GPC International
GPC International is a lobbying firm now known as Fleishman Hillard. GPC was centrally involved in the 'Drapergate' scandal over cash-for-access.
'Cash for access'
In 1998, GPC was at the centre of an investigation by journalist Greg palast for The Observer. Palast discovered that GPC's top lobbyist Derek Draper, a former chief aide to Peter Mandelson offering access to ministers and senior civil servants in return for cash. Of the British Government, Draper said:
- There are 17 people who count. And to say I am intimate with every one of them is the understatement of the century. [1]
Derek Draper also claimed his firm GPC got British Gas chief executive David Varney on to the welfare-to-work task force. Draper called this one of his 'biggest' achievements. British Gas insists that Varney wanted only to contribute to the debate about getting young people off the dole and into work. However, a GPC client brochure carries an interview with Varney in which he admits the appointment gives him 'the opportunity to communicate your assessments of a particular situation clear and undiluted to senior Ministers. The insights into government . . . are valuable in a wider business context.' [2]
Close watchers of the lobbying saga will recall that Draper told The Observer's man that he had passed on remarkably accurate predictions of public spending plans to Salomon Smith Barney. Salomon has consistently refused to comment on the story. But we can give a couple of further insights. Draper and other GPC colleagues held regular meetings with Salomon managing director Costas Kaplanis.
An APPC inquiry found that Draper was a "rogue elephant" and that his conduct "was to be attributed not to defects in management systems or procedures but to human failure", it said. The firm had tightened procedures and the APPC said they were being readmitted to the association. They had withdrawn while their management systems were "audited". [3]
Following the expose, Draper left his job with GPC and was sacked as a columnist by the Express. [4] GPC was also suspended from the lobbyists' umbrella group, the APPC. [5]
But the episode was seen as a minor blip in the growth and expansion of this lobbying outfit.
From £1 to £1m
Former aide to Peter Mandleson Roger Liddle and his associates paid £1 for Prima Euope only months before the 1997 election transformed its prospects. But by May 1998, with Labour having been in power for a year, Prima was valued at up to £1.8 million when it was sold to rivals GPC Market Access. Liddle, Draper and three associates invested £200 in Prima shares after the business was acquired in January last year from its American former owners. The deal was a management buy-out for a nominal £1; on top of this, they agreed to pay up to £250,000 dependent on future profits.
Liddle, through a 'blind trust', received £260,000 cash. Downing Street has been eager to emphasise that Liddle did not participate in the 'earn-out' arrangements: these mean that ex-Prima owners can boost the amount they receive by up to £1m, bringing to £1.8m the total they receive for the takeover. The £1m is dependent on profits over the next three years.
Liddle founded Prima with former Labour Minister Lord Dick Taverne in 1987. It was later sold to US advertising agency Young & Rubicam. Prima continued to be run by Liddle, Taverne, former Labour MP turned Lib-Dem Sir Ian Wrigglesworth and John Dickie. They bought the Prima business back in January last year. With Draper on board and Labour in power, business boomed. In 1997, the company's revenues rose to £1m and profits to £173,000. The directors paid themselves £300,000 plus dividends of £104,000.
GPC was a very Pro-EU lobbying outfit. Links across the political spectrum, many from SDP, Lib Dems. New Labour complement boosted by acquisition of Prima Europe in 1997 (though this precipitated the exit of many senior staff - including many to APCO and Mike Craven, who went on gardening leave and then on to set up Lexington Communications).
In April 2000, GPC hired the former Labour Party PR chief Joy Johnson. [6]
BBC
Greg Dyke, former BBC Director-General hired outside consultants for strategic advice on how to thwart any government plan to partially privatise the BBC or abolish the licence fee. The contract with GPC, one of Westminster's leading political lobbyists, is worth about £175,000 and covers every aspect of the corporation's activities.The BBC has hired GPC not least because its managing director, Kevin Bell, is a Tory party supporter with close connections to the leadership. Mr Bell was trained by Lord Tim Bell, who masterminded the three Thatcher election victories. [7]
A senior BBC figure said: "This is not just about giving us advice on how to acquire the ammunition to fight off a privatisation of all or parts of the BBC or how to retain the licence fee at all costs. There are some people in very senior levels within the BBC who support an element of fee and who think the licence fee is out of date." [8]
Mr Bell, who declined to comment on the details of the contract, is working with a number of senior figures within the BBC, including Carolyn Fairbairn, the strategy director. Both Ms Fairbairn and Mr Bell are trustees of the Institute of Economic Affairs, the free market think-tank that enthusiastically supported the privatisations of the Thatcher years. [9]
In January 2003, the BBC appointed an ex-Prima and GPC consultant as its Head of Political and Parliamentary Affairs. John Dickie "spent ten years as a public policy consultant, initially with Prima (1989-1998) and then GPC (1998-2000), providing high level policy and political advice to major UK and international companies". [10]
Devolution has provided plenty of work for GPC Scotland, the Edinburgh arm of GPC, the lobbying group, which saw sales rise by 422% in 2001/02. [11].
Links with John Elkington and Sustainability
- The customer is king. The customer is always right, even when wrong! Such market mantras are ubiquitous these days. All are true, up to a point, but it depends on what business you are in. Furthermore, many of us have little idea of what we will need, want or demand a year or two hence. Things we turn our noses up at today often turn into tomorrow's must-haves. So any company relying solely on its customer base to dictate future market trends potentially runs huge risks.
- At least, that's how I comfort myself when weighing early business reactions to a new initiative focusing on corporate political influence. Working with government policy experts GPC, and with groups as diverse as the CBI and the European Commission, we are looking at how leading companies shape government thinking and action. (Guardian 120501)
Resources
FOI documents
Notes
- ^ Greg Palast 'LobbyGate: “There are 17 people that count. To say that I am intimate with every one of them is the understatement of the century”', [www.gregpalast.com Greg Palast's website], July 5, 1998, accessed June 2006.
- ^ Greg Palast 'LobbyGate: “There are 17 people that count. To say that I am intimate with every one of them is the understatement of the century”', [www.gregpalast.com Greg Palast's website], July 5, 1998, accessed June 2006.
- ^ David Hencke, 'Lobbists' inquiry disowns 'rogue elephant' Draper'. The Guardian, July 31 1998.
- ^ 'Lobbyist escapes disciplinary action', BBC News online, August 8, 1998.
- ^ 'Lobbyists suspended from umbrella body', BBC News online, July 15, 1998, accessed June 2006.
- ^ 'GPC strengthens media expertise with Johnson', PR Week, April 7, 2000, subscription access only, accessed June 2006.
- ^ Andrew Pierce 'BBC hires firm with Tory links to defend licence fee', The Times, January 9, 2004.
- ^ 'John Dickie appointed Head of Political & Parliamentary Affairs at the BBC', BBC website, January 14, 2003, accessed June 2006.
- ^ Article unavailable online, Business a.m. (Scotland), April 26, 2002.
