Tell truth about oligarch links, Mandelson told

(GETTY/Rex)

Lord Mandelson's relationship with the Russian oligarch Oleg Deripaska came under fresh scrutiny yesterday after it was claimed the billionaire helped him enter Russia despite not having the correct paperwork.

The revelations prompted the Conservative Party to again ask the Business Secretary to give a full explanation of his dealings with Mr Deripaska. He also faced criticism over his relationship with a business lobby group while the EU's trade commissioner.

According to a report in The Mail on Sunday, Lord Mandelson arrived in Russia with Nat Rothschild, an adviser to Mr Deripaska, in the Russian businessman's private jet.

It is alleged that after Mr Mandelson realised he did not have the right paperwork to enter Russia, which has strict visa rules, Mr Deripaksa's company was contacted to assist Lord Mandelson's passage into the country.

Lord Mandelson said yesterday: "All I would say about that is that he has never asked for any favours, I have never given him any favours and that is what the European Commission in their examination of the issue has very firmly put on record."

A spokesman for Lord Mandelson would not respond to the suggestion that he had arrived in Russia without a visa, or whether Mr Deripaska intervened to gain him access. But he did deny that the oligarch had secured Lord Mandelson a visa.

A spokesman for Mr Deripaska, who has remained silent about his relationship with Lord Mandelson, said: "As he has demonstrated throughout this, Mr Deripaksa has no intention of commenting on private meetings and private conversations."

A source close to the Russian oligarch, who made his fortune through the aluminium industry, added: "He is not going to give a line-by-line account of these reports. He has always said he has no intention of getting involved with British politics."

The Independent has learnt that the new allegations have angered Lord Mandelson so much that he has written to the Press Complaints Commission to complain about the story.

Lord Mandelson has already had to admit that he first met the businessman in 2004, two years earlier than his spokesman in Brussels had previously suggested. The European Commission defended the former commissioner over the weekend, saying Lord Mandelson had not intervened in any decisions over EU import duties, which were eased in a way that benefited Mr Deripaska. It said all decisions had been taken in "full transparency".

The Conservatives made a fresh call for Lord Mandelson to give a clear outline of his relationship with the Russian billionaire.

William Hague, the shadow Foreign Secretary, said: "We and, I think, the whole country do want to know transparently about the meetings that have happened and what was discussed at them and whether they ever discussed aluminium tariffs and so on. He added: "If Peter Mandelson could put the record straight on that then I think the media could move on."

A Brussels pressure group has also accused Lord Mandelson of being too close to the Europe-wide lobby group BusinessEurope. The Corporate Europe Observatory has written to the Commission's president, Jose Manuel Barroso, claiming Lord Mandelson gave the group "privileged access" during his term as EU trade commissioner.

But one of Lord Mandelson's key European aides dismissed the claims as "ludicrous" last night. "Saying that Lord Mandelson should not talk to BusinessEurope is like saying as Business Secretary, he should not speak to the CBI," the source said. But the Conservatives also faced embarrassing questions about party funding, after it emerged the party was handed a loan of more than £1m by a company, owned by Lady Victoria de Rothschild, that was set up purely for the purpose of protecting Lady Rothschild's anonymity.

The company, Ironmade Ltd, gave the Conservatives a loan of £1,014,000 in June 2005, before loans from anonymous donors and non-trading companies had been outlawed. The rules were altered in 2006.

The Labour MP Denis McShane said the Conservative leader, David Cameron, was displaying a "contempt for British democracy's rules on party financing" by not operating under the current lending rules. He called on the Conservatives to repay the money.

Lord Bell, a spokesman for Lady de Rothschild, said: "At the time she made the loan, it was absolutely proper and legal for her to do so."

A Tory Party spokesman said: "This loan was taken out prior to the 2006 Electoral Administration Act which has since set out new rules governing the way political parties can borrow.

"The loan is fully declared to the Electoral Commission and entirely permissible under the rules as they stood at the time."

In private, the Conservatives concede that mistakes have been made over the handling of party donations.

Politics and money The latest allegations

*Lord Mandelson

On the day he began a four-day trip to Russia, the Business Secretary faced new questions over his relationship with two businessmen. Fresh allegations emerged over the nature of his relationship with Oleg Deripaska, after allegations were made that he was assisted in entering Russia by the businessman. A Brussels pressure group claimed that, while working as the EU's trade commissioner, Lord Mandelson gave "privileged access" to French businessman, Ernest-Antoine Seilliere, the head of lobby group, BusinessEurope. But a source close to Lord Mandelson said the claims were "ludicrous".

*Victoria de Rothschild

Lady Victoria de Rothschild, the distant cousin of Nat Rothschild, gave a loan for £1,014,000 via a "non-trading" company whose sole purpose was to lend money to the Conservatives and protect her identity. The loan was made through the company Ironmade Ltd on 1 June, 2005. It is due to be repaid by 2010. The company has been dormant since it was created in April 2005. The loan was legal as rules banning anonymous loans or those from dormant companies were only introduced in 2006, but the Conservatives are facing a call to return the loan.

*Serena Rothschild

A donation of £190,000 was made by Lady Serena Rothschild, the mother of George Osborne's old friend Nat Rothschild, to help fund the running of the shadow Chancellor's office last year. The donation was declared in the members' register of interests but allegations emerged yesterday that Lady Rothschild had been persuaded to do so by her son, Nat Rothschild. Lady Rothschild could not be contacted yesterday, but the Conservative Party said that the donation from Lady Rothschild had been paid directly by her and was "legal and permissible".

*Nat Rothschild

Further details of the hedge fund guru's close relationship with the Lord Mandelson emerged yesterday, when it was revealed he urged Lord Mandelson and his friends to borrow his fleet of luxury cars, including a Porsche and a Ferrari, while they stayed at his Swiss chalet last summer. Lord Mandelson stayed at Mr Rothschild's luxury Alps chalet, in Klosters, along with his former aide Benjamin Wegg-Prosser, and Mr Wegg-Prosser's wife, Yulia. In a blog post written by Mrs Wegg-Prosser, written in Russian, she said: "Nat is begging us to drive in his smart-looking Porsche, Ferrari and Alfa Romeo."