Rothschild Loses Libel Suit In 'Puppet-Master' Regulatory Scandal
By Andrew Kreig
A London judge has ruled against a billionaire member of the Rothschild banking family who sought huge damages because a newspaper reported he was "puppet-master" of a leading European Union (EU) leader who had been Rothschild's guest on a visit to Russia.
Rothschild and Mandelson met Russian aluminum tycoon Oleg Deripaska, whose net worth Forbes reported in 2008 as $28 billion. Deripaska is CEO of RusAl (or "Rusal"), and is Rothschild's business partner. Reports of the 2005 visit created a scandal in the UK by illustrating the tight ties between globe-trotting billionaires and Mandelson. He is a UK Labor Party careerist with a history of socializing with the wealthy while holding posts regulating their businesses. Rothschild asserted that their January visit to Siberia was merely social. Part of the evidence -- that the visitors were warmed, in a custom of the region, by a young man who flogged them with birch branches -- has encouraged more news coverage. The headline in the UK Independent over the weekend, for example, was, Rothschild loses libel case, and reveals secret world of money and politics.
The UK's defamation laws are much more restrictive than in the U.S. for news reporters. But the judge's verdict enabled the Daily Mail to publish a column both hard-hitting and mocking in tone: The Russian oligarch, the Old Etonian billionaire and deeply disturbing questions about Lord Mandelson's integrity.
Justice Tugendhat dismissed the libel case. He found after a trial that Rothschild “had not been entirely candid throughout the different stages of the case, or in evidence” claiming that he took Mandelson on the trip to see Deripaska and Hungarian-born tycoon Peter Munk, founder of the world's largest gold-mining company, “as a friend and not for any business reason.” The judge noted their visit to a Rusal property, and continued, “I cannot accept that the position was as simple as that....I do not accept that there is a clear line between the business and the personal sides of Mr. Rothschild’s relationship with Mr. Deripaska. They have very extensive business relationships. When asked about this, Mr. Rothschild gave what I regard as quite unrealistic answers."
As illustrated by the two news articles cited above, the story has many dimension attracting different audiences -- not a good thing for secretive global tycoons or their government friends who supposedly regulate them.
For tabloid readers and those who seek to watch Lifestyles of the Rich and Famous unfold, the original news coverage and the libel trial show Rothschild-level living. Nat Rothschild, 40, is the Eton-educated scion -- and purportedly the richest -- of the current generation of the famed banking family that's been influential throughout Europe for two centuries.
As context, the Rothschilds helped bankroll the British Government's funding of the Cecil Rhodes diamond mining operations in South Africa, for example, and then helped implement his desire after his 1902 death to create the Rhodes Scholarships at Oxford and a variety of other bodies. The late Georgetown University professor Carroll Quigley, mentor to future Rhodes Scholar and President Bill Clinton, famously traced this history in books and lectures for many years and generations of students.Some of these important organizations included Chatham House in London, and the Council on Foreign Relations, each created in 1919.
In sum, the Rothschild family and its allies have been involved in many other iconic business deals, government initiatives and non-government organizations helping shape the Western World's modern history, often working with influential U.S. financial and government leaders during recent decades. Our Justice Integrity Project has repeatedly reported, for example, that the federal corruption prosecution of former Alabama Gov. Don Siegelman was in part based on a desire by Siegelman's largely Republican political opponents to help steer to EADS a $35 billion defense contract for a next generation of Air Force tankers.
One example is our report last year, Inside Story on DoD's $35 Billion Boeing Air Force Tanker Deal. To recap, EADS makes Airbus planes, among other products. European government leaders and such private interests as those represented by Nat Rothschild supported the bid of an EADS subsidiary in the United States to win the contract. Under the plan, much of the aluminum would come from Russia, airplane engines from the UK, and so forth, for planes to be assembled in Alabama. Some of us following the decade-long contract competition marvelled at the audacity and/or brilliance of a plan whereby U.S. taxpayers would in effect buy high-tech defense equipment in one of the nation's largest defense contracts during a period of high-tech job losses in the United States. But the U.S. government and competing bidders argued at least in public that the contract should be awarded on the basis of honest competition. U.S. Sen. John McCain, R-AZ, presided over Senate hearings showing that a high official of EADS's rival, Boeing Corp., had bribed an Air Force procurement officer. That scandal temporarily voided award of the contract to Boeing. EADS-backers then strongly supported McCain's 2008 Presidential campaign as the GOP nominee.
Alabama journalist Roger Shuler recently noted the tanker procurement and other reasons for Siegelman's still-pending prosecution in Why Did Karl Rove and His GOP Thugs Target Don Siegelman in Alabama? Those following the Siegelman case may disagree on the precise weight for each reason for the former governor's prosecution. The key decisions are made in secret, of course, and government officials have scant incentive to discuss their personal motives and any political pressures aside from asserting they as officials do the right thing at all times. But what's telling is the continued evidence that corruption-fighting -- the Justice Department's ostensible mission in the Siegelman case-- could hardly be the sole reason for such an ongoing national disgrace with somay legal irregularities. Even conservative columnist George Will has joined those urging Supreme Court review of what's now a decade-long federal jihad against the state's most prominent Democrat until his prosecution, which culminated in his 2006 convictions primarily for reappointing to a state board in 1991 a wealthy donor to a non-profit whose mission Siegelman supporetd.
Author and investigative reporter Wayne Madsen, right, has published breakthrough reports on several of these situations. He is a former Naval Intelligence officer who publishes most frequently on the Wayne Madsen Report, a website requiring paid subscriptions. In 2008, for example, he published a column, John McCain's 70th birthday bash held on boat of Russian tycoon. It linked then-GOP Presidential nominee McCain, Deripaska, Rothschild and Munk far beyond mere social encounters. Madsen provided this context:
The 40-year old Deripaska is also politically-connected, having married the daughter of Russia's late President Boris Yeltsin. Unlike most other Russian tycoons, who now live in exile abroad and are protected by Israeli passports, Deripaska maintains close relations to Russian Prime Minister Vladimir Putin and another Russian tycoon, Roman Abramovich, who was also invested in Russia's aluminum industry. In 2000, Deripaska merged his firm, Basic Element, with Abramovich's firm, RusAl. Both tycoons maintain expensive homes in London.
Deripaska has attracted the attention of U.S. law enforcement and he has been the subject of several civil law suits filed against him because of his business practices. However, no federal criminal charges have been brought against Deripaska. That is because Yeltsin's son-in-law counts, in addition to McCain, former GOP Senator and 1996 GOP presidential candidate Bob Dole among his most ardent supporters. In 2005, Deripaska paid Dole $500,000 in lobbying fees and was granted a visa to enter the United States. However, in 2006, the Wall Street Journal reported that the U.S. government refused to grant Deripaska another visa because the FBI discovered he made "inaccurate statements" to the bureau.
In the past, the Canadian firm Magna International, in which Deripaska is a $1.5 billion investor, attempted to buy Daimler Chrysler. The deal ultimately fell through.
Madsen's account, for which the Justice Integrity Project has since independently verified some of the sourcing, goes on to report:
McCain and Deripaska first met at a dinner party held concurrent with the Davos World Economic Forum in January 2006 in Switzerland. The party was hosted by Canadian gold mining billionaire Peter Munk, owner of Barrick Gold, which has counted former President George H. W. Bush, former Canadian Prime Minister Brian Mulroney, former Senator Howard Baker, major Democratic Party lawyer/lobbyist Vernon Jordan, and former German Central Bank President Karl Otto Pohl among the members of its International Advisory Bord. The party was arranged by McCain's 2000 campaign manager Rick Davis, of the Washington lobbying group Davis Manafort. Attending the meeting in Davos was McCain, Davis, Deripaska, and Senators Saxby Chambliss (R-GA) and John Sununu (R-NH), as well as the host Munk.
On August 29, 2006, McCain attended a dinner party in Montenegro that was followed by a champagne reception on a yacht that was hosted by Deripaska. Also reportedly in attendance was Davis, whose lobbying firm was representing the government of Montenegro; Munk; and Nathan Rothschild who, on March 20 of this year held a controversial fundraiser for McCain at Spencer House in London. The fundraiser raised questions about McCain receiving illegal "in kind" contributions from a foreign national.
Such events normally remain secret, of course. Ordinarily, the public can at most expect opaque discussions in the news pages of business deals in language understandable largely to a specialized readership. The Wall Street Journal reported Feb. 15, for instance, Peace, of sorts, has broken out at Bumi PLC, describing how Rothschild appears to be retaining his co-chairmanship of the coal company. Rothschild occasionally attracts attention from readers far beyond the business press because of his ties with world-famous models as well as to Said Gaddafi, son of Libya's longtime ruler.
But the evidence from the libel suit enables a much more thorough level of scrutiny, especially of Mandelson because of his government responsibilities and ties. He is a television producer whom Labor Party leader Neal Kinnock identified as a political talent. Kinnock's Labor successors. Prime Ministers Tony Blair and Gordon Brown, similarly supported Mandelson in years which Labor took steps, especially in Blair's "Third Way" to shed its working class roots and become more corporate-friendly, much like the Democratic Party in the United States during the same period. Thus, Mandelson has reportedly bought a home in London worth 8 million pounds following his government service, raising eyebrows. Especially after the libel trial, he may now be experiencing "Lifestyles of the Rich and Infamous."
Publishing sensitive information regarding tycoons who can bankrupt even a mainstream news outlet with legal costs and judgements is no easy matter, especially in the United Kingdom, which has harsher libel laws in general than the United States. Author and investigative reporter Greg Palast, a guest on my radio show Feb. 9, has written extensively about this. In one such column in 2001, Palast cited Rothschild-Deripaska-Mandelson junket companion Peter Munk as one of the world's most aggressive and effective libel litigants. Palast is a native of California who has worked for the Observer and BBC in the United Kingdom. Among his major stories were financial connections between the Bush family and Munk's company Barrick Gold. Palast described that situation as follows in his 2001 column, in Alert: British paper faces suit over Palast investigation:
In retaliation for the investigative story about the finances of the George W. Bush campaign, Barrick Gold Mining of Canada has sued my paper, the Observer of London, for libel. The company, which hired the elder Bush after his leaving the White House, is charging the newspaper with libel for quoting an Amnesty International report, which alleged that 50 miners might have been buried alive in Tanzania by a company now owned by Barrick.
The company has also demanded the Observer and its parent, Guardian Newspapers, force me to remove the article from my US website, a frightening extension of Britain’s punitive libel laws into the World Wide Web. The company has also issued legal threats against Tanzanian human rights lawyer Tundu Lissu, one of the Observer’s independent sources and an investigator of the mine-site allegations.
The attack by Barrick and its controversial Chairman, Peter Munk, one of the wealthiest men in Canada, who boasts of his propensity to sue, also aims to gag my reporting on his company’s purchase of rights to a gold mine in Nevada -- containing $10 billion in gold -- for a payment of under $10,000 to the US Treasury.
Palast says in his book, The Best Democracy Money Can Buy, that Munk and Barrick have achieved great success in both the United Kingdom and North America in using libel actions threats to frighten news media outlets from reporting such allegations. Palast said one Barrick legal strategy was to forbid Palast from writing on his U.S.-based website about the Amnesty International report about the Tanzanian mine worker deaths because his website is visible in the United Kingdom. This kind of intimidation against reporters and their outlets is a particularly effective in the United Kingdom, Palast writes, since:
In the United Kingdom one can't complain about being sued for libel because, under their law, the paper is guilty of defamation until it proves itself innocent.
Munk's friend, Rothschild, is appealing his loss in court last week. Let's hope Rothschild stays on a losing streak. Associated Media, the defendant and parent of the Daily Mail, said the damages he's seeking would cripple news-gathering. Clearly, we need less secrecy, not more.