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BBC Chairman, Sunaks' Pal, QUITS After SCANDAL of Boris £80,000 Loan
Fresh Sleaze Claims as Tories Take 1.5million From Oil and Gas Donors under Boris Johnson
No 10 faces legal challenge to PM’s support for Priti Patel on bullying claims Senior civil servants’ union move for judicial review allegations adds to pressure on Boris Johnson
Boris Johnson holiday villa linked to Zac Goldsmith firms accused of tax evasion -Costa del Sol property firms owned by Goldsmith family ordered to pay €24m in unpaid taxes and fines
Boris Johnson has been blasted for climate change hypocrisy over Tory party funding as Electoral Commission records shows donations stretching back to 2019 linking the Conservatices with oil and gas magnates
BBC News 13 NOV 2021.
Boris Johnson decided Priti Patel Home Secretary, had not breached the ministerial code. Photograph: Jessica Taylor/UK PARLIAMENT/AFP/Getty Images
The government faces a legal challenge to Boris Johnson’s decision to back Priti Patel over bullying allegations, throwing a fresh spotlight on the prime minister’s approach to ethics in public life.
Alex Allan, Johnson’s independent adviser on the ministerial code, resigned last year after the prime minister chose not to act on a critical report about Patel.
After a Cabinet Office investigation, citing instances in which she had shouted and sworn at staff, Allan found Patel had displayed “behaviour that can be described as bullying” and that she had “not consistently met the high standards expected of her”.
His report suggested she had breached the ministerial code, even if unintentionally.
Boris Johnson says the UK is not ‘remotely a corrupt country’. Is it?
Johnson decided she had not breached the code, however, and subsequently urged his colleagues to “form a square around the Prittster”.
The FDA union, which represents senior civil servants, has brought a judicial review of his decision, probing the legal status of the ministerial code, which will be heard at the Royal Courts of Justice next Wednesday and Thursday.
Dave Penman, the FDA’s general secretary, said: “Civil servants should expect to work with ministers without fear of being bullied or harassed.
“The prime minister’s decision, which he said reflected the home secretary’s assertion that her actions were unintentional, also potentially allows ministers to avoid the consequences of their behaviour in future by pleading that it should be the intent of their actions which is important, not the consequences.
“The result is that civil servants’ confidence in challenging unacceptable behaviour from ministers has been fatally damaged.”
He added that 90% of civil servants in a recent survey carried out by the union said they had no confidence in the ministerial code as a way of dealing with bullying or harassment by ministers.
Johnson took the unusual step earlier this week of insisting the UK is “not remotely a corrupt country”, amid a slew of sleaze claims after his botched bid to protect disgraced former MP Owen Paterson from a 30-day suspension for paid lobbying.
Decisions on whether backbench MPs have breached their code of conduct are taken by the cross-party committee for standards, after an investigation by the independent watchdog, Kathryn Stone, and must then be rubber-stamped by the House of Commons.
But the prime minister is the ultimate arbiter of whether the ministerial code has been broken – and Johnson chose to override Allan’s findings in Patel’s case.
The home secretary subsequently reached a six-figure settlement with the former permanent secretary of her department, Sir Philip Rutnam, after claims that he was forced out of his job for intervening in her alleged bullying.
Whitehall sources said that Rutnam received a £340,000 settlement with a further £30,000 in costs. He had threatened to take the home secretary to an employment tribunal hearing.
Resigning in February last year, Rutnam claimed he had been the victim of a “vicious and orchestrated campaign against him”, which Patel had organised. Patel has consistently denied that claim and rejected allegations of bullying.
A report from the independent Committee on Standards in Public Life, published last week, urged the government to strengthen the powers of the independent adviser on ministers’ interests – currently Lord Geidt, who was appointed to succeed Allan.
The committee said he should be able to launch his own investigations; his reports should be published promptly; and the government should publish the range of sanctions that could be applied to ministers who breach the rules in future.
“Meaningful independence is the benchmark for any effective form of standards regulation and current arrangements for the adviser still fall below this bar,” the committee said.
Zac Goldsmith (left) is a longstanding friend of Johnson and his wife, Carrie. In 2019, the PM personally appointed Goldsmith to the House of Lords. Photograph: Ben Pruchnie/Getty Images
Under strain Boris Johnson faces a crisis over sleaze
Villa Tramores, where Johnson stayed
The luxury villa where Boris Johnson stayed on holiday last month is linked to Costa del Sol property businesses owned by Zac Goldsmith’s family that engaged in a multimillion-pound tax evasion scheme, according to Spanish courts.
Court papers obtained by the Guardian show tax inspectors ordered two property companies owned by the Goldsmith family to pay €24m (£20m) in unpaid taxes and fines after investigating what they said was a suspicious property deal.
The tax authority’s findings have been upheld by one of Spain’s highest courts, with judges agreeing the companies effectively engaged in a deliberate effort to evade tax and committed “serious” violations of the law.
Documents indicate Spanish authorities are still seeking to recover the funds and could even seize parts of the family’s land, which is spread across more than 600 hectares (1,480 acres) of private woodland about 10 miles from the Marbella coastline.
A Swiss lawyer for one of the companies denied the case amounted to a “tax evasion” issue, describing it as a dispute that resulted from a mistaken land valuation by Spanish tax authorities. She said the finding against her client was “extremely hard to understand, to put it mildly”. Court papers indicate there will be a further appeal.
However, the revelation raises difficult questions for the prime minister, who has already faced criticism for refusing to declare his use of the luxury property in the MPs’ register of interests, which would require him to disclose the monetary value of the gift from the Goldsmith family.
Villa Tramores, where Johnson stayed, was not owned by a company involved in the tax investigation but forms part of the Goldsmiths’ property holdings. Photograph: Tramores
Downing Street has insisted the holiday at the villa, which costs £25,000 a week to rent, was “unconnected with the PM’s parliamentary and political activities”. Zac Goldsmith, a Conservative minister, is a longstanding friend of Johnson and his wife, Carrie. In 2019, Johnson personally appointed Goldsmith to the House of Lords after his friend lost his seat as an MP.
Johnson is now likely to be asked how much he knew of the Spanish tax investigation into companies owned by the Tory minister’s family before staying at their villa, which is in a secluded corner of an estate beside swimming pools, a tennis court and an organic farm.
The revelations raise questions for both Goldsmith, a senior minister, and his brother Ben, a non-executive director at the environment department, about the extent to which they were aware of or involved in the property deal .
Neither brother responded in detail to questions about the extent of their knowledge or involvement in the transactions at the heart of the tax investigation. In an email, Ben Goldsmith said: “This whole thing serves as a warning to any Brit thinking of owning a property in Spain.”
The Goldsmith brothers inherited their wealth from their father, Sir James Goldsmith, who died in 1997 with a £1.2bn fortune. Goldsmith senior’s wealth now resides in a discretionary trust run for the benefit of his children. It is understood that not all of the children have an interest in the Spanish property portfolio.
The family first acquired the Tramores estate, the site of the villa where Johnson stayed, in the 1980s. By 1999, the Goldsmiths are understood to have used a company linked to a Cayman Islands structure to acquire additional land bordering the villa, effectively expanding their estate.
More recently, separate Goldsmith-owned offshore companies have been used to own the patchwork of land and properties, which are all situated in the same hills surrounding the quiet mountain village of Benahavís.
The Swiss lawyer, who represents one of the companies accused of evading tax, Guadalmansa Administraciones, said the villa where Johnson stayed was “entirely separate” from the property ensnared in the tax dispute.
However, while the villa Johnson stayed in was not owned by a company involved in the tax investigation, public records suggest it forms part of the Goldsmiths’ wider sprawling property holdings in Benahavís.
It is unclear why Zac Goldsmith has only declared one of at least three companies that own parts of his family’s land outside the village. The Lords register of interests lists only a Spanish and Maltese company as holding an interest in land in Andalucía.
But documents suggest a more complex trust structure has been used to hold land in the area and generate income from holiday rentals, including companies that have not been declared. A spokesperson for the peer insisted: “All reportable interests have been correctly and transparently declared.”
Spain’s tax agency first began investigating the Goldsmith family’s companies in 2012. Inspectors homed in on an unusual property deal when one of the companies transferred land on a large estate to a related company.
According to court papers, in 2008 – two years before Goldsmith became an MP – the minister’s family segregated parts of its land near Benahavís village and transferred it from one of their companies – Guadalmansa Administraciones – to another called Benaltos Inversiones in exchange for satisfying a €5m debt owed to the company.
However, inspectors alleged the debt was in fact “fictitious” and the companies should have treated the transaction as a “profitable transfer” rather than a debt repayment. They alleged the transaction significantly undervalued the land, which they estimated was in fact worth €23.2m.
After a year-long investigation, the agency ordered the companies to pay a combined €24m in unpaid taxes, interest and penalties. It alleged the companies had violated a law requiring the transfer of assets between related parties to be valued at their normal market value.
Crucially, inspectors alleged the companies failed to properly declare the financial gains arising from the transfer by filing inaccurate tax returns.
In 2016, Spain’s central economic-administrative court (CEAT) rejected an appeal by the companies against the agency’s decision.
Lawyers for the companies had argued the €5m debt owed by Guadalmansa to Benaltos was genuine and a valuation of the property commissioned by the tax agency was flawed. They claimed the fines were disproportionate.
Downing Street has insisted the holiday at the villa was ‘unconnected with the PM’s parliamentary and political activities’
The court, however, accepted the debt was artificial and not a normal commercial arrangement, noting that “several companies domiciled in tax havens” were involved “for no apparent economic reason”.
The court also accepted the tax agency’s valuation of the property and noted that just eight months after the transfer the land was used as security for a loan and valued at €23m. According to the ruling, there was “no doubt” Benaltos was guilty and its improper actions had “resulted in a loss to the public treasury”.
Two years later, one of Spain’s highest courts, the audiencia nacional, upheld the tax court’s ruling. Documents suggest a further appeal has been filed before Spain’s supreme court, but the companies can only appeal against the 2018 ruling on a point of law rather than on the facts of the case.
The Swiss lawyer representing Guadalmansa maintains the Spanish tax agency significantly overvalued the property. It said the assessment was “based entirely on one wildly aberrant valuation” by an agency-appointed valuation company which has since acknowledged they “made a mistake”.
It added: “The purchase was proper, and all taxes associated with the property have always been paid in full.”
Meanwhile, the two Goldsmith companies investigated by tax authorities appear to be in financial jeopardy. Both were placed into voluntary insolvency in 2019. Documents suggest that by April last year, as a result of the dispute, they owed more than €20m to their biggest creditor: the Spanish state.
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