Four Cabinet Ministers and a Tory special relationship “charity” get off lightly

Henry Kissinger- a star speaker at Atlantic Bridge's uncharitable events- picture courtesy UPI

Any political activist knows that party politics and charitable status don’t mix. And if they do and someone complains the effects can be toxic for the organisation and any leading figures involved.

The Smith Institute found this to its cost when it was torn apart by a Charity Commission investigation two years ago accusing its trustees and organisers of appearing to be too party political and too close to Gordon Brown. The damage to Labour was enormous and the Commission used its powers to hold a full inquiry and directed its trustees to reform the organisation or else.

This week it was the turn of the Tories – or did you notice it?

 Atlantic Bridge- patron Margaret Thatcher  and an advisory board composed of four prominent Tory Cabinet ministers, Liam Fox, George Osborne, William Hague and Michael Gove – was given a year to change its act- after facing exactly the same allegations as Labour. The charity which promotes the “special relationship” with the US – was found in a damning report to be little more than a promotion for Thatcherite party political beliefs and neo-Cons in the US.

But one reason why it may not have hit the headlines is that the Charity Commission was far softer on the offending Tory charity. For a start its press officer advised after they received the initial complaint from Labour activist Stephen Newton that the word investigate could not be used as they had not launched a formal investigation. Instead the phrase “engaging with the charity to address concerns” through a regulatory compliance case was used instead.

Now nine months later the report has been issued with the almost same findings against The Smith Institute. The key phrase is the finding that the charity is “promoting a policy which is closely associated with the Conservative Party.”

But instead of a six month direction the charity has been given a year to change and only then is there a threat against the charity’s trustees of further action.

But more significantly while it is clear that the charity had broken the rules for at least seven years nothing is being done about its tax free position.

These are not minor sums. This was the charity that was charging £700 a seat for VIPs and £400 a seat for ordinary mortals to hear Henry Kissinger speak at a luxury London hotel last year and see him presented with a Margaret Thatcher Medal of Freedom. The commission’s report discloses that the charity admits this event was part of a tax free fund raising drive. The donors – probably mainly higher rate taxpayers – could claim the money against their tax returns. And it is now clear that Atlantic Bridge can’t claim the same charitable status as the National Trust.

So why hasn’t this been referred to Revenue and Customs?  Why aren’t more searching questions not being asked of the advisory panel of Cabinet ministers who presided over an organisation that clearly broke charity rules?

Atlantic Bridge is not actually being repentant either. In a statement they reluctantly promised to follow the Commission’s ruling and have taken down their website for “updating”. But it expressed its  “ disappointment” at the Commission’s ruling  and refused to answer any questions about the role of their trustees or advisory panel.

 The Charity Commission is being a little too careful in handling this scandal. I wonder why.

A similar version of this blog has now appeared on the Guardian’s Comment is Free website.

How Ashcroft got a peerage and no tax bills

lord ashcroft- a non dom peer for a decade-picture courtesy the Guardian

Lord Ashcroft must have been laughing all the way to the tax office for the last decade if the revelations produced by the release of Whitehall memos telling the story of the scrutiny of his peerage are anything to go by.

 They show that the ultra canny lord successfully managed to pull the wool over the eyes of the scrutiny committee, enlist the loyal support of leading Tories to keep his non dom status and befuddle and exasperate some of the country’s leading mandarins. No wonder he is a billionaire, pity any business partner negotiating over the small print with him.

 By concentrating on the semantic difference between being a “long term resident” rather than a “permanent resident” Lord Ashcroft managed to both escape paying tax and still get a peerage with all the status and influence that implies in both Parliament and the business world.

 It is totally clear from the reaction of Baroness Dean that the scrutiny committee believed that he had agreed to the terms and conditions to pay tax in order to get his peerage. But in fact under a deal negotiated by the then chief whip, James Arbuthnot, and Sir Hayden Phillips, the Whitehall mandarin in charge of the negotiations, it was nothing of the sort.

What yesterday’s hearing by the Commons Public Administration committee reveals is a question mark over Sir Hayden’s role – whether he knew that the deal he was negotiating had let Ashcroft off the hook. Certainly Sir Hayden was probably fed up to the back teeth with the issue and probably wanted it sorted out. But it is rather surprising that he insists he did not know of the tax implications.

 What I have been told by a very senior Whitehall source is that Sir Hayden happily took on the job because another figure Lord Wilson, then Cabinet Secretary, didn’t want his hands dirty over such a hot political potato. It is therefore possible that the jovial Sir Hayden got out of his depth in dealing with such a slippery customer as Lord A.

This leaves the issue of how much senior Tories knew about it all. It is crystal clear that Arbuthnot knew exactly what was going on. He seems to have been up to his eyes in securing Ashcroft the peerage. I find it hard to believe that William Hague was also  in ignorance. Ashcroft  is very close to Hague, funds his Parliamentary office and jets around the world with him as shadow foreign secretary. Even at that time his office could have had a look at Ashcroft’s chequebook- and see where the donations came from. So it is possible that Hague could have known at the time, not just in the last few months, that Ashcroft was not paying tax.

Two figures come out well in this sorry saga. Tony Wright, the Labour chairman of the committee, who stuck to his guns and held the inquiry, despite a childish boycott by Tories on the committee. The other is Gus O’Donnell, the present Cabinet secretary. By releasing the documents rather than keeping them secret, he has shed a lot of light on a very murky tale about the award of peerages. Both have done voters a great service in the run up to the election.

This blog is also on the Guardian’s Comment is Free website.