The Liam Fox affair: the latest example of corruption in government and business

Dr Liam Fox decided to fall on his ministerial sword, or was thrown onto it, after the publication of a report following an investigation into his conduct by Cabinet Secretary Sir Gus O’Donnell which found him guilty of clear breach of the ‘ministerial code of conduct’.  Parliamentary Standards Commissioner John Lyon is to launch another investigation into Dr Fox and the press are still circling the ex-minister like sharks around a bloodied survivor from a shipwreck.

We are left wondering what this right-wing Tory has done to upset enough of the establishment to warrant this attention. 

There are accusations of misused public funds but that is nothing special among bourgeois parliamentarians of any hue; in fact their official wage even before ‘perks’ could well be described as a misuse of public money. 

Perhaps the Government’s cuts to the defence budget have angered some of their masters and Fox has paid with his head as a shot over the Government’s bow?  On the other hand this is a time of especially rich pickings for the arms corporations overseas sales and Dr Fox has certainly been involved in helping them.

Perhaps rival business interests are clearing him out of the way to have someone in the MOD and Cabinet batting for them?

Or maybe this irksome man has amassed enough personal enemies to be targeted as the latest sacrificial lamb to be ritually slaughtered in public to try and prove that the establishment is serious about clearing dishonesty out the Augean stables that are the natural habitat of any British government? 

Whatever the reasons, in the “media frenzy”, several interesting items were revealed, if only in passing, re arms sales, front companies, bogus charities and Israel and the way these various connections intertwine. 

There were also, of course, plenty of allusions from both the sensationalist and ‘serious’ bourgeois press that Fox’s relationship with Adam Werritty was ‘more’ than that of good pals.  However, whether they are gay or not is immaterial; it is not something that adds to either our condemnation of him or gives him any special defence. It is for us an irrelevance.  To put it into cruder terms, we don’t care who is screwing who so long as they are not screwing the working class!  No, their murky political and business relationship is what should and does concern us.

Werritty certainly had almost unlimited and immediate access to Fox whether in Parliament, his MOD office or even on Government business abroad; and whether the O’Donnell report admits it or not, Werritty was recognised by those foreign governments, and both British and foreign ‘businessmen’ dealing with the British establishment through the MOD, as an important player who could speak certainly for Fox and perhaps even for the Government itself.  It is not for nothing that Werritty had business cards printed portraying himself as an advisor to Dr Fox: he was just that and was present during many meetings discussing arms sales, methods of repression, and shady business deals.

The globe-trotting of Werritty to attend Fox’s overseas meetings, often as part of the Minister’s entourage, was an expensive business and could not lightly be taken up even by a wealthy businessman – but Werritty had no worries on that score.  He had set up a private company, Pargav, as a not-for-profit organisation to ‘support his work’ in the Middle East.  This company picked up the tab for all Werritty’s first class air flights and rooms in the best hotels etc. But where did the company get the money to pick up these tabs?  It seems that the company relied on donations, somewhere around £147,000 according to some reports, from companies and individuals to ‘support the work’ of Mr Werritty in the Middle East.  We know that three of those donors were very well known to each other: Mick Davis who runs the massive mining company, Xstrata, Michael Lewis and Poju Zabludowic.  Mick Davis has previously given £150,000 to the Conservative Party in 2010-11 and a further £7,500 to the Education Secretary Michael Gove.  He also threw £100,000 into the NO2AV campaign this year.  South African Davis is also the head of the United Jewish Israel Appeal (UJIP), the foremost fundraiser in Britain for Israel.

Michael Lewis is a top financier and closely linked to the British Israel Communications and Research Centre (Bicom), the leading lobbyist for Israel in the UK, and he also donates to the Tory Party.

Poju Zabludowic, a real estate tycoon, is the chairman of Bicom and has also made large donations to the Tories.  In June, both Davis and Zabludowic were part of a delegation that met with William Hague MP to discuss the ‘Arab Spring’ and likely impacts of it on Israel.

These connections and links spread further as we learned that Lee Petar, a boss of Tetra Strategy, a lobbying firm that introduced a Dubai ‘defence contractor’ to Adam Werritty, had previously been in charge of communications for Bicom.

A company that donated money to Pargav is IRG which describes itself as “an international professional services firm that helps governments”.  This Washington-based company is owned by L3 Communications.  One of the investors in L3 Communications is Michael Hintze’s hedge fund CQS which has around £21 million tied up in L3.  In July Liam Fox told parliament that he had decided not to revive the Nimrod early warning aircraft project and that the MOD would award the contract to L3 to provide the new Rivet Joint aircraft.

Other donors to Pargav include G3 Good Governance Group, an international investigation company run by former MI6 employees which has an ongoing contract with BAE Systems, which in turn has £520 million worth of MOD contracts, as well as the venture capitalist John Moulton who nowadays owns the Readers’ Digest. According to the parliamentary report from Gus O’Donnell “Dr Fox facilitated an introduction between Mr Werritty and a donor” but didn’t say which one.

That covers most of what we know about Adam Werritty’s financial ability to travel the world with Dr Fox and begs the obvious question: why were all these people and organisations, with all their connections and ‘business’ minds, so willing to pay for his travel and board?  Perhaps the fact that most had links with ‘defence interests’ would be enough explanation for most people?

The meetings Adam Werritty ‘sat in on’ with Dr Fox included briefing the then UK Ambassador Designate to Israel, Matthew Gould, on the MOD’s perspective of the security situation in the Middle East.  He attended the Defence Minister’s meetings with ‘businessmen’ and government officials in Dubai.  When Fox went to Israel to discuss the situation regarding the Palestinians, Werritty was listed as being present.  Werritty was also in Sri Lanka at the same time as Fox and was present at many meetings Fox had with Sri Lankan government officials.  The Sri Lankan Government have never denied that Werritty was there selling arms and associated products. 

Dr Fox certainly doesn’t mix morality with either his business or political interests and told firms gathered at the Defence and Security Equipment International (DSEI) arms fair in London that the best way to safeguard jobs in the industry was to “widen the customer base”.  This ‘widening of the customer base included MOD approval of sales of shotguns, teargas and rubber bullets to Bahrain and various ‘defence’ equipment to Saudi Arabia, which both governments put to use earlier this year when the Saudi army entered Bahrain, using armoured vehicles reportedly supplied by BAE Systems, to help that government put down popular unrest and killing at least 30 protesters, injuring and imprisoning many more.

Another joint venture of Fox and Werritty was the now dissolved ‘charity’ Atlantic Bridge.  This ‘charity’ was run out of Liam Fox’s Parliamentary office by its only employee, Adam Werritty, who was Chief Executive of the UK branch.  Liam Fox was its Chairman, Margaret Thatcher was a Patron and its membership included the MPs George Osborne, William Hague and Michael Gove.  The published reason for the existence of Atlantic Bridge was to “foster closer links between the US and Britain”, but the Charity Commission eventually investigated it and concluded that Atlantic Bridge was ‘not an educational trust but a political organisation promoting a particular view of the transatlantic alliance’  William Hague who, along with Osborne and Gove, tried to defend Fox in parliament as the accusations and rumours leading to his resignation built up, has since tried to play down his role in this sham ‘charity’, saying that he was “only a name on the letterhead” and that he had “only exchanged a few sentences with Adam Werritty since becoming Foreign Secretary”.  Yet, when Hague published a book on William Wilberforce, it was Atlantic Bridge, with Werritty as the Chief Executive, that paid for the launch of the US edition of this book in New York.  When Atlantic Bridge was wound up, it had £36,000 in its account but there seems to be no record of where that money went.  While in existence, Atlantic Bridge linked up with a US neo-con organisation called the American Legislative Exchange Council.  This is a powerful lobbying organisation, which receives funding from pharmaceutical, weapons and oil interests among others.  It is heavily funded by the Koch Charitable Foundation whose founder, Charles G Koch, is one of the most generous donors to the Tea Party movement in the US. In recent years, the Tea Party has become a potent ultra-right force in American politics.

All of these links and connections, running into a powerful web of private interests, are the latest proof of the correctness of Engels’ observation that in a democratic republic, “wealth exercises its power indirectly, but all the more surely”, first, by means of the “direct corruption of officials” …; secondly, by means of an “alliance of the government and the Stock Exchange”. (Quoted by Lenin in State and Revolution).

The Fox affair is the latest confirmation also of Lenin’s observation that “Finance capital has created the epoch of monopolies, and monopolies introduce everywhere monopolist principles: the utilisation of ‘connections’ for profitable transactions takes the place of competition on the open market.” (Imperialism, the Highest Stage of Capitalism).

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