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> www.wsws.org
>
> WSWS : News & Analysis : Europe : Britain
>
> The case of British Tory Treasurer Michael Ashcroft: wealth,
> patronage and parliamentary politics
>
> By Tony Hyland
> 4 August 1999
>
> Back to screen version
>
> Over the last few weeks parliamentary debate in Britain has been
> dominated by the spectacle of the Labour government and
> Conservative opposition trading accusations and
> counter-accusations over sleaze.
>
> Standing at the center of this battle is the figure of Michael
> Ashcroft, business tycoon and treasurer of the Conservative
> (Tory) Party. Over the past few years he has donated £1 million
> annually. The contributions of Britain's fourteenth richest man
> amount to one tenth of the party's financial resources.
>
> That the Conservative Party is reliant on the largesse of big
> business for their funding is not a new phenomenon. That they are
> so dependent on the patronage of a single benefactor is of
> contemporary relevance. It demonstrates that considerable
> sections of British big business have switched their traditional
> allegiance from the Tories to the Labour Party.
>
> Michael Ashcroft is a Florida-based billionaire who holds both
> British and Belize nationality. The former British colony in
> Central America has served as an offshore tax haven for his
> business empire.
>
> Initially the allegations made against the undue influence
> Ashcroft exerts on the Conservatives related to concessions
> extracted from the previous Tory government which were
> advantageous to his business dealings in Belize. This was later
> expanded to include possible involvement in drug trafficking and
> money laundering.
>
> On July 13 the London Times published two leaked foreign office
> documents. The first involved a telegram written in 1997 by the
> British high commissioner in Belize, Gordon Barker, cautioning
> against the appointment of Ashcroft to the chair of the Caribbean
> trade advisory group. It warned that the Belize government viewed
> him with “deep suspicion” and remarked that rumors concerning his
> business deals cast a “shadow over his reputation that ought not
> to be ignored.”
>
> This was followed by a 1994 report by a British foreign office
> adviser calling for tighter regulation of financial services in
> Belize and noting with some alarm that “low standards of
> regulation and supervision” were attracting “those seeking to
> conceal proceeds of drug trafficking and other serious crime.”
>
> Ashcroft's response was allegedly to quash the report and solicit
> the British government to intervene on his behalf. Another
> document involved a letter from a local diplomat in 1996, Charles
> Drace-Francis, stating that Ashcroft made threats to the effect
> that he would “stir up trouble” for Britain unless he were
> allowed to set up a branch of his Belize bank in the Turks and
> Caicos islands.
>
> Four days later the Times disclosed that Mr. Ashcroft's name
> appeared in a series of files kept by the US Drug Enforcement
> Agency (DEA) as part of its investigations into drug trafficking
> and money laundering in Belize. It later transpired that cocaine
> was found on at least two ships sailing under the Belize “flag of
> convenience” in 1994, under a shipping register in which Mr.
> Ashcroft had a 50 percent stake until earlier this year.
>
> The attempted rebuttal to such charges by the Conservative Party
> Central Office, as well as the pro-Tory Telegraph and Daily Mail
> newspapers, was far from emphatic. A statement by the US State
> Department to the effect that no conclusive proof had been
> established connecting Michael Ashcroft with money laundering and
> no specific concerns had been raised with either the British or
> Belize governments was released.
>
> The Times then published an article which explained that Ashcroft
> had been index-numbered on the files of the DEA, a step taken
> only when serious suspicions exist. On the same day Peter
> Bradley, Labour MP for Wrekin, raised explicit allegations within
> Parliament. Utilising the legal immunity afforded under
> parliamentary privilege, Bradley stated that Ashcroft and his
> companies had been repeatedly mentioned in connection with money
> laundering by the DEA. Among the most incriminating examples was
> one document dated April 1994 with the heading: “Intelligence
> concerning possible air smuggling/money laundering activity
> undertaken by Michael Ashcroft.”
>
> It was only after this, nine days after the initial accusations
> had been made, that Michael Ashcroft issued a libel writ against
> the Times, naming the editor Peter Stothard and two journalists.
> Tory leader William Hague has resisted calls from inside as well
> as outside of the Conservative Party for Ashcroft to stand down
> while he pursues legal action.
>
> Speaking in Parliament Hague stated: “I'm surprised the Labour
> Party has the nerve to talk about this, because after Formula One
> and fox hunting there's only one party where a large donation is
> coincidentally followed by a change in policy, and that's this
> government.”
>
> This is a reference to the £1 million donated by Bernie
> Ecclestone, the owner of Formula One and another member of
> Britain's wealthy elite. This donation was only disclosed after
> the Labour government decided to make motor racing exempt from
> the ban on tobacco advertising.
>
> The accusations made by Peter Bradley were countered by Tory
> backbenchers, who also made use of parliamentary privilege, to
> claim that Bradley was guilty of impropriety himself. Six Tory
> MPs put down a motion stating that the Labour MP should “look to
> his own record in public life before making unfounded allegations
> about the business affairs of a private individual, under the
> cloak of parliamentary privilege”.
>
> His alleged failure to declare a conflict of interest relates to
> his former position as a local councilor, when he blocked a
> planning application by Waitrose supermarket while working as a
> consultant for a competitor, Safeways.
>
> That rebuttals over allegations of sleaze should take this form
> is highly indicative. Neither the government nor the opposition
> can deny that they are dependent upon the finance of big business
> and that this exerts ever-greater influence over the policy
> decisions they make.
>
> That the Times newspaper should profess such concerns over a
> single businessman wielding control over a political party is an
> irony to which none of the political commentators have drawn
> attention. The broadsheet is part of Rupert Murdoch's
> multi-media, transnational News Corporation. In the course of the
> 1997 general election Tony Blair went all out to win his backing.
>
> The tabloid Sun, another Murdoch newspaper, switched its
> allegiance from the Tories to Labour, and this was an important
> factor in Labour's victory. The Sun is the highest circulation
> paper in Britain. In the aftermath of the election Labour
> silently dropped its proposals to introduce new restrictions on
> cross-media ownership, which would have been detrimental to the
> activities of News Corporation.
>
> The correlation between Ashcroft's rapid amassing of wealth and
> his efforts to influence the political process raise serious
> democratic concerns. He became a millionaire by the age of 31
> after a cleaning firm he bought with a £15,000 loan was sold five
> years later for £1.3 million. Since then his profits have been
> accumulated through non-stop acquisitions. Carlisle Holdings, his
> principle business vehicle, was acquired last year and merged
> with Belize Holdings Incorporated (BHI). A series of acquisitions
> followed. Ashcroft's business ventures have a combined workforce
> of 47,000.
>
> He owns the fourth largest bank in Belize and has a 26 percent
> share in Belize Telecommunications. Earnings from his interests
> in Belize account for 20 percent of Carlisle's profits. Ashcroft
> made large donations to the People's United Party of Belize
> (PUP), estimated in the area of $1 million, while they were the
> opposition party. After coming to power last year they introduced
> legislation which was beneficial to his business operations. This
> included legislation offering tax exemption to some companies,
> including BHI. Ashcroft's Bank of Belize was also granted the
> exclusive right to set up off-shore companies in the country for
> UK and US citizens. He was also appointed Belize ambassador to
> the United Nations.
>
> A large portion of his business profits have been derived from
> contract cleaning. Approximately two-thirds of the
> transnational's profits are generated in the US, where the former
> BHI owned a number of cleaning companies, including OneSource,
> the market leader in this field.
>
> Questions have arisen over what influence he may have exerted on
> the Tory government to introduce compulsory competitive tendering
> in the public services in the mid-eighties, in which operations
> such as cleaning were privatised. Ashcroft stood to gain from
> this as it opened up an untapped market for the cleaning services
> he owned. These questions center round whether he funded Pulse,
> the pressure group lobbying for the contracting out of public
> services in 1986-7.
>
> A striking aspect of these exposures is the fact that the
> incidents cited are not recent. Ashcroft has been Conservative
> Party treasurer since last summer. So why is it only now that
> concerns are being raised?
>
> One explanation is the ongoing internal feuding within the Tory
> party. Peter Stothard, the Times editor, maintains close
> connections with Tory grandees. The article which first appeared
> raising concerns over Ashcroft's preponderance within the party
> was published in June and entitled “Massive donations make Tories
> the plaything of one man”.
>
> According to Stothard, in an interview given to the Guardian's
> Roy Greenslade, a meeting was arranged between himself and
> Ashcroft by Lord Bell, a PR man for the Conservatives. Ashcroft
> was invited to put his side of the argument in the newspaper and
> silence the rumors. This offer was declined in favor of
> interviews in the Daily Mail and the Daily Telegraph, which are
> perceived as being more loyal to the Tory party cause.
>
> More serious allegations began in earnest several weeks later.
> That the party was becoming so cash-strapped and dependent on
> being bankrolled by a single business with a dubious reputation
> was widening the rifts within the ranks.
>
> The scandal has demonstrated William Hague's poor standing with
> wide sections of the ruling class. The Evening Standard conducted
> a recent survey of 106 City of London and business leaders, media
> executives and think tank directors. Some 68 percent believed
> that Hague was doing “fairly badly” or “very badly” as party
> leader. In contrast, the majority believed that Labour were
> performing better in areas usually entrusted by big business to
> the Tories, including welfare, running the economy and
> maintaining low inflation.
>
> Sections of the party have warned that the inability to cast off
> the image of sleaze will spell the end of the Tories as an
> electoral party. Speaking on Radio 4, senior Conservative
> campaigner John Strafford stated, “I hope he [Ashcroft] will go
> so we can get past this stage in our fortunes ... Clearly sleaze
> has an effect, as we saw in the last general election. We ought
> to clear all this problem of sleaze away...”
>
> The issue has been used as a barely concealed attempt by sections
> of the Tory right to displace William Hague as leader. Ashcroft's
> appointment as party treasurer was made by Hague. Michael
> Portillo, favored as an alternative to Hague, has stated that
> this reflects badly on the present leader's judgement. The
> ability of Hague to maintain his leadership of the Tories will be
> dependent on the outcome of the libel case against the Times.
>
> The Times campaign has also had the effect of creating a
> distraction from the Labour government's misfortunes—it suffered
> poor results in the recent European and local elections, and has
> itself been targeted for more sleaze allegations. Besides the
> issue of Formula One, there have been high level resignations
> from the government concerning the activity of business lobbyists
> and undisclosed financial transactions with ministers. Using the
> campaign against Ashcroft, the Times called for a vote for Labour
> in the recent by-election held in Eddisbury on 22 July.
>
> The whole issue of political funding only serves to highlight the
> narrow social basis upon which the main parties rest.
> Parliamentary politics does not consist of a genuinely democratic
> public debate over policies. Rather it increasingly revolves
> around leaks and scandals orchestrated by PR consultants and spin
> doctors. Such is the public face of back-stage political intrigue
> and the efforts of the mass media and its wealthy owners to
> manipulate public opinion.
>
> 5
>
>
>
>
>
> -----------------------------------------------------------------
> -------
>
> Copyright 1998-99
> World Socialist Web Site
> All rights reserved
>
>
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