Tessa Jowell financial allegations
Encyclopedia
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.
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.
. During his work for Berlusconi, Mills received $600,000 (£340,000); 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).
The Italian state prosecutors believed 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".
Mills was investigated in Italy for money laundering and alleged tax fraud and on 10 March 2006 Italian prosecuting magistrates decided that they had sufficient evidence to ask a judge to indict Berlusconi and Mills.
On 17 February 2009, Mills was found guilty of accepting a bribe and sentenced to prison. It was not fully clarified who actually gave him the money until May when the court gave the reasoning behind its decision and implicated Berlusconi. However, by 2009 Berlusconi enjoyed immunity because of new legislation. His defence counsel said that the sentence went "against the logic and dynamic of the evidence presented."
On 25 February 2010, the Italian Cassation Court (the second and last court of appeal under Italian law) ruled a sentence of not guilty because the statute of limitations
expired. The supreme court judges ruled that he received the money in 1999, and not 2000 as prosecutors had previously argued. He was ordered to pay €250,000 compensation to the office of the Italian prime minister for "damaging its reputation". Ms Jowell said "although we are separated I have never doubted his innocence."
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 . 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.
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' 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, 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 .
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.
Still claiming to be separated, it is known that Jowell and Mills spend most weekends together and Christmas holidays.
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. The application was rejected by the Dubai authorities because Mills had sought to conceal the fact that Italian prosecutors were investigating his business affairs.
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". 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".
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.
, Chairman of the Committee on Standards in Public Life
(2003-7), said the controversy over Jowell highlighted the problem that public trust was being undermined by the way alleged misconduct by ministers was policed. He stated that he was "puzzled" by the Prime Minister's reluctance to change the rules; the Committee proposed that independent figures, rather than senior civil servants, should investigate claims that the ministerial code has been broken.
On 16 March 2006 Blair announced that a new independent figure would 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 would continue to have the final say on taking action.
Tessa Jowell
Tessa Jowell is a British Labour Party politician, who has been the Member of Parliament for Dulwich and West Norwood since 1992. Formerly a member of both the Blair and Brown Cabinets, she is currently the Shadow Minister for the Olympics and Shadow Minister for London.-Early life:Tessa Jane...
, the then United Kingdom Secretary of State for Culture, Media and Sport
Secretary of State for Culture, Media and Sport
The Secretary of State for Culture, Olympics, Media and Sport is a United Kingdom cabinet position with responsibility for the Department for Culture, Media and Sport. The role was created in 1992 by John Major as Secretary of State for National Heritage...
. They arose when her husband David Mills
David Mills (lawyer)
David Mackenzie Mills is a British corporate lawyer who specialises in international work for Italian companies. He was accused of money-laundering and alleged tax fraud, involving Silvio Berlusconi, he was convicted in first instance and in appeal, but the conviction was quashed by the Supreme...
came under investigation by Italian authorities who suspected him of corruptly receiving £340,000 from Silvio Berlusconi
Silvio Berlusconi
Silvio Berlusconi , also known as Il Cavaliere – from knighthood to the Order of Merit for Labour which he received in 1977 – is an Italian politician and businessman who served three terms as Prime Minister of Italy, from 1994 to 1995, 2001 to 2006, and 2008 to 2011. Berlusconi is also the...
. Some newspapers have termed the accusations the 'Jowellgate' scandal.
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.
"Jowellgate"
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 ItalyPrime minister of Italy
The Prime Minister of Italy is the head of government of the Italian Republic...
. During his work for Berlusconi, Mills received $600,000 (£340,000); 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).
The Italian state prosecutors believed 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".
Mills was investigated in Italy for money laundering and alleged tax fraud and on 10 March 2006 Italian prosecuting magistrates decided that they had sufficient evidence to ask a judge to indict Berlusconi and Mills.
On 17 February 2009, Mills was found guilty of accepting a bribe and sentenced to prison. It was not fully clarified who actually gave him the money until May when the court gave the reasoning behind its decision and implicated Berlusconi. However, by 2009 Berlusconi enjoyed immunity because of new legislation. His defence counsel said that the sentence went "against the logic and dynamic of the evidence presented."
Appeal
The judgement was appealed by David Mills. On 27 October 2009, the Italian Appeal Court upheld his conviction and his sentence of 4½ years prison. He confirmed that he would initiate a second and final appeal to the Cassation CourtOn 25 February 2010, the Italian Cassation Court (the second and last court of appeal under Italian law) ruled a sentence of not guilty because the statute of limitations
Statute of limitations
A statute of limitations is an enactment in a common law legal system that sets the maximum time after an event that legal proceedings based on that event may be initiated...
expired. The supreme court judges ruled that he received the money in 1999, and not 2000 as prosecutors had previously argued. He was ordered to pay €250,000 compensation to the office of the Italian prime minister for "damaging its reputation". Ms Jowell said "although we are separated I have never doubted his innocence."
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
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
, 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
Inland Revenue
The Inland Revenue was, until April 2005, a department of the British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, inheritance tax, corporation tax, petroleum revenue tax and stamp duty...
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 . 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 SecretaryCabinet Secretary
A Cabinet Secretary is almost always a senior official who provides services and advice to a Cabinet of Ministers. In many countries, the position can have considerably wider functions and powers, including general responsibility for the entire civil service...
Sir Gus O'Donnell
Gus O'Donnell
Sir Augustine Thomas "Gus" O'Donnell GCB is a British civil servant, who is the current Cabinet Secretary, the highest rank in the British Civil Service. He is consequently, under current practice, Head of the Civil Service, which means he has authority over all civil servants except those who are...
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
Permanent Secretary
The Permanent secretary, in most departments officially titled the permanent under-secretary of state , is the most senior civil servant of a British Government ministry, charged with running the department on a day-to-day basis...
of the department, in the case of the DCMS, Dame Sue Street
Sue Street
Dame Sue Street, DCB, was the Permanent Secretary for the Department for Culture, Media and Sport from 2001 to 2006. She was responsible for the overall strategy, delivery and expenditure for the whole department...
). After receiving Sir Gus' report, the Prime Minister announced that he did not consider that Jowell had broken the Ministerial Code.
The Conservatives
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
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, 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 .
Parliamentary rules
On 6 March 2006, following a meeting with the Parliamentary Commissioner for StandardsParliamentary Commissioner for Standards
The Parliamentary Commissioner for Standards is an officer of the British House of Commons.He or she is appointed by a Resolution of the House of Commons and works a four-day week.- Tasks :...
to discuss her entry in the Register of MPs' Interests, Sir Philip Mawer
Philip Mawer
Sir Philip Mawer was the Parliamentary Commissioner for Standards from 2002 until 2008 when he became an independent advisor on Ministerial standards to Gordon Brown. He was previously Secretary General of the General Synod of the Church of England....
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.
Separation
After the financial allegations concerning Mills began to affect Jowell's political career, it was announced that Jowell and Mills were to separate after their marriage was "put under strain" ; 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.Still claiming to be separated, it is known that Jowell and Mills spend most weekends together and Christmas holidays.
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 DubaiDubai
Dubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
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. 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 offshoreOffshore investment
Offshore investment is the keeping of money in a jurisdiction other than one's country of residence. Offshore jurisdictions are a commonly accepted solution to reducing tax burdens levied in most countries to both large and small scale investors alike...
share venture in the Virgin Islands
Virgin Islands
The Virgin Islands are the western island group of the Leeward Islands, which are the northern part of the Lesser Antilles, which form the border between the Caribbean Sea and the Atlantic Ocean...
, 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
Flavio Briatore
Flavio Briatore is an Italian businessman. During the 1980s, he was convicted for multiple counts of fraud, receiving two prison sentences, only one of which he served. As a fugitive from Italy, he set up restaurants and then a number of successful Benneton franchises in the Virgin Islands and the...
, that Mills had assured him that all the investments were "his personal assets". 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".
Iran
On 12 March 2006 the Sunday MirrorSunday Mirror
The Sunday Mirror is the Sunday sister paper of the Daily Mirror. It began life in 1915 as the Sunday Pictorial and was renamed the Sunday Mirror in 1963. Trinity Mirror also owns The People...
revealed that as a consequence of her husband's involvement in an ultimately unsuccessful deal for Iranian airline Mahan Air
Mahan Air
Mahan Airlines, doing business as Mahan Air, is a private airline based in the Mahan Air Tower in Tehran, Iran. It operates scheduled domestic services and international flights to the Far East, Middle East, Central Asia, and Europe...
to buy a fleet of BAe 146
BAe 146
The British Aerospace 146 is a medium-sized commercial airliner formerly manufactured in the United Kingdom by British Aerospace, later part of BAE Systems. Production ran from 1983 until 2002. Manufacture of an improved version known as the Avro RJ began in 1992...
from British Aerospace
British Aerospace
British Aerospace plc was a UK aircraft, munitions and defence-systems manufacturer. Its head office was in the Warwick House in the Farnborough Aerospace Centre in Farnborough, Hampshire...
, Jowell has been excluded from Cabinet discussions and papers on Iran since 2003.
Procedural changes
Sir Alistair GrahamAlistair Graham
Sir John Alistair Graham is a well known figure in British public life. He was Chairman of the Committee on Standards in Public Life from 2003 until April 2007....
, Chairman of the Committee on Standards in Public Life
Committee on Standards in Public Life
The Committee on Standards in Public Life is an advisory non-departmental public body of the United Kingdom Government.The Committee on Standards in Public Life is constituted as a standing body with its members appointed for up to three years.-History:...
(2003-7), said the controversy over Jowell highlighted the problem that public trust was being undermined by the way alleged misconduct by ministers was policed. He stated that he was "puzzled" by the Prime Minister's reluctance to change the rules; the Committee proposed that independent figures, rather than senior civil servants, should investigate claims that the ministerial code has been broken.
On 16 March 2006 Blair announced that a new independent figure would 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 would continue to have the final say on taking action.