Mandelson at it Again ?

Discussion in 'Current Affairs, News and Analysis' started by Hootch, Jan 13, 2009.

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  1. This time Gilligan is onto him

    So how did Mandy buy his £2.5 million Regency villa?
    Andrew Gilligan
    AN EVENING Standard investigation today raises new questions about how the Business Secretary, Peter Mandelson, was able to finance his purchase of a £2.5 million villa near Regent's Park.

    Using publicly-available records, the Standard examined Lord Mandelson's finances and his proceeds from a decade in the property market. Even on the most generous possible analysis, we have established that there appears to be a substantial gap between the amount of money he was able to raise and the price he paid for his latest house.

    Almost 10 years after Lord Mandelson was brought down by buying a house he could not afford, the disclosure will inevitably fuel speculation as to whether he has again financed a property purchase through the generosity of a rich benefactor, along the same lines as the millionaire businessman Geoffrey Robinson, who in 1998 secretly lent him £373,000 to buy a house in Notting Hill.

    Lord Mandelson's spokeswoman last night refused to deny the existence of a new loan.

    In 1998 the then Mr Mandelson failed to declare the loan although his own department was investigating Mr Robinson over an unrelated matter. This forced him to quit as Trade Secretary in December 1998. Lord Mandelson declares no loan, gift or any other such interest in his current declaration of interest as a peer.

    His current property is even smarter than the Notting Hill house that caused his first resignation. The pink-stucco property is on one of London's most expensive streets where neighbours have included former England and Manchester City football manager, Sven Goran-Eriksson, and theatre impresario, Sir Cameron Mackintosh.

    Sir Cameron is worth around £450 million. Even Mr Goran-Eriksson was on a salary of £5 million a year at England, and £2 million at City. By contrast Mr Mandelson, then an EU commissioner, was on the comparatively modest salary of around £160,000 a year when he bought the house. He also received a further housing allowance from the EU but this was spent on renting a flat in Brussels.

    Land Registry records show he paid £2.4 million for his Regent's Park house - or £2.5 million including stamp duty and legal fees. This was almost 16 times his income, a mortgage which even in pre-credit crunch days no lender would contemplate.

    It was reported at the time that Mr Mandelson had financed much of the purchase through selling shares in the advertising agency Clemmow Hornby Inge. However, Companies House records obtained by the Standard show that these shares were not sold until June 2007, nearly a year after Mr Mandelson bought his Regent's Park house.

    Sources close to Mr Mandelson also claimed at the time that he had been able to finance the purchase with a large legacy from his mother, Mary, who died earlier the same year. However, the Standard has obtained a copy of Mary Mandelson's will, which shows that the amount her son received, though substantial, was nowhere near £2.5 million.

    After inheritance tax, the value of her estate was just under £980,000. She left a total of £76,000 to various beneficiaries including the Labour Party, the pressure group Liberty, her daughter-in-law and the nursing home in which she died. The remainder was split between her two sons, leaving Mr Mandelson with just under £452,000.

    Probate was granted on 12 July 2006 and Mr Mandelson purchased his Regents Park house almost immediately afterwards, suggesting that he applied the whole sum to the purchase. That still left him almost £2.1 million short.

    Could he have found the rest of the money from the equity built up in a decade's dealings in the London property market? Our investigations suggest not. Including the Notting Hill house, he has bought or sold five London properties in the past 10 years (he has lived in more than five homes but the others were temporary accommodation or rented).

    Using Land Registry records, we have traced the price Mr Mandelson paid for each of his homes. He made a profit on all of them and an extraordinary profit on one. In August 1999, after selling the Notting Hill house and repaying Mr Robinson in full, he bought a one-bedroomed flat in Pembridge Villas, Notting Hill, for £249,000. Just 19 months later, in March 2001, he sold it for £545,000, a rise of 118 per cent. The average property in the area rose by only 12 per cent over the same period, although part of the difference may be explained by the fact that Mr Mandelson's flat was extensively refurbished under his ownership.

    The man who paid Mr Mandelson such a high price was Arthur Bastings, then managing director for northern and central Europe at Turner Broadcasting, the TV arm of the media giant Time Warner. Mr Bastings owns the flat below Mr Mandelson's and it is possible that he was prepared to pay a substantial premium in order to join the two floors together. However, there is no record of any planning application for this. Mr Bastings declined to comment yesterday.

    Mr Mandelson's profits on his other transactions were proportionately much smaller. However, the key to estimating how much equity he was able to build up from his dealings depends also on how big a mortgage debt he took each time, and thus how much he had to repay to the lender when he sold each property.

    Normally, the amount of a person's mortgage on any property is private. But because of the investigation by the Parliamentary Standards Commissioner into Mr Mandelson's Notting Hill house purchase, we do know that he took out a £150,000 mortgage on it. With this information, it is possible to estimate roughly how much equity he has amassed from each of his five transactions between the Notting Hill house and his purchase of the Regent's Park house in August 2006.

    Our calculations show that by August 2006, even assuming Mr Mandelson reinvested the entire profit each time in his next property and took a mortgage only for the remainder, and even assuming he was lucky enough always to get the best possible interest rates and repayment deals, he would have built up equity of between only £700,000 and £840,000.

    Adding in his bequest from his mother, that would still have left him between £1.2 million and £1.35 million adrift from the price of his Regent's Park house.

    Mr Mandelson did have one other substantial asset, his former constituency home in Hutton Avenue, Hartlepool, which he bought in 1990 for £69,000 and sold in 2005 for £205,000. He sold a country cottage near Ross-on-Wye to buy this house. Even making the - again generous - assumption that the Hartlepool house was fully paid off when he sold it and he was able to bank all the proceeds, that would have left him with between £1 million and £1.15 million to find.

    Could this gap have been bridged by a mortage? Land Registry records show that Mr Mandelson has a mortgage, with HSBC, on his Regent's Park home but the amount is not disclosed. The highest mortgage HSBC offered at the time to standard single buyers was four and a half times salary. £1 million is around six and a half times Mr Mandelson's then salary; £1.15 million is seven times.

    "As someone with the potential to write high-earning memoirs or get corporate directorships in the future, it is just possible that they could have given him a six-and-a-half or seven times salary mortgage," said one banking expert. "But I still think it very unlikely. I would imagine that as a single man they would have offered him, at most, between four and five times salary."

    It was reported in November 2006 that Mr Mandelson had a mortgage of £750,000 on the Regent's Park property, 4.6 times his salary, which would be consistent with this. If this is correct, this would have left him with a last gap to fill of between £250,000 and £400,000.

    How could Mr Mandelson could have filled this shortfall? The Standard has examined Mr Mandelson's declarations of interest as an MP between 1992 and 2004 and as a European commissioner between 2004 and last year. As a minister between 1997 and 1998, and again between 1999 and 2001, he was not allowed any paid interests, and declares none. The same applies to his work as a European commissioner between 2004 and 2008.

    During his periods as a backbench MP, he lists under "remunerated employment" only modestly-paid work for GQ magazine and speaking engagements. Apart from the ad agency Clemmow Hornby Inge, he registers no other shareholdings or directorships.

    The only other source of declared income is his relationship with the French business "fixer," Alain Minc. Between 2002 and 2004 he acted as an "adviser" to Mr Minc's consultancy firm, AM Conseil. Between 2001 and last year Mr Minc was also a board member of Policy Network, a British think-thank and networking organisation of which Mr Mandelson is honorary chair.

    Despite employing only three staff - Mr Minc, a secretary and a chauffeur - AM Conseil turned over £5.5 million a year in 2004. According to Mr Minc's biographer, Stephane Marchand, Mr Minc charges up to £150,000 for a consultation to favoured clients and "earns his money selling intelligence and influence." It has never been clear what Mr Mandelson, who does not speak French, did for AM Conseil, or how much he earned.

    A spokeswoman for Lord Mandelson yesterday refused to answer when asked if Lord Mandelson had received any gifts or loans, other than his mortgage, to help him buy his Regent's Park house. In a five-word statement, she said that the Standard had "made inaccurate assumptions" but, when pressed, refused to elaborate.

    The homes of Peter Mandelson: From the property that led to his first resignation from Government ... to a pink stucco Nash house near Regent's Park
  2. Schaden

    Schaden LE Book Reviewer

    Ok if there is a God out there - please ensure Mandy is stuffed and mounted for a 3rd time.

    It's not too much to ask surely?
  3. Or he produces a very wealthy 'gentleman friend' who is a 'life partner' ?
  4. Did he not get a substantial payoff from the European Parliament ??
  5. The same thing - no?!
  6. The guy is as bent as a 5 bob note (literaly).
    It is a sad fact of this gubment that he has been allowed to enter the cabinet again. In future years, long after Mandy and all the rest have hung up their red briefcases, we will no doubt find out just how much these arrseholes have been screwing the British taxpayer.
    My only cheery thought is most of the coniving tw@ts have been playing the property markets (remember Cherie Bliar and Peter Foster?) and they will now be, hopefuly losing some money for a change.
  7. This was in the Grauniad in October of last year on that very subject. And does his spokesman really think that anyone is dumb enough to believe that bit about him "not being aware of his entitlement"? I bet Mandleson hasn't missed submitting a claim for absolutely everything he can ever since he entered political life.

    Mandelson also denied that he was profiteering from the EU. He will be entitled to around £78,000 a year for the next three years in "transitional payments". When he reaches 65 he will then be entitled to a pension of £31,000 at today's prices.

    His spokesman said: "He is not aware of his entitlement."
  8. You suggesting he is bent (in more ways than one....) Surely not, cannot imagine it for one second. There is no way a bent EU minister could be given a Lordship and brought into government and be bent, that would just make a mockery of the whole system......

    Ho hum, BTW.
  9. His spokesman said: "He is not aware of his entitlement."

    ... so, and do elephants fly, built nests and sit in trees??

    Friends in High Places..... maybe..... (allegedly)..... another Mr Eastern Oligarch called Stanislav...??

    Third Time Lucky.... Maybe Mandy-skins is just another 'Banana Skin' for Gollum Broone to slip and slide on...:excited:
  10. One small spelling correction that may explain the deficit?
  11. I do hope that there is no insinuation of any wrong doing here. The man has a flawless past so there can be no question of any impropriety. If you find any, expect a visit from the Anti Terrorist Squad complete with videos and sound recorders in the ON position.

    Gilligan - be very careful what with bad weather and slippy driving conditions.
  12. They always find a way to hump Andy don't they...
  13. Whether it's true or not, I don't know - but it's a good story, so what the hell.

    Apparently, when Mandelson was given the safe Labour seat of Hartlepool, he thought he'd better actually go there and try to endear himself to the locals. So, he went off on a tour of the town with members of the media in tow, and ended up near one of its chip shops. Mandy went in, and wanting to appear to be a "man of the people" ordered fish and chips. He added "and could I have some of your avocado dip as well please?"

    The avocado dip was, in fact, mushy peas.

    Pity the people of Hartlepool didn't mistake him for another monkey.
  14. And don't go taking any long walks in the countryside like Robin Cook MP or a certain Dr. Kelly.
  15. I almost laughed at that one. Almost.