Blair role in Palestine contracts gives rise to conflicts of interest

26 September 2011

Tony Blair's role in two multi-billion dollar contracts in Palestine give rise to conflicts of interest, Channel 4's Dispatches programme reveals.   

In his role as the Quartet's Representative to the Middle East, Tony Blair helped persuade the Israeli government to open up radio frequencies so that cell phone company Wataniya Mobile could operate in the West Bank.

He also championed the development of a huge gas field off the coast of Gaza operated by the British Gas Group.      

Both Wataniya Mobile and the British Gas Group are major clients of JP Morgan, the same American investment bank that pays Tony Blair £2m a year for a role as a senior advisor. 

If Tony Blair was still an MP or worked for the United Nations, he would be bound by a very strict and publicly available code of conduct which demanded he set out in full commercial interests. Dispatches has learned that the Quartet on the Middle East has no such code.

 

Background to Blair's Quartet role

On the same day he left Downing Street Tony Blair was appointed Representative to the international diplomatic group known as the Quartet on the Middle East.  

Formed by America, the EU, Russia, and the UN nine years ago, the Quartet's stated aim is to forge peace between Israel and the Palestinians.

The post is unpaid, but its substantial expenses are part-funded by the British taxpayer and little is known about the rules that govern how he works.

Seven months after leaving Downing Street,   Blair also became a senior advisor to investment bank JP Morgan.  

 

Wataniya Mobile West Bank Deal

A major success for Tony Blair in his Quartet role was in persuading the Israeli government to open up radio frequencies so that the cell phone company Wataniya Mobile can operate on in the West Bank.

But Wataniya Mobile's majority owner - Qatari telecoms giant QTEL - is a major client of JP Morgan.

When QTEL bought Wataniya Mobile's parent company in 2007, they did so with a $2bn loan that JP Morgan helped arrange. The bank stood to make huge profits if the frequencies were released - and deal went ahead.

Wataniya Mobile's Chief Executive Officer Bassam Hanoun told Dispatches that Blair ‘played a significant role' in breaking the monopoly in the telecommunications sector in Palestine. 

Wataniya phone network had been built but was not operational until Tony Blair's intervention with Israeli ministers.

"I would say his prime contribution to Wataniya was negotiating the release of the frequencies. That was a milestone, obviously", says Bassam Hanoun. 

"November 2009, we were nothing.... And since then we have done fantastically well. We have captured 23 per cent of the market."

Blair says that he raised the issue of Wataniya with the Israelis at the request of the Palestinian Authority.

But despite the apparently conflict of interest, Blair insisted he had done nothing wrong and that there was no conflict of interest at all.  He claimed not to know that JP Morgan, the bank he works for, helped finance the deal he rescued.

He even emphatically reiterated a statement he issued last December saying he knew of no links between JP Morgan and QTEL - although it was mentioned in a QTEL press release, and detailed in the Bank's regulatory disclosure report under the heading, ‘important disclosures'. He says he and JP Morgan have never discussed the issue.

 

Off-Shore Gaza Gas Field Development

In a second major Palestinian project, Tony Blair in his role as the Quartet's Representative has championed the development of a huge gas field off the coast of Gaza worth over $6 billion. 

Blair says he counts the project as a priority for Gaza and proposed the deal jointly with the Israelis as Quartet envoy.  The deal has not yet been signed and negotiations are still in progress. It would likely see Israel control the gas supply, and any surplus gas sold to Israel, and not on the open market.

The British Gas Group, which owns the rights to operate the field, is a major client JP Morgan.

According to the bank's website, they provide a wide variety of important financial services to the British Gas Group.

JP Morgan told us that: "Mr Blair is a strategic advisor to our management team on high-level geopolitical issues and trends. We have never raised or discussed with him the two projects you mention. Any suggestion of a conflict of interest is baseless."

We asked Mr Blair if he accepted there was a conflict of interest in his relationship with JP Morgan.   He replied that he was not even aware that JP Morgan had a connection with the British Gas Group.

He said the Gaza Gas project was promoted by him at the request of the Palestinians.

 

Code of Conduct

If Tony Blair was still an MP or in the House of Lords; or worked for the World Bank  or the IMF  or even directly for the United Nations , he would be bound by a very strict and publicly available code of conduct which demanded he set out in full  commercial interests. Dispatches has learned that the Quartet has no such code.

Anis Nacrour, a senior French diplomat who worked directly for Tony Blair at the Quartet's Jerusalem office for three years as a Political & Security Advisor revealed no code of conduct applies to Tony Blair. 

"I think he makes his own rules depending on the experience he has as a former Prime Minister for over ten years", says Nacrour. 

 Dr Nicholas Allen, a senior politics lecturer at the University of London, specialising in parliamentary ethics and standards in public life believes Blair's Quartet role is not transparent.

"It is not altogether clear that Blair is separating very clearly his work as the representative of the Office of the Quartet and his business interests", he says.

"Clearly if he was holding a ministerial office in Britain, that kind of conflict, even the appearance of that kind of conflict, the appearance of that influence wouldn't be tolerated."  

When asked how many of the seven Nolan principles - the code of ethics for public servants enforced by Tony Blair when he was British prime minister - appear to be undermined by Blair's conduct and behaviour, Dr Allen says:  "I think there's a good case for saying that six of the principles appear to be undermined by Blair's conduct and Blair's behaviour."

Blair's New Found Wealth

Channel 4's Dispatches investigation also reveals that in the four years since leaving Downing Street Tony Blair has made more money than any other former British Prime Minister.

 

Public speaking has earned Blair a reported £9m.  He's been paid a six figure sum by Louis Vuitton Moet Hennessy for promoting the brand.  He made another half million pounds per year from Swiss insurers Zurich - for advice on politics and climate change and as previously mentioned seven months after leaving Downing Street,  Blair became a Senior Advisor to investment bank JP Morgan - for £2m a year.  

These findings will be broadcast in Dispatches: The Wonderful World of Tony Blair on Monday 26th September at 8pm on Channel 4.