Q:Who’s afraid of the big bad Fox? A:The Charity Commission

Liam Fox:Back in the News Pic courtesy:Metro

So Liam Fox is back from the political dead after having to quit as defence secretary.  How interesting! It comes after a little noticed report  from the Charity Commission into the affairs of  his doomed charity, Atlantic Bridge.  Conveniently it closes down any further investigation into his dubious past.

Remember this was the charity that promoted the Margaret Thatcher and Ronald Reagan view of Anglo-American relations and gave a Margaret Thatcher Freedom medal to Henry Kissinger.

 The Charity Commission would never have looked at it if it had not been the persistence of Stephen Newton the Labour blogger who lodged a complaint. The charity run by Mr Fox and his best man, former special adviser,Adam Werrity ( remember him too?) was found not to be a charity, not have charitable purposes and was also operating in breach of Parliamentary rules from Liam’s office in the House of Commons.You might have thought after the furore  over the Smith Institute which was dragged through a formal inquiry for being too close to Gordon Brown,you would get  a devastating critique from them. You’d be wrong.

The report reveals that because it was a faux charity – HM Revenue and Customs demanded that some £50,000 in back tax, which according to the Financial Times, was paid by Tory donor.billionaire City trader Michael Hintze. See http://on.ft.com/N5zxqS as part of a £53,478 loan to the charity from his hedge fund company CQS.

However the Charity Commission did not believe any of the trustees or for that matter their advisory board were culpable so it could not recover the money from them. As the report says: “in taking such proceedings it would need to be clear that the trustees were sufficiently culpable in law to make good the loss and the proceedings were in the public interest.”

It added that there was ” no evidence the trustees acted in  bad faith” and “no compelling evidence of deliberate wrongdoing.” It accepted the evidence from the trustees that they just thought they were acting lawfully and its was perfectly proper to set up a charity to pursue the political objectives of Margaret Thatcher and Ronald Reagan.

Of course it could just be that  Professor Patrick Minford of Conservative Way Forward, Lord Astor of Hever, a hereditary Tory peer, and the lobbyist Andrew Dunlop a former advisor to Margaret Thatcher, were a load of naive gits who didn’t have a clue how a charity works or an inkling of charity law. And of course their board of advisers was not stuffed with clever worldly political activists – it  was only composed of William Hague, George Osborne and Michael Gove.

And Liam Fox is so innocent he seems to have forgotten to declare some other US lobbying appointment in his ministerial interests, according to revelations in today’s Political Scrapbook.http://politicalscrapbook.net/

Curiously Dame Suzi Leather . chair of the Charity Commission, could have referred the matter up to Dominic Grieve, the Attorney General, to rule on whether there was a case to answer. But conveniently for  Dominic he was not placed in such an embarrassing position.

Of course it was different for the Smith Institute – everybody knows that Gordon Brown and Ed Balls  were  through Wilf Stevenson (now Lord) manipulating charity law and unlike Liam Fox had to be taken to task in much stronger terms. 

Job not well done, Dame Suzi. But I am sure you will be up for peerage as soon as your appointment ends, as a thank you for saving the present Establishment a lot of angst.

The American and British time bombs still under Liam Fox and Adam Werritty

Together forever?- Adam Werritty and Liam Fox. Pic courtesy:http://www.parker-joseph

When Cabinet Secretary Sir Gus O’Donnell publishes his report this week on whether  former defence secretary Liam Fox broke the rules over his curious working relationship with ” adviser” Adam Werritty, it may not be the end of the matter.  There is still unfinished business across the pond in the US and there could be a kickback in Britain as well.

To use a metaphor that Mr Fox and his friend might be familiar just as  foot soldiers sent into battle in Afghanistan have to be wary of  the explosive danger of hidden IED’s in Helmand, Fox and Werritty are still in the middle of a minefield where one false step could be fatal.

One reason is that  a blogger from Manchester-Stephen Newton who had been pursuing  Fox and Werrity’s  Atlantic Bridge  Neo Con”charity” in Britain for two years – put a formal complaint into  the  US Internal Revenue Service about its sister organisation in America.

Basically the accusation was similar to the British charity whose organisers have just closed down rather than obey charity rules- that  Atlantic Bridge Inc was not a non-profit educational body which should avoid tax.

In a  cryptic reply, the IRS said it would evaluate the information they had received and decide whether to investigate but would not contact him until the investigation was complete. 

Remarkably ( and perhaps Revenue and Customs should do this here) they said that he might qualify for a financial  whistleblower’s award if Atlantic Bridge was found to be tax dodging.

 The IRS has still to inform Newton about his award  but has made it clear it will never discuss what action it is going to take. See his own website http://www.stephennewton.com/  for his  take.

 The signifance of this  is the US operation is totally bound up with the  British one – to the extent that it funded Liam Fox’ s charity and that some of the people thought to have bankrolled Adam Werritty on his trips with the minister may well be connected. On top of this as Sunny Hundal pointed out on the Liberal Conspiracy website last week, (see http://bit.ly/n53Oye ) they include through the American Legislative Exchange Council  links to powerful arms dealers like the Koch Foundation and the tobacco industry. It also backs the Tea Party. And one has only to look at the Guardian, Observer, Sunday Telegraph and the Times to see how extensive these connections are.

Now ,if and it is still if, the IRS acts against Atlantic Bridge Inc, this is only going to intensify the pressure on the people who have been backing Fox and Werritty and set a whole new trail going in the US ( no wonder the blogger has taken calls from the Wall Street Journal).

Meanwhile in Britain the trustees of the Atlantic Bridge charity have closed it down rather than comply with recommendations from  our own Charity Commission to make it less partisan.  the Commission seemed  to think it had to treat Atlantic Bridge with kid gloves. Indeed  unlike the treatment of the Smith Institute – slammed for links with Gordon Brown – it was almost obsequious in its dealings with a body that had five Tory shadow ministers advising it ( though two, Michael Gove and Chris Grayling can’t remember attending – I hope they take their present paid jobs more seriously!)

The Commission gave the charity months to change its rules – despite a decision that it was partisan which would disqualify it for charity status. Adam Werritty at the time objected to the findings-saying he was ” disappointed” by the ruling.

There was also the small question that five Conservative ministers-Liam Fox,George Osborne, William Hague,Michael Gove and Chris Grayling plus John Whittingdale ( current chair of the culture,media and sport committee) were all members of its advisory board of  what  is now known not to be a properly constituted charity.

 If I was a sharp tax inspector at Revenue and Customs I think I might decided to approach  the accountants of prominent donors like  Tory donor Michael Hintze   ( £47,000 in two years according to Atlantic Bridge Accounts) and see whether the donated money qualified for gift aid-saving tax payments by both the donor and the charity. And then I would claim it back.

Atlantic Bridge also charged unbelievable sums to attend its events -£400 a time and £700 for VIPs- to go to a  reception at the Lanesborough Hotel in Hyde Park Corner to see Henry Kissinger get the Thatcher Medal for Freedom. Luckily under gift aid rules, at least the people going could not get a rebate from the tax authorities. No doubt it was these lavish occasions that encouraged Werritty on his high living vists, funded we now know through his private company.

There is an interesting irony about all this – the resignation will enable Fox and his friend Werritty to continue their lobbying. Journalists should keep an eye on the Advisory Committee on Business Appointments website over the next few months to see what lucrative jobs Fox applies for next.

 Just like the Afghan war, this story will run and run.

Four Cabinet Ministers and a Tory special relationship “charity” get off lightly

Henry Kissinger- a star speaker at Atlantic Bridge's uncharitable events- picture courtesy UPI

Any political activist knows that party politics and charitable status don’t mix. And if they do and someone complains the effects can be toxic for the organisation and any leading figures involved.

The Smith Institute found this to its cost when it was torn apart by a Charity Commission investigation two years ago accusing its trustees and organisers of appearing to be too party political and too close to Gordon Brown. The damage to Labour was enormous and the Commission used its powers to hold a full inquiry and directed its trustees to reform the organisation or else.

This week it was the turn of the Tories – or did you notice it?

 Atlantic Bridge- patron Margaret Thatcher  and an advisory board composed of four prominent Tory Cabinet ministers, Liam Fox, George Osborne, William Hague and Michael Gove – was given a year to change its act- after facing exactly the same allegations as Labour. The charity which promotes the “special relationship” with the US – was found in a damning report to be little more than a promotion for Thatcherite party political beliefs and neo-Cons in the US.

But one reason why it may not have hit the headlines is that the Charity Commission was far softer on the offending Tory charity. For a start its press officer advised after they received the initial complaint from Labour activist Stephen Newton that the word investigate could not be used as they had not launched a formal investigation. Instead the phrase “engaging with the charity to address concerns” through a regulatory compliance case was used instead.

Now nine months later the report has been issued with the almost same findings against The Smith Institute. The key phrase is the finding that the charity is “promoting a policy which is closely associated with the Conservative Party.”

But instead of a six month direction the charity has been given a year to change and only then is there a threat against the charity’s trustees of further action.

But more significantly while it is clear that the charity had broken the rules for at least seven years nothing is being done about its tax free position.

These are not minor sums. This was the charity that was charging £700 a seat for VIPs and £400 a seat for ordinary mortals to hear Henry Kissinger speak at a luxury London hotel last year and see him presented with a Margaret Thatcher Medal of Freedom. The commission’s report discloses that the charity admits this event was part of a tax free fund raising drive. The donors – probably mainly higher rate taxpayers – could claim the money against their tax returns. And it is now clear that Atlantic Bridge can’t claim the same charitable status as the National Trust.

So why hasn’t this been referred to Revenue and Customs?  Why aren’t more searching questions not being asked of the advisory panel of Cabinet ministers who presided over an organisation that clearly broke charity rules?

Atlantic Bridge is not actually being repentant either. In a statement they reluctantly promised to follow the Commission’s ruling and have taken down their website for “updating”. But it expressed its  “ disappointment” at the Commission’s ruling  and refused to answer any questions about the role of their trustees or advisory panel.

 The Charity Commission is being a little too careful in handling this scandal. I wonder why.

A similar version of this blog has now appeared on the Guardian’s Comment is Free website.