05/07/2013 Newsnight


Labour and Unison clash over candidate selection. The latest from Egypt. And the man who sold his dot com for $850 million and bought it back for $1 billion.

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Labour's biggest donor broken the law, tonight the police have been


asked to find out. One seat has become a real test of strength.


will have no part of the Labour Party, no part of the kind of


politics we believe in, and no kind of politics that I think Len


McCluskey should be believing in. chance for the leader to show his


metal, or the Tories to draw blood. Also tonight, gunfire and clashes


in the streets of Cairo, as the Muslim Brotherhood try to fight


back. We will have the latest from the city tonight.


Meet the man who sold his social networking site Bebo for $8950


million and bought it back for just $1. Do you feel at all guilty about


those people who suffered? I hadn't until now, not really.


Good evening. The Labour Party has passed information to the police


about whether its biggest donor, the union, Unite, has broken the


law. The allegation is the union signed up scores of members, often


without their knowledge in an attempt to win the selection in the


safe Labour seat of Falkirk. Ed Miliband says he has acted


decisively. The union boss, Len McCluskey, says he's giving into


Tory hysteria. And the Conservatives, when they could drag


themselves away from debating Europe, mostly kakled with delight.


-- cackled with delight. Today threatened to be a mid-summer


nightmare for Ed Miliband. While this lot lounged, the Labour leader


felt a diefrpb kind of heat. Chancellor Eppinged to chastise


Unite, the union, his biggest financial backers. With a hole


blown in his election strategy with the resignation of the man in


charge of it. For Ed Miliband, the last 48 hours haven't been a walk


in the park. In the end he used the sunlight to his own advantage. To


disinfect a political wound. Instead of defending these


practices, Len McCluskey needs to face up to what happened in Falkirk.


This can have no part of the Labour Party, and no part of the kind of


politics we believe in, and no part of the kind of politics that Len


McCluskey should be believing in. Instead of throwing allegations


around in the way he is, he should be facing up to his responsibility,


not to defend this kind of machine politics.


That was Ed Miliband's strongest challenge yet to this man, Len


McCluskey. Labour also handed to police the task of investigating


whether individuals aligned to Unite sign people up to Labour to


rig -- signed people up to Labour to rig the vote in Falkirk.


McCluskey didn't back down. clearly disappointed that the


developments back in London in relation to the Falkirk situation.


It seems to me that the Labour leadership has now been caught up


in anti-union Tory hysteria. Let's resolve the situation. We have


Shadow Cabinet members saying Unite overstepped the mark. What does


that mean? We asked too many of our members to join the Labour Party,


we should have told them that the Labour Party was full up, perhaps?


But McCluskey is used to disagreeing with Labour HQ. While


Ed Miliband won the Labour leadership with a little help from


union brothers, actually in his near three years as leader there


have been frequent disagreements between himself and McCluskey. Ed


Miliband has had rows with Unite, Labour's largest donor before. It


doesn't harm him and makes him look like an independent chap. But it


does come with some risks. The first is that ban Miliband thinks


he might win a parliamentary majority -- Ed Miliband thinks he


might win a parliamentary majority by winning a Labour majority.


Bringing back all sorts of people that left before. By having rows


with unions like Unite doesn't really help that. The second


problem is this, Unite gives Labour a lot of money.


One MP speaks for many of his Labour colleagues when he defends


Unite. There is also some within the Labour Party who take the view


that the trade unions are there to pay up and shut up. They are there


to be passive, they are not there to be active or involved in the


Labour Party, and as soon as some of the unions try to get what many


of them would see as above themselves by actually having an


involvement in selecting candidates they want to stamp on their heads.


Disciplining Unite, but keeping them on side, Miliband must get it


right, because politics at the moment is quite finely balanced.


Since January Ipsos mori's poll has Labour's lead narrowing, the Tories


are stable but UKIP hasn't had a bad six nooints -- months. There


are suggestions some of the gains come about doubts on Labour. This


week the Tories and Labour tried to turn weaknesses in advantages. For


Labour it was the issue of the union link, for Tories it was


Europe. While the sun shone David Cameron gathered all his MPs inside


this building to vote for a referendum in 2017. The Tories had


always promised that they wouldn't bang on about Europe, but with this


vote today, many Tory MPs told me that this party is happier than


they have been at any time since March 2012.


Forget about Henman Hill or Murray Mount at Wimbledon, for one day in


there it was Cameron's chamber. a time of profound change in Europe


this bill would give the British people the power to deone of the


greatest questions, whether we should be in or out of the EU. Must


say in deference to my honourable friends in the Liberal Democrat


party, that in this speech I'm not speaking for the whole coalition,


as will be quite obvious toe the House, I'm speaking on behalf of


the Conservative Party. Thank you Mr Speaker, I beg to move that the


bill be read a second time. Mr Speaker it is an honour for me to


put forward a bill that has at its heart the heart of our democracy.


Power should reside with the people, Mr Speaker. In proposing this bill


I speak for many in this House, but I speak for millions more outside


of this place. But for now Ed Miliband, hoping he


has shown the unions who is boss, and David Cameron, over Europe,


letting his party boss him around. Different tactics, but the same aim,


keeping their parties together through all kinds of weather.


The Shadow Business Secretary, Chuka Umunna, is with me now, we


will come to you in a moment, first the Energy Minister, Michael Fallon,


amongst your titles. It was called Tory hysteria today, and the Tories


seem excited about this. I wonder if any of this matters if it is an


internal Labour problem snfplgt it is far worse than that, this is


appallingly weak leadership by somebody who wants to be Prime


Minister. He has known about the allegations for weeks, he has done


nothing about it and finally referred them to the police only


when he heard a Conservative MP was referring them to the police. We


needs to act very quickly to make sure one union doesn't subvert the


democratic process. We have discovered why he wouldn't do that,


Unite are his paymaster, they got him elected, they gave him �8.5


million last year and he's too weak to stand up to them. People have


always rigged selections, it has been revealed Thatcher's own


election has been rigged. It has been happening for years? It is one


vote one person in the Conservative Party. If people have been signed


up to vote to choose new MPs, without their knowledge, that is


criminal activity. And the police should be investigating it.


think that is criminal? If they have been signing people to vote


without their knowledge to be members of the Labour Party to get


their vote, that would be criminal and a matter for the police. What


would the crime be? Being signed up without their knowledge, they have


been impersonated. That is something the police should


investigate and should have been investigating all along. He has had


the allegations in front of him for weeks, he has done nothing about it,


the contrast couldn't have been clearer, in Falkirk you have a


democratic process being subverted where you won't have true one-


person-one-vote, in the Commons you had David Cameron leading his party


giving everybody in the party one- person-one-pert. That was hardly --


Vote. You is in hock to his party, otherwise he wouldn't have this


crazy bill that won't be brought into the election? There is nothing


crazy about giving people the vote about staying in Europe or not.


This came after UKIP pushed him to it, and after the Queen's Speech


that didn't contain it. It is hardly strong leadership? It is a


Private Members Bill paving the way for a vote in 2017. What did the


Labour Party do? They didn't vote for it, they didn't vote against it,


they couldn't decide whether to be in favour of a referendum origins


it. That again is weak leadership. Let me ask your position with


regard to the unions, do you think they have a pernicious effect on


accomplish politics? If you have a procedure set out to organise


selection in 40 constituencies, clearly they are trying to subvert


the democratic process. That can't be right. Ed Miliband, if he's


showing any new leadership at all should suspend the selection


contest. You don't mind isolating union members that might vote


Conservative. 30% of which we hear? This is not an attack on union


members, this is a matter for a union leader who has decided to


subvert the democratic process, to put his people into 40


constituencies. 40 future Members of Parliament who will be passing


laws. That can't be right. Michael Fallon thank you very much. To


Chuka Umunna, I know you didn't want to enter into discussion with


Michael Fallon. Let's just examine some of those points. Is this


criminal activity, is what what you fear? We had an internal


investigation carried out in the party, it is totally untrue to say


no action has been taken on this for weeks. In mid-May, hours after


the leadership were informed of the allegations of irregularities in


that selection contest it was suspended He has only just gone to


the police in the last 24 hours, has there been possible criminal


activity? We have taken advice from the party solicitors and further to


that advice decided to talk to the police. When did you decide it was


a massive problem? Once the final report had been produced and


further evidence came to light this week. It was the further evidence


that triggered its referral to the police. On Tuesday when Matthew


Watson offered to resign it wasn't a -- Tom Watson offered to resign


and by Thursday Ed Miliband had sacked him? Tom is a distraction to


this. It is about the strength of leadership and the clarity of


thought, which Ed Miliband promised. Did he think wrong had been done


before Tuesday? First of all, you have sought to establish a


connection between whether or not this has been reported to the


police and Tom Watson, I'm telling you there isn't. The thing that has


triggered it being referred to the police is the fact there is further


evidence that has come to light. Tom Watson still a member of the


NEC tonight? I have no idea about that question, but I do know he has


stepped down his role as the general election election co-


ordinator. It is kind of critical to his position now whether he has


resigned or not? A sub-committee of the NEC will decide on a timetable.


Will you feel confident if Tom Watson was sitting on the NEC now?


I don't believe he will have role in the process now. Labour's


biggest donor may have acted criminally, that is what the police


investigation is ultimately about, the General Secretary, Len


McCluskey, says he has done nothing wrong. If this is proven criminal


activity, should Len McCluskey go? Let's see the extent of anybody.


This is not about Len McCluskey, two individuals were suspended this


week, who had been involved in that particular selection. I'm not aware


that Len McCluskey was directly involved. So you have complete


faith in Len McCluskey, The Dark Knight leader? I haven't seen all


the details of the report. I know its conclusions and I know it is


referred to the police. Do you have faith in him as the union leader,


your biggest donor? In relation to Len McCluskey's position in Unite,


that is an issue for Unite. I'm concerned about taking strong and


swift action for a situation that has arisen in one of our 650


constituency parties and we have seen swift action taken. Do you


think Labour would like to be Leeds dependant on union leaders. Are you


reviewing now your relationship with the unions? We don't just have


a relationship with the unions. have lots of relationships, what


about the one we are discussing tonight. Let me finish my sentence.


Can you answer that one? I'm trying to. There are lots of affiliates to


the Labour Party and lots of different people part of the party.


I'm brought of that. Let's not forget what we are talking about,


members of the trade union, if we were ill and an ambulance arrived,


a trade union member would come to help us and our children are taught


by trade union members. Vince Cable has worked with the senior


management of GM Vauxhall and management to keep British jobs in


this country. Are you reviewing that close relationship between the


unions and Labour, is that wrong? I'm not aware of any review that is


going on into Labour's relationship with the trade unions. It is not a


review that is needed? No, because we engage with a broad spectrum of


stakeholders in our party to come up with policy. We seek to govern


in the interests of the British people. I don't believe it is a


huge issue. For example, do we charge donors �100,000, whatever it


is to have kitchen supper with our leader, we don't do anything like


that. I'm afraid we have to end it there,


thank you very much. Coming up.


Do you think they massively overpaid? They did, yeah. But


hindsight is a wonderful thing. sold his company for almost a


billion dollars and then he bought it back.


Chaos on the streets of Cairo tonight, supporters of the ousted


President, Mohamed Morsi, have gathered outside the city. The


members of the Muslim Brotherhood have rejected the military coup,


and they call them the usurping authorities. In a day of rumour,


skirmishes and bloodshed, the Egyptian army has deployed tanks


and roadblocks, demonstrators have been gunned down by the army, five


police officers are said to have been shot. I spoke to Jeremy Bowman


who was injured slightly today in a demonstration? Big demonstrations


today from the Muslim Brotherhood, a very long and impassioned prayer


at the mosque which they have made one of the centres of their protest.


Lots and lot of men with tears pouring down their face as the


cleric leading them prayed to God for guidance and help through what


they say the prayer said was their ordeal. After that, when


demonstrations and marches began I was at a military compound when the


army opened fire on the crowd and killed at least one man. I saw one


dead body there. Reports of two others at that particular place as


well. And there is a real sense now that this coup is starting to get


pretty messy. How do you judge the situation tonight? Definitely messy.


Very messy and bloody as well. Fears that there could be more of


it. It is not just in Cairo, in many other cities, and it has been


particularly serious violence we are told from the second city,


Alexandria. The chances are that the Muslim Brotherhood will want to


keep their people on the streets to show their strength on the streets


for a few days more. They have said they would like to keep their


people out until President Morsi is reinstated. Other Islamist parties


are trying to form a bridge between the Brotherhood and the army,


making proposals, one of which is for a referendum on early elections.


It is early days on that though. This remains a very difficult


emergency for the Egyptian people. The kind of nightmare they really


didn't want. Joining me now is the former Brigadier who also teaches


international law at Cairo university. Thank you very much for


joining us. What do you make of the position of


the Muslim Brotherhood who simply refuse to accept the position of


the army? This actually to tell you the truth the shocking and


appalling news for the second wave of the 25th revolution is the shock


ing address levelled by the doctor, who (inaudible) for the Muslim


Brotherhood in Egypt their supporters and the party of the


deposed President Dr Morsi, I would like to tell you that there have


been many allegations and claims from the Muslim Brotherhood and the


supporters that the army stands here in Egypt not neutral, that it


is biased and prejudice, they claim the army is one-sided towards the


revolution against them. But militarily speaking I would like to


confirm that from credible military sources of information that the


rules of engagment have been directed to the army forces and are


special rules of engagment towards and targeting the Muslim


Brotherhood and the Salafist movement, to the largest


excontinuity on the other hand they apply the strict rules of engage to


the other parties. One important thing, confirming that an hour ago


General Wasfi is the chiefer or the commander of the second -- chief or


commander of the second wave in Egypt. The Egyptian military has


said tonight it will intervene if this continues. What does that


mean? What do you understand by intervention? Intervention means


that there is a very tense situation between the Muslim


movement, parties on the one hand and the secular, liberal, human


rights and also the revolutionists on the other. Intervention means


that the army is not going to have a one-sided stance, or stand. This


means the intervention. I would like to confirm what has been also


targeted and addressed by the removal statement of General El Sis,


the chief of the army. He said they do not seek power and they are not


going to assume control, they will withdrew and that is what has


happened, the next day, when yesterday the interim President of


Egypt, he assumed control, temporarily for an expeditious and


early presidential and parliamentary elections which are


going to settle down and calm down the whole situation, the tense


situation here in Egypt. Is there room in these new parliamentary


elections for a candidate from the Muslim Brotherhood? What if they


have put forward the President again? No ex cushion, because -- No


exclusion, and last year the proposed President Morsi, he and


his group applied all sorts of the exclusiveness in the Egyptian


society. He excluded the other parties from the constituent


assembly, the parliament, et cetera. That's why the Egyptian army forces


confirm it in other following statements to the statement by his


excellency the chief of the army. They confirmed that no exclusion


for Muslim movements here in Egypt. Thank you very much indeed. We


appreciate your time tonight. Anyone remember Bebo? It was the


social networking site that became big, biggish, shortly before


Facebook took the world by storm. It spent the last few years in the


doldrums, this week it was bought for a $1 million, by the couple who


originally created and sold it at the top of the market. What does it


pay about AOL, the company that paid $850 million for it but


couldn't make it work. Ever heard of a backronym, it is an acronym


applied after the name's invention, and in Bebo's case it is "blog


early blog often", people haven't been blogging often enough. Step in


this man, Michael Birch, with a million dollars to spare and ideas


to reinvent the site, he should find it no trouble. He and his wife


created Bebo in 1985, turning its popularity into a sale for AOL for


a whopping and you could argue unwise $850 million in 2008. AOL


failed to build on the success. By the end of the decade sites such as


Facebook and Twitter were ahead of the game. AOL sold Bebo for a


fraction of what it paid to a company that failed to turn around


its fortune, Michael Birch has his work cut out if he's to make it


cool again. Turning to the other web, he said "can we reinvent it?


Who knows, but we can only try". Do you feel like you have your baby


back? Yes, I did miss it when I sold it, now we are back in control


it feels exciting. Is it a very different beast it time around?


is very different from what we sold it, the traffic is 1,000th from


when we sold it. Why did it go badly wrong? To be fair it was


going badly wrong beforehand. That was why we sold it. It was in a


very competitive market, Facebook were really starting to beat you,


the writing was on the wall. Although the traffic wasn't going


down, we did everything we could to increase the traffic and we failed


for six months. You must have been laughing all the way to the bank.


This has been called the worse deal in dotcom history? I don't know if


that is a good or bad thing. We were relieved all the way to the


bank, I don't think we were laughing. Do you think they


massively overpaid? They did, yeah. But hindsight is a wonderful thing.


If you cast your mind back to that period we were the biggest Bible


social network at the time, so Facebook were too big to be bought,


and MySpace had already been bought, we were the next big opportunity,


could you take that and make it something really amazing, they


hoped they could. They lost interest soon after they bought the


business. They decided themselves it was a mistake and they properly


said so and that demotivated the staff at bee bow, at that point it


really didn't have a chance. you feel angry that they didn't


make that work? Or did you feel slightly guilty that you had sold


them a duff secondhand car? I would have loved to have seen it be


successful. If you said would you rather regret selling it because it


became a success or rather be happy you sold at the right time. I would


rather reing selling it and this thing that went on to greatness.


Given the choice I would choose that. I was a little bit sorry it


didn't work out. Do you feel apologetic in terms of the


investment made and the price that was made and presumably the knock-


on to the pensions that have suffered as a result of that?


are trying to make me feel guilty now. I hadn't done until now. No,


not really. What does Bebo become now? It is still a pretty crowded


market place? It is more crowded than ever. We have this luxury of


reinventing it to be whatever it makes sense to be. And what made


sense eight years ago isn't what makes sense today. The world has


moved on a lot. Now it is a mobile world, we are developing initially


probably only for iPhone and Andrews void and even the web, it


is questionable even with the web if we would do that. To be radical,


why would I not bother with Facebook or Twitter or the market


dominant ones? It is not about not bothering with emthis. It is not


trying to build a website where people cancel Twitter or Facebook


and use the new ones. Things co- exist, use Twitter and Facebook,


and I will continue to use them after we relaunch Bebo. They serve


a purpose and time and place. We are trying to take a blank sheet of


paper and think what can we build or design that we think will be


relevant today that will stand the test of time that isn't a fad, that


service some utility and purpose but is also just fun and engaging


for users to use. Do you think it has become harder for social media


sites to retain their consumers' trust? Have it become harder? I


think it has always been quite hard. When we were running Bebo I spent


most of my interviews talking about privacy concerns. As long as you


are aware of the sites that you use and how that information is shared


I feel comfortable using them. I do use them actively. I think the


difficulty is sometimes the smoke and mirrors of not really


understanding the cons sequences of taking a certain action -- cons


sequences of taking certain action, we speak to our children about


social media and how they should go using them. It is more education


than a threat from the beast of the internet. Will you seek to make


Bebo very profitable? It is the last thing on my mind right now. We


are not in any hurry to make it profitable. Obviously we can't run


a business forever as a charity. Because it is not a charity. So it


does have to eventually make a profit. Our aim is to build


something that people love. If we can succeed in that we know we will


have a successful business. Let me just take you through the papers


Apology for the loss of subtitles for 62 seconds


That's all we have time for tonight, Jeremy is back on Monday. Tomorrow


morning the British and Irish Lions team try to win the test against


Australia. Here at Newsnight we have decided to copy the Wells ---


# Pilgrims through this barren land # I am weak


# But though art mighty # Hold me with Thai powerful hand


# Bread of heaven # Feed me now and ever more


Feed me now It is said to be a lovely weekend


for the vast majority. Sunny skies from the whole of England and Wales.


But for Northern Ireland and western parts of Scotland wet


weather. Some cloud for Northern Ireland too through the afternoon.


But with the brightness 23 degrees in Belfast. The south and east of


Scotland not too bad, it is the west of Scotland that will be


plaged by cloud and outbreak of rain. Further south through England


and Wales a lot of sunshine, strong sun shine, warm sunshine, mid-20s,


stippically. In some places we could go as high as 27 degrees,


there is just the risk of some sea mist lapping on to the beaches


along the south coast. If you are heading to the coast be aware. It


could be disappointing from time to time. Patchy cloud for the south


west of England and at south-west Wales. It won't spoil things, it


will be a reasonable thing here. Inland temperatures will do pretty


well. That is the story through Saturday, that weather front will


weaken to tomorrow extent as we go through into the night. Further awe


field through this weekend a lot of sunshine across Europe. Heading to


Mediterranean, again largely sunny skies, there is just the risk of


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