Here’s a story from our print edition:
The Ken Livingstone campaign’s largest individual donor is a tax-avoiding property tycoon until recently based in Switzerland and
the British Virgin Islands.
Andrew Rosenfeld gave £90,000 to Mr Livingstone’s mayoral election bid in the first quarter of this year, Labour sources say. The amount makes him by far Mr Livingstone’s biggest single supporter. Mr Livingstone’s spokesman refused to deny the donation last night.
The sum is in addition to £121,000 donated by Mr Rosenfeld to Labour last October, much of which will also have been spent on the mayoral campaign. The money is partly the proceeds of tax avoidance. Until last year Mr Rosenfeld, who is said to be worth £100 million, lived in Geneva and operated his Air Capital property empire through a series of offshore trusts in the Caribbean to avoid tax. By remaining in Switzerland for five full tax years, he was also able to escape capital gains tax on his property and investments.
Mr Rosenfeld’s huge donation will add to the controversy surrounding Mr Livingstone’s own personal tax arrangements. The Labour candidate’s bid to regain his old job from Boris Johnson has been badly damaged after it was revealed he channelled his six-figure earnings through a personal company in order to avoid at least £50,000 in tax.
More than four weeks after promising to “publish details of everything I’ve earned over the last four years,” Mr Livingstone has
still not done so, though all the other candidates have published full details of their income and tax paid. Ten days ago he promised that figures certified by his accountant would be produced “shortly,” but none have yet been forthcoming.
Priti Patel, Tory MP for Witham, said: “Mr Livingstone has attacked tax avoiders as ‘rich bastards’ who ‘should not be allowed to vote.’
He clearly believes that doesn’t apply either to him or to people who are willing to give him money.”
Companies House records for Air Capital show that Mr Rosenfeld only changed his country of residence from Switzerland to the UK on 5 December 2011, two months after his first donation to Labour. However, his spokesman said that Mr Rosenfeld had returned to Britain and started paying UK tax in “early 2011” and the company’s status was “entirely separate from his status.”
The records show that all Mr Rosenfeld’s British companies, including Air Capital, are either “dormant” with no money passing through them, or are less than two months old. The spokesman declined to comment on the location of Mr Rosenfeld’s fortune and of the companies he uses to operate his business. However, he said that the British Virgin Islands companies previously used by Mr Rosenfeld were now also dormant. “When he came back to the UK, all those vehicles would then qualify for UK tax if any profits were made out of those companies.”
The spokesman refused to confirm or deny Mr Rosenfeld’s latest donation, saying: “Any donation will be registered with the Electoral Commission.” Mr Livingstone’s spokesman said: “The Labour Party declares all donations received for Ken Livingstone’s election
campaign to the Electoral Commission in line with party funding rules.” Donations for the first quarter of 2012 will only be published
by the Commission in the third week of May, after the elections.
Mr Rosenfeld is a controversial figure who found himself caught up in the “loans-for-honours” scandal when his name appeared on a list of businessmen – all donors to Tony Blair’s 2005 election campaign – who were being considered for peerages. He loaned the party £1 million, which has now been repaid. After Labour’s political fortunes slumped, Mr Rosenfeld switched his support to the Conservatives. Both before and after the last election he made persistent efforts to contact senior Tories with a view to a donation, but they declined to see him. “We did not trust his politics,” said one Tory source. He has since turned back to Labour, promising to donate £1 million to the party.
If elected mayor today, Mr Livingstone will gain enormous planning powers, representing a potential conflict of interest with
his funding from Mr Rosenfeld. Air Capital invests in “distressed property” in London and elsewhere and is closely linked to Goldman
Sachs’ property arm, the Goldman Sachs Whitehall Fund.
During his previous mayoralty Mr Livingstone made a number of decisions which helped Mr Rosenfeld’s then company, the property
developer Minerva. In 2005 he relaxed controls on “protected views” around St Paul’s Cathedral, where Minerva was proposing a massive scheme. Mr Livingstone also approved Minerva’s proposed 50-storey Houndsditch office tower, the tallest in the City, against furious objections from Historic Royal Palaces, which said it would “inexorably ruin” views of the Tower of London. The scheme later fell victim to the credit crunch.
Mr Livingstone had earlier opposed another Minerva development, the £500 million Park Place shopping centre in Croydon, but it was approved by the Deputy Prime Minister, John Prescott. Four weeks after the approval, Mr Rosenfeld’s partner in Minerva, Sir David Garrard, loaned £200,000 to the Labour Party.