a nice fat juicy old corruption scandal

Scotland Yard feared officers were leaking information from ‘cash for honours’ inquiry to private intelligence firm
Michael Gillard, Edward Malnick, Claire Newell, Telegraph, Oct 7 2016

The wreckage of the helicopter in which RISC founder Stephen Curtis died in 2004. (Photo: BPNS)

Tony Blair had occupied Downing Street for almost nine years when the Metropolitan Police launched an inquiry into potentially explosive claims that peerages had been “sold” by political parties to their wealthy owners. A complaint had been brought by Angus McNeil, the SNP MP, after it emerged that four businessmen who gave Labour £4.5m in unpublicised loans were subsequently nominated for peerages, all of which were later blocked by the House of Lords. In Apr 2006 Des Smith, a headteacher involved in the Government’s academies project, was arrested by police carrying out the inquiry. Three months later Lord Levy, Mr Blair’s chief fundraiser, was also arrested. Scotland Yard’s team of detectives, led by the then assistant commissioner John Yates, was centring its investigation at the heart of Britain’s political parties. By Jul 14 2007, 48 people had been interviewed. The third arrest to emerge, in Sep 2006, was that of Sir Christopher Evans, a biotechnology entrepreneur who had lent the Labour Party £1m in 2005. Sir Christopher, like Lord Levy and Mr Smith, was never charged. But the “cash for honours” team at Scotland Yard had appeared fixated on a note in his diary in which he had recorded a conversation with Lord Levy in which the peer discussed the possibility of the then Mr Evans receiving a “K” or a “P”, code for a knighthood or peerage.

Sir Christopher Evans (Photo: Vismedia)

The conversation took place a year before he was knighted in 2001 and five years before his loan to Labour. Later, when Mr Blair was interviewed by detectives he was asked about the diary entry. Sir Christopher was left “shocked and dismayed” about his arrest, given that in his mind his payment had simply been a commercial loan to help Labour. What followed was months of uncertainty as he attended further police interviews, but he avoided publicly speaking out, having been warned by legal advisers that “to get caught up in this circus” would “damage my interests.” It was simply a case of sitting tight and waiting for the storm to pass. Unbeknown to him, however, a private intelligence firm was, according to Scotland Yard documents, in the background making inquiries about progress with the case. One source suggested that employees of the firm, which folded in 2014, may have “gone rogue.” It is possible that employees of the firm were carrying out activities of which its directors were unaware. Sir Christopher was unwittingly linked to the apparent activities of the firm, RISC Management, in intelligence reports prepared by Met officers. There is no evidence he instructed RISC to carry out any work in relation to the case, although he had used the firm’s services on entirely separate matters relating to Merlin Biosciences, his venture capital fund. Spokesmen for Sir Christopher and Keith Hunter, who was chief executive of RISC, confirmed on Thursday that while the businessman had instructed the company for entirely separate work relating to Merlin, he never asked them to carry out any activities relating to the “cash for honours” investigation. Somewhere along the line, though, be it by the former police officers working for RISC, or mistakenly by Met intelligence officers monitoring the company, Sir Christopher’s separate relationship with the firm was conflated in the eyes of Scotland Yard officers with its employees’ apparent inquiries about the investigation. The Met’s Intelligence Development Group (IDG), a covert arm of the anti-corruption squad, feared that RISC, for whatever reason, would “corrupt” officers as part of attempts to seek information about the investigation. Seven months after Sir Christopher’s arrest, the CPS was handed a file for a decision on whether to charge any donor or party figures with criminal offences. Shortly afterwards the alleged attempts by RISC employees to approach their former colleagues for inside information about the investigation were being covertly monitored by the IDG.

Stephen Curtis, RISC founder PA

ISC Global, later RISC, was set up in 2000 by Stephen Curtis, a lawyer acting for Russian oligarchs who had fallen foul of the Putin government. Mr Curtis was killed in a mysterious helicopter crash in 2004 outside Bournemouth, having reportedly told a friend the previous week:

If anything happens to me in the next few weeks, it will not be an accident.

He was part of a circle of wealthy friends and business associates, many of whom died in untoward circumstances. Former Metropolian Police officer Keith Hunter took over ISC Global and renamed it RISC Management. In 2006, it emerged the former Russian spy Alexander Litvinenko had visited RISC’s Mayfair offices shortly before he died of polonium poisoning, and traces of the radioactive substance were found at the premises. The company had counted the late Russian tycoon Boris Berezovsky, who was found dead at his Berkshire home in 2013, among its clients. Two companies linked to Mr Berezovsky, in Gibraltar and London, reportedly made payments totalling almost £600,000 to ISC Global. Among the firm’s clients was James Ibori, a Nigerian politician under investigation by SCD6, the Met’s economic crimes unit separately carrying out the ‘cash for honours’ investigation. In 2011, RISC was hired by England’s 2018 World Cup bid team to snoop on rival football bodies. A RISC team operated at a five–star Baur au Lac hotel where many of the bid delegations stayed before votes were cast in Dec 2010. There is no suggestion of any illegality on behalf of either RISC or the bid team. The firm was also linked to the Candy brothers, the property developers. Christian Candy’s company CPC allegedly hired a RISC operator to pose as a “representative of the Saudi royal family” in an attempt to track down a business rival.

The Candy brothers, property developers, allegedly hired a RISC detective.
(Photo: PA)

A wider inquiry into the relationship between RISC and Met police officers had identified more than 300 calls between individuals at the two organisations in 12 months. Mr Hunter on Thursday disputed the figure and denied any attempts to corrupt or obtain information from serving police officers. One briefing document summarises the findings of Bartonia, a covert operation established to examine potentially corrupt relationships with officers. The operation was “concerned with the suspected leakage of information from the cash for honours enquiry to an employee of RISC.” Offers of corporate hospitality and even future employment were made to police officers by RISC employees in order to assist the “cultivation of potential sources,” the IDG stated. The report identified two former Metropolitan Police officers who were apparently using their old contacts to make inquiries about the honours investigation. One was said to have “tasked” an officer at SCD6, the economic crimes unit carrying out the investigation, with providing information. The IDG separately found that RISC had received intelligence about the honours inquiry from an unnamed high-ranking officer from the same unit. Over the next two weeks RISC is said to have received inside information about three suspects. The IDG document said:

Intelligence indicates that RISC got information on names of people due to be charged.

A report dated Jul 11 2007 noted that with a “charging decision” in relation to the cash for honours investigation expected imminently, RISC may have been about to make further approaches to SCD6. The report said:

This decision, if unfavourable to their client, may force RISC to make further enquiries about the investigation with any corrupt officers that will provide further intelligence/evidential opportunities.

The decision by the CPS not to charge anyone was announced on Jul 20 on the grounds of insufficient evidence against any individual. The wider operation examining the relationship between RISC and Met officers continued, but its findings have been kept secret. Mr Hunter and Cliff Knuckey, another senior RISC executive were arrested in connection with another case and allegations that SCD6 officers had been paid for information.

Boris Berezovsky, pictured in London with his girlfriend, was linked to deals with RISC.
(Photo: Rex Features)

No further action was taken against Mr Hunter, who said he was exonerated after a lengthy investigation following “malicious allegations” against the two men. Mr Knuckey was subsequently prosecuted for allegedly faking invoices but was also cleared when his trial collapsed over information the CPS had apparently failed to disclose. RISC, which always denied making any payments to police officers, was put into administration in 2014. Mr Hunter has since set up a new intelligence firm called Animus Associates. On Thursday he said:

Sir Christopher never instructed us in relation to the cash for honours matter and to the best of our knowledge we did not provide any services to him relating to this matter. We have not and never have been involved in obtaining information from serving police officers.

A spokesman for Sir Christopher said:

Allegations that Sir Christopher instructed RISC in relation to the cash for honours inquiry are totally false and entirely groundless, and there can exist no credible evidence to the contrary. Insofar as there is any suggestion that RISC may have claimed to act on behalf of Sir Christopher in this regard, it is absolutely false and they had no right to make any such claim. Even aside from our client’s clear denial, given the very high profile, and public nature of the matter at the time, it would logically have been wholly unnecessary for our client to have engaged a third party to make covert enquiries into the progress of the police investigation. Sir Christopher was never contacted by police about his dealings with RISC.

How the cash for honours scandal unfolded

  • Oct 2005: Leaked list reveals Barry Townsley, Chai Patel, and Sir David Garrard have been recommended for peerages by Mr Blair.
  • Dec 2005: Lords’ Commission blocks list ‘pending further checks.’
  • Mar 12 2006: Mr Patel complains of blocked peerage, saying Labour took secret loans from him. Party also borrowed from Mr Townsley and Sir David.
  • Mar 13 2006: Electoral Commission says political parties will be forced to declare multi-million pound loans from donors.
  • Mar 17 2006: Labour admits it received nearly £14m in loans in past year but will not name them.
  • Mar 21 2006: Scotland Yard announces it is to investigate.
  • Apr 13 2006: Des Smith, a headteacher involved in the Government’s city academies project, is held.
  • Jul 12 2006: Labour’s chief fundraiser Lord Levy is arrested.
  • Sep 21 2006: Biotech boss Sir Christopher Evans becomes the third person to be arrested.
  • Oct 23 2006: Former Conservative leader Michael Howard is interviewed by police.
  • Dec 14 2006: Prime Minister Tony Blair is interviewed by police.
  • Apr 20 2007: Met Police hand over “cash for honours” file to the CPS.
  • Jun 27 2007: Tony Blair stands down as PM. It also emerges that Scotland Yard paid for a California soft porn star to fly to UK in connection with the cash for honours inquiry.
  • Jul 20 2007: CPS says there is insufficient evidence to charge anyone over the cash for honours allegations.

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