The downfall of Peter Mandelson

Peter Mandelson has had more experience at compiling resignation statements than most politicians. Even so, his latest – announcing his departure from the Labour Party after a lifetime’s immersion – was a corker.

Allegations that he had received $75,000 from Jeffrey Epstein 20 years ago, he said, “need investigating by me”. It was vintage Mandelson: grandiose, controlling and supremely confident in his powers as an escapologist.

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In the US, he has been summoned to testify before Congress. Mandelson has also been forced to divest his 21% stake in Global Counsel, the lobbying firm he co-founded in 2010, following revelations that he sought advice from Epstein, says City AM. The firm has completely expunged him, in hopes of stemming an exodus of blue-chip clients that so far includes KKR, Barclays, GSK, the Premier League and Palantir.

Meanwhile, Peter Mandelson’s earlier business contacts are under scrutiny: not least the friendship forged with Russian metals oligarch Oleg Deripaska – a close associate of Vladimir Putin – during his stint as an EU trade commissioner from 2004-2008, which involved “ghost flights” in the Russian’s private jet and steam sessions in the “banya” of his Siberian dacha, says the Daily Mail. “To the delight of Deripaska”, soon afterwards the EU lifted tariffs on aluminium.

A decade later, Mandelson’s client list at Global Counsel included a shady firm with ties to the Chinese military.

After all that, Mandelson’s two previous resignations – for not declaring an interest-free home loan from Geoffrey Robinson in 1998, and the Hinduja “cash for passports” affair in 2001 – look almost quaint.

What drives Peter Mandelson?

Although clearly appreciative of life’s comforts, Peter Mandelson is not driven by money.

As a perceptive Prospect profile in 2009 observed, he’d take “politics-power” over “business-money” any day.

His much-peddled remark that new Labour was “intensely relaxed about people getting filthy rich” wasn’t a personal manifesto, “but a clever sound bite” aimed, successfully, at puncturing the party’s reputation for the politics of envy.

Mandelson, who was born in 1953 and grew up in Hampstead Garden Suburb, was famously born into Labour aristocracy. His maternal grandfather was Herbert Morrison – a leading light in the Atlee government, and the Wilsons “lived down the road”.

In later life, currying favour with “authority figures” was “almost a compulsion” for him, a former aide once observed. Indeed, Mandelson’s “default setting” was “to identify the most powerful person in prospect and then work exclusively, almost slavishly, for them – often at the expense of all other relationships”, says Prospect.

Witty, waspish, generous and a godfather many times over, Mandelson had a talent for friendship, across business and the arts as well as politics. Yet, often “blind to the effect of his own behaviour”, he was equally adept at making enemies.

“Peter who?”

In 2009, Mandelson briefly became the most powerful man in Britain after Gordon Brown made him his de facto deputy.

He holidayed at the Rothschild estate in Corfu, notes The Times, and, during a trip to New York, mixed business with pleasure, turning down the chance to attend an Armani party with “the young daughter of a close friend”.

This was the year of Mandelson’s most wretched betrayal. What goes around comes around.

When asked by Sky News last September if he had any sympathy for the former UK ambassador, Donald Trump replied: “I don’t know him actually”.

We’ve long known that the rich are different, and not just because they have more money. But the Jeffrey Epstein files, a huge cache of correspondence between the disgraced financier and the rich and famous, give us a “rare glimpse” into what the personal finances of billionaires actually look like, says Rachel Louise Ensign in The Wall Street Journal.

The complex finances of Leon Black, former CEO of Apollo Global Management, for example, are laid out in several documents, “down to the exact balances in each of his 69 bank accounts”.

What is revealed are the strategies used by the ultra-rich to build wealth and minimise their tax bills.

Even though they are worth billions on paper, they still borrow, for example, and funnel their wealth into trusts, limited liability companies and private investments not accessible to the typical person.

They spend millions on art collections and rare books and Chinese bronzes. In the first two months of 2015, Black spent $27,196 on dining out and $67,333 on alcohol.

What such folk were getting from their association with Epstein is clear enough – tax and estate-planning advice, if nothing more sinister. (There is no evidence Black was involved in any wrongdoing and he has said he regrets his involvement with Epstein.)

But what were the likes of Peter Mandelson getting?

One thing we should take from the Epstein scandal is a “better understanding of the elites”, says Janan Ganesh in the Financial Times. The self-made super-rich – the “private elite” – often discover too late that most people do not find money or the making of it interesting, and that there is less social status than they expected to be gained from all their hard work.

So they seek to bask in the reflected glory of artists, intellectuals and politicians – the “public elite” – by hobnobbing with them.

For their part, the high-status “public elite” struggle to make the kind of incomes they feel themselves entitled to from work that is actually enjoyable.

There are obvious ways for both parties to mutually benefit. The “classic solution” is marriage, where one partner provides the wealth and the other the social clout. A few end up doing “improper things for the rich in order to get some of their crumbs”.

Mandelson was beguiling to the rich because he came from the world of ideas and events. “Their appeal to him scarcely needs spelling out.”

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Jane writes profiles for MoneyWeek and is city editor of The Week. A former British Society of Magazine Editors (BSME) editor of the year, she cut her teeth in journalism editing The Daily Telegraph’s Letters page and writing gossip for the London Evening Standard – while contributing to a kaleidoscopic range of business magazines including Personnel Today, Edge, Microscope, Computing, PC Business World, and Business & Finance.