The recent release of the Epstein files by the US Department of Justice has so far led to little accountability in the US for the many sordid crimes revealed there, but it has caused the swift and decisive downfall of Peter Mandelson. On Monday he was arrested on suspicion of misconduct in public office, having been under investigation due to allegations he shared market-sensitive government information with Epstein when he was a minister in Gordon Brown’s government (it’s been reported he does not think he’s committed an offence). A scion of New Labour who rode to power with the Blair government, he famously declared in 1998 that he was “intensely relaxed about people getting filthy rich as long as they pay their taxes”. True to his word, he frequently relaxed in the company of billionaires. In 2008, this led to the affair known as “Yachtgate”, which seemed shocking at the time, but in the light of the revelations in the Epstein files looks like a pretty quaint idea of a scandal.
Yachtgate was about political figures rubbing shoulders with shady Russian oligarchs. It hinted at possible financial improprieties. The superyacht, moored off the coast of Corfu, belonged to Oleg Deripaska, a Russian aluminium magnate who had his US visa revoked in 2006 because of suspected ties to organised crime. In Europe, Deripaska was benefiting from the lifting of EU tariffs on aluminium in 2007, so when Mandelson, Britain’s EU commissioner in charge of trade, showed up on his boat, questions were raised about a possible conflict of interest.
Other guests at the party included Mandelson’s good friend Nathaniel (Nat) Rothschild, a financier and heir to the Rothschild fortune (Mandelson often stayed at his villa in Corfu), and Rothschild’s old schoolmate, the then shadow chancellor George Osborne. Rothschild was so livid that gossip about the party had made the papers that he wrote a letter to the Times, insisting that the only impropriety to have taken place was Osborne trying to solicit from Deripaska, a foreign national, a donation to the Tory party. The editor of the Times, Rothschild’s friend James Harding, published it and soon the waters around Yachtgate were muddied. People lost track and lost interest.
Perhaps we should have suspected that this particular constellation of people sharing cocktails on the Ionian Sea wasn’t just happenstance. Deripaska was a businessman with a sketchy past (Roman Abramovich once said of the 1990s “aluminium wars” in Russia that “every three days someone was being murdered”; Deripaska came out the winner). But he was also a close associate of Vladimir Putin and had swept into London in the early 2000s, forging relationships with Britain’s political and monied elites that could be strategically useful for Russia. None of the relationships between these men, as we see in the Epstein files, were straightforward friendships.
Soon Mandelson would be part of a world that had little regard for laws or loyalties, but was held together by different types of indebtedness
Mandelson had done favours for Deripaska and would go on to trade access to him in exchange for favours from others. We now know that, contrary to the story he told in 2008 about when he first met Deripaska, Mandelson had arrived at an EU-Russia summit in The Hague on Deripaska’s Gulfstream IV jet in 2004. We also know that Mandelson and Rothschild flew to Siberia with Deripaska in 2005, where the three visited a sauna together and were thrashed with birch leaves. And now, thanks to the Epstein files, we know that, in 2010, Mandelson asked Deripaska to help a friend of his, convicted sex trafficker and questionable financier Jeffrey Epstein, get a Russian visa.
Rothschild apparently nixed Epstein’s introduction to Deripaska in 2011. He had an interest in keeping Deripaska to himself. In 2009, he had signed up to buy a large stake in Deripaska’s aluminium company Rusal when it launched on the Hong Kong stock exchange in 2010 (this was probably the reason he was so sensitive about being in the press during Yachtgate – he didn’t want to jeopardise that relationship). He made a $40m investment in the commodities and mining company Glencore in the same year, a company which had complex and somewhat opaque relations with Rusal, including holding a stake in Rusal’s parent company, Deripaska’s EN+ Group. But Mandelson evidently persisted. Soon he, Rothschild, Deripaska and Epstein would be part of a world that had little regard for laws or loyalties, but was held together by different types of indebtedness and varying degrees of kompromat.
For a long time the public assumed that the secrets of these elites involved “white collar” crimes, like tax evasion or financial fraud. Glencore has been an object of unrelenting suspicion since the 1980s when its founders, Marc Rich and Pincus Green, were indicted for tax evasion, wire fraud and racketeering (Bill Clinton would later, in one of the greatest scandals of his presidency, pardon Rich). In the early 2000s, the CIA suspected Glencore of paying illegal kickbacks to evade UN sanctions on buying oil from Iraq. Similar charges have dogged the company to the present day. In 2022 they were ordered to pay a $1.5bn fine for corrupt activities in the Democratic Republic of Congo, Nigeria and Venezuela. Related prosecutions are ongoing. But it’s not just “white collar crime” – the wealth of men like Marc Rich and Deripaska is reputed to have originated in mob ties, which would implicate them in much worse things. And we now know from the Epstein files and related sources that this code of secrecy, binding together people who can be trusted only because they are all compromised, has covered up horrors.
In 2008, as Mandelson partied on yachts, his good friend Epstein was fighting federal child trafficking charges. In the end he pleaded guilty to much lesser state charges, including soliciting prostitution from a minor. He served just 13 months in exceptionally comfortable circumstances and when he emerged, now a registered sex offender, many of his powerful friends stood by him. The reality that they were apparently able to overlook, in spite of scarcely hidden and even flaunted evidence, was that girls as young as 14 were being raped and trafficked.
None of the headline-making stories about the varying degrees of complicity of Epstein's famous friends can prepare you for the grim reality of child rape revealed in the files that have been released and in the horrifying accounts of survivors. It makes very uncomfortable viewing and reading, but you have to understand how viscerally disgusting it all was to appreciate how deeply the perpetrators were compromised. And any friends who had an inkling of what was going on were compromised too, because their silence was a form of complicity. Many of those who didn’t directly participate in the abuse of the girls (like Mandelson, who is gay), must have seen the constant retinue of teenagers, often half-naked (though, as Virginia Giuffre tells us in her memoir, on his island Epstein insisted they hang around fully naked). They must have heard crude boasts of the kind we can now read in the messages. These people traded favours with Epstein and his friends anyway.
What Mandelson wanted out of it seems to have been fairly simple: money. Tony Blair had been making a fortune exploiting his political connections since founding Tony Blair Associates in 2008. He continued making valuable connections out of office in his position as Middle East envoy representing the “Quartet” of Russia, the US, the EU and the UN. So in September 2012, when Glencore ran into trouble over a deal Rothschild supported (a merger with mining group Xstrata), Blair could use his connections to Qatar’s royal family to help broker the deal at the last moment. Qatar’s sovereign wealth fund, QIA, held a stake in Xstrata and had been opposing the merger before Blair’s intervention. This favour apparently earned him around £250,000. It was lucrative to be part of this money-go-round.
But Mandelson didn’t have quite the same cachet. The new files show that in 2011 he had sought a role at Glencore himself, with Rothschild advising him to talk to its billionaire CEO, Ivan Glasenberg. Epstein schemed with Mandelson about how to make this happen. It didn’t work out. But what Mandelson could do was trade on his access to business partners in Russia. In 2010, Mandelson founded a consultancy business, Global Counsel, with a former Blair adviser, Benjamin Wegg-Prosser. They had a natural base in Moscow because Wegg-Prosser had worked since 2007 for a big Moscow online media company, SUP, and he and his Russian wife, Yulia, continued dividing time between Russia and the UK. And the Epstein files show that Global Counsel immediately began soliciting business in Russia, primarily with a large nanotechnology group called Rusnano Group. That was the same year that Mandelson tried to use his connection with Deripaska to wrangle a last-minute Russian visa for Epstein.
You have to understand how viscerally disgusting it all was to appreciate how deeply the perpetrators were compromised
Other emails show that in 2011 Mandelson was consulting Epstein about some potential business with Yuri Milner, a Russian oligarch who had been making large investments in Facebook. Epstein said: “You must be careful if you want this and will visit lebedev [sic]” – presumably referring to London-based oligarch and former KGB officer Alexander Lebedev, who had been investing heavily in British media (he acquired the Evening Standard in 2009, and the Independent in 2010). Interestingly, the following year Epstein cautioned another friend to take care with Milner, saying “yuri money is russian gangster money, usmanov…[sic]”. In 2017 it was revealed that the Kremlin had been behind many of Milner’s strategic investments in Silicon Valley, with the money being funnelled through the Russian mining oligarch and former Arsenal shareholder Alisher Usmanov.
If Epstein, Mandelson and others knew this, Britain’s intelligence services and political classes should have too. But in yet another sign of the entanglement of British politics with Russian money, Liberal Democrat peer Lord Owen has served as a representative for Usmanov, and the late Lord Myners, a former Labour treasury minister, was on the board of Usmanov’s telecoms group, MegaFon, until 2018. Meanwhile, Mandelson took a directorship of Sistema in 2013, a Russian conglomerate with shareholdings in defence companies, and refused to resign when Putin invaded Crimea the following year. But sometimes it’s convenient to ignore what everyone knows, and a silent bond is forged between those ignoring it.
None of the men in these circles were naive about Russian money. Epstein least of all. He set out to become an adviser to the Kremlin at just the time Putin was silencing all dissent domestically, had intensified his hybrid warfare on liberal democracy, and made clear his expansionist ambitions. Between 2013 and 2018, Epstein sent many messages to people who could act as intermediaries between Putin and himself. He used three friends in particular for this purpose: former Israeli prime minister Ehud Barak, former Norwegian prime minister and secretary-general of the Council of Europe Thorbjørn Jagland, and Emirati billionaire Sultan bin Sulayem, all of whom were holding private meetings with Putin. Epstein didn’t just want money, he wanted influence – he was always very close to power. It made sense in this amoral world for Mandelson to maintain a friendship with him for nearly two decades in spite of what he knew and pretended not to know.
The full story hasn’t yet been told. We probably only have a fraction of the materials the FBI and DoJ obtained. The files that are public are still redacted. But we can already see a dark realm, set apart from laws, morality and the most basic humane impulses. It’s inhabited by some of the world’s most powerful men: Peter Thiel, Elon Musk, Bill Gates and many others. And now that we’ve seen just a glimpse of this world into which Yachtgate was potentially a window, we have to wonder why no one took a better look 18 years ago.
Tamsin Shaw is Associate Professor of European and Mediterranean Studies and Philosophy, New York University