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Blair's behaviour was third rate. He played a crooked hand - and tried to bury me...
By Tom Bower
Last updated at 10:01 PM on 19th February 2011Away from the crowds at Formula One races, behind security gates, lurks a black-windowed, air-conditioned coach.
There, Bernie Ecclestone, undisputed king of wheels and deals, holds court, but only a privileged few - supermodels, pop stars, billionaire magnates, international statesmen and Grand Prix power-brokers - are allowed in.
One such visitor on a summer's day at Silverstone in 1996 was Tony Blair, then Labour leader.
Political ambition: Bernie Ecclestone's one-time legal adviser Max Mosley (right) told the F1 boss a £1 million donation would help him present himself as a prospective Labour MP
Political ambition: Bernie Ecclestone's one-time legal adviser Max Mosley (right) told the F1 boss a £1 million donation would help him present himself as a prospective Labour MP
Conversation centred on the euro and, although they didn't see eye-to-eye, the impish tycoon liked the future Prime Minister.
The meeting ended cheerfully, but its reverberations were to severely damage Ecclestone's reputation and taint Blair with the accusation of sleaze just months after arriving in Downing Street.
Blair's staff had set up the Silverstone meeting after Ecclestone had been named Britain's highest-paid businessman, earning £1million a week.
A smooth progression of events followed.
Later that year, in October, Michael (now Lord) Levy, a former pop promoter employed by Blair as a fundraiser, arranged a discussion between Blair and Ecclestone at the Commons.
After speaking alone with Blair for 20 minutes, Ecclestone was taken to another office by Levy, where he put a discreet proposal to the former secondhand car dealer.
'We would be grateful,' said Levy, 'if you could make a significant contribution, something around £1million.'
Ecclestone listened, said nothing and left after five minutes.
'Bernie wasn't impressed,' said Max Mosley, Ecclestone's one-time legal adviser and head of the FIA (Federation Internationale de l'Automobile), motorsport's supreme body.
It was Mosley's election to the FIA that had secured Ecclestone's unquestioned control of Formula One.
Ecclestone was disparaging about Levy when he spoke to David Ward, a former Labour official on Mosley's staff.
'He's amateurish,' he said.
It was an accurate judgment of Labour's ferocious political machine and he would come to regret failing to follow his original instinct.
At the time Ecclestone's bankers were struggling to compose a prospectus for the flotation on the Stock Exchange of Formula One Holdings, valuing it at between £1.5billion and £3billion.
And there was a further problem of more pressing concern to Ecclestone than dalliances with politicians.
Grid iron: F1 boss Bernie Ecclestone, who has a reputation for hard bargaining, knew his donation would pay for access to Downing Street
Grid iron: F1 boss Bernie Ecclestone, who has a reputation for hard bargaining, knew his donation would pay for access to Downing Street
The European Union wanted to ban tobacco sponsorship of sport, and that would affect Formula One.
Something needed to be done. A phone call from Ward to Mosley brought the strands together.
'If you can get Bernie to give Labour some money,' said Ward, 'we will get enormous access.'
Mosley was sympathetic, but Bernie was a Tory with no interest in helping Labour.
Nonetheless, in January 1997 Mosley repeated to Ecclestone: '£1million pounds will give us access and help us on tobacco.'
The tobacco companies were agitating against the ban.
About 30 per cent of circuits' adverts and 30 per cent of team sponsorship - notably Ferrari and McLaren - were funded by them.
Even so, Ecclestone was not keen to help his political enemies. Mosley ratcheted up the pressure.
'It would be a great favour to me, Bernie,' he said.
Mosley, the barrister son of Sir Oswald Mosley, was a frustrated politician.
£1 million would not only give him access to Blair to lobby on Formula One's behalf, but also offer him the opportunity to present himself as a prospective Labour MP.
This, in Ecclestone's view, tilted the balance.
'I want Max to be in a good position to get a Labour seat,' Ecclestone said.
'I want to help Max look good in front of Blair.'
He finally agreed to pay Labour £1million. Now talks on tobacco sponsorship could begin in earnest.
Soon after, Ward was seated in Blair's living room at his Islington home.
Jonathan Powell, a Blair aide, and Blair's ally, Peter Mandelson, remained outside.
'You're getting £1million 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 there are better ways to achieve the same by a voluntary global agreement.'
The EU's draft directive, he said, banned tobacco sponsorship across the whole EU, but under EU law sponsorship was a subsidiary issue for member countries to decide, so the directive would be illegal.
In any event, Ward added, Formula One was not opposing a ban.
Tobacco sponsorship of the British Grand Prix had been voluntarily stopped but the draft European directive would ban tobacco sponsorship in other countries.
'We just want a transition period,' continued Ward.
He was convinced Blair understood the link between Ecclestone's £1million, tobacco sponsorship and the fact that Formula One supported gradual transition.
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Ecclestone handed Ward his personal cheque, despite intending to vote Tory in the imminent 1997 General Election - and although Labour remained pledged in its manifesto to ban tobacco sponsorship of all sports.
For Ecclestone the gambler, the £1million was the same as pushing his chips on to red at the casino - red for Labour and red for Ferrari, sponsored by a tobacco company.
After Blair's landslide victory in May 1997, Levy invited Ecclestone to the Commons, where he expressed hope that his guest would agree to 'loan' the party £800,000 every year for three years.
Of course, Levy explained, the loan would not be repaid.
Ecclestone's expressionless reaction persuaded Levy to add: 'For two-and-a-half-million pounds you will have the key to Downing Street.'
Ecclestone replied: 'I've got the keys to the whole of Rio and it's done me no good.'
Although Ecclestone departed with a glacial smile, Levy was undeterred and invited David Ward to his home in North London.
Sitting in the garden, Levy asked: 'Is Bernie thinking of giving more money to Labour?
'We wondered if he would commit himself to giving Labour £1million every year for the life of the current parliament.'
'There are problems,' Ward replied.
Ecclestone refused to offer any further donation.
On May 15, Frank Dobson, the new Health Minister, had announced the Government intended to ban tobacco sponsorship of all sports.
'We must arrange another meeting with Tony,' Levy soothed.
In Ward's mind that meant he and Mosley would explain their problems to Blair. The meeting was set for October 16, 1997.
The news of another meeting with Blair, now Prime Minister, did not excite Ecclestone: he was used to meeting kings, presidents and prime ministers.
He knew, however, that his donation had paid for access to Downing Street.
Season's grinnings for Blair: In the wake of the donation scandal, Bernie Ecclestone found a novel way to hit back at Tony Blair. He sent this cheeky Christmas card to friends and associates in 1997
Season's grinnings for Blair: In the wake of the donation scandal, Bernie Ecclestone found a novel way to hit back at Tony Blair. He sent this cheeky Christmas card to friends and associates in 1997
Seated in a circle in a small groundfloor room in Downing Street along with Powell, now Blair's chief of staff, and Ward, Mosley addressed the Prime Minister, as he would later say, 'lawyer-to-lawyer'.
His argument appeared irrefutable.
A sponsorship ban, he said, would be pointless because pictures of Grand Prix races transmitted from non-EU countries would display tobacco adverts.
All the FIA wanted, said Mosley, was a global solution.
'We don't oppose the end of tobacco advertising but we just want gradual elimination so alternative sponsors could be found.' Blair nodded.
If a phased reduction were denied, Mosley added, 50,000 British jobs could be relocated outside the EU. Blair looked towards Ecclestone.
Ecclestone was annoyed by Frank Dobson's portrayal of him as a representative of the tobacco industry.
He had never smoked and did not care who sponsored Formula One, but he wanted Blair to know that with the snap of his fingers Britain could lose its Grand Prix and the industry associated with it.
Those who ignored his warnings were always surprised he did what he said but, deliberately, he made his brief contribution unmemorable.
He did not mention tobacco or his need for a favour. He allowed Mosley to deliver what he believed to be the killer blow.
'Under European laws,' said Mosley, 'the proposed EU directive is illegal.'
On health issues, he explained, Brussels had no powers to impose directives on the UK or any member country.
Blair nodded his understanding.
In conclusion, said Mosley, Formula One did not want an exclusive exemption from the ban, merely a phasing out of tobacco sponsorship.
'Let's keep in touch about this,' said Blair after 35 minutes.
The three visitors departed convinced there was an understanding. Shortly after, Mosley bumped into Mandelson at a reception in Lancaster House.
'How's it going?' Mosley asked. 'The whole of Whitehall is reverberating to the sound of grinding gears,' smiled Mandelson, implying Formula One's request was being granted.
The following week, Ward heard that Blair had given an order to 'sort out the Formula One problem'.
Powell explained the Government was seeking an exemption for Formula One.
Later, junior Health Minister Tessa Jowell called Mosley.
Blair, she said, had directed that Formula One should be given special exemption from the EU directive until October 2006.
Mosley was displeased. He did not want special treatment for Formula One.
He had argued for the abandonment of an illegal directive. Blair had ordered something he never requested.
On November 4, 1997, Jowell announced Britain's requirement for exemption.
Two days later, though, David Hill, Blair's spokesman in Downing Street, was asked by a journalist if Ecclestone had made a large donation to the party.
'Good God, I've no idea,' replied Hill.
Soon after, Hill emphatically denied Ecclestone had made a donation, or that there was a link with Formula One's exemption.
The same question was put to Ecclestone.
'I wanted nothing to do with this,' he cursed.
He directed solicitors to issue a statement that 'Mr Ecclestone had not given a donation to the Labour Party' and threatened libel proceedings.
Mosley was appalled.
'That's a mistake,' he told Ecclestone. 'You should have said nothing.'
Some fire-fighting, Mosley decided, was now required.
Ward rushed to Downing Street to meet Powell and Alastair Campbell, the Prime Minister's media supremo.
His instructions from Mosley were to urge the politicians to remain silent 'so that the problem goes away'.
On his return Ward said: 'It's total chaos.'
Neither official wanted to admit that Hill, on their orders, had made a mistake.
'They didn't want to listen to me,' he told Mosley, sensing that Powell and Campbell, anxious to protect the Prime Minister, would cast Ecclestone as a villain and encourage Blair, if necessary, to lie.
'You could be in trouble,' Mosley told Ecclestone.
'It's no one's business,' Ecclestone retorted.
Meanwhile, Mosley had discovered a legal escape route.
Under the official rules, donations over £5,000 did not need to be listed until the party's accounts were published the following year.
The crux was to refuse any comment.
'I said to those clowns,' recalled Ecclestone, 'if someone puts me up against the wall with a machine gun, I will not confirm-or deny anything about the donation. They said, "OK, OK, we'll do the same." '
Ward phoned Powell and again urged that the Government stay silent about the donation.
In Ecclestone's circle of like-minded businessmen, a conspiracy of silence was effortlessly executed.
Now, though, he had entered a foreign world.
He was playing with Campbell and a Prime Minister preening himself about being 'whiter than white'.
Blair concocted a ruse with Gordon Brown, then Chancellor.
They would order Tom Sawyer, Labour's general secretary, to write a letter to Sir Patrick Neill, the commissioner of standards in public life, based on a falsehood.
The letter said Labour had accepted a donation from Ecclestone while in Opposition, and that 'Mr Ecclestone has since the election offered a further donation'.
Sawyer expressed his concern to Neill about Ecclestone's offer of a second donation.
So far, he wrote, the second offer had been refused out of fear of a potential conflict of interest.
Ecclestone would never discover whether Sawyer or Blair knew he had ignored Levy's request for a second donation, but he realised the letter was catastrophic.
Sawyer's letter was sent on November 7. Ecclestone sensed the chaos.
'I've dealt with a lot of politicians,' he told Ward, 'and I've never had any problems before.
'I like to think I can trust people - and he's the Prime Minister - but Labour are like Boy Scouts and the Tories are like hardened criminals.
'The Tories would have known how to stop this.'
On the same day, Hill began prevaricating. He discovered the truth but used evasions and menaces to deflect journalists' questions.
On Sunday, November 9, a newspaper reported Ecclestone's donation and the link to the Government's political somersault.
So far, no one knew the amount Ecclestone had given, but there were estimates of between £100,000 and £1.5million.
Ecclestone's anonymity had evaporated and he was equated in the media with buying access.
'They've got me hooking up the Government,' he said to Mosley. 'There's nothing I can do and I don't care. I'm not fazed out.'
The following morning, Gordon Brown appeared on the Today radio programme.
Asked about the donation, he unconvincingly answered, denying any knowledge of Ecclestone's money.
Events had moved beyond the Government's and Ecclestone's control.
Patrick Neill replied swiftly to Labour's letter.
Regardless of the truth, he wrote, the appearance of taking Ecclestone's money had raised questions of honesty and offended the rules.
He concluded that the second donation should be refused and the first donation returned.
There was panic in Downing Street. No one had anticipated that interpretation.
Spin doctors spoke about limiting the damage by admitting some truth.
So Hill told journalists Ecclestone had given the party 'over £5,000'.
Ecclestone issued a statement admitting he made a donation but adding: 'I never sought any favour from New Labour or any member of the Government, nor has any been given.'
No one believed the denials. The conspiracy to deceive had unravelled.
Labour, Ecclestone moaned, should have stuck to its agreement not to mention his donation.
Then he heard that Campbell, in conversations with journalists, was portraying his donation to the party as an attempt to change Labour policy.
'Tony Blair has started talking,' Ecclestone cursed. 'It's third-rate behaviour.'
Later, he was approached by journalists. Blair, they exclaimed, had admitted the donation.
'Well, if Mr Blair said that, he wouldn't lie, would he?' Ecclestone replied. 'How much did you give?' he was asked. '£1million,' he said.
His disclosure was explosive. Ecclestone became a byword for sleaze.
Wags dubbed £1 million 'a Bernie' and politicians renamed No10 'Bernie's Inn', a reference to a restaurant chain famous in the Sixties and Seventies.
To close down the horror, Campbell arranged Blair's first post-Election television interview.
The Prime Minister's words were rehearsed to place the blame on Ecclestone.
Even 'before any journalist had been in touch' with Downing Street, Blair told his audience, the party had notified Ecclestone that, despite his 'firm commitment' of paying another £1million: '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 be repaid.
To tilt the balance further in his favour against a used-car dealer, Blair concluded: 'I'm a pretty straight sort of guy.'
The lies saved Blair, but left Ecclestone's reputation damaged and Formula One's Stock Exchange flotation dead.
'I've been hung out to dry,' Ecclestone complained.
To his wife Slavica's distress, a pupil at their daughters' school read an essay in assembly about Ecclestone's apparent corruption of the Labour Party.
A cheque for £1million was sent to Ecclestone, who kept it until the last day before cashing it.
As the storm passed, Ecclestone concluded Blair was a better dealer than himself.
'Blair played with chips,' was his view, 'I played with money. Blair played a crooked hand. These people did the best they can for themselves and then tried to bury me.'
Ecclestone - the master deal-maker, the arch-manipulator of Byzantine contractual detail - had met his match.
Westminster, it seemed, was infinitely tougher than the used car trade.
No Angel, by Tom Bower, is published by Faber on Thursday at £18.99. To order your copy for £14.99 inc p&p, call the Review Bookstore on 0845 155 0713 or visit MailLife.co.uk/books
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