by Tom Bower
Inside Downing Street there was panic. For a prime minister who had deliberately used the vocabulary of trust to highlight Tory sleaze during the election and who had promised that he would be ‘whiter than white’, the allegation of corruption was shattering. Labour’s ‘moral crusade’, Blair had said, embraced compassion, integrity, community and honesty. Now, television news programmes illustrated their reports of ‘corruption’ by broadcasting pictures of Ecclestone walking up Downing Street. Viewers would assume it was the historic moment when Formula One had paid cash for access, but the images had been recorded earlier in the week at a charity event. How Blair now regretted the ‘sleaze’ soundbite. ‘The consequences were disastrous,’ he admitted. ‘I couldn’t see us doing some of the things the Tories had done.’
Unknown to the public, Ecclestone had indeed donated £1 million to the Labour Party, and was discussing a further contribution of £3 million. Although he was a Tory voter and contributor to the Conservative Party, he and his representatives had met Blair and paid the sweetener. On the Monday morning after the exposure, Brown appeared on BBC Radio 4’s Today programme. Asked about the donation, he lied, denying any knowledge of Ecclestone’s gift.
Events were moving beyond the government’s control. ‘This was the kind of issue’, Campbell noted in his diary, ‘that [Blair] hated most of all, though in truth there was nothing wrong about the way the decision was reached.’ Blair, he continued, had ‘nothing to hide’ because ‘the policy on banning was made after the donation was received, which blows the idea [Ecclestone] bought a change.’ The £1 million, wrote Campbell mistakenly, had been brought in by Michael Levy, Blair’s friend and successful fund-raiser.
A false version of events was being swiftly embedded. In reality, the financial relationship had been initiated by Jonathan Powell, who himself would disingenuously write, ‘Our sin in this case was one of naivety.’ Combined with those inaccuracies was Blair’s own, written thirteen years later: ‘To be fair to [Ecclestone], he made no link whatsoever between the gift and the policy … not even implicitly.’ That was also untrue. Blair had been explicitly told by an emissary of the businessman that £1 million would be donated on condition that Formula One was exempted from the ban. The agreement was made because Blair and Ecclestone had forged a good relationship by then.
The two men had first met at the British Grand Prix in Silverstone in 1996. Blair’s visit had been organised by Powell after Ecclestone had featured in the Sunday Times Rich List as Britain’s highest-paid businessman. Powell telephoned David Ward, a former Labour Party official employed in Formula One. ‘Do you know how we can contact Ecclestone?’ he asked, and wondered whether Ecclestone might become a Labour donor. ‘Blair has already been invited to visit Silverstone in July,’ replied Ward, ‘and we can arrange for him to meet Bernie.’
On the day, Ecclestone welcomed Blair into his motorhome. The two leaders bonded instantly. The following day, Powell telephoned Ward. Would Ecclestone consider donating to the Labour Party? ‘Nowadays’, continued Powell, ‘we don’t consider anything less than £1 million.’
‘Are you serious?’ asked Ward incredulously.
Both knew New Labour had set a tariff for peerages and access – a sliding scale depending on wealth and importance to the party – but this amount for a simple donation was unprecedented. Ecclestone nevertheless agreed to consider the proposition. A meeting was arranged with Blair in the House of Commons. After a twenty-minute conversation, Ecclestone was taken by Michael Levy to another office.
‘We would be grateful’, said Levy, ‘if you could make a significant contribution, something around £1 million.’
Ecclestone listened, said nothing and after five minutes took his leave. ‘He’s amateurish,’ he told Ward.
In early January 1997, Levy telephoned Max Mosley, Ecclestone’s trusted partner in the transformation of Formula One from a sport for enthusiasts into a global business, to ask again for £1 million. By then Philip Morris was agitating against the European ban on tobacco companies sponsoring sport. ‘£1 million’, Mosley told Ecclestone, ‘will give us access and help us on tobacco.’ His words fell on fertile ground.
Ecclestone was furious that, despite big donations to his party, John Major had failed to secure him the promised knighthood. In revenge for that snub and to please the tobacco companies, Ecclestone agreed to pay £1 million to Labour. Ward passed the news on to Powell with a caveat: ‘I will support Bernie Ecclestone’s contribution so long as I can talk to Tony and outline the sensitive issues around Formula One.’ Powell agreed.
Soon after, Ward was seated opposite the prime minister in Blair’s living room in Islington. Powell and Peter Mandelson, who had welcomed Ward into the house, remained outside. ‘You’re getting £1 million from Ecclestone,’ Ward told Blair, ‘but you must understand that the issue of tobacco sponsorship will arise in a European directive, and we believe that a better way to achieve the same outcome is by a voluntary global agreement. We just want a transition period.’ The problem, Ward added, was the officials in Brussels, who were stubbornly resisting such a period. ‘There is no need for controversy, but we will want your help,’ he concluded. At the end of twenty minutes, Blair said, ‘I understand.’ Back in Ecclestone’s Knightsbridge office, Ward was given a personal cheque by the billionaire, although both knew that Labour remained committed to banning tobacco sponsorship of all sports.
On 15 May, Frank Dobson announced in the House of Commons that the government intended to implement the ban. Tessa Jowell, his junior minister, repeated the same pledge in Brussels. Soon after, Levy invited Ward to his home in north London and set about reassuring him that the government was sticking to their agreement to change the law. Sitting in the garden, he asked, ‘Is Bernie thinking of giving more money to Labour? We wondered if he would commit himself to giving Labour £1 million every year for the life of the current parliament.’
‘There are problems,’ Ward replied.
‘We must arrange another meeting with Tony,’ Levy soothed.
Soon after, Levy spoke to Powell. ‘The prime minister needs to meet Bernie.’
‘OK,’ replied Powell.
The arrangements were made soon after. Blair’s agreement to meet Ecclestone in Downing Street, Ward reassured Mosley, was directly linked to their conversation in his Islington home before the election: another donation would protect the tobacco companies’ sponsorship of Formula One.
Seated in a circle in a small ground-floor room in Downing Street with Blair, Powell, Ward and Ecclestone, Mosley addressed the prime minister, as he would later say, ‘lawyer to lawyer’. Eloquent and precise, Mosley said, ‘We don’t oppose the end of tobacco advertising but we just want a gradual elimination so that alternative sponsors can be found.’
Blair nodded. If phased reduction was denied, Mosley explained, 50,000 British jobs as well as F1 Digital TV could easily be relocated outside the EU. Blair looked over at Ecclestone. The businessman wanted Blair to know that there was no contest between Dobson and himself. With a snap of his fingers Britain could lose its Grand Prix and the lucrative motor-sport industry. Those who ignored his warnings, Ecclestone implied, were always surprised that he did what he said.
‘Let’s keep in touch about this,’ said Blair after thirty-five minutes. The three visitors departed convinced that an understanding had been reached.
Shortly after, Mosley bumped into Mandelson at a reception in Lancaster House. ‘How’s it going?’ he asked.
‘The whole of Whitehall is reverberating to the sound of grinding gears,’ said Mandelson, implying that Formula One’s request was being granted.
The following Monday, Ward heard that Blair had given an order to ‘sort out the Formula One problem’. Powell explained that the government was seeking an exemption in Brussels from the directive. Shortly after, Tessa Jowell called Mosley. Blair, she said, had ordered that Formula One should be given special exemption until October 2006. Ecclestone’s money had fo
rced Dobson to reverse the ban on tobacco sponsorship.
Although Levy would mischievously write, ‘To my knowledge [Blair] never altered any of his policies because of any of the big-money donations I brought in,’ he did criticise Blair for what followed.
Ecclestone’s success was leaked to a journalist and, the day after the Sunday newspaper’s report, Ward rushed to Downing Street to confront Powell and Campbell. He discovered ‘total chaos’. ‘They didn’t want to listen to me,’ he told Mosley, adding that Powell and Campbell, anxious to protect the prime minister, would cast Ecclestone as the villain and encourage Blair, if necessary, to lie. At Mosley’s suggestion, Ward telephoned Powell and urged that the government stay silent about the donation. The suggestion of a conspiracy to suppress the truth hardly appealed to Blair or his entourage. On the contrary, ignoring Ecclestone’s interests, Blair had already asked Derry Irvine, the Lord Chancellor, to limit the damage.
By then, Blair’s confidence in his former pupil master had been shaken by Irvine’s arrogance and misunderstanding of the media. The extravagant manner of Britain’s most senior lawyer would later be compared to Cardinal Wolsey’s behaviour, and in that vein Irvine blamed Blair for the disaster. ‘He could not believe how badly we had fucked it up,’ noted Campbell. Irvine advised that any confession of the truth was ‘utterly absurd’, and suggested that the government should create a smokescreen.
Acting on Irvine’s advice, Blair and Gordon Brown concocted a ruse. They ordered Tom Sawyer, the party’s general secretary, to write a letter to Patrick Neill, the commissioner for standards in public life, based on a lie. The letter referred to a new code of conduct for party funding. Sawyer mentioned that the Labour Party had accepted a donation from Ecclestone while in opposition, and that ‘Mr Ecclestone has since the election offered a further donation’. So far, wrote Sawyer inaccurately, the second offer had been refused out of fear of a potential conflict of interest because of the tobacco exemption. He asked Neill whether the party’s concern was justified. The letter was sent on 7 November. On the same day, David Hill, as he would later admit, continued using evasions and menaces to deflect journalists’ questions.
Wracked by fear, Blair was not sleeping. His fate depended upon the ability of his clique – especially Alastair Campbell – to manage the media. After the election, the PR man had introduced himself to government information officers as ‘a believer in strategic communications’. Few officials immediately understood that in the daily battle for favourable headlines they were to serve Blair’s interests and not the media’s. ‘We must not let the press think they can push us around,’ Campbell said. While working for Robert Maxwell, he and other Mirror journalists were routinely ordered to distort the news, a practice that Campbell imported into Downing Street. Frightening people was his strategy. His misfortune was that Hill’s denials about Ecclestone were denying him his accustomed influence over the media. Blair, he realised, ‘was taking a real hit. We had made a big mistake in not going upfront. We were looking shifty and shabby.’
Patrick Neill only contributed to Blair’s plight. Regardless of the truth, he replied to Sawyer the same day, the appearance of taking Ecclestone’s money had raised questions of honesty and offended the rules. Therefore, he recommended, not only should the second donation be refused, but Ecclestone’s first should be returned. In Downing Street, the panic intensified. No one had anticipated that interpretation. Campbell suggested limiting the damage by admitting some truth. Accordingly, Hill told journalists that Ecclestone had given the party ‘over £5,000’. At the same time, another Downing Street spokesman said that, during their meeting in No. 10, Ecclestone made ‘no request regarding policy’. That lie was quickly contradicted by Campbell. Ecclestone’s donation, he admitted, was made to change Labour’s policy.
‘Tony Blair has started talking,’ Ecclestone cursed. ‘It’s third-rate behaviour.’ Besieged by journalists, he was told that Blair had finally admitted receiving the donation. ‘Well, if Mr Blair said that, he wouldn’t lie, would he?’ Ecclestone replied.
‘How much did you give?’ he was asked.
‘£1 million,’ said Ecclestone.
His admission was explosive. Off message, Jack Straw publicly admitted that Blair had ‘been aware of the second offer from Mr Ecclestone when they met at Downing Street’. After implying that the additional £3 million had persuaded Blair to accommodate Ecclestone’s wishes, Straw then promptly headed for the bunker.
The ammunition against Blair was so strong that no one even referred to the manifesto’s pledge to ‘clean up public life’. To close down the horror, Campbell arranged Blair’s first post-election television interview. The prime minister’s words were carefully rehearsed. He resisted Irvine’s advice of total disclosure, refused to apologise and instead blamed Ecclestone. Even ‘before any journalist had been in touch’ with Downing Street, Blair told his audience, the Labour Party had notified Ecclestone that, despite his ‘firm commitment’ of paying another £1 million, ‘we couldn’t accept further donations’. Only then, said Blair, had the government asked Neill about the probity of the first donation, and as a result it would of course be repaid. To tilt the balance further in his favour, Blair added: ‘I think that most people who have dealt with me think I’m a pretty straight sort of guy – and I am.’
Despite his damnation in the Commons by William Hague for a ‘shabby tale of evasion’, the lies saved Blair but left Ecclestone’s reputation damaged. ‘I’ve been hung out to dry,’ he complained.
Blair was shaken by the crisis. In an unusual post-mortem, he privately admitted his dishonesty. To avoid chaos in the future, Cherie advised, he needed to organise ‘proper decision-making structures’ to resolve ‘the lack of clarity in his office’. The truth, she implied, was that Powell, Levy and Campbell had failed to protect her husband.
Derry Irvine was harsher. Blair’s mistake, said the lawyer, was to believe his own propaganda and trust that Campbell could spin an escape from anything. In his grandiose manner, Irvine had lectured his employer, whom he would call ‘the boy’, that solving the malpractice required legal, not journalistic, minds. That reprimand evoked from Campbell a rare confession: ‘I have been evasive too often … The problem had been a lack of precision and a lack of candour.’
In concluding the inquest, Brian Bender mentioned that Blair must hope that his team ‘would return to [the] rigour of [the] Wilson and Callaghan years’. Blair agreed, without realising that Wilson’s premiership had been damned for serial dishonesty, while Callaghan had developed a corrupt relationship with a banker who loaned the prime minister sufficient money to buy a farm in Sussex in exchange for a knighthood.
The self-flagellation included Mandelson giving a lecture entitled ‘Effective Communication in the Public Sector’ to civil servants in Whitehall. Referring to the Ecclestone scandal, Mandelson told his audience, without blushing, ‘Honesty is the first principle of good communications … and the purpose of communications is not to stall or to hide but to put in context and to explain.’ The cynics in the audience chortled. Mandelson had never previously spoken about Labour’s moral mission or ‘the right thing to do’. His writ had always been ‘This is how we win’, and he intended to continue in the same vein.
The tumult disrupted relations among Blair’s closest advisers, especially between Mandelson and Brown. Ever since he withdrew his bid to be party leader in 1994, Brown’s venom had been directed at Mandelson in particular. ‘Mendelsohn’, he said, emphasising the Germanic lineage, was ‘a menace’. Previously, the two had been close allies, but Mandelson’s support for Blair’s leadership bid had devastated Brown. The depressive Scot was incapable of maintaining civilised relations with anyone other than subservient ultra-loyalists. By October 1997, he was brazenly ignoring the most senior officials in Blair’s office. Even Powell was ignored for thirteen years.
Unflattering stories about Brown spread, especially after the EMU row, and the chancellor was convinced
that Mandelson was the source. ‘Call the dogs off,’ he snapped at Blair. In response, Mandelson was reported to have cried during an emotional interview with a psychiatrist. Campbell, he complained, had become too grand, and in addition was undermining him, keeping him off television. Mandelson suspected that he himself was even disliked by Fiona Millar. He next remonstrated in Blair’s Downing Street den that he was fed up with being ‘treated like dirt’.
‘The attention-seeking was becoming absurd,’ sighed an insider who lamented Mandelson’s exaggeration of his status. Increasingly, Blair was buffeted by arguments among his team. There was even a dispute about who could claim the credit for the election victory.
Amid all the bitter emotions, Blair relied on each of those loyalists. Mandelson was his political genius, Brown his financial expert, Campbell his protector and Hunter his confidante. At the end of May, before departing for the ‘People’s Banquet’, a lunch he hosted with the Queen for 350 ‘ordinary people’ in Banqueting House, Blair told the four of them, ‘I could not survive without you.’ Yet each, in their different way, was making his survival more difficult.
SIX
The Battle Plan
* * *
‘I know we have an army, navy and air force but I don’t know any more,’ Blair told a senior RAF officer soon after he stepped into Downing Street. He opted to rely on General Charles Guthrie, the chief of the defence staff, to educate him.
