Tony Blair's fight to keep his oil cash secret: Former PM's deals are revealed earnings since 2007 - £20million -

Reading - Tony Blair's fight to keep his oil cash secret: Former PM's deals are revealed earnings since 2007 - £20million -

Tony Blair waged an extraordinary two-year battle to keep secret a lucrative deal with a multinational oil giant which has extensive interests in Iraq.

The former Prime Minister tried to keep the public in the dark over his dealings with South Korean oil firm UI Energy Corporation.

Mr Blair - who has made at least £20million since leaving Downing Street in June 2007 - also went to great efforts to keep hidden a £1million deal advising the ruling royal family in Iraq's neighbour Kuwait.

In an unprecedented move, he persuaded the committee which vets the jobs of former ministers to keep details of both deals from the public for 20 months, claiming it was commercially sensitive. The deals emerged yesterday when the Advisory Committee on Business Appointments finally lost patience with Mr Blair and decided to ignore his objections and publish the details.

News of the secret deals fuelled fresh accusations that Mr Blair is 'cashing in on his contacts' from the controversial Iraq war in what one MP called 'revolving door politics at its worst'.

They will increase concerns that Mr Blair is using his role as the West's Middle East envoy for personal gain.

The revelations also shed fresh light on his astonishing earnings, which include lucrative after-dinner speaking, consultancies with banks and foreign governments, a generous advance for his forthcoming memoirs, as well as the pension and other perks he enjoys as a former Prime Minister.

The full extent of his income is cloaked in secrecy because he has constructed a complex web of shadowy companies and partnerships which let him avoid publishing full accounts detailing all the money from his commercial ventures.

Critics also point out that a large proportion of his earnings comes from patrons in America and the Middle East - a clear benefit from forging a close alliance with George Bush during his invasion of Iraq.

Last night Tory MP Douglas Carswell said of Mr Blair's links to UI Energy Corporation: 'This doesn't just look bad, it stinks.

'It seems that the former Prime Minister of the United Kingdom has been in the pay of a very big foreign oil corporation and we have been kept in the dark about it.

'Even now we do not know what he was paid or what the company got out of it. We need that information now.

'This is revolving door politics at its worst. It's not as if Mr Blair has even stepped back from politics, because he is still politically active in the Middle East.

'I'm afraid I have no confidence at all in the committee that vets these appointments. It's no good telling us these deals may be commercially sensitive - we are talking about the appointment of our former Prime Minister and the public interest, rather than any commercial interests, must come first.'

Liberal Democrat MP Norman Baker said: 'These revelations show that our former Prime Minister is for sale - he is driven by making as much money as possible.

'I think many people will find it deeply insensitive that he is apparently cashing in on his contacts from the Iraq war to make money for himself.'

The committee said yesterday that Mr Blair had taken a paid job advising a consortium of investors led by UI Energy in August 2008. The exact nature of the deal is unknown, but UI Energy is one of the biggest investors in Iraq's oil-rich Kurdistan region, which became semi-autonomous in the wake of the Iraq war.

Mr Blair's fee has not been disclosed but is likely to have run into hundreds of thousands of pounds.

The secrecy is particularly odd because UI Energy is fond of boasting of its foreign political advisers, who include the former Australian prime minister Bob Hawke and several prominent American politicians.

Mr Blair successfully persuaded the committee that the appointment was 'market sensitive' and could not be made public.

The committee agreed to suspend its normal practice and keep the deals secret for three months. Mr Blair then asked for a further extension.

When this ran out last year the committee repeatedly 'chased' Mr Blair about the issue without hearing anything. Eventually the committee's chairman, former Tory Cabinet minister Lord Lang, reviewed the papers and ordered the deal to be made public, along with a separate deal with Kuwait which had been kept secret at the request of the Kuwaiti government.

The decision to keep the deals secret will fuel concerns about the effectiveness of the committee, which has been repeatedly criticised for its failure to halt the revolving door between politics and industry.

The committee is supposed to ease public concerns about former public servants using their contacts for private gain.

Ministers have to have all jobs vetted within two years of leaving office. But the committee is packed with former politicians and Whitehall grandees and is thought never to have banned a former minister or senior civil servant from taking up a lucrative job in the private sector.

Earlier this month the Government quietly rejected calls for the committee to be beefed up with more figures from outside the world of politics.

Gordon Brown has so far refused to answer questions about whether Mr Blair's arrangements breach his responsibilities under the ministerial code.

Mr Blair's office did not respond to calls yesterday.

Read more -http://www.dailymail.co.uk/news/article-1259030/Blairs-fight-oil-cash-secret-Former-PMs-deals-revealed-earnings-2007-reach-20million.html#

Greenspan Finally Admits He Blew It - Five years later, Alan Greenspan finally admits he screwed up -

Reading - Greenspan Finally Admits He Blew It - Five years later, Alan Greenspan finally admits he screwed up -

Is Alan Greenspan, famous for his libertarian leanings and hands-off approach to Wall Street, having some second thoughts?

After more than six decades as a skeptic of big government, the formerFederal Reserve chairman, now 84, is gingerly suggesting that perhaps regulators should help rein in giant financial institutions by requiring them to hold more capital.

Mr. Greenspan, once celebrated as the “maestro” of economic policy, has seen his reputation dim after failing to avert the credit bubble that nearly brought down the financial system. Now, in a 48-page paper that is by turns analytical and apologetic, he is calling for a degree of greater banking regulation in several areas.

The report, which he is to present Friday to the Brookings Institution, is by no means a mea culpa. But in his customarily sober language, Mr. Greenspan, who has long argued that the market is often a more effective regulator than the government, has now adopted a more expansive view of the proper role of the state.

He argues that regulators should enforce collateral and capital requirements, limit or ban certain kinds of concentrated bank lending, and even compel financial companies to develop “living wills” that specify how they are to be liquidated in an orderly way.

And he acknowledged shortcomings in regulation — an area on which the central bank has placed far greater emphasis under Mr. Greenspan’s successor, Ben S. Bernanke.

“For years the Federal Reserve had been concerned about the ever-larger size of our financial institutions,” Mr. Greenspan wrote. Fed research has not been able to find economies of scale as banks grow beyond a modest size, he said, and in a 1999 speech, Mr. Greenspan warned that “megabanks” formed through mergers created the potential for “unusually large systemic risks” should they fail.

Mr. Greenspan added: “Regrettably, we did little to address the problem.”

The former Fed chairman also acknowledged that the central bank failed to grasp the magnitude of the housing bubble but argued, as he has before, that its policy of low interest rates was not to blame. He stood by his conviction that little could be done to identify a bubble before it burst, much less to pop it.

“We had been lulled into a sense of complacency by the only modestly negative economic aftermaths of the stock market crash of 1987 and the dot-com boom,” Mr. Greenspan wrote. “Given history, we believed that any declines in home prices would be gradual. Destabilizing debt problems were not perceived to arise under those conditions.”

His new thoughts on regulation appeared to be a turnabout from Mr. Greenspan’s past views on bank size. Sanford I. Weill, the former Citigroup chief executive, wrote in a 2006 memoir that when Citigroup was formed in 1998 out of the merger of banking and insurance giants, Mr. Greenspan told him, “I have nothing against size. It doesn’t bother me at all.”

In a lengthy footnote, Mr. Greenspan wrote that it was “interesting speculation” to ask whether investment banks would have avoided taking on extraordinary leverage — as much as 20 to 30 times tangible capital — had they remained partnerships instead of incorporating, as a 1970 ruling permitted broker-dealers to do.

“To be sure, the senior officers of Bear Stearns and Lehman Brothers lost hundreds of millions of dollars from the collapse of their stocks,” he wrote in the footnote. “But none to my knowledge filed for personal bankruptcy and their remaining wealth allowed them to maintain much of their previous standards of living.”

The main policy prescription in Mr. Greenspan’s paper was higher capital requirements and liquidity ratios, which he argued would be the most effective way to blunt the impact of future crises. And he suggested that discussions under way to designate regulators to detect systemic financial risks would be of limited use.

“Unless there is a societal choice to abandon dynamic markets and leverage for some form of central planning, I fear that preventing bubbles will in the end turn out to be infeasible,” Mr. Greenspan wrote. “Assuaging their aftermath seems the best we can hope for.”

Mr. Greenspan, who stepped down as Fed chairman in January 2006, has defended his once-celebrated 18-year tenure previously. But the Brookings paper is his most extensive examination to date of the crisis’s origins.

The paper, titled “The Crisis,” argues that a global housing bubble was primarily caused by a sharp drop in long-term interest rates in 2000 and 2005, brought about by export-oriented growth in developing economies, especially China, after the end of the cold war. China, saving the dollars it was earning, in effect made money available for cheap loans.

“In short, geopolitical events ultimately led to a fall in long-term mortgage interest rates that in turn led, with a lag, to the unsustainable boom in house prices globally,” he wrote.

Mr. Greenspan also tried to refute, or at least deflect, the criticism he has received for the Fed’s conduct of monetary policy in the years after the burst of the dot-com bubble in 2001 and the subsequent recession. John B. Taylor, a Stanford economist, has been the most influential exponent of that criticism.

In response, Mr. Greenspan argued that the rise in home prices had become unhinged from other measures of inflation. While conceding that the low fed funds rates, the benchmark interest rate the Fed controls, made it easier for borrowers to use adjustable-rate mortgages, he said he suspected — “but cannot definitively prove” — most home purchasers would have taken out 30-year fixed-rate mortgages had the adjustable-rate ones not been available.

“The global house price bubble was a consequence of lower interest rates, but it was long-term interest rates that galvanized home asset prices, not the overnight rates of central banks, as has become the seemingly conventional wisdom,” Mr. Greenspan wrote.

In addition to endorsing raising capital and liquidity requirements, Mr. Greenspan said banks and possibly all financial intermediaries should be required to hold bonds that automatically convert to equity when capital falls below a certain threshold. That could help reduce the “moral hazard” that exists because the banks that failed did not suffer the full costs of their actions.

The Senate is contemplating a mechanism by which the government can seize and dismantle a huge, interconnected financial company before panic spreads.

For a big, interconnected company, regulators should initiate a special bankruptcy process, he wrote. A bankruptcy judge would require creditors to take a haircut before the company is reorganized. The company should then be split up into separate units, “none of which should be of a size that is too big to fail,” he wrote.

Read more -http://www.nytimes.com/2010/03/19/business/economy/19fed.html?hp