07/11/2017 Newsnight


07/11/2017

In-depth investigation and analysis of the stories behind the day's headlines with Evan Davis.


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Government 2017?

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Another fine mess...

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Or two.

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The Government's coping,

or striving to cope,

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with one mishap after another.

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Is it really capable of driving

the country into a new Brexit era?

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I think the problem is you've now

got five Cabinet ministers,

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the former Defence Secretary,

the current Defence Secretary,

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the Foreign Secretary,

the Development Secretary

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and the First Secretary,

all now mired in serious

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controversies of one

form or another.

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We'll be asking if yet

another minister could be

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gone by the morning.

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Also tonight, Prince Charles

lobbied for a change

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in carbon trading rules -

without pointing out that the Duchy

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of Cornwall had invested

in a company that stood to benefit.

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We'll ask a former Chairman

of the Committee of Standards

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in Public Life why he thinks

that's a problem.

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We'll have a special report

about what the Paradise Papers

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have revealed in Angola.

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Oil money, which might have been

used to help some of the poorest

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people in the world,

has ended up making

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one man super rich.

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Although the border is only just

there, where those signs are,

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a couple of hundred yards,

it's not an easy place

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for journalists to go.

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Particularly when the subject

of our investigation is the son

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of the President and someone very

close to him.

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Hello.

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Accidents happen in government.

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People slip on banana skins.

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There are momentary lapses,

or arguments that spill

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into the public domain.

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Events can catch

Cabinets by surprise.

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That's normal.

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At a rate of one every few months.

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But then there's this Government.

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Since the election knocked

the confidence out of

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the Prime Minister five months ago,

to many it has just lurched from one

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self-inflicted wound to another.

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Public arguments over

Brexit are half of it,

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the harassment cases have piled

on the pressure.

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But the coincidence of extra

missteps has given this

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Government a whiff of decay.

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And you're not meant to have

that until you've been

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in power for a decade or more.

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Two particular things

are exercising many MPs right now.

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The Foreign Secretary giving

the unhelpful impression that

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a British woman imprisoned in Iran

is guilty of crimes there.

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And the other is Development

Secretary Priti Patel,

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who clearly tried to mislead

the public about her

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activities in Israel.

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This is a far more intense

speculation this evening.

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An unlucky government,

or a careless one.

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Nick Watt reports.

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Day by day, piece by piece, the

forces holding this Government

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together are fracturing. There is an

unmistakable air of weakness and

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fragility, as Theresa May struggles

to assert her authority.

You've now

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got five Cabinet ministers - the

former Defence Secretary, the

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current Defence Secretary, the

Foreign Secretary, the development

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secretary, and the first Akrotiri,

all now mired in serious

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controversies of one form or

another. And in each case, the Prime

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Minister is unable to get a grip of

it and unable to provide a sense of

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direction.

And today, Downing Street

was mopping up after not one but two

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Cabinet ministers gave the Prime

Minister grief of a highly sensitive

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security issues.

We are going to

work flat-out.

It took Boris Johnson

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nearly an hour in the Commons

chamber to offer an apology for the

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loose language which may have added

to the prison sentence in Teheran

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handed down to the British-Iranian

woman Nazanin Zaghari-Ratcliffe.

I'm

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sorry if any words of mine have been

so taken out of context and

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misconstrued as to cause any kind of

anxiety for the family of Nazanin

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Zaghari-Ratcliffe, of course I am.

Of course I am.

Shortly before the

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Foreign Secretary's appearance, one

of Prydie Patel's deputies had to

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explain why she held a series of

official meetings in Israel during

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her summer holiday without first

notifying the Foreign Office or

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Downing Street.

The Secretary of

State has been very clear and

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absolutely contrite in her statement

yesterday. She recognises that of

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course she sure to have informed the

Foreign Office before the visit, but

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she didn't.

Downing Street is doing

little to disguise its frustration

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with the two wayward Cabinet

ministers. In the eyes of many

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ministers, Boris Johnson and Priti

Patel have both lived down

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expectations. The Foreign Secretary

has caused heartache for the family

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of Nazanin Zaghari-Ratcliffe with

his careless language, whilst the

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International Development Secretary

has shown that even in the world of

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high diplomacy, she believes she can

live by her own rules.

The wider

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question is, there is no sense of

direction, no sense of grip in any

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of these controversies coming from

the Prime Minister, at a time when

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we really need a functioning Cabinet

and this affects our reputation

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around the world when we have such

important international negotiations

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at stake. This is really damaging

for the whole country, not just for

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the Conservative Party.

Even loyal

MPs believe this has not been the

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Goverment's finest hour.

I've got to

be honest about it, neither of these

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scenarios are ideal. Prydie Patel,

from what I can gather, did inform

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the Foreign Office, albeit whilst

she was in Israel on this visit. But

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in relation to the Foreign Secretary

Cosme comments, I'm not here to

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defend those comments. I think, you

know, it is tricky and difficult to

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do that. What I think we should

remember, though, is that the real

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criminals here are the Iranian

regime who are holding somebody, you

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know, against all natural justice,

for the average over foreign

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countries.

-- for the average.

Battered by events and headstrong

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Cabinet ministers, Theresa May's

Government limps on. For the moment,

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it is intact. But the damage is

taking its toll. Nick Watt there.

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Accidents don't happen, they are

caused, the old phrase goes.

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Nick Watt is with me now.

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Next, it's been a bad day for Boris

Johnson. But a much worse one for

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Priti Patel, we gather, this

evening. Quite a lot of speculation

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about her future.

That's right. She

is still the international developer

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and secretary. She recently arrived

in the next few hours to Africa for

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a long planned trip. But some very,

very serious questions are being

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asked in the heart of Government

about Priti Patel and what actually

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she declared for this trip to

Israel. And Priti Patel will be

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very, very lucky if she is still in

the gambit micro by the end of this

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week. I think the thinking is -- if

she is still in the Cabinet. If new

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details emerged about this visit,

perhaps elements of this trip that

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she didn't declare fully to the

Prime Minister, I think she will no

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longer be a member of the Cabinet.

That information has not yet been

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presented, it is not yet there are,

as I understand it, at the highest

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levels of Government. But they are

thinking that if there is more

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information that wasn't the Clare...

Can use tag a Cabinet minister

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whilst they are overseas on official

business, what happens? -- can you

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sag a Cabinet minister.

There would

be a discussion between said, by

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criminals than the premise that, as

I understand it. That information is

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not sitting in Downing Street, and

it may not get there, but bit by bit

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more information is coming out. For

example, the Prime Minister did not

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know, until our BBC colleague James

Landale revealed on the today

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programme this morning, that Priti

Patel tried to change Government

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policy on the Golan Heights. She saw

the work that the Israeli defence

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forces are doing in helping Syrian

refugees who come onto the Golan

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Heights. The UK Government says the

IDF is doing very, very serious

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work. But of course, as Alistair

Burt, her ministerial colleagues,

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said in the Commons today, the UK

can't help the Israeli defence

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forces because the UK has never

recognised the Israeli annexation of

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the goal of heights. That sort of

thing, there is more information

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that comes out, then it will be very

difficult for her -- the annexation

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of the Golan Heights.

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In a few minutes, we'll talk

to Labour's Tulip Siddiq.

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Nazanin Zaghari-Ratcliffe

is her constituent.

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She is currently in jail in Iraq,

very important set of questions for

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Boris Johnson -- in Iran.

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But first, the Conservative MP

Nadhim Zahawi is here.

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He is a member of the Foreign

Affairs Select Committee.

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Good evening to you. I'm assuming

you think it's not possible to

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remain a Secretary of State if you

have lied and misled the public on

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this matter was ill and Priti Patel

was on a family holiday paid for by

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herself.

She met ministers as well

as many charities and some very

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interesting start-ups who are, you

know, working in Africa, which she

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is passionate about. She is in

Africa now.

She took a working

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break.

She is a workaholic, that is

what she is like. The Foreign Office

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knew that whilst the trip was

ongoing... The white they found out

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that she would does -- she was

visiting... I think are apology, she

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was contrite about not going through

the right procedures. Because you

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need to make sure that you do that.

I didn't focus on the offence of

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breaking the ministerial code by

going to Israel and conducting your

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own foreign policy, I was focusing

on the misleading of the public. She

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said, Boris knew about the visit.

The point is, the Foreign Office did

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know about this, Boris knew about

the trip. In fact, yesterday we were

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told he did become aware of it, but

not in advance. Now, wouldn't you

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say that she was misleading the

public, or even lying, when she said

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that Boris did know about the trip?

Well, that was her interview with

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the Guardian. The Guardian

subsequently corrected that

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published every interview that she

had.

There was another set of

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misleading... She said, the stuff is

out there, the stuff that is out

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there is it as far as I'm concerned.

She hadn't at that stage mentioned

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that she had met the Israeli Prime

Minister on her holiday, you know,

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as one does. Did that slip her mind,

or was she trying to mislead when

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she said that the stuff that is out

there is it as forestry is concerned

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with the well, I think what we know

already is that

she had those

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meetings, the Foreign Office knew

during her trip that those

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meetings...

I'm talking about the

way that she tried to mislead the

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public. Do you think misleading the

public is a sackable offence or not

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Brazil and she apologised to the

Prime Minister, and corrected all of

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that

with a statement. You know, I

think those things...

Hang on, she

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apologised or corrected herself

after it was discovered. She didn't

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correct it and say, by the way, I've

accidentally misled you. If

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effectively, she came out when it

was all in the public domain.

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Doesn't that mean what she was doing

was trying to get away with

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minimising her breach of the

ministerial code, quite a serious

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one, and then, when she is caught,

she says, sorry, I miss spoke. That

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is a sackable offence, isn't it?

Beverley Hughes in 2004 went through

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a similar thing. Peter Mandelson in

the Hindu decays, you didn't like he

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was is, rated, -- he didn't lie, he

was exonerated, but people thought

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that he had lied and he had to

resign.

You are talking about these

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cases. Israel is one of our closest

partners. This is not an enemy state

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that she was somehow having

clandestine meetings with. The

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Foreign Office knew during this trip

that she was having these visits.

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She has admitted the mistake of not

following procedure and apologised

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for it. I somehow feel that some of

this stuff is being drummed up

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because both Priti Patel and the

Foreign Secretary of big beasts in

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the Brexit campaign and there are

remembers if you think, if we can

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take out these people and Israel by

-- derail the government...

I will

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bring in Tulip Siddiq on this one.

Nazanin Zaghari-Ratcliffe is a

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constituent of yours. How damaging

the comments that Boris Johnson

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made?

Extremely damaging. My

constituent has been imprisoned in

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Iran for 18 years now. She's been in

solitary confinement, separated from

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her baby daughter and denied access

to medical treatment. Boris Johnson,

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in front of the Select Committee,

even though I have raised this case

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countless times in the last 18

months, and repeatedly said that my

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constituent was on holiday in Iran,

said that she was training

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journalists. I would expect our

Foreign Secretary to know that basic

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facts of a very important case.

His

actual words were, he said, she was

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simply teaching people journalism,

as I understand it, at the very

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limit. His defence is, he was

saying, at the worst she was

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teaching journalism and even that

doesn't justify putting him in jail.

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I wonder if those words at the limit

get him off, because he was meaning

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to say something along the lines of,

you know, that's not my view, that's

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the view, and is not a dust of a

geisha.

That is absolutely not a

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good defence in my opinion. --

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his words have been seized upon by

the Iranian judiciary system. If you

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look on their website, they have

said that this shows clearly that

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this woman was not on holiday in

Iran. As a result, she could be

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facing fresh charges against her. We

on this side of the world,

0:14:110:14:17

especially the Foreign Secretary,

should be getting our constituent

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back here at home in West Hampstead,

not increasing the charges against

0:14:200:14:24

her.

I'll tell you what I'd like,

we've only got another minute, I'd

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like to get a comment from you both

on whether this multiple sort of

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issues around harassment, Boris

Johnson, the Foreign Secretary,

0:14:330:14:36

Priti Patel, is telling us there is

some decay in this Government.

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Tulip, is it a bigger vulnerability

for this Government?

I think it

0:14:410:14:45

shows the Government is weak. The

Prime Minister needs to take action

0:14:450:14:49

quickly. But my focus this week is

bringing my constituent back home,

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and the Foreign Secretary needs to

retract his statement, fly out to

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Iran, meet her, and bring her back

to her house, where she belongs.

A

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lot of people, even friends of the

party, they are saying, we can't

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have five years of this, this just

can't go wild.

I think the Prime

0:15:050:15:14

Minister has been very thoughtful in

her speech to the CBI this week --

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this can't go on. It was well

received by the CBI. On Boris, he

0:15:170:15:20

has apologised and called his

counterpart and sought reassurances.

0:15:200:15:26

His words weren't in any way

affecting Nazanin Zaghari-Ratcliffe.

0:15:260:15:30

I'm glad julep wants to focus on

higher, we should put her front and

0:15:300:15:34

centre of this. I'm sad that the

front bench on the other side were

0:15:340:15:41

giggling as soon as Emily Thornberry

finished her speech. You know,

0:15:410:15:45

making political hay out of this.

This will only encourage the IR GC,

0:15:450:15:51

who was a real culprits, remember

who the culprits are. They will

0:15:510:15:56

enjoy this.

The man is Foreign

Secretary of our country. He should

0:15:560:15:59

not be repeating them mendacious

comments made by the Iranian

0:15:590:16:03

Revolutionary guard, which is what

he was doing in the Select

0:16:030:16:06

Committee. He should know better.

We

need to leave it there. Thank you so

0:16:060:16:10

much. We could talk a great deal

longer about this.

0:16:100:16:16

A former member of the Welsh

Government who resigned last week

0:16:160:16:19

in light of allegations made

against him has been found dead.

0:16:190:16:22

He is understood to have

taken his own life.

0:16:220:16:24

Carl Seargent lost his job

as Cabinet Secretary for Communities

0:16:240:16:26

and Children last Friday.

0:16:260:16:27

He was suspended from Labour

after the First Minister,

0:16:270:16:29

Carwyn Jones, learned of a number

of alleged incidents

0:16:290:16:32

involving women.

0:16:320:16:33

The death has obviously been

a great shock to members

0:16:330:16:35

of the Welsh Assembly,

who suspended proceedings

0:16:350:16:37

this afternoon.

0:16:370:16:38

Chris Cook reports.

0:16:380:16:43

There was rare consensus today in

Cardiff Bay and throughout Labour.

0:16:430:16:48

Sadness at the death of Carl

Sargeant who is believed to have

0:16:480:16:52

taken his own life. The former Welsh

Cabinet minister left his post last

0:16:520:16:57

week pending an investigation into

his conduct.

Shocked, horrified and

0:16:570:17:03

deeply sympathetic to his family and

the statement they put out was that

0:17:030:17:06

he was the glue that held them

altogether and I can only think for

0:17:060:17:11

the moment of the stress and horror

they are going through. He was

0:17:110:17:15

somebody who represented our party,

worked hard to represent community

0:17:150:17:23

and my deepest sympathies are with

them.

Carl Sargeant held a range of

0:17:230:17:26

post since being elected in 2003

culminating in a Cabinet post for

0:17:260:17:31

communities and children.

He had

been a member of the Welsh

0:17:310:17:35

Government for ten years, he served

as Chief Whip and then held a

0:17:350:17:39

variety of sensitive political roles

and I think it is fair to say that

0:17:390:17:43

half the legislation roughly passed

in the last six years would have

0:17:430:17:46

been passed through his hands, some

quite ground-breaking stuff around

0:17:460:17:52

domestic violence and future

generations.

Last week Carl Sargeant

0:17:520:17:56

agreed to stand down from the Welsh

Cabinet while Labour investigated

0:17:560:18:00

allegations about his behaviour.

Carwyn Jones, the First Minister,

0:18:000:18:07

explained I asked by office to speak

to the women involved to provide

0:18:070:18:10

details of those incidents. As a

result of the conversations I felt I

0:18:100:18:14

had no choice but to refer the

matter to the party.

The family

0:18:140:18:18

asked me to speak on their behalf

today.

They do not want to dwell on

0:18:180:18:23

the allegations that were made

against him but clearly those have

0:18:230:18:26

had an impact on his mental state in

recent days and all of us who have

0:18:260:18:31

been in contact with him have been

worried.

Friends, comrades, first of

0:18:310:18:36

all a big thank you...

We have heard

concerns from high up within Welsh

0:18:360:18:41

Labour about the treatment of Carl

Sargeant why the claims were

0:18:410:18:44

investigated. Friends say that this

morning he only knew the outline of

0:18:440:18:50

the allegations. Carl Sargeant is

survived by a widow and two

0:18:500:18:54

children. Chris Kirk.

0:18:540:18:58

Over the last few days, we've had

stories about Lewis Hamilton,

0:18:580:19:00

Lord Ashcroft and the Queen,

all thrown up by the leak

0:19:000:19:03

of the so-called "Paradise Papers" -

documents which were obtained

0:19:030:19:05

by the German newspaper

Sueddeutsche Zeitung and shared

0:19:050:19:07

with the International Consortium

of Investigative Journalists.

0:19:070:19:09

The reporting has been led

in the UK by BBC Panorama

0:19:090:19:12

and The Guardian newspaper.

0:19:120:19:15

There is no doubt as to which of

today's Paradise Papers stories

0:19:150:19:18

is getting most of the attention:

It is the one about Prince Charles,

0:19:180:19:21

an undisclosed investment

in a sustainable forestry company,

0:19:210:19:23

and some active campaigning

for its interests.

0:19:230:19:28

Now, in contrast to the revelations

about the Queen's investments

0:19:280:19:30

in Bermuda, there was here

a potential conflict of interest

0:19:300:19:33

in the public work of the Prince,

and the private holdings.

0:19:330:19:40

It was February, 2007 that the Duchy

of Cornwall bought shares

0:19:400:19:42

in a Bermuda company called

Sustainable Forestry Management,

0:19:420:19:44

SFM, for $113,500.

0:19:440:19:51

It sold the shares 16 months later

for almost three times the price.

0:19:510:19:56

Nothing wrong with that, it was

clearly a lucrative investment.

0:19:560:20:00

It was also an unsurprising

investment, since the Prince himself

0:20:000:20:02

is said to be actively involved

in running the Duchy.

0:20:020:20:08

One of his best friends,

the late Hugh Van Cutson

0:20:080:20:11

was on the board of the company

and it touched on a subject

0:20:110:20:14

that was obviously dear

to his heart, but interestingly,

0:20:140:20:16

it was all kept very hush-hush.

0:20:160:20:22

The board unanimously agreed

that the subscription by the Duchy

0:20:220:20:24

of Cornwall can be kept confidential

except in respect of any

0:20:240:20:27

disclosure required by law.

0:20:270:20:30

Documents say.

0:20:300:20:33

OK, so no one wanted

to publicise his involvement.

0:20:330:20:35

There followed a number of public

interventions, including this.

0:20:350:20:41

The immediate priority, I believe,

is the need to develop

0:20:410:20:43

a new credit market,

which will give a true value

0:20:430:20:46

to carbon and the ecosystem services

that rainforests provide the rest

0:20:460:20:48

of the world.

0:20:480:20:54

Other speeches went further,

specifically on an issue that

0:20:540:20:56

mattered to the company, SFM.

0:20:560:21:01

It's complex, but it was

whether the market in carbon credits

0:21:010:21:04

created under EU rules

and the Kyoto Protocol

0:21:040:21:09

should recognise pay-outs

for the preservation

0:21:090:21:11

of tropical rainforests.

0:21:110:21:13

Not only did this matter to SFM,

but the company prepared lobbying

0:21:130:21:16

papers for the Prince.

0:21:160:21:20

Who spoke to the European Commission

and the European Parliament,

0:21:200:21:23

obviously no MEP listening to him

would have been allowed to make such

0:21:230:21:26

a pitch without disclosing

the financial interest in it.

0:21:260:21:30

No MP here would be either.

0:21:300:21:33

Should the Prince be able to?

0:21:330:21:35

Should his investments be

kept secret and should

0:21:350:21:37

he be lobbying anyway?

0:21:370:21:39

In response to the story,

Clarence House said...

0:21:390:21:44

They added...

0:21:540:21:56

Joining me now from Leeds is

the former Chairman of the Committee

0:22:020:22:05

on Standards in Public Life,

Sir Alistair Graham.

0:22:050:22:10

Good evening to you. Can you explain

the conflict of interest you

0:22:100:22:15

referred to earlier today as regards

this case?

I believe the conflict is

0:22:150:22:20

that if any public official or in

this case a member of the Royal

0:22:200:22:27

Family decides to lobby on an issue,

then they should have a duty to

0:22:270:22:32

declare any financial interest they

have in the issue that they are

0:22:320:22:36

lobbying about, which did not happen

in this case.

I think a lot of

0:22:360:22:40

people would say that Prince Charles

would very likely have lobbied on an

0:22:400:22:43

issue like that because he takes

such an interest in things like

0:22:430:22:47

sustainable forests and it is

perfectly logical that he would

0:22:470:22:53

lobby out without having a financial

investment.

I do not see why a

0:22:530:22:56

member of the Royal Family should be

different from any public official

0:22:560:23:01

who signs up to the seven principles

of public life, which very clearly

0:23:010:23:05

spell out that if you have got a

financial interest, you have to

0:23:050:23:09

declare that. There has to be total

transparency about your interests in

0:23:090:23:15

a matter that you are trying to

influence public policy, so I don't

0:23:150:23:18

see why a member of the Royal Family

should be different to any other

0:23:180:23:23

public official. If they want to

seek to change government or

0:23:230:23:27

international policy.

Would you like

the code to be extended to members

0:23:270:23:30

of the Royal Family or

0:23:300:23:41

would you rather say, we should not

need a code for the Royal Family,

0:23:450:23:48

they should just know this kind of

thing of what works and what does

0:23:480:23:51

not and they should be automatically

above all that anyway?

You would

0:23:510:23:53

expect members of the Royal Family

to have the highest possible ethical

0:23:530:23:56

standards in these matters and of

course normally most members of the

0:23:560:23:58

Royal Family do not get involved in

public policy issues, however,

0:23:580:24:00

Prince Charles has a history of

doing that and I personally have no

0:24:000:24:04

objection in that, but if in fact he

wants to continue, then I think he

0:24:040:24:10

does have to meet the standards that

are required of every other public

0:24:100:24:15

official and that means I accept

that he does not direct what his

0:24:150:24:21

financial investment is, but before

he speaks on a policy, he should

0:24:210:24:25

check with his officials with the

Duchy of Cornwall about whether they

0:24:250:24:30

have any investments that would put

him in an embarrassing conflict

0:24:300:24:34

situation.

We do not know whether he

knew he had money invested in this

0:24:340:24:39

company but we do know that his

friend who was a director had

0:24:390:24:43

written to him with some of this

lobbying material that was making

0:24:430:24:46

the case for this change in carbon

trading. Even if he did not know he

0:24:460:24:53

had the investment, merely on the

grounds that his friend had given

0:24:530:24:56

him some lobbying material without

the conflict of interest in itself?

0:24:560:25:00

I think a potentially could be,

because you're open to the charge or

0:25:000:25:04

the perception that you are pursuing

someone else's argument rather than

0:25:040:25:12

necessarily your own. But I do think

the crucial thing in this particular

0:25:120:25:17

instance was not the lobbying

documents but the timing of the

0:25:170:25:21

lobbying was shortly after the

investment. And therefore, there was

0:25:210:25:26

bound to be, if the information

became public, a perception of a

0:25:260:25:31

conflict of interests. And I would

have thought Prince Charles being a

0:25:310:25:37

man of highest integrity would have

seen that that would be an

0:25:370:25:40

embarrassing situation and he should

have checked whether there was any

0:25:400:25:45

investment that produced a potential

conflict.

Thank you for joining us.

0:25:450:25:50

Now, without diminishing any

revelations contained

0:25:500:25:51

in the Paradise Papers relating

to the Royals, the super rich,

0:25:510:25:54

TV stars or VAT-avoiding

racing drivers, it may be

0:25:540:25:56

that we are giving too little

attention to another side of this

0:25:560:25:59

world of offshore finance.

0:25:590:26:02

It's one that has massive

implications for the citizens

0:26:020:26:04

of countries far poorer than ours,

because in this leak of documents

0:26:040:26:07

we can see how it's possible to take

revenues or resources that belong

0:26:070:26:10

to poor nations and expropriate

them for private use.

0:26:100:26:16

Our reporter David Grossman has been

one of the international team

0:26:160:26:18

of journalists examining

the Paradise Papers,

0:26:180:26:20

and has been looking specifically

at the management of Angola's

0:26:200:26:22

sovereign wealth fund.

0:26:220:26:27

It is designed help develop

the country and provide a future

0:26:270:26:29

income when the country's oil

reserves run out.

0:26:290:26:33

It appears though that the level

of management fees charged

0:26:330:26:35

and the choice of investments

is making one individual close

0:26:350:26:38

to the Angolan regime

a great deal of money.

0:26:380:26:43

MUSIC.

0:26:430:26:50

Angola manages a curious double.

0:26:500:26:53

Its capital, Luanda,

is officially the most expensive

0:26:530:26:55

city in the world to visit.

0:26:550:26:57

But the country is

one of the poorest.

0:26:570:27:00

One reason for this is corruption.

0:27:000:27:02

Investigating the financial

interests of Angola's rulers

0:27:020:27:04

is usually an impossible task.

0:27:040:27:11

Although the border's only just over

there where those signs are,

0:27:110:27:13

a couple of hundred yards from here,

it's not an easy place

0:27:130:27:16

for journalists to go,

particularly when the subject

0:27:160:27:18

of our investigation

is the son of the President

0:27:180:27:20

and somebody very close to him.

0:27:200:27:23

Fortunately, though, we've got

a huge pile of leaked data -

0:27:230:27:26

sensitive financial information that

throws a window open

0:27:260:27:28

into that closed world.

0:27:280:27:34

Although Jose Eduardo dos Santos

stood down as President after 38

0:27:340:27:36

years in the summer,

it was to his chosen successor.

0:27:360:27:41

Many believe the move was more

about preserving power,

0:27:410:27:43

not handing it over.

0:27:430:27:47

In Angola, power comes from money,

and money comes from oil.

0:27:470:27:51

And while he was in office,

President dos Santos ruthlessly

0:27:510:27:54

controlled that well.

0:27:540:27:56

His daughter, Isabel,

known as Africa's richest woman,

0:27:560:28:00

with an estimated wealth

of $3.5 billion, was,

0:28:000:28:03

at the stroke of her father's pen,

made head of the state oil company,

0:28:030:28:06

Sonangol.

0:28:060:28:08

His son, Jose Filomeno dos Santos,

known as Zenu, was appointed

0:28:080:28:12

to another position -

again, by the President.

0:28:120:28:16

$5 billion of oil money was placed

in a sovereign wealth fund,

0:28:160:28:19

the Fundo Soberano de

Angola, or FSDEA.

0:28:190:28:22

And Zenu was put in charge.

0:28:220:28:24

The process was not transparent

according to normal standards

0:28:240:28:27

anywhere in the world.

0:28:270:28:31

But what was transparent

for the people of Angola

0:28:310:28:34

was that the only criteria why

he was selected, it was because he

0:28:340:28:37

was the son of the President.

0:28:370:28:39

He had no training, no experience,

no special qualifications.

0:28:390:28:44

The fund appointed a company called

Quantum Global to manage its money.

0:28:440:28:49

It is majority-owned

by Jean-Claude Bastos,

0:28:490:28:54

a Swiss-Angolan businessman

who is a close friend and at that

0:28:540:28:57

time was a business partner of Zenu.

0:28:570:29:00

We see only one asset management

firm in charge of the vast majority

0:29:000:29:03

of the fund's assets.

0:29:030:29:05

That's unusual.

0:29:050:29:07

And it's unusual for

a number of reasons.

0:29:070:29:10

And the principal one is that funds

want to hedge the risk.

0:29:100:29:15

You don't want to put

all your eggs in one basket.

0:29:150:29:17

You want to spread your eggs over

a number of baskets.

0:29:170:29:21

In general, the Angolan fund,

and I think this is true of a lot

0:29:210:29:25

of the funds that sort of score

poorly on transparency

0:29:250:29:27

and accountability indicators,

one of the things that they have

0:29:270:29:30

in common is the lack of rules

around who the managers are,

0:29:300:29:34

how the managers are chosen,

and what assets the fund can invest

0:29:340:29:37

in and what it can't invest in.

0:29:370:29:40

We asked FSDEA how Quantum Global

was selected as the main

0:29:400:29:43

investment manager.

0:29:430:29:45

No one wanted to be interviewed

for this programme.

0:29:450:29:47

But in a statement, they said...

0:29:470:29:52

Mr Bastos also told us...

0:30:010:30:04

Mr Bastos first applied to manage

the money from Jersey.

0:30:150:30:19

But the authorities there thought

he was too close to the President's

0:30:190:30:22

son to be independent.

0:30:220:30:25

We've seen the internal report

into his application,

0:30:250:30:27

which also noted...

0:30:270:30:28

Mr Bastos turned to another island

to manage the fund's investments.

0:30:580:31:03

Where it once farmed sugar,

Mauritius now farms money.

0:31:030:31:07

It's an offshore tax haven.

0:31:070:31:10

And it's here that Mr Bastos left

three of the $5 billion to invest

0:31:100:31:14

in seven funds he created.

0:31:140:31:16

Using the services of the law firm

Appleby, based in this

0:31:160:31:19

building in Port Louis,

Mr Bastos set up Quantum Global

0:31:190:31:21

Investment Management.

0:31:210:31:26

Appleby, as you may have seen

in the news, suffered a huge data

0:31:260:31:29

leak of highly sensitive

information, revealed this week.

0:31:290:31:30

The leak was obtained

by the German newspaper

0:31:330:31:35

Suddeutsche Zeitung,

who shared it with the

0:31:350:31:37

International Consortium

of Investigative Journalists.

0:31:370:31:40

The BBC has been researching it,

along with the Guardian newspaper.

0:31:400:31:44

For the last nine months,

we've been putting together

0:31:440:31:46

information from the leak

with publicly available sources,

0:31:460:31:50

and talking to insiders.

0:31:500:31:52

As a result, we have managed

to piece together much of what's

0:31:520:31:55

going on inside the management

of the sovereign

0:31:550:31:57

wealth fund's money.

0:31:570:32:01

The first thing to look

at is the management fees

0:32:010:32:03

Quantum Global was paid for managing

the seven Mauritius-based funds.

0:32:030:32:08

Between 2% and 2.5%

of the $3 billion every year.

0:32:080:32:14

In just 20 months, the company

was paid $92 million.

0:32:140:32:19

Over this time, most of that

money was not invested,

0:32:190:32:21

but sat in bank accounts.

0:32:210:32:23

At the end of 2015,

QGIAM had invested just

0:32:230:32:26

$407 million of the $7 billion.

0:32:260:32:31

At the end of 2016, that figure had

gone up to $433 million.

0:32:310:32:35

In other words, during 2016,

an additional $26 million

0:32:350:32:37

was invested by the seven funds.

0:32:370:32:41

Over this period, Quantum Global

was paid around $70 million in fees.

0:32:410:32:46

So, what we see in that case...

0:32:460:32:49

Is that unheard-of?

0:32:490:32:51

No.

0:32:510:32:52

The question I'd be asking is,

is the Angolan fund getting

0:32:520:32:55

its value for money?

0:32:550:32:56

If you are making...

0:32:560:32:58

If you're paying those

types of management fees,

0:32:580:33:01

you must be getting extraordinary

service for that.

0:33:010:33:04

And if I were the Angolan fund

managers, I would be asking,

0:33:040:33:07

are we getting an extraordinary

service or not?

0:33:070:33:11

Both Mr Bastos and the funds say

the management fees are reasonable.

0:33:110:33:14

What happened to them,

though, may, in according

0:33:140:33:17

to industry insiders,

be an indication that

0:33:170:33:23

they were set too high.

0:33:230:33:24

Because of the leak,

we can see that $41 million

0:33:240:33:27

of the $92 million of management

fees was paid out as dividends.

0:33:270:33:30

In other words, it was profit.

0:33:300:33:31

It went to a company called

QG Investments Limited

0:33:310:33:33

in the British Virgin Islands.

0:33:330:33:35

This is owned by White Nite Limited,

also in the British Virgin Islands.

0:33:350:33:38

Which is owned by Green Trees

Incorporated, in the Seychelles.

0:33:380:33:42

And this company is

owned by Mr Bastos.

0:33:420:33:45

Of the rest, $34 million

was paid to another company,

0:33:450:33:49

Quantum Global Alternative

Investments.

0:33:490:33:51

Part of the Quantum Global Group

of which Mr Bastos

0:33:510:33:54

is the majority owner.

0:33:540:33:56

So, the documents that I saw reveal

a complex financial structure.

0:33:560:34:02

But they reveal a complex financial

structure which doesn't,

0:34:020:34:06

on the face of it, seem illegal,

but highly opaque, that allows

0:34:060:34:10

somebody who wants to hide gains

that they are making,

0:34:100:34:13

perhaps inappropriately,

shall we say, rather than illicitly,

0:34:130:34:17

hide those gains and hide who owns

what company and who is

0:34:170:34:20

receiving what payments.

0:34:200:34:25

The videos on Mr Bastos's personal

YouTube channel portray

0:34:250:34:29

a dynamic entrepreneur

with many financial interests.

0:34:290:34:34

Go out as you are a dreamer

and follow your dreams.

0:34:340:34:38

Be courageous, and do not give up.

0:34:380:34:41

So, what did Mr Bastos

invest the sovereign

0:34:410:34:43

wealth fund's money in?

0:34:430:34:44

During the 20 months

covered by the leak,

0:34:440:34:46

we can see evidence that he made six

investments in hotels

0:34:460:34:49

and infrastructure.

0:34:490:34:51

But three of the investments

were in projects in which Mr Bastos

0:34:510:34:54

has a personal stake.

0:34:540:34:58

For example, there is a $157

million hotel complex

0:34:580:35:01

in Angola's capital,

Luanda.

0:35:010:35:04

It is to be built on land

owned by Mr Bastos,

0:35:040:35:07

and by a company owned by Mr Bastos.

0:35:070:35:11

We have spoken to an insider

with knowledge of the deal,

0:35:110:35:14

who told us that Quantum Global

appointed independent analysts

0:35:140:35:17

to go over the deal.

0:35:170:35:20

They concluded it wasn't a good one

for the Angolan people's money.

0:35:200:35:25

The projected returns were too low,

and the costs too high.

0:35:250:35:28

And yet, the investment

was approved.

0:35:280:35:32

So, the difference between private

equity and venture capitalism...

0:35:320:35:36

Mr Bastos clearly knows

a lot about making money.

0:35:360:35:39

But what's not clear is why a man

who was prosecuted in Switzerland,

0:35:390:35:42

a man with a web of complex

financial interests,

0:35:420:35:45

was given the opportunity

to make what appears,

0:35:450:35:47

from this leak at least,

to be so much money

0:35:470:35:50

from the Angolan people's fund?

0:35:500:35:53

This is a balance of cash

being carried into bank

0:35:530:35:55

accounts in Switzerland.

0:35:550:35:56

This is fees being charged here,

earnings being made there,

0:35:560:36:02

to benefit, it would appear,

one particular individual.

0:36:020:36:06

Why is he in this favoured position?

0:36:060:36:08

What connections does he have?

0:36:080:36:13

Where does the money go onward

from him and from his companies?

0:36:130:36:19

At this stage, certainly

from documents I've

0:36:190:36:21

seen, we don't know.

0:36:210:36:22

But there will clearly be some other

connection that justifies him

0:36:220:36:27

being in the position that he is in.

0:36:270:36:29

Mr Bastos, though,

insisted that the hotel

0:36:290:36:31

investment was viable.

0:36:310:36:32

He denied there was any conflict

of interest, saying...

0:36:320:36:35

The FSDEA told us...

0:36:420:36:44

Meanwhile, in Luanda,

where a man skims a flooded crater

0:37:000:37:06

for the mosquito larvae which causes

yellow fever, malaria and Zika,

0:37:060:37:09

it's not hard to see

where the money could be spent.

0:37:090:37:14

This hospital in Cazenga

is overwhelmed by patients.

0:37:140:37:17

Some have had to buy their own drugs

and equipment from hawkers outside.

0:37:170:37:21

These are the people the Angolan

sovereign wealth fund

0:37:210:37:23

is supposed to be helping.

0:37:230:37:27

David Grossman joins me now.

0:37:270:37:33

David, you've been working a couple

of months on that piece from the

0:37:330:37:37

Paradise Papers. But evidence that

this isn't the only story of this

0:37:370:37:42

kind. This angle the case.

No,

indeed. We focused a lot on these

0:37:420:37:47

jurisdictions and the impact on the

super-rich, when actually it may be

0:37:470:37:50

that they have more impact on the

Super Bowl, particularly in

0:37:500:37:54

developing countries that maybe,

like Angola, resource rich but lack

0:37:540:37:57

of expertise and capital to exploit

those resources. In many cases, they

0:37:570:38:05

invite in multinationals, and those

companies find that multinationals

0:38:050:38:08

are very good at shifting profit out

of the company so they do not pay

0:38:080:38:13

tax, and into offshore

jurisdictions. I visited Namibia as

0:38:130:38:17

part of an investigation for the BBC

World Service assignment programme

0:38:170:38:21

and Radio 4, and I found that even

though it has the richest fishing

0:38:210:38:25

waters in that part of the world and

on the planet, the Finance Minister

0:38:250:38:29

told me they cannot make enough on

taxing fishing to pay for the

0:38:290:38:34

furniture of the fishing industry,

the regulation, the patrol boats.

0:38:340:38:38

One of the people that we met told

us there is a vast sinkhole down

0:38:380:38:42

which Africa's tax revenues are

disappearing, that is the

0:38:420:38:47

jurisdiction of Mauritius.

Thank

you.

0:38:470:38:50

Time now for Viewsnight -

where we give original thinkers

0:38:500:38:53

the space to get something

off their chest.

0:38:530:38:55

And in the run up to

Remembrance Sunday,

0:38:550:38:56

tonight's contributor,

Prospect Magazine's

0:38:560:38:57

Stephanie Boland, has this

on wearing the poppy.

0:38:570:39:00

Stephanie Boland for Viewsnight.

Let's take a quick look with Nick on

0:40:490:40:59

the latest on Priti Patel, what is

the latest?

The International

0:40:590:41:03

Development Secretary will be having

a very awkward phone conversation

0:41:030:41:06

with the Prime Minister in the

morning. As I understand it, there

0:41:060:41:10

is a feeling in Whitehall that there

was at least one extra meeting that

0:41:100:41:14

Priti Patel did not tell the Prime

Minister she had had with Israeli

0:41:140:41:18

officials after she came back from

Israel in August. She did not, it is

0:41:180:41:22

alleged, told the Prime Minister

about this on Monday when she met

0:41:220:41:25

her. The feeling from number ten is

that if more information comes out

0:41:250:41:29

and they will have to take a very,

very careful look. A very difficult

0:41:290:41:33

conversation tomorrow morning, I'm

told.

Clearly a moving story there.

0:41:330:41:39

That is all we have time for

tonight. I suspect that we will

0:41:390:41:44

return to that tomorrow. In the

meantime, good night.

0:41:440:41:48

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