Mind.

Two years ago she an-nounced a Government U-turn on the tobacco sponsorship of Formula One racing. The decision created a storm when it emerged that Labour had received a £1million donation from racing supremo Bernie Ecclestone. The furore was heightened when it was rev-ealed that Mr Mills had been a non-executive di-rector of the Formula One team owned by the Benetton clothing family, who are among his clients. Ms Jowell was accused of a conflict of interest, though she insisted the "sleaze allegations" were unfounded. "I have taken advice and acted on it. Any suggestion of im-propriety is deeply off-ensive," she said.

In 1996 Mr Mills be-came embroiled in an investigation into another of his clients, former Italian Prime Minister Silvio Berlusconi. He was caught up in a five-year inquiry into Berlu-sconi's business affairs which involved allegations of bribery, slush funds and secret offshore accounts.

Officials from the Serious Fraud Office, acting for Italian authorities, raided the Mayfair offices of CMM. Files relating to more than 20 companies set up by Mr Mills for Berlusconi were confiscated. Mr Mills had served as either director or company secretary of the firms. There was no suggestion that Mr Mills or his law firm had acted improperly.

In another episode Mr Mills was caught up in a nuclear waste controversy. A company he had formed for clients was named in a Greenpeace report into toxic waste dumping at sea. His speciality has been to advise on legal tax avoidance. This looks set to continue as he has formed a new Mayfair-based venture with a firm of lawyers from the tax haven of Gibraltar. - Lineone via freerepublic

Italy mulls David Mills trial

By By Tony Barber in Rome

Italian prosecutors were on Thursday night considering whether to press a judge to schedule a trial for Silvio Berlusconi, prime minister, and David Mills, a British corporate lawyer who worked for him, on charges of corruption.

Prosecutors in Milan received a request from Mr Mills's lawyers this week for more time to study the mass of documents connected with the case. But the prosecutors are anxious not to delay the technical legal process too long because, even if the two men stand trial, a statute of limitations annulling the case could kick in next year.

The affair has created a political storm in the UK and Italy because Mr Mills is the estranged husband of Tessa Jowell, Britain's culture secretary, who has come under pressure to resign, and comes at a time when Mr Berlusconi is fighting to remain premier in Italy's general election on April 9-10.

The focus of the prosecutors' attention is a $600,000 payment that they suspect Mr Mills received from Mr Berlusconi in return for giving false testimony at two trials in the 1990s in which the premier was accused of corruption.

In July 2004 Mr Mills told the prosecutors that he had received the money from Mr Berlusconi, but four months later he retracted his statement and said the funds had come from a different client.

Speaking on Italian television on Monday night, Mr Berlusconi strongly denied that he had any involvement with the money paid to Mr Mills.

"I have sworn on my children that I knew nothing about this money. Then again, I am prime minister, and by definition the prime minister cannot lie, otherwise he would have to go. I swear here in front of these television cameras that I knew nothing about Mr Mills's money," Mr Berlusconi said.

He also said it was impossible that any manager of Fininvest, the Berlusconi family-owned business empire, could have transferred money to Mr Mills. "I never knew this Mr Mills at all," the prime minister said. "This story is invented, and shows that there are judges who are organically on the left and invent stories during an election period." - msnbc.msn.com

2 February 2004

Dear Bob

The brief relevant facts are these.

In 1996 I ended up with a dividend from Mr B's companies of around £1.5m after all the tax and fees had been paid.

This was all done on a personal basis: I took the risk, and kept my partners right out of it.

Wisely or otherwise, I informed my partners what I had done and, since it was a substantial windfall, offered to pay them (I think) around £50,000 or £100,000 each as what I though [sic] was a pretty generous gesture.

Which shows you how you can be, as they insisted the transaction should be treated as a partnership profit. To avoid litigation (we had just merged with Withers) I agreed to put the money on deposit in my bank until they were satisfied that there would be no third part claim.

By 2000 it was clear there would be no claim (I knew that all along) and the money was taken off deposit and paid out; I kept just under £500,000 out of what was then getting on for £2m.

So all that risk and cost for not very much. The greatest cost was leaving Withers. I was not asked to leave it, but felt so uncomfortable there, not least because my Mackenzie Mills partners had taken most of the benefit for none of the risk, that I really couldn't stay.

I spent 1998, 1999 and 2000 as a sole practitioner, and it was evident that the trials were going on, there would be lawyers to pay and there was always the risk of being charged with something - which is actually about to happen now as a result of the latest investigation, which you know about.

I kept in close touch with the B people, and they knew my circumstances.

They knew, in particular, how my partners had taken most of the dividend; they also knew quite how much the way in which I had been able to give my evidence (I told no lies, but I turned some very tricky corners, to put it mildly) had kept Mr B out of a great deal of trouble that I would have landed him in if I had said all I knew.

At around the end of 1999, I was told I would receive money, which I could treat as a long term loan or a gift. $600,000 was put in a hedge fund and I was told it would be there if I needed it.

(It was put in the fund because the person connected to the B organisations was someone I had discussed this fund with on many occasions, and it was a round about way of making the money available.)

For obvious reasons of their own (I was at that stage still a prosecution witness, but my evidence had been given) it needed to be done discreetly. And this was a roundabout way.

At the end of 2000 I wanted to invest in another fund, and my bank made a loan of the amount, secured on my house etc., of around 650,000 euros. I paid it off by liquidating the $600,000. I attach a copy of the dollar account.

I regarded the payment as a gift. What else could it be? I wasn't employed, I wasn't acting for them, I wasn't doing anything for them, I had already given my evidence, but there was certainly the risk of future legal costs (as there have been) and a great deal of anxiety (as there certainly have been).

This has been going on for more than eight years now. My contract was aware of how my income earning capacity had been damaged, and in 1998 and 1999 I was able to send bills from my practice to certain companies, which were paid and increased my income. But this was different.

Because I was pretty sure my CGT position was negative overall, I stupidly made no returns on my transactions. If they are closely looked at (i.e., where did the money come from to buy the centurion shares?), I am obviously concerned about what to do and how this should best be handled.

I attach the key documents.

Yours sincerely

David Mills