How Blair rescued Palestine deal worth $200m to his £2m-a-year paymasters
By David Rose
Special investigation: How Blair rescued Palestine deal worth $200m to his £2m-a-year paymasters
Tony Blair mounted an intense political lobbying campaign to rescue a struggling mobile-phone business owned by a client of the bank that pays him a £2 million annual salary.
The firm, Wataniya, had already built a brand-new network in the Israeli-occupied Palestinian West Bank.
But it almost collapsed before launching its service, jeopardising a £450 million investment, because Israel’s government was refusing to let it use the frequencies it needed to operate.
Acting in his capacity as the international Middle East peace envoy, Mr Blair helped to save the company by spending months putting pressure on Israel’s prime minister and his colleagues in a bid to change their minds.
An investigation by The Mail on Sunday has revealed:
- Mr Blair spoke of the need to get Wataniya up and running in order to boost the Palestinian economy. However JP Morgan, the American investment bank that employs him as a consultant, has a financial stake in Wataniya through Wataniya’s owner, the Qatari firm Qtel, which is an important client of JP Morgan.
- Financial documents show that back in 2007, JP Morgan had been one of four ‘mandated lead arrangers’ of a $2 billion loan with which Qtel bought Wataniya from its original Kuwaiti owners. Last year, the bank joined a syndicate that lent Qtel a further $500 million, and became a ‘lead arranger’ for a Qtel bond issue which raised yet another $1.5 billion.
In these deals, JP Morgan would have been paid many millions of pounds in fees, and if the loans had gone bad, could have been exposed to substantial losses. ‘Its original exposure was probably around $200 million,’ one Wall Street expert said yesterday.
Mr Blair’s lobbying campaign also helped to enrich the family of the Palestinian Authority president, Mahmoud Abbas […]
A firm run by his son Tarek has secured a lucrative contract to provide advertising for Wataniya.
Mr Blair’s envoy role – for which, as he has often boasted, he is not paid
a salary – has now been enhanced.
Last night Mr Blair faced calls to publish full details of the myriad business interests that have netted him a personal fortune estimated to be at least £15 million since he left office.
He is paid not only by JP Morgan but also by the insurance giant Zurich, and his own private consulting firm, Tony Blair Associates, counts among its clients the royal families of Abu Dhabi and Kuwait.
A frequent visitor to Libya, he has used his personal friendship with the dictator Colonel Gaddafi to explore business opportunities there on behalf of JP Morgan.
With ten rooms permanently booked at Jerusalem’s most expensive hotel, the American Colony, at an annual cost of £1.1 million, he spends a few days there each month.
involved with Wataniya were leading members of the Palestinian elite around Mr Abbas. Its Palestine chairman is Mohammad Mustafa – his financial adviser and closest associate, who accompanies him on virtually every foreign trip.
Mr Blair was furiously trying to rescue the company. ‘From day one of this problem, he’s been very proactive through his role as Quartet representative,’ Mr Richardson said.
A senior Israeli official said last week: ‘In the meetings he had with the Prime Minister, he brought it up time and time again, and kept pushing, pushing.’
Another Israeli source confirmed that Mr Blair repeatedly raised the matter in meetings with Israel’s defence minister, Ehud Barak.
Mr Blair made several public statements about the Wataniya frequency dispute, and did not mention JP Morgan at all.
‘If we cannot get the proper frequency and it cannot go forward then we don’t have proper competition on mobile telephony and we don’t get the investment and jobs,’ he said after the first launch was cancelled in June 2009.
‘It may seem a small thing in one sense but it’s very important for the Palestinian economy.’
Wataniya launched on November 10, with Mr Blair at the opening ceremony.
one big beneficiary of the firm’s investments is none other than Tarek Abbas, the son of the Palestinian Authority president, Mahmoud Abbas.
American-educated Tarek runs Sky, the West Bank’s biggest advertising agency. Last year, it was awarded a contract to be Wataniya’s lead advertising agent, with both a monthly retainer and further payments for individual campaigns.
Palestinian business sources say that its work for Wataniya has been worth approximately £700,000 in the past 12 months – almost certainly, the biggest advertising ‘spend’ in Palestine.
Meanwhile, businessman Firas Nasruddin, a friend of both Tarek and his father, owns Hemaya, a security company
Hemaya has a contract to provide security for Wataniya personnel and installations.
It also serves several other firms that are supported by the Palestine Investment Fund, a large pot of money that is meant to be used to benefit the Palestinian people.