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Britain’s political class has been reeling from a scandal on a scale that typically occurs only once in a generation, and its central figure was once seen as the savior of the party currently in power.
Peter Mandelson, the former British ambassador to the US who is credited with helping found the modern Labor Party that brought Tony Blair to power in 1997, is currently facing a criminal investigation stemming from the US Department of Justice’s latest release of documents relating to disgraced financier Jeffrey Epstein.
Mandelson, 72, is accused of passing market-sensitive information to Epstein in the wake of the 2008 financial crisis that was clearly of financial benefit. Then-British Prime Minister Gordon Brown said on Tuesday he had written to police with information relevant to the investigation and condemned Mandelson’s “inexcusable and unpatriotic” conduct.
The scandal might have had less impact if Mr Mandelson, who has twice been forced to resign from government over his connections to the wealthy, had not been plucked from the private sector by Prime Minister Keir Starmer to become Britain’s ambassador to Washington, despite his famous friendship with Mr Epstein.
The prime minister’s initial decision to appoint Mandelson, which Starmer sacked as ambassador after just seven months in Washington in the wake of the earlier Epstein file disclosures, is likely to create further political friction as the crisis snowballs for the beleaguered Labor government.
Who is Peter Mandelson?
Mandelson, whose Machiavellian approach to power earned him the somewhat melodramatic nickname “Prince of Darkness”, rose to become Labour’s communications director in the 1980s. He helped transform a party seen as sclerotic and union-bound into a sophisticated, pro-market project known as New Labor, which ultimately won a landslide victory in the 1997 election under Tony Blair.
Mr Mandelson, who helped bring Labor to power, was made a “minister without portfolios”, allowed to sit in cabinet meetings and given wide powers across the government. But in 1998, just over a year after taking office, he was forced to resign after failing to declare a loan he had obtained from a billionaire colleague to buy a home.
Despite resigning in disgrace, he returned to government the following year as trade minister, but resigned again in 2001 after being accused of using his position to influence British passport applications from wealthy donors.
Mandelson then left government and moved to Brussels, where he served as European Union trade commissioner from 2004 to 2008. He returned for a third time to help Prime Minister Gordon Brown rebuild his government in the aftermath of the 2008 financial crisis, this time as business secretary.
After Labor lost the 2010 general election, Mr Mandelson worked in the private sector for more than a decade. But last year he was appointed British ambassador to the US by Prime Minister Keir Starmer. At the time, this decision was considered risky. Mr Starmer wanted political heavyweights to hold his ground in US President Donald Trump’s Washington. So he traded Karen Pearce, a career diplomat who was considered a safe bet, for the more mercurial Mandelson.
Mr Starmer’s decision backfired within months. In September, the U.S. Department of Justice published a book compiled to mark Epstein’s 50th birthday in 2003, in which Mandelson wrote a handwritten note describing Epstein as “my best friend.” He was also photographed wearing a bathrobe and sitting with Epstein.
The scandal escalated after British media reported on a trove of emails between Mandelson and Epstein. In it, the veteran Labor politician expressed support for his friend, despite Mandelson’s 2008 conviction for pimping a minor.
“I know you and I both feel despair and outrage at what happened,” Mandelson wrote. He gave Epstein advice and suggested using techniques from Sun Tzu’s “Art of War” to fight back.
Days before Trump’s second state visit to Britain, which Mandelson had helped plan and was expected to play a key role in, Starmer removed him as ambassador. The Foreign Office told CNN at the time that the emails showed the “depth and extent” of the relationship with Epstein was “significantly different from what was known at the time of appointment.”
Recent files released by the Justice Department show the depth and scope of their relationship was even greater. The documents include email exchanges from 2009 in which Mr. Mandelson, while serving as commerce secretary in the Brown administration, appears to have leaked to Mr. Epstein detailed policy measures that the Cabinet was considering in the wake of the 2008 financial crisis.
In another exchange in December 2009, Mr. Epstein and Mr. Mandelson discussed Britain’s plans to impose an additional tax on bankers’ bonuses as a punitive, one-time measure after the crash. Mr Mandelson appears to have suggested that the head of JPMorgan Chase should call Alistair Darling, then the UK Chancellor of the Exchequer, and “mildly threaten him”. The call was made official, according to Darling’s memoir, published two years before his death in 2023.
Mr. Mandelson also appears to have tipped off Mr. Epstein to the European Union’s plans for a 500 billion euro bailout to prop up the euro, also in response to the financial crisis.
Newly released bank statements appear to show that Mr. Epstein made payments totaling $75,000 to bank accounts connected to Mr. Mandelson between 2003 and 2004. Emails suggest the investor may have transferred £10,000 to Mr Mandelson’s husband, Reinaldo Ávila da Silva, to fund an osteopathic course.
A spokesperson for Mr Mandelson told British media that neither the former ambassador nor Mr da Silva had “any record or recollection of receiving payments in 2003 and 2004, nor do they know whether the documents are genuine.” CNN has not been able to reach Mandelson.
Mandelson was removed from his post as ambassador, but remained a member of the House of Lords (the upper house of parliament). But this week, in the face of mounting backlash, the Speaker of the House of Commons announced that Mr Mandelson would resign as Lords on Wednesday.
His problems don’t end there. Following the recent release of the Epstein files by the US government, the Metropolitan Police announced on Tuesday that it had opened an investigation into Mandelson on charges related to misconduct in public office.
Mr Brown said he had provided the Metropolitan Police with information relevant to the investigation into Mr Mandelson’s communications with Mr Epstein. The former prime minister said Mr Mandelson’s alleged leak of information to Mr Epstein was an “inexcusable and unpatriotic act at a time when the government and the country as a whole was trying to deal with the global financial crisis that is damaging so many lives”.
Mr Mandelson’s recent disgrace has caused a major political headache for Mr Starmer. Opposition parties have questioned Mr Starmer’s wisdom in appointing Mr Mandelson as ambassador despite his history of scandal.
Conservative Party leader Kemi Badenoch said: “The scandal, the vulgarity and the speed with which Mr Mandelson was ousted will only increase scrutiny of Mr Starmer’s decision to send him to Washington.”
Nigel Farage, leader of the populist British Reform Party, who is also mentioned 32 times in Epstein’s file, said Mr Starmer had made a “serious and serious error of judgment” in appointing Mr Mandelson as ambassador.
Starmer slammed Mandelson, calling his passing on classified information “disgraceful” and saying Mandelson had “let the country down”.
Mr Mandelson resigned from Labor on Sunday, saying he did not want to “cause further embarrassment” to the party. Despite his nonstick qualities, it’s unlikely that Mandelson’s latest disgrace will be rehabilitated like before.
In 1998, in an attempt to move Labor away from its socialist roots and affirm a newfound support for the free market, Mandelson, then Britain’s trade secretary, said that the Labor government was “very lenient about people getting unjustly rich” as long as everyone paid tax. Now, Mandelson’s own proximity to the filthy rich appears to have led to his ultimate downfall.
