A comment on the Mandelson affair

A democratic republic”

, said Lenin,

“is the best possible political shell for capitalism, and, therefore, once capital has gained control of this very best shell, it establishes its power so securely, so firmly, that


change, either of persons, of institutions, or of parties in the bourgeois-democratic republic, can shake it”


The State and Revolution


The above penetrating observation of Lenin, which applies with equal force to a bourgeois-constitutional monarchy as it does to a bourgeois-democratic republic, comes to mind whenever a big corruption scandal explodes in the face of any bourgeois government. The Cash-for-Passports affair which led to Peter Mandelson’s second resignation from the government within two years, throwing prime minister Blair and his dwindling band of Downing Street confidants into blind panic, is no exception.

Following revelations that in return for the promised £3 million donation to the Faith zone of the Millennium Dome, Peter Mandelson (who at the time was the minster with responsibility for the Dome) helped Srichand Hinduja, a billionaire Indian businessman, secure a British passport in record time and without the inconvenience of complying with residence and other requirements normal in such cases, Tony Blair, activated by a mixture of paranoia, despair and ruthlessness, forced Peter Mandelson to offer his resignation on the morning of Wednesday 24 January.

Hammond Inquiry

At the same time he instituted an inquiry under Sir Anthony Hammond to look into the whole affair. Sir Anthony concluded his inquiry and produced a report which absolves everyone concerned except for a junior civil servant who, it says, ought to have kept better records.

The Hammond report has been widely condemned as a whitewash.

“Rarely has any inquiry,”

writes Joe Murphy in the

Sunday Telegraph

of 11 March,

“received such scornful or disbelieving reception from the press as accorded to his

[Sir Anthony’s]

72 pages of evidence.”

All the same, while showing a willingness to look the other way when confronted by ministerial misconduct and nauseating corruption, the Hammond report throws a great deal of light on the question of the ease with which the two billionaire Hinduja brothers, already embroiled in an arms deal scandal in India, came to possess so huge and influence over, and access to, the most senior of Her Majesty’s Secretaries of State. By supplying a considerable amount of his source material, Sir Anthony,

“…by accident or design, allows a glimpse into the closeted world that the Hinduja brothers managed to infiltrate so effectively”



). Consequently, the story that emerges lends itself to conclusions just the opposite of those formally reached by Sir Anthony. For instance, his report confirms that at a meeting to discuss the Hinduja brothers’ offer to donate £3 million to the troubled Dome project, Srichand Hinduja, whose earlier application for a British passport had already been rejected during the previous Tory administration, asked Mr Mandelson if he, Srichand, would qualify if he were to apply again. Sir Anthony’s formal conclusion is that there was no link between the donation for the Dome and Srichand’s enquiry. Yet, to anyone in the least acquainted with the nods and winks of Whitehall, and the way the bourgeois system of government, with its endemic corruption, works, there was absolutely no need for any explicit suggestion of this kind.

Mandelson –

a scapegoat for the Labour government

Since his departure from the government, Downing Street spin doctors have assiduously employed the lone gunman theory, which puts the entire blame on Peter Mandelson alone, singling him out as the Lee Harvey Oswald of this messy affair. This spin is scarcely credible.

After 18 years in office, a stench of sleaze hung over the Conservatives. Tony Blair’s Labour exploited that circumstance with skill and adroitness. While the Conservatives cared only about the exercise of power, Labour was supposedly about values and things would be different under Labour. This was Labour’s refrain prior to, and during, the 1997 election. As a matter of fact, it became crystal clear soon after it assumed office that, if anything, Labour’s infatuation with the rich and famous was ever greater than that of its Conservative predecessors. Writing in the

Sunday Telegraph

of 11 March, Stephen Pollard has this to say on the question under discussion:

New Labour was not merely obsequious to business; it revered businessmen as if they were direct descendants of Zeus and Aristotle rolled into one.”

In his decision to snuggle up to the many wealthy businessmen, Mr Blair could not, continues Mr Pollard, have found

“…a better vehicle for this than Mr Mandelson, who combined the zeal of a convert to the worship of Mammon with a childlike obsession with hanging out with the ‘in’ crowd. In the world of New Labour, that ‘in crowd’ was the wealthy”.

Mandelson was dazzled more than most by the moneyed glitterati,”

wrote Philip Stephens in the

Financial Times

of 26 January.

Doubtless, Peter Mandelson, while in government, had amassed huge power. The point to emphasise, however, is that much of that power was deliberately delegated to him by prime minister Blair, who did not always want to dirty his own hands. Thus it came to be that Mandelson spent

“too much time at parties, clinking champagne glasses with businessmen and biddable Tories. But he did so not only because he enjoyed it – and he enjoyed it very much – but because his master knew that he was the only one who could do it”

(Matthew d’Ancona,

Sunday Telegraph,

11 March 2001).

Hinduja brothers’ fabulous riches

Blair and his cronies were attracted to the Hinduja brothers for the same reason that they were to other wealthy businessmen. Their power and wealth was dazzling, and, given Labour’s infatuation with the wealthy, they were irresistible. They regularly entertained top statesmen from all bourgeois political parties, and were in turn invited back. “

The Hinduja parties

“, writes the

Sunday Telegraph

of 28 January, “

are legendary. Their annual Diwali party at Alexandra Palace has become part of the London social calendar which in past years has been attended by Margaret Thatcher, the Blairs and many Cabinet ministers. In fact the Blairs were so keen to make a good impression at the Hindujas’ Diwali Celebrations in November 1999 that Anji Hunter, one of the Prime Minister’s most senior aides, met the brothers’ representatives beforehand to discuss arrangements.

At the wedding of the three Hinduja sons, Bombay’s racecourse was transformed with grottos of dry-ice waterfalls, caparisoned elephants and white horses with golden livery. The event was attended by 10,000 guests from 58 countries.”

After publication of the Hammond report, the Hindujas were visited in their Bombay penthouse by the

Sunday Telegraph’

s Julian West. Over lunch, the brothers discussed almost casually the guest list of their Diwali parties in Britain

“which sound like a ‘Who’s Who’ of the great and good in politics. All the while, they dropped coy hints about both their closeness to the Prime Minister and how they themselves operate.”

The eldest brother, Srichand, went on to explain: “

When we came to Britain in the 1980s, the Tory Party was in power and everyone knew that we were Tory. Still, at all our Diwali functions we had Neil Kinnock, John Smith, Tony Blair, Paddy Ashdown, Margaret Thatcher and John Major. All three parties were represented and even today, with all this exposure, our relationship with them is the same”


Sunday Telegraph,

11 March 2001).

To make doubly sure that the people they entertain do not subsequently deny being wined and dined, the brothers have a cameraman to hand, ever ready to keep a photographic record of important meetings. When it was suggested by Julian West that Chancellor Brown, on the alleged advice of Lord Sawaraj Paul, another Indian tycoon and steel magnate, had wisely turned down Gopichand Hinduja’s request for a meeting, Srichand retorted: “

You should ask Gordon Brown: did you meet the Hindujas, did you talk to them? If he says no, I have the photograph”




Subordination of government to monopoly capital

The media, as well as the three main bourgeois political parties, have repeated ad nauseam that Peter Mandelson had to go because he had misled the media, the House of Commons, the prime minister and his ministerial colleagues. That is a mere trifle. The real point needing to be emphasised, and which for obvious reasons no bourgeois party dare stress, is the subordination of bourgeois governments all over the world, ours included, to the interests of monopoly capital. True, capitalism from day one went hand in hand with corruption. What distinguishes the monopoly phase of capitalism (from the earlier free-competition stage), however, is that the scale of corruption becomes truly breathtaking.


Sunday Telegraph

of 11 March, in its editorial entitled ‘Back from the dead’, attempts to evade this central question by blaming it all on foreigners who, naturally, in line with the


‘s anti-foreign bias, are corrupt and corrupting. Here, in its own words, is the

Sunday Telegraph

‘s anti-foreign tirade:

Just as Mohamed Fayed transplanted the practices of the Egyptian souk to British politics, so the Hindujas – who are still embroiled in the Bofors scandal – have imported a distinctively Indian belief that business and politics are so close as to be indistinguishable. In apparently encouraging the brothers to believe that the same rules apply here, Mr Blair and his colleagues have laid themselves open to serious charges by apparently encouraging delusion.”

The only conclusion one can draw from such a tawdry piece of writing is: keep away from these foreigners, who corrupt our innocent politicians. Better still, keep them out.

This attempt to pass the buck on to foreigners, to blame them for what is inherent to the very functioning of governmental institutions under the conditions of monopoly capitalism, will not pass muster. For, notwithstanding the desire and proclivity of bourgeois authors to avoid revealing the mechanism of the formation of the financial oligarchy, its methods, the size of its revenues, its connections with government, “

the monstrous facts concerning the monstrous rule of the financial oligarchy are so glaring that in all the capitalist countries …, a whole literature has sprung up, written from the bourgeois point of view, but which, nevertheless, gives a fairly truthful picture and criticism – petty-bourgeois, naturally

of this oligarchy”


Imperialism, the highest stage of capitalism


Long before there were Egyptian and Indian billionaires introducing practices of the souk or the bazaar, monopoly capitalism had introduced the same practices on a gigantic scale, for

“monopoly hews a path for itself without scruple as to its means”,

it introduces monopolist principles:

“the utilisation of ‘connections’ for profitable transactions takes on the place of competition in the open market.”

The payment of £1 million by Ecclestone, a life-long Tory voter, to Labour in order to secure an exemption for the blanket ban on tobacco advertising (Labour’s campaign pledge only weeks prior to that) can hardly be blamed on the practices of the Egyptian souk or the Indian bazaar, any more than can be the £5 million donation by a gambling billionaire, an old Etonian and English to the core, to the Conservative party on the condition that it keep its Eurosceptic stance. The fact is that bribery and corruption are a way of life under the rule of finance capital. The fact is that the financial oligarchy is constantly buyng favours from the highest-ranking politicians, civil servants and members of the officer high command, in hundreds of direct and indirect ways. Such is the power of the financial oligarchy that, in the words of Anthony Sampson, “

National politicians or administrators begin to look more like local councillors confronting big time developmers

” (

The Independent,

This being the case, why was Peter Mandelson given the push? Simply because he was found out and had, therefore, become an embarrassment. He was thus expendable. It is this which led to his forced resignation from his ministerial berth – not any sense of outraged propriety on the part of Tony Blair and his Cabinet. Mandelson has gone but the corruption and bribery, the subordination of state institutions to the interests of the tiny handful which constitutes the financial oligarchy, carries on and continues to flourish. Only a proletarian revolution can put an end to this quadrille.

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