IE 11 is not supported. For an optimal experience visit our site on another browser.

British media buzz over Tory scandal allegation

It was a potent mix: a Greek holiday isle, the scorching summer sun, a Russian oligarch with a huge yacht, and some of Britain's top politicians.
/ Source: The Associated Press

It was a potent mix: a Greek holiday isle, the scorching summer sun, a Russian oligarch with a huge yacht, and some of Britain's top politicians.

When trouble hit back home, it wasn't sex or drugs. It was money — an allegation that the opposition Conservative Party's second most powerful figure solicited an illegal political contribution from a Russian businessman.

The Conservatives deny George Osborne did any such thing. And, even though Prime Minister Gordon Brown, leader of the Labour Party, called Wednesday for an investigation, the uproar may fizzle as a legal scandal since no money apparently changed hands.

But British news media are buzzing and the case could blossom into an embarrassing political scandal for the Tories, recalling party funding transgressions that preceded the last Conservative government's trouncing in 1997 elections.

It also undercuts a campaign by current Conservative leader David Cameron to crack down on sleaze, announcing a "deep clean" of party members' expenses and banishing lawmakers for expense irregularities.

Osborne is alleged to have asked for an $80,000 contribution to the Conservatives from Russian aluminum tycoon Oleg Deripaska during a summer sojourn to the Greek island of Corfu. It is illegal for foreigners to give money to British political parties.

At its heart, the story has many of the ingredients that titillate the British, including the spectacle of politicians succumbing to temptation. It also plays to a perception of Tory politicians basking in privileged backgrounds and close ties to the financial elite.

Indeed, Osborne found himself under attack after he broke a simple rule of that elite — never divulge comments that are made in private at the home of a friend.

The accusation against Osborne was leveled by another tycoon, British banking heir Nat Rothschild, a college chum and drinking buddy of Osborne who has turned on his old friend with startling fury.

Both men attended the elite University of Oxford and were members of the exclusive Bullingdon Club during their college days. But Rothschild apparently was enraged by reports that Osborne told journalists about a private conversation Osborne had while vacationing at the tycoon's Corfu villa.

Osborne was identified as the source for reports that Labour Party member Peter Mandelson — known as "the Prince of Darkness" because of his taste for political intrigue — had badmouthed the prime minister to Osborne.

The leak embarrassed Mandelson just as Brown named him to the key Cabinet post of business secretary, undercutting Mandelson's claim to have great respect for the prime minister.

In retaliation, Rothschild wrote a letter to The Times newspaper accusing Osborne and a top Conservative fundraiser of discussing ways to circumvent the law by having any Russian contribution "channeled through one of Mr. Deripaska's British companies."

The letter expressed bitterness at the way discussions at his social soirees in Corfu had ended up in the press. "Perhaps in future it would be better if all involved accepted the age-old adage that private parties are just that," he wrote.

Rothschild, who had hosted both men at his seafront estate on Corfu, says he can back up his allegation by producing witnesses

Osborne says it was Rothschild who raised the matter of a cash donation in discussions with the Russian. Osborne, who has been supported by the Conservative leader, says he neither sought nor accepted any money.

The saga has people tut-tutting over politicians hobnobbing with financiers and industrialists. They sip cocktails and trade stories with some of the globe's richest, people like Deripaska, who met with Osborne aboard the Queen K, his multitiered yacht that is one of the biggest private ships in the world.

It's a practice that's been going on for ages. Conservative Prime Minister Winston Churchill used to take painting breaks at the homes of wealthy friends on the Riviera. And former Labour Prime Minister Tony Blair drew criticism for vacationing at the retreats of wealthy friends in Italy, Miami and the Caribbean.