Sovereign power

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Sovereign power (extract from Private Eye, No 1139, 19 August-1September 2005, p.27)

Sports minister Richard Caborn's reassurance to the head of Formula One's governing body, Max Mosley, that the ban on tobacco sponsorship coming into effect for the sport this month won't apply to broadcasts from outside the EU is the latest happy development in the warm relationship between the sport and "new" Labour.

Formula One famously won a deferral of the ban following Bernie Ecclestone's £1m donation to the party shortly before the 1997 election (subsequently returned); but motor racing has since turned to more subtle methods by employing the services of one of the best-connected lobbying firms, Sovereign Strategy.

Sovereign was set up in 2000 by Labour's former leader in the European Parliament, Alan Donnelly, who soon persuaded his old friend from the north-east and former cabinet minister Jack Cunningham to join the company, ignoring the bar on employing serving MPs imposed by the lobbying industry's professional body (which Sovereign conveniently failed to join).

Among the wealthy mates Donnelly had made during his time in Brussels was Max Mosley, who was reported in the Sunday Times six years ago to have paid Donnelly, then the European parliament's spokesman on the car industry, £18,000 for a "researcher" and to have funded several trips for the MEP to the US, Monaco and France. In return Mosley acquired a useful ally in Donnelly, especially when it came to brokering a deal with the European commission over competition issues.

When Donnelly alighted the European gravy train, Mosley's organisation, Federation Internationale d' Automobile (FIA), along with Ecclestone's Formula One group, duly became one of the first clients of his lobbying firm under arrangements that have recently been exposed in BusinessF1 magazine to be every bit as unconventional as the parties to them.

Donnelly spends much of his time "representing" Mosley at Grand Prix events around the world, although what this involves nobody is quite sure. What is known, however, is that he gets a lot of money for it, and is estimated to have earned around 11 million euros (£7.5m) in the three years up to 2004. But while FIA pays these vast sums under a contract with Sovereign Strategy Ltd, there are no signs in the company's accounts that it receives any money from them, suggesting that Donnelly receives them personally. Doubtless Jack Cunningham and the other directors know what's going on; but members of FIA's governing council are said to be indignant about a contract that they had no say in and that appears to be very generously priced to say the least.

Flouting standards on lobbying and unusual contracts are, however, no barrier to access to the heart of "new" Labour. For a suitable fee of a few thousand pounds Geordie MP Alan Milburn spoke at a Sovereign Strategy conference during his first break from the cabinet, while former defence minister Lewis Moonie has recently become an associate director of the firm. The party has also been happy to accept more than £80,000 in donations from Sovereign in the last four years, making it Labour's third largest corporate donor.

Not long before he gave Mosley the news that he could continue to beam fag adverts into the country's living rooms from outside the EU, in January this year Richard Caborn himself was guest of honour at a dinner hosted by Sovereign at Durham County Cricket Club in support of, er, London's 2012 Olympic bid. Sovereign's website makes no secret of how it achieves results for its clients: "Our team's considerable hands-on experience and contacts are brought to bear." Or, as Bernie Ecclestone puts it in a glowing testimony: "While many professional advisers make claims - Sovereign delivers." Who could disagree?