Following the money…

From a series of posts on his blog,- [1] [2] [3] & [4] its looks very much as if both myself and Iain Dale have been simultaneously working on the same question – just what was John Prescott actually doing in visiting Colorado-based Billionaire, Phillip Anschutz, at his home, last July.

The story so far is that Iain’s definitely up on me on this one:

I can exclusively reveal that two days after John Prescott’s overnight stay with Philip Anschutz John Prescott flew to Los Angeles where he was a guest at a champagne reception hosted by the Chief Executive of AEG Tim Leiwke. AEG is the company which runs the Dome and is owned owned by Anschutz. This man is on record in the Independent saying that "a casino licence is fundamental to the future of the Dome". So if that is so, how could Prescott and Anschutz discuss the regeneration of the Greenwich Peninsula without talking about a casino licence?

But we’re pretty much even on the revelation that Anschutz, a mild-mannered businessman by today, by night turns into Stephen Green on steroids.

In the past, Mr Anschutz has donated large sums of money to Colorado for Family Values, an organisation with explicit homophobic views. He is also a major patron of the Republican Party and funded ‘Amendment 2’, a voter initiated ballot to overturn gay rights in the state of Colorado. He is also a major donor for the Institute for American Values, who campaign against single parent families.Voters approved ‘Amendment 2’ in 1992 which changed the state’s constitution to explicitly ban laws that protected gay and lesbian people from discrimination based on their sexual orientation.The approval of the amendment by voters led for some activists to label Colorado as a “hate state”, and there were mass protests by LGBT campaigners outside of churches…

from Pink News

I should also note that another Anschutz’s favoured causes is the Discovery Institute who are, of course, the leading UA propnents of the errant and unscientific wingnuttery that is so-called ‘intelligent design’.

What’s bothering me about this whole story is that if there really is anything to it at all then something about it just doesn’t add up.

Put it this way, if Prescott genuinely has been playing footsy with a billionaire would-be super-casino owner then as the usual quid pro quo in such a relationship goes there seems to be an awful lot of quid potentially heading Anschutz’s way but not a lot of pro quo on Prescott’s side of the equation.

It just doesn’t add up…

I wrote the first part of this about 10 O’Clock this evening, then took a break to watch Newsnight, which has confirmed what has been my line of enquiry in this. Documents obtained under FOIA (so say the Beeb – more on this later on) appear to show that Prescott took a keen interest in casinos and that OPDM was monitoring progress on on a few things in relation to Anschutz’s plans to  place a casino/hotel complex inside the Millenium Dome, amongst other stuff.

Iain Dale was also interviewed, but only in much the same vein as Nick Robinson’s line on his blog today – i.e. bloggers are biased and don’t have to research stories and verify the facts like us professional journalists, so were better than the. Nyar-nyar-nee-nyar-nar! It’s seems the BBC has now started with much the same kind whinging about bloggers we’ve getting from the dead tree press for months.

Well, Newsnight – let’s just see you suck on this.

First, while its nice that you managed to obtain these documents, can I ask you specifically WHEN you obtained them?

Considering that this whole story has blown up in the matter of, what, a couple of days and that the government is certainly not in the habit of responding to a fresh FOIA request in such a short space of time, one has to wonder quite how you managed to have just the rights documents for the story at just the the right time…

…unless you’ve either

(a) known about this story for a while and sat on it, until bloggers smoked it out and force you out into the open, or

(b) you’re request for information has been fast-tracked by twhoever dealt with this request because someone on the inside see’s it as being in their interests for you to have this  information.

When is a leak, not a leak? When its a conveniently timed release under FOIA?

Second – and this is going in bold type…

Even with all the information at your disposal, you still succeeding in missing completely the single most salient and important fact in your whole report!

Look, its simple – all you need to do is follow the money.

Step 1 – Anschutz’s entertainments company, AEG, takes the desperately embarrassing white elephant that was the Millenium Dome off the government’s hands under a 20 year lease on what amounts to a ‘pay as you go’ deal.

This deal, as the report explained, entails AEG paying nothing until it has recouped its investment in various things – including an arena and the aformentioned hotel and casino complex – plus some degree of profit, following which the taxpayer will start to get it’s kickback – by way way of what appears to be a share in the profits from the Dome over an above what the Chancellor normally takes by way of taxation and any licencing costs, if the casino licence is granted.

That’s the deal between the government, specifically DCMS, and AEG for the Dome – and this was mentioned, albeit briefly, in the report.

The documents obtained by Newsnight also indicate that AEG’s view of the whole project was that a casino licence would be essential to its success – bottom line, the casino is, in AEG’s view, the cash cow that makes the rest of project work and, not only that, but of course, if AEG do get the casino licence, which amounts to a licence to print money, then it will much more quickly recoup its costs, deliver a profit and start paying on trhe terms of its lease, which means money paid over to the taxpayer – or rather the government.

And who collects this cash – well ultimately the Treasuery, of course, but the department which signed off on the deal was the DCMS…

…who by a complete coincidence are also the department responsible for issuing casino licences.

Now everything would have been hunky dory, were it not for a bit of media-driven furore over gambling and a bit of opposition in the Commons & Lords, which resulted in the number of licences on offer for the kind of unlimited jackpot, super-casino that AEG want to put in the Dome down to just one…

… for which their are currently eight eager bidders, all of whom want the big prize and the largest piece of the action.

Now according to Newsnight, all this could create the unfortunate impression that AEG have had a bit od preferential treatment on their bid – which is where they completely miss the key point in all this.

All you need do it follow the money thorugh the deal between DCMS and AEG for the Dome – if AEG get the super casino licence it will start to generate big profits the sooner it generates the profits, the sooner it begins to pay its contractual kickback to the taxpayer for the lease on the Dome… and unless there’s a set cap on this kickback, this also means that the more profits AEG make, the more money slips quietly in the Treasury’s coffers.

This is NOT about Prescott’s freebies and who he may, or may not, have been shagging while off on his jolly little junket.

It is NOT EVEN about AEG maybe getting a bit of preferential treatment and ministerial solicitude.

What is is about is a government that has a direct pecuniary (i.e. financial) interest in seeing AEG get the super casino licence, and one compounded even further by the fact that it is the same department (Culture, Media and Sport) that made the deal with AEG for the use of the Dome, that will now issue the licence for the super casino.

Now some may see that as a canny bit of business – that ‘some’ certainly will not include the seven other bidders for the same licence who, when the penny drops, are likely to notice that they’re bidding against a competitor (AEG) who has a considerable advantage over them due to a deal they’ve already cut with government for use of the Millennium Dome.

What ther other bidders have to offer, in strict cash terms, is whatever they pay for their licence plus whatever the Treasury rake off in taxes, but when it comes to AEG, not only does the Treasury get the licence fee and taxes it also, somewhere down the line, get a direct share in AEG’s profits.

On top of which, you now have the little matter of Prescott hanging out with the owner of AEG – oh, and before I forget, its also worth mentioning AEG’s other little favour to the government, which involves the arena they’re going to build in the Dome being used for a few events at the 2012 Olympic Games, including the Basketball tournament…

…and, oddly enough, Prescott just happened to take his trip out West to see Anschutz last July (2005) while, by strange coincidence, London’s success in bidding for the Olympic Games was announced on 6th July 2005.

This leads me to two observations.

The first is that if you were involved in any of the seven rival bids to AEG’s, then you could easily be forgiven for thinking that maybe, just maybe, the fix has gone in and the outcome of the decision on awarding the licence for the one super casino that the government is allowing is, shall we say, looking suspiciously like a bit of a foregone conclusion.

The seond observation is simply that, with all the resources at its disposal and its ‘oh, so professional’ reporters and editors to rely on, it seems rather strange that no one at the Beeb appears to have noticed or saw fit to comment on the glaringly obvious pecuniary interest that the government has in AEG’s bid, even though all the information required to make the connection was in the actual report.

Simple oversight, a bad case of post-Hutton gun-shy syndrome, or maybe just playing it cute in the hope that blogger might just make the connection… I’ll let you decide.

As for Prescott – to me he looks like the fall guy as usual, because instinct suggests there are bigger fish to fry somewhere in all of this…

BTW – should note in relation to my comments earlier in this post about when I started to write this up – there are a number of fine, upstanding, bloggers who can, if necessary, testify to my having made the connection at the core of this piece at least a couple of hours before Newsnight aired, although I am happy to credit Newsnight with having provided the evidence which verified my thinking on this subject.

  • “…there are a number of fine, upstanding, bloggers who can, if necessary, testify to my having made the connection at the core of this piece at least a couple of hours before Newsnight aired…”

    Yep, I’m one of those bloggers who can testify Unity got the jump. Not sure about the fine and upstanding bit though.

    Great stuff, BTW

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  • John S

    I think you’re right. Once again Prezza is the fall-guy deflecting attention from the real deals, and working in the background to keep the parties happy. And until the reshuffle he would have been the one to overrule any adverse local planning decisions.
    Agreed that it was very surprising when Newsnight popped up with a handful of documents under FOIA, as if they’d phoned up and asked for them yesterday afternoon. Still, if it suits the Government to keep the Prezza story running…

  • perusing in portsmouth

    What a fine piece of analysis. And in a classic fashion – follow the money. I look forward to reading it again on Sunday, on a dead tree. Unattributed, no doubt.

  • redpesto

    Listening to Prescott’s blethering on Today this morning made me wonder (a) that the albatross – sorry, the Dome – was central (despite JP’s claimn about how wonderful a deal it all was, regeneration, blah blah blah); (b) why had he not met any other the other bidders, given that planning permission might be an issue for any or all of the bids?

    Does Blackpool have any cattle ranches? Did Wilberforce ever give a speech there?

  • How did Newsnight get the documents under FOI? All is explained here: http://www.bbc.co.uk/blogs/opensecrets/. You will see that neither of your theories is true.

  • Philip

    Your ‘journalism’ would be better if the quality of your English didn’t lapse into ‘Prescottese’ from time to time..but then again, it is catching..

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  • ziz

    The real story is RISE Associates run by ex mistress to DPM and wannabe Labour MP.

    You can start here.

    Smith: ODPM has no existing contracts with Rise Associates. …
    http://www.publications.parliament.uk/pa/cm200506/cmhansrd/cm060510/text/60510w0223.htm

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