Lord Mandelson’s friendships ‘did not affect his EU role’

Lord Mandelson has frequently accepted hospitality from Nathaniel Rothschild, including a stay at his chalet in the Alps, The Times has learnt. 

The depth of the friendship between the former European Trade Commissioner and the international financier has emerged as the extent of business links between Mr Rothschild and Oleg Deripaska, the Russian oligarch, has become clear. 

Lord Mandelson stayed at Mr Rothschild’s home in Klosters, Switzerland, earlier this year. In August he was a guest of Mr Rothschild in Corfu, during which he was “billeted” on Mr Deripaska’s yacht because there were so many guests staying at the family villa. 

Friends of Lord Mandelson say that the Business Secretary is able to maintain personal friendships with people who have direct financial interests in the decisions before him without affecting his professional judgment. 

However, Lord Mandelson’s enjoyment of Mr Rothschild’s hospitality has raised questions of a possible conflict of interest in his role in Brussels. There, he made decisions on tariffs that affected Mr Deripaska’s aluminium empire. Mr Rothschild is described as principal adviser to Mr Deripaska and his investment vehicle, Basic Element, which owns a majority stake in Rusal, the world’s largest producer of aluminium. Mr Rothschild is also chairman of N Plus, an energy company owned by Mr Deripaska The code of conduct for EU commissioners states: “The general interest requires that in their official and private lives commissioners should behave in a manner that is in keeping with the dignity of their office.” It continues: “Ruling out all risks of a conflict of interest helps to guarantee their independence.” 

Alan Duncan, the Shadow Business Secretary, said: “Peter Mandelson had executive authority while in Brussels, so he was in a position to take decisions that would materially affect people he knows. We must have a full declaration of his interests and associations while in Brussels.” 

Since his return to the Cabinet early this month, Lord Mandelson has been dogged by questions over his links to Mr Deripaska and Mr Rothschild. Mr Deripaska, Mr Rothschild and their mutual friend, Peter Munk, have extensive business connections, including joint investments and advisory roles in each other’s companies. 

Mr Munk, chairman of Barrick Gold, the world’s largest producer of gold, sits on Rusal’s international advisory board. Mr Rothschild sits on Barrick’s international advisory board. 

All three men have invested substantial sums in Porto Montenegro, a resort on the Balkan coast. Lord Mandelson has no financial involvement in these ventures, but some of the decisions that he made as Trade Commissioner may have benefited the companies owned by his acquaintances. 

He signed off large tariff reductions for aluminium imports into Europe and also promoted Montenegro’s entry into the World Trade Organisation. This could aid its attempts to join the EU, which in turn could benefit the Porto Montenegro project. The European Commission has said it is happy that Lord Mandelson acted appropriately. 

Mr Rothschild is co-chairman of Atticus Capital, a hedge fund based in New York. Mr Munk has invested in Atticus and Mr Deripaska is also rumoured to be an investor. 

The fund is seen as the attack dog of the hedge fund world, on occasions publicly lambasting the company managers of whom it disapproves. While most hedge fund managers prefer quiet anonymity and extreme secrecy, Atticus has occasionally been noisy and troublesome. continues here

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