SPONSORSHIP OF DOME

  8.1. I have already described in Chapter 7, the part which Mr Vaz played in supporting Millennium projects proposed by members of the Asian community, including the Hinduja brothers and which, in their case, became a Dome project. As I have already said in the Introduction to my Report, I am only concerned with issues related to the sponsorship of the Dome by the Hinduja brothers, insofar as it is necessary to do so for the purpose of establishing whether there was any link between their offers of sponsorship and their attempts to obtain British citizenship.

  8.2. I begin the story at the point when the present Government arrived in Office. In June and July 1997 there was correspondence between the Hinduja brothers and Mr Mandelson about prospects for obtaining the approval of the Millennium Commission to the funding of the Concordia project. This was a project for the establishment of a multi-ethnic cultural centre near Peterborough. Mr Mandelson, who, as Minister Without Portfolio at the Cabinet Office was responsible for the Dome, whilst politely wishing them well, said it was for the Commission to decide on the merits of competing bids. On 17 July 1997 Mr Vaz wrote to Mr Mandelson, suggesting that the Concordia project, put forward by the Hinduja brothers, had not attracted the approval of the Millennium Commission and asking that it be considered as part of the projects for the Dome. In the same letter, Mr Vaz drew attention to the lack of funding for other "Asian-led projects" pointing out that these projects had received only £5m of the £900m allocated by the Commission. Mr Mandelson replied on 11 August 1997 saying that the project was still under consideration by the Millennium Commission. As far as the Dome was concerned, he said that consideration of what should be incorporated into the Dome was a matter for the New Millennium Experience Company and he had no direct control over the content. He suggested that Mr Vaz should write to Miss Jennie Page, the Chief Executive of the Company. In February 1998 Mr S P Hinduja wrote to the Prime Minister and Mr Mandelson offering to contribute to the Dome. There is no record that the Prime Minister replied to that letter. There was then contact between Miss Page and the Hinduja brothers. On 6 October 1998 Mr S P Hinduja wrote to Mr Mandelson asking for his assistance in resolving difficulties which had arisen over conditions attached to their offer of sponsorship of what was then called the Spirit Zone of the Dome. By this time they had offered to underwrite the Zone in the sum of £3 million. There is no record on the files of any reply to this letter.

  8.3. On 19 October 1998 Miss Page wrote to the Department of Culture, Media and Sport, the Department responsible for handling issues relating to the Dome, asking that formal checks should be instituted within Government about the Hinduja group of companies. It was normal procedure for the Millennium Experience Company to check on the status, credit and general standing of potential sponsors. In the case of the Hinduja companies, it was not easy to be clear about the full extent of involvement between them and the Government, because of the diverse nature of their business. There were also concerns within Government about reports about their business background.

  8.4. On 3 November 1998 a submission was put forward to Mr Mandelson, who was, by this time, the Secretary of State for Trade and Industry, but who had retained responsibility for the Dome. This minute was accompanied by an account of the intelligence material which I have already described in Chapter 5. The minute stated that although there were a number of allegations of improper, and in some cases criminal, behaviour, none of it was conclusive. There was a risk of adverse publicity if any of the various proceedings or investigations currently under way abroad were to become public, but, on balance, the risk was worth taking. It recommended that Miss Page be advised that there was no reason for her not to continue negotiations with the Hinduja brothers. Mr Mandelson minuted this submission in the following terms:

"I agree that they are an above average risk but without firm evidence of wrongdoing how could we bar them from involvement in sponsorship? We are right to reduce our exposure to them. I wonder how this involvement got publicity in the first place. Incidentally, if Mr S P Hinduja wishes to pursue his citizenship application he can do so without further involvement or commendation from me!".

  In view of reports which have appeared in the media, I think that I should say that it is possible that Mr Mandelson saw some intelligence material before 3 November 1998, but I am satisfied that this could not have been before 21 October 1998.

  8.5. Mr Mandelson has said to me that he regards this comment as consistent with his position throughout and that at no stage did he seek to advance the applications for naturalisation made by any of the Hinduja brothers. I have found no evidence to the contrary and I accept Mr Mandelson's explanation. As regards the decision to allow negotiations over the Dome funding to continue, this was a judgment which Mr Mandelson came to after receiving advice from his officials. He followed their advice and, again, I find no grounds to criticise him on that score.

  8.6. There is one further issue concerning Mr Mandelson's contacts with the Hinduja brothers. An article in The Mirror on 25 January 2001 reported that at a meeting in August 1988 at the headquarters of the Hinduja companies in New Zealand House, Mr Darin Jewell alleged that naturalisation was discussed. It was also alleged that Mr Mandelson attended this meeting. Mr Mandelson has said that he has no knowledge of any such meeting if there was one and, if naturalisation was discussed, it was for the purposes of the Hindujas and not shared with Mr Mandelson. I can find no record of any such meeting on the official papers and I have not considered it necessary to contact Mr Jewell. I accept Mr Mandelson's explanation.

  8.7. I must deal with one other matter concerning the sponsorship of the Dome. An article appeared in the Daily Telegraph on 1 February this year suggesting that Lord Levy brokered a deal with the Hinduja brothers to sponsor the Dome. Hon Nicholas Soames MP, wrote to me asking me to investigate this report. I have spoken to Lord Levy. He told me that Mr Mandelson had contacted him to say that he was concerned about the arrangements for the sponsorship of the Dome and a meeting was held in the Department of Trade and Industry on 23 October 1998 between him, Mr Mandelson, Miss Page and officials. There was a later meeting on 29 October 1998 in the House of Lords, at which Lord Levy and two of the Hinduja brothers were present. Mr Mandelson did not attend this meeting. At that meeting Lord Levy said that a gift would be more satisfactory instead of the previous "underwriting" arrangement which was suggested and a gift of £1 million was offered instead. Lord Levy said to me that, at no time, was there, at this meeting, any reference, explicit or implicit, to the obtaining of passports or citizenship by the Hindujas. I accept his explanation.

  8.8. I have also asked Miss Page whether, in her dealings with the Hinduja brothers, any such reference was ever made and she has confirmed that there was no such reference. Again, I have no reason to doubt the accuracy of what she has said.

  8.9. I will now sum up the account which I have given of the handling of relations with the Hinduja brothers over the funding of first, the Concordia project, and then the Spirit Zone of the Dome.

  8.10. It is clear that they wished the Government and, in particular, Mr Mandelson, as the Minister responsible for the Dome, to accept their ideas for ethnic representation in the Dome project in return for offers of sponsorship. Although Ministers gave their approaches general encouragement, the detailed negotiations were carried out by Miss Page, as Chief Executive of the New Millennium Experience Company. Ministers generally and Mr Mandelson, in particular, acted correctly. The judgment which Mr Mandelson reached to allow negotiations with the Hindujas to continue, notwithstanding the intelligence information, was in accordance with official advice and was a reasonable one in the circumstances. As a matter of timing, discussions with the Hindujas over sponsorship were being carried out over the same period as their efforts to obtain citizenship. But I have found no evidence either that they sought to link these discussions to their desire to obtain citizenship or that any Minister, whether Mr Mandelson, Mr Vaz, or anyone else, sought at any time to make such a connection.