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POLICE CORRUPTION IN ENGLAND AND WALES: An assessment of current evidence 2003

UK DEPARTMENT OF DEFENCE DOCUMENT Titled - DCDC Global Strategic Trends Programme 2007-2036

Titled - Understanding and preventing police corruption: lessons from the literature 1999

Rothschild threatens to 'destroy' Osborne if Tories continue to 'rubbish' his Corfu story

Daily Mail 23rd October 2008

Millionaire banker Nat Rothschild, who accused shadow chancellor George Osborne of soliciting a £50,000 donation from Russian oligarch Oleg Deripaska, has warned he will 'come back at' the shadow chancellor if the Conservatives continue to throw doubt on his account of their meetings at his Corfu villa, it was claimed today.

The merchant banker offered a truce to the Tories after two days in which he has been at loggerheads with the party, but insisted he was not running up 'a white flag of surrender'.

Mr Rothschild's sensational claim has put intense pressure on the shadow chancellor, culminating in a call yesterday from Prime Minister Gordon Brown for 'the authorities' to look into Mr Osborne's relationship with aluminium tycoon Mr Deripaska.


George Osborne

Don't cross me: Nat Rothschild (left) has warned he will destroy George Osborne (right) if the Tories continue to question his account of the discussions that took place at his villa on Corfu

The affair was kick-started on Tuesday with a letter in The Times from the banking heir claiming that Mr Osborne and Tory fundraiser Andrew Feldman sought to secure a £50,000 donation when they visited Mr Deripaska's yacht in Corfu with him.

When the Conservatives denied the claim, an apparently furious Mr Rothschild - an Oxford friend of Mr Osborne - stoked up the row by announcing he had an independent witness who could corroborate his story.


Today, sources close to Mr Rothschild suggested he had initially intended his letter to be no more than a 'slap on the wrist' for Mr Osborne, who he blamed for leaking details of a private conversation with Business Secretary Lord Mandelson at a dinner he hosted during the Corfu holiday.

The source told The Guardian that Mr Rothschild did not want to escalate the dispute further, but added: 'This is not a white flag of surrender. He dropped his bombshell because he was angry. This is not a campaign to get George.'

Mr Rothschild has written witness statements from two friends, including James Goodwin, a former adviser to President Bill Clinton, said the source, adding: 'If anything is put out that in any way contradicts what he has said, Nat will come back.'


Prime Minister Gordon Brown

Donor row: Prime Minister Gordon Brown stunned MPs when he called for an official inquiry into Mr Osborne's relationship with Oleg Deripaska

He claimed Mr Goodwin had witnessed the conversation and 'recalls that the subject of a donation by Mr Deripaska's UK company also arose briefly while we were on the boat, but the conversation gained no traction'.

Mr Rothschild said that at dinner at his house later that evening, the subject again came up in conversation, and Mr Osborne 'was interested in whether and how such a donation could be secured'.

The banker said that a phone call between him and Mr Feldman in mid-September, when the possibility of a donation was again discussed, left him 'with the impression that the Conservative Party remained interested in pursuing it'.

Former Labour minister Denis MacShane last night issued a list of questions for Mr Osborne to answer, including whether Mr Deripaska or the Tories had finally decided it would not be appropriate to 'channel' a donation through one of the oligarch's British companies, Leyland Daf.

Mr MacShane warned he was ready to take the matter to the Electoral Commission or Parliamentary Standards Commissioner John Lyon unless there were satisfactory replies.

But the Tories accused him of a 'desperate attempt' to keep the story in the headlines, insisting that all his questions had already been answered in a statement issued by Mr Osborne and Mr Feldman on Tuesday.

The person who should provide more information was Lord Mandelson, who was present at many of the Corfu social events with Mr Osborne, said a Tory spokesman.

Jubilant: Peter Mandelson and Gordon Brown sharing a joke today

Happy birthday to me: Lord Mandelson, whose just turned 55, looks jubilant

Senior party figures were last night rallying around their beleaguered shadow chancellor, accusing the Prime Minister of trying to use 'Westminster tittle-tattle' to deflect attention from unfavourable economic news.

'With the pound plunging, the stock market going down, the housing market going down, unemployment going up and the economy going into recession, the Government would like to talk about anything else but what is happening to the lives of real people in this country,' said shadow cabinet member Liam Fox.

'This attention being given to what is little more than Westminster tittle-tattle is really quite confusing to people worrying about whether their homes are going to be repossessed and whether they will keep their jobs.'

Family holiday: Mr Osborne was on holiday with his wife Frances and children at the Rothschild's villa in Corfu when he met Mr Deripaska

Family holiday: Mr Osborne was on holiday with his wife Frances and children at the Rothschild's villa in Corfu when he met Mr Deripaska

Tory grandee Lord Heseltine told BBC2's Newsnight: 'For the Prime Minister to start trying to muddy the water by calling for some inquiry into wholly irrelevant events that led to nothing is an extraordinary lapse of prime ministerial judgment.'

For his part, Mr Osborne has flatly denied either he or Mr Feldman raised the prospect of a donation from Mr Deripaska at the social gatherings.

Under the Political Parties Elections and Referendums Act 2000 it would have been illegal for Mr Deripaska, who is reputed to be Russia's richest man, to donate to a British party as he is not on the UK electoral register.

It would also have been illegal for the Tories to accept a "disguised" gift through one of the oligarch's British companies.



But the Electoral Commission made clear yesterday that it had no intention of starting a probe, because soliciting a donation which was not eventually made could not constitute a breach of the law.

Meanwhile, the office of Parliamentary Standards Commissioner Mr Lyon - who has powers to investigate the general conduct of MPs - said it had not received any complaint against Mr Osborne.

However Mr Brown has described Mr Osbourne's attempt to solicit a donation from Mr Deripaska a 'very serious matter'.



During Prime Minister's Questions, Mr Brown insisted that the 'authorities' should look into the affair - a call that took even his own MPs by surprise, since there is no suggestion that Mr Osborne broke the law or any Parliamentary rules.

But pressure on the Shadow Chancellor increased yesterday as former party chairman Lord Tebbit became the first senior Tory to criticise his conduct.

He said he did not believe Mr Osborne would have been foolish enough to attempt to solicit money from Mr Deripaska, knowing a donation from a foreigner would have been illegal.

'On the other hand, one has to say that George Osborne should remember that those who sleep with dogs will get fleas.'

Nat Rothschild

Times letter

Knife-in-the-back moment: Nat Rothschild and his accusing letter to The Times

Today's Spectator magazine quotes friends of the financier as saying he was 'furious' with Mr Osborne for using him as a ' political pawn' by leaking gossip about Lord Mandelson, another guest on Mr Deripaska's yacht.

Having invited him to a private gathering, he was seen to have breached the code of the 'international billionaires' club and displayed extreme rudeness', they said.

George doesn't play in that league,' one friend was quoted as saying. 'He was granted honorary membership of the club for a few days and he blew it.'

However, there is widespread speculation that there must have been an additional reason why Mr Rothschild reacted so spectacularly, effectively attempting to destroy the Shadow Chancellor's career.

Lord Rothchild's property

Gift: Lord Rothschild's estate on Corfu where Mr Osborne enjoyed a free holiday

The Spectator speculates that personal animosity 'can run deep between boyhood friends' and that Mr Rothschild might have been uneasy at the idea of seeing an old friend becoming Chancellor of the Exchequer.

It was also claimed yesterday that the Rothschild family is considering halting donations to Mr Osborne's office following the row.

Nat's mother Lady Rothschild has given £190,000 to fund Mr Osborne's office, helping pay for staff, entertaining and research papers.

But rumours are circulating that Nat was encouraged by his father to launch his attack on the Shadow Chancellor. 'Lord Rothschild increasingly thinks that George is a lightweight,' a source was quoted as saying. 'And he might have a hand in all this.'

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