Lowy's personal wealth was recently estimated by Forbes magazine at £1.5 billion and he is well known in Australia as a philanthropist supporting Jewish causes.

London, Sunday, April 14, 2002

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Blair's envoy in new row over pay

Nicholas Rufford

LORD LEVY, one of Tony Blair's closest and most trusted aides, was paid at least £250,000 by an Australian property group headed by one of the world's richest men.

The payments, which the company has attempted to keep private, are far higher than previously thought and began in 1999, the year Levy was appointed Blair's envoy to the Middle East, reporting directly to the prime minister.

They were authorised by Frank Lowy, the head of the Westfield corporation, who has business and political interests in Israel and whose company is seeking planning permission to develop shopping centres across Britain. Lowy is a veteran campaigner on Jewish causes. He fought as a commando in Palestine during the 1948 Israeli war of independence and served with the Golani Brigade, which is currently serving in the occupied territories.

The disclosure has raised questions of "cash for foreign policy". MPs expressed concern at Levy's potentially conflicting roles as a consultant for a powerful multinational company and supposedly impartial and unpaid envoy. Levy said he paid privately for trips he made on behalf of Blair. In a letter to Jack Straw, the foreign secretary, Norman Baker, the Liberal Democrat MP for Lewes, said:

"I am concerned the Foreign Office's diplomatic initiatives in the Middle East should apparently be so closely tied to the aims of one of the world's richest men."

Baker said Levy appeared to be "simultaneously a quasi-minister, Labour fundraiser and consultant to a company seeking to influence government policy".

David Irving comments: WELL, well, well. The story of the Three Wells, but this time they seem to be bottomless. Tony Blair, who has projected the sanctimonious image of a pure white politician driven by the highest ideals, turns out to be no less corrupt than his predecessors this last hundred years.    What is it that infects them as soon as they set foot in No. 10? Easy answer: Greed -- not for money, but for the power that money brings.    The men who are revealed as his friends now appear to be particularly nasty breed of money grubbers: "fighting in Israel's War of Independence," as The Sunday Times discreetly puts it, means having fought a bitter and criminal war waged by underground assassins, a war of the knife in the darkened alley, against their enemies, the ordinary British troops, most of them National Servicemen, who had the thankless task of enforcing the Mandate in Palestine until the creation of the State of Israel.    No Englishman of my generation will forget the Daily Express photograph of these Jewish heroes hanging a British army sergeant -- i.e. garroting him -- while their leaders gloated.    One later famous statesman said at the time that he "lit a little candle in his heart for every British serviceman that died."    Now comes Tony Blair, and pretends without a blink of embarrassment that a quarter of a million pounds can have left him as immaculate as ever in his impartiality in the dispute between Israel and Palestine.

MPs have also demanded to know why a company with big expansion plans in Britain should employ a man with no obvious expertise in the field. Levy has earned up to £3,800 a week since 1999 from Westfield, the world's biggest developer of shopping centres. Over the same three years, Levy made 45 trips to 19 countries, meeting Arab and Israeli leaders and reporting back to Blair and the Foreign Office. He terminated his arrangement with Westfield last month, shortly before he would have been under pressure to make it public by tighter rules on parliamentary disclosure.

Levy is expected to reveal in the new House of Lords register of interests this week consultancies he has with two foreign-owned companies. Vivendi Universal, part of the French conglomerate that owns the Connex rail operator and several British water suppliers, is thought to have paid Levy a six-figure amount. A Vivendi subsidiary in Britain gave £10,000 to Labour. BEA Systems, an American IT company with millions of pounds worth of British government contracts for supplying software, is also thought to have retained Levy for a substantial sum. Both companies, and Westfield, have insisted they have done nothing wrong and that Levy provided advice on business but not on political or government matters.

Nicholas Soames, the Tory MP for Mid Sussex, called for an inquiry by Sir Nigel Wicks, the chairman of the committee on standards in public life into Levy's business links.

"If these allegations are true, how does Lord Levy keep his work for corporations separate from his work for government, where presumably he has access to privileged information?" said Soames.

Lowy trained in the 12th battalion of the Golani Brigade and fought against five Arab armies. He was wounded but served until the end of hostilities in December 1948. Rafi Kocer, his former commander, said Lowy was among the unit's best soldiers: "Frank was a brave and determined fighter." Lowy has donated about £200,000 to build a memorial museum in Israel for his former brigade and has toured old battle sites with former comrades. His personal wealth was recently estimated by Forbes magazine at £1.5 billion and he is well known in Australia as a philanthropist supporting Jewish causes. Through the Westfield Foundation he has given to the United Israel Appeal, an organisation for resettling Jewish immigrants in Israel. His family was last year preparing to invest more than £30m in property and media interests in Israel.

Westfield refused to elaborate on its relationship with Levy, saying only that he was retained "to advise on and identify potential business opportunities or partners". His payments over three years totalled "at least £250,000", according to Whitehall sources.

Levy's apparent lack of accountability has been criticised by members of the three main parties. Michael Ancram, the shadow foreign secretary, wrote to Blair last week calling on him to make Levy a minister "so as to be fully answerable to parliament", or sack him.

Customs and Excise last week began examining whether Levy's payments from Westfield should have been subject to Vat. Levy did not charge or pay sales tax on payments from Westfield, claiming on accountants' advice that his services were "outside the scope of Vat".

Levy said he had maintained the strictest confidentiality on matters relating to his role as Blair's envoy. "In this role I report directly to the prime minister and foreign secretary and work in close liaison with the Foreign and Commonwealth Office," he said.

Copyright 2002 Times Newspapers Ltd.

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