The Libyan despot’s son, the Rothschilds and other questions for Lord Mandelson

Mandelson Jacob Rothschild in Corfu

Lord Mandelson with his host Jacob Rothschild in Corfu. The Business Secretary talked briefly about the Lockerbie bomber to the son of Libyan leader Colonel Gaddafi, who was also staying at the Rothschilds’ villa. Photo: Evening Standard

The Rothschild villa on Corfu and the oligarch-rich coast of tiny Montenegro have once more hosted what could easily be mistaken as a Mandelson-orchestrated salon of mutual backscratching.

Daily Mail | Aug 24, 2009

ANALYSIS: The despot’s son, a Corfu soiree and yet more questions for the Fixer Supreme

By Richard Pendlebury

Mutual connections, ‘chance’ meetings and social back channels are often what make the diplomatic and economic worlds go round. But Lord Mandelson’s Adriatic vacations with his rich friends are in danger of becoming an annual cause celebre.

Last summer they resulted in ‘ Yachtgate’ – his vicious spat with Shadow Chancellor George Osborne over what was said on their high seas holiday in Corfu with controversial Russian oligarch Oleg Deripaska.

This year the Business Secretary faces growing speculation over his part in the release last week of Abdelbaset Al Megrahi, the Libyan convicted of the Lockerbie bombing which killed 270 people.

The backdrop to this fresh controversy is a very familiar matrix of exotic faces and locations.

We have the involvement of Mr Deripaska, the Russian oil and metals baron, and British financier Nat Rothschild – two Mandelson cronies who were also central to Yachtgate.

The Rothschild villa on Corfu and the oligarch-rich coast of tiny Montenegro have once more hosted what could easily be mistaken as a Mandelson-orchestrated salon of mutual backscratching.

But the crucial new figure this year is that of Saif al-Islam Gaddafi, second son of Libyan dictator Colonel Muammar Gaddafi, whom he is widely expected to succeed.

Lord Mandelson denies that he had any influence over Megrahi’s release and triumphal return home, which has so infuriated the United States.

But he has already had to admit that the matter was discussed at least once in private with the urbane Saif, who then declared on Libyan TV: ‘In all commercial contracts for oil and gas with Britain Megrahi was always on the negotiating table.’

It is worth remembering that last year it took some little time before Lord Mandelson admitted that he had known Mr Deripaska for at least two years longer than his office had previously let on.

Will the forgetful Business Secretary have to make similar admissions this time round? There is no doubt that Saif is the coming man on the Libyan scene and already an international player in both politics and business.

If his one-time pariah father has managed a remarkable rehabilitation in the West – thanks in no small part to the 44billion barrels of oil as yet untapped on Libyan territory – then the London School of Economics- educated Saif, who has exhibited as an artist, appears to be the regime’s more palatable future.

And it is a future which offers immensely lucrative trade deals for the UK – one hint of the emerging relationship between Libya and Britain came with the news this weekend that Saif has just purchased a £10million mansion in Hampstead, North London.

Saif’s official role is that of running a Tripoli-based family charitable foundation. Last year he foreswore any active part in Libyan public life.

He declared that democracy was the only way forward and that North African politics – Libya aside – was a ‘ forest of dictatorships’. Such noble utterances are greeted with scepticism by Libyan dissidents.

It is difficult to tell the truth about what Saif’s true politics and intentions are,’ says Ashour Shamis, a leading London-based Libyan opposition activist.

‘Saif says he wants a new beginning and for the country to be run with more freedom. We shall see. Do not forget that in Libya there is no opposition, only Gaddafi and his sons. They treat Libya as their own possession. Its assets belong to their family.

‘Saif is not rebelling against this regime. He is part of it. I place no credence in his saying that he has no interest in succeeding his father.’

Another Libyan exile was even more cynical: ‘Saif is his father’s son. The idea that anything dramatic will change under him is laughable. He is very good at presenting himself as a reformer and blaming the excesses for people around his father. But I for one do not believe him.’

Saif is not the only son of a head of state to appear in this circle of friends.

Our own Prince Andrew, the UK’s special trade envoy, is a friend of his, having met him on a number of occasions in private and public capacities. Saif has also been a guest at Buckingham Palace and Windsor Castle.

The Gaddafi family are particularly keen to nuture this connectionit seems. Another boost for them on the global stage.

And what a small world it is. In March this year, Andrew went to Montenegro to open the new British embassy there.

During the trip he took time out to be shown round the £500million Porto Montenegro marina which is being developed on the coast near Tivat.

Two of the main investors in the project are Mr Deripaska and his financial adviser Mr Rothschild. Indeed, the former’s business interests make him the largest private employer in Montenegro.

Early last year, when he was still EU Trade Commissioner and not yet ennobled, Peter Mandelson announced that he had secured a bilateral agreement with the tiny Adriatic nation.

‘Today’s signature is an important milestone,’ he declared at the time. Montenegro’s progress toward becoming a reliable world trading partner had been ‘ remarkable’. Mr Deripaska must have been delighted.

It later emerged that during Lord Mandelson’s tenure as commissioner, there had also been two cuts in EU aluminium import tariffs, which has benefitted Mr Deripaska’s company Rusal – the EU’s biggest importer of the raw metal – by tens of millions of pounds a year.

In June this year what was described as the most lavish celebration ever held in the Adriatic took place near the Tivat marina.

Saif Gaddafi had chosen the Splendid hotel in Becici as the location for his 37th birthday party. Among the guests, who flew in on a fleet of a dozen or more private jets, were Prince Albert of Monaco, Mr Deripaska and Mr Rothschild.

Saif is said to be interested in investing in Montenegro. Presumably he and Mr Deripaska had plenty to talk about – the Russian also controls the oil company Russneft and Libya is looking for foreign investors in the energy industry. Business and pleasure combined in one ostentatious display.

August came and the Mandelson circus arrived back on Corfu. Displaying his trademark rhino hide, he brushed off the 2008 imbroglio and returned once again as a guest at the Rothschild villa.

No Mr Deripaska this time. But sharing the Rothschild hospitality for 24 hours of his holiday was someone with the potential to be equally if not more controversial: Saif al-Islam Gaddafi.

Lord Mandelson has admitted to having met the despot’s son at least once before, in May this year. On Corfu they chatted. And, inevitably, the subject of Megrahi came up.

Within the month the convicted mass murderer was free and being welcomed at Tripoli airport by a jubilant Saif.

There were no linked trade deals, we are asked to believe by the Foreign Office. And no input by Lord Mandelson, the man himself claims.

Unfortunately experience has taught us to be more than a little circumspect about the Business Secretary’s declarations.

His soiree with Saif on Corfu, at a time when the Megrahi affair was about to reach a crisis, leaves too many questions unanswered from the fixer supreme.

For the moment there is only one clear beneficiary of the affair: Saif’s father. ‘Gaddafi is reaching a crescendo of success as he approaches his 40th anniversary,’ says Mr Shamis.

‘He is the chairman of the African Union, has visited most of the European and world capitals that were once closed to him and now he has freed Megrahi. He has achieved most of the things he wanted to do.

‘Lord Mandelson and other politicians in the West have fallen completely into his lap.’

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