Various exclusive investigations published in The Scotsman, Scotland on Sunday and The Herald. Copyright belongs to the respective publications. Click the blue links where applicable to read the original web version of the stories.
Knockroon – from Scotland on Sunday and The Scotsman – A series of articles looking into the finances and viability of Prince Charles’s eco-village development in East Ayrshire.
PRINCE Charles’s flagship charitable foundation is facing questions from a government watchdog over its decision to waive a seven-figure loan towards a beleaguered eco-village billed as “a model community for Scotland”, following a Scotland on Sunday investigation.
Although more than £5 million has been invested in Knockroon, a new community endorsed by the Scottish Government as an “ambitious and inspiring” design exemplar, just 31 houses have been built, fewer than half of which are owned by members of the public.
The majority have been sold to a longstanding multimillionaire benefactor of the prince and the charitable trust spearheading the development, raising questions over the long-term viability of a project envisaged as Scotland’s answer to Poundbury.
Financial records show The Prince of Wales’s Charitable Foundation (PWCF), one of the largest charities in Britain, waived a loan of more than £1.71m to Dumfries Farming and Land Limited (DFLL), a real estate subsidiary tasked with turning the prince’s vision of an environmentally-friendly neighbourhood into a reality.
After being presented with information by Scotland on Sunday, the Charities Commission said that although it did not believe the money has been “lost”, it has contacted the foundation “to clarify the basis on which the loan was waived”.
Five years after construction work began on the community in East Ayrshire, its masterplan is being revisited, striking a blow to the prince’s urban design aspirations and public bodies which backed the scheme.
When Knockroon’s blueprint was unveiled, it detailed 770 houses, 330 of which were to have been built by 2017. But nearly seven years after outline planning permission was granted and an investment of £5.4m, most of the sales have been reliant on those close to the prince.
Documentation obtained by Scotland on Sunday through Freedom of Information (FoI) legislation shows 10 properties were bought by Havisham Properties, an investment vehicle owned by Havisham Group, founded and chaired by David Brownlow.
The venture capitalist has longstanding ties to the prince. He serves as a director on several of the heir apparent’s charitable and commercial entities in the region. The multimillionaire has even named one of his racehorses after Knockroon.
Six houses have been bought by The Great Steward of Scotland’s Dumfries House Trust (TGSSDHT), a charity responsible for the wider development at the nearby Dumfries House. It has rented several out to its staff. A further 15 properties at Knockroon are owned by members of the public.
A DFLL director’s report prepared last year by Andrew Wright, the prince’s treasurer, shows the Knockroon site, once valued at £14.85m, is worth just £2m. The timescale for the development, meanwhile, has more than doubled to over 30 years.
It has led to searching questions over the future of a scheme awarded Scottish Sustainable Community Initiative status and tens of thousands of pounds in grant funding by the Scottish Government.
“It’s been a very difficult time and it will require a significant reassessment of what Knockroon is and what it should become if it has any realistic chance of being regarded as a success,” explained a source familiar with the development.
Knockroon is located close to Dumfries House, the 18th century Palladian mansion that came close to being stripped of its prized Rococo furniture after its interiors were put up for auction in 2007.
Prince Charles spearheaded a last minute £45m rescue package from a consortium including the Scottish Government and the former Historic Scotland agency, which contributed £5m. PWCF took out a £20m loan with Bank of Scotland as part of the deal with John Crichton-Stuart, the 7th Marquess of Bute, which saw DFLL acquire a 69-acre site. A waterlogged expanse of farmland, it became the security for the loan and the canvas for Knockroon, a vehicle for the prince’s “heritage-led regeneration” philosophy.
As recently as 2013, the prince reiterated his vision for the site. “The aim here,” he said, “is to regenerate the area by creating a vibrant, sustainable community with houses, offices, shops and a school.”
He is, however, a rare visitor to Knockroon. According to the Court Circular, the prince has attended no less than 58 engagements at Dumfries House. By contrast, he has visited Knockroon just twice, the last time being January 2012.
A visit to the Knockroon of 2016 reveals his ambition is far from being realised. A quadrant of streets perched by the Lugar Water, its houses embody the prince’s architectural tastes, with slate roofs and chimney pots topping rows of properties finished in the hues of a Farrow & Ball colour chart. If this is to be a model community, it exists only in miniature at present.
Certain factors, such as the financial crisis, dealt an unfortunate blow to Knockroon’s aspirations, though other problems were avoidable.
The project’s main housebuilder, Hope Hopes, withdrew from the venture last year. In a joint press release in conjunction with PWCF and TGSSDHT, it was presented as an amicable parting. But correspondence between Stuart McCall, East Ayrshire Council’s legal manager, and Wright shows there was a legal dispute.
An email from McCall to Wright details how the local authority proposed taking Hope Homes to court last February over its failure to provide a £370,000 road bond. The matter was subsequently resolved, but it further frustrated work, with roads and pavements in the “walkable neighbourhood” left uncompleted. A document prepared by TGSSDHT for Historic Environment Scotland in April indicates a “settlement deal” was reached between TGSSDHT and Hope Hopes last summer. PWCF, which now has nothing to do with Knockroon, said the details were confidential.
Even those properties that were completed proved challenging. The high build quality, specified in forensic detail down to the lettering style of house numbers, resulted in high end prices – as much as £190,000 for a three-bedroom home.
The pricing strategy, say locals, was incongruous with the depressed housing market in neighbouring Cumnock and Auchinleck, home to some of the most deprived areas in Scotland.
“The houses at Knockroon are pretty expensive, but near me, the houses are at silly prices – £40,000, £50,000, £60,000,” explained Maureen Paterson, a member of Cumnock Community Council. “Even they’re not selling.”
Other properties at Knockroon had their asking price cut and the development joined the Help to Buy scheme. Some houses snapped up by Havisham Properties were offered for rent; one four-bedroom, part-furnished property in the village’s Kirk’s Alarm street is currently available for £1,000 a month. With no affordable housing incorporated in the first build phase, it struck some as a curious model.
“Knockroon may have been titled ‘Scotland’s Poundbury’, for that was certainly true as far as its architectural aspirations, eco credentials and strict design control was concerned, but not, in my view, its financial viability,” reflected award-winning architect, Alan Dunlop, a fellow of the Royal Incorporation of Architects in Scotland and the Royal Society of Arts.
“From the beginning I could not see how it could stack up, but particularly after the crash in 2008 and the announcement that Diageo was to close the Johnny Walker distillery in Kilmarnock, with the loss of over 700 jobs. The closure had a profound effect in most of the towns in the area and the traditional engineering and textile industries had long gone from East Ayrshire.
“In contrast, Poundbury is situated in Thomas Hardy country on the outskirts of Dorchester and within commuting distance to Weymouth, with access to a highly aspirational professional class and with a combined population of around 75,000.”
Dunlop added: “The closest towns to Knockroon are Cumnock and Auchinleck, both ex-mining villages and strongly socialist. Together they have a population of only 16,000. Just who was going to buy a mock Georgian property or heavily invest in social housing was a complete mystery.”
The travails at Knockroon have dealt a blow to construction timetables, but so too have they put paid to its primary ambition – to harness the proceeds from house sales and bankroll the prince’s charitable entities, in turn helping to reinvigorate the wider East Ayrshire economy.
A brochure released at the outset of the development emphasised that Knockroon “will not only create employment and help bring prosperity to the area”, but would ultimately “generate profits for donation to charitable causes”. The aim was for the subsidiary, DFLL, to emulate the prince’s other commercial vehicles, such as Duchy Originals Limited, by generating revenue for its charitable parent company. Such promises of altruism and regeneration were a decisive factor in East Ayrshire Council granting planning permission, given the application contravened its local development plan.
That, at least, was the theory. While the Dumfries House project is widely viewed as a success that has bolstered employment, Knockroon has become an “economic white elephant”, according to one source involved in development talks.
Since its incorporation, DFLL has never forwarded a penny to the PWCF. Accounts show that between 2007 and 2014, the company ran up losses totalling nearly £430,000.
Indeed, far from providing donations, Knockroon has been receiving them. Only last year, TGSSDHT received restricted funds of £1,150,000, earmarked in its annual accounts for “Knockroon Dumfries House Trust Housing”.
The same year, PWCF waived an intercompany loan of £1,714,514 it provided to DFLL. The amount represents a considerable proportion of the foundation’s funds; the same year, it raised £3.82m in donations. Without the waiver, DFLL would have posted losses of more than £132,000 for the 12 months to 31 March, 2015.
Soon afterwards, the entire issued share capital of the subsidiary was gifted to TGSSDHT, which has received over £1.5m in grants from the Scottish Government and Historic Environment Scotland since 2008. In the process, a trade debtor balance of £148,136 between the subsidiary and Hope Homes became “irrecoverable”.
Given the subsidiary’s financial performance, the decision to grant the loan in the first instance sits uneasily with guidelines laid down by the UK government’s regulatory body, the Charity Commission for England and Wales, which state that trustees of a charity should not invest loan capital in a trading subsidiary “if it is reasonably foreseeable that the subsidiary may not be able to service the loan or repay it when it the term expires”.
Scotland on Sunday presented details of the loan waiver to the watchdog. In a statement, it said: “The commission will await the response from the charity before commenting further regarding the loan. The commission has reviewed the information provided and at this stage does not currently have regulatory concerns from the information it has analysed to date.
“The information analysed indicates that the charity funds have not been lost and are being donated to another charity in line with the charity’s charitable purposes. The commission has contacted the charity to clarify the basis on which the loan was waived.”
Asked on what basis and terms the intercompany loan was approved, and how the trustees justified waiving it, a spokesman for PWCF said: “The aim of the Knockroon project is to build a thriving community in one of the more disadvantaged areas of the UK. The project was designed to be realised over several decades with Hope Homes playing a crucial part in turning the initial vision into a reality. Despite the tough economic conditions which have impacted the housing market since the project began, all 31 homes built so far are currently occupied with more to come.
“Having donated the company that owns the land to the Dumfries House Trust, the next stage of the project is under way and is being delivered by a new company established under the Dumfries House Trust – the Dumfries House Development and Training Company.”
He added: “The Prince of Wales’s Charitable Foundation carefully considers the merits of each of the projects that it supports. In this case the foundation funded the early stages of the Knockroon project with the aim of creating housing, education and business opportunities in the local community in accordance with its charitable objectives.
“The project is now moving forwards under the stewardship of the Dumfries House Trust which has the local skills and expertise to develop the subsequent phases in the most appropriate way.”
The financial problems that have beset Knockroon are not the principal concern of the small band of people who call it home. The vast majority are happy with life in the village, if vexed at the lengthy delays in constructing proper roads and pavements, work that was still under way last week.
Even so, they have faith in the prince’s representatives, with regular meetings held between residents and charity officials. Over the festive period, many received Christmas cards signed by the prince, a reminder that this is no ordinary community.
As one owner who moved into a picturesque house in the village’s Darsie Brae last February explained: “Everybody loves their houses, they just want it finished.”
Even so, not everyone is enamoured with the build quality of Knockroon’s first wave. Yiorgos Vazakas has complained of ongoing and unresolved snagging issues at his two-storey property, located at the village’s southern perimeter.
“Hope Homes did not live up to our expectations and did not meet their duties,” he said. “Everything felt like it was half finished, the doors didn’t shut and there was no sound insulation.
“I wouldn’t expect to have water coming through the ceiling in a new build property or floors that creak like hell, and if you were passing my garage, you’d be able to see right inside because the gaps are four inches wide in places.”
“I didn’t expect to be a decorator or a carpenter, but I had to fix the problems myself because Hope Homes never came. The ridiculous answer I received is that they only had four hours to correct the snags on each house.”
The experience has soured the lecturer’s experience of life in Knockroon, a place he describes as a “paradise” otherwise. He and his wife contacted the prince’s people last month in an attempt to resolve the issues with the house once and for all. “We’re waiting to hear back,” he added. “Let’s hope they are more sympathetic because the housebuilder was hopeless.” Hope Homes did not respond to Scotland on Sunday’s inquiries.
As things stand, it has been a year since the last house was built, but work is due to commence in the coming weeks on four new properties which will conclude the initial phase of the development. At 35 properties, it is a significant downscaling of plans lodged with East Ayrshire Council, which indicated the first phase would create 72 houses, 15 flats, 12 workshops and four commercial units.
Yet there is reason for cautious optimism on TGSSDHT’s part in the form of Knockroon Learning and Enterprise Campus, a £63.5m council-led initiative which will merge various primary and secondary schools into a purpose built complex fit for up to 2,200 pupils, right next door to Knockroon.
Over 800 people signed a petition objecting to the use of Cumnock’s popular Broomfield playing fields for the development, and it has yet to receive planning permission, but the local authority has already appointed a design team and quantity surveyors to the project. A £50m contract for a main contractor is currently out to tender.
It is clear the campus will have strong links with Prince Charles’s interests. A strategic brief commissioned by the local authority states that some school lessons may be held in Dumfries House, while TGSSDHT wrote to Historic Environment Scotland to express confidence that “the demand for local housing within the vicinity is going to be enormous,” adding: “With completion of the school scheduled for 2019, it is important that we can build sufficient housing stock to meet the market demands.”
In a statement, TGSSDHT said: “Having recently taken over the Knockroon development, we are excited about the potential for this project, whilst also being aware of the challenges that it faces. We will shortly be completing work on first phase of the development, which began in 2011.
“As we look ahead, and mindful of the difficult economic climate, we will review the overall plans to make any necessary adjustments in terms of scale and timing before beginning work on the next phase in earnest. Cumnock is a very special part of East Ayrshire and we are proud to be involved in the regeneration of this community.”
Time will tell if the prince’s Scottish utopia reaches maturity and eventually finances his charitable work, but critics of Knockroon believe its fate is already sealed. Dunlop, who characterises the development as the brainchild of “feckless and lazy thinking”, said: “Knockroon has ignored its primary intent as a sustainable development and model for the future.
“Poundbury also seems to be struggling to live up to the promise, cars are sneaking in en masse, build quality is by all accounts poor, 18th century house building skills are not being taught today and those that have bought property want to distinguish their property from those for rent.
“I fully expect the same to happen with Knockroon, if it ever gets fully realised, and frankly I’m happy that is the case. Now perhaps we can have a serious debate on how to create a truly sustainable, community residential development, with contemporary designs fit for the 21st century, not the 18th.”
For Maureen Paterson, a Cumnock native who, like many in the area, welcomes any investment, there is doubt but also hope. “In this part of Ayrshire we’re used to quite a lot of developers stopping and starting and stopping and starting on a project as the housing market deems fit,” she said.
“Knockroon has been at a standstill but I would like to think that it will be an ongoing development. I would assume it should be. But who knows?”
ONE of Scotland’s most senior civil servants, who played a crucial role in approving one of Prince Charle’s charities for sustainable grant funding, took up a key appointment with the same charity while employed as the head of a Scottish Government directorate, an investigation by The Scotsman can reveal.
Jim Mackinnon, the government’s chief planner, suggested officials at the Prince’s Foundation for Building Community (PFBC) seek out assistance for a troubled eco-village development billed as a “model community for Scotland,” before going on to join the foundation while employed in his £90,000 a year public service post.
Mr Mackinnon, who has been described by the prince as “marvellous,” was extensively involved in the government’s dealings with Knockroon, the PFBC-designed environmentally-friendly development in East Ayrshire.
He chaired an assessment panel which recommended ministers award the project Scottish Sustainable Communities Initiative (SSCI), which made it eligible to receive tens of thousands of pounds in government grants.
According to the Scottish Government, Mr Mackinnon retired from his post as chief planner in July 2012 after more than a decade’s service. But financial records filed with Companies House show that on 8 June that year, he was appointed as a director and trustee of PFBC, where he listed his occupation as ‘director.’
The potential conflict of interest raises questions over the Scottish Government’s role in the development near Cumnock, where despite an investment of more than £5m, just 31 houses have been completed.
The government said Mr Mackinnon’s appointment was approved by the then permanent secretary, Sir Peter Housden, but Willie Rennie, leader of the Scottish Liberal Democrats, said questions remained over whether Mr Mackinnon’s “close association” the foundation impacted on his work as chief planner.
Mr Mackinnon headed an eight-strong panel of architecture and planning experts which gave the greenlight for Knockroon to receive SSCI status in 2009. The scheme recognises low-carbon communities which are seen as “ambitious and inspiring,” according to Scottish Government documents.
In their conclusions, the panel described Knockroon as a proposal which “embraces long-term sustainability,” adding: “The collaborative approach to design and masterplanning promoted by the Prince’s Foundation has clearly contributed to the way the proposals have developed.”
Documents show that in 2010, the Scottish Government approved grant funding of £26,250 towards Knockroon via the SSCI programme, money which was used for the creation of a residential travel plan, sustainable energy studies, a workplace feasibility study, the creation of a dedicated Knockroon website, and a design review.
Mr Mackinnon, whose job involved formulating planning policy and legislation, remained involved with the project, even after it had been granted planning permission by East Ayrshire Council in January 2011.
The following month, Mark Greaves, Scottish programme manager of PFBC, wrote to Mr Mackinnon, praising the “invaluable” help of Sandy Robinson, the Scottish Government’s principal architect.
In the email, obtained by The Scotsman under the Environmental Information (Scotland) Regulations Act 2004, Mr Greaves explained how Mr Robinson joined a meeting between Knockroon’s developers and officials from East Ayrshire Council ahead of the decision to grant planning permission for Knockroon.
Mr Greaves wrote: “Previous meetings had been somewhat contentious, email exchanges indicated firm positions taken and there was a degree of worry that we would not reach agreements that satisfied the roads authority and ourselves sufficiently to allow the application to progress.”
He later added: “At our meeting with EAC Sandy was instrumental is [sic] reaching agreeable solutions for all and allowing the application to progress to determination (and approval).”
In his reply, Mr Mackinnon echoed Mr Greave’s “assessment of Sandy’s professionalism (in its widest sense) and his ability to influence and persuade, even the most reluctant of individuals and groups.”
He added: “I spoke with Ed [Taylor, Scottish representative for the from the PFBC] about a possible offer of further assistance at Knockroon and perhaps you could take up with him on his return from Caithness.”
Mr Greaves wrote back: “I spoke briefly with Ed yesterday and he mentioned this. We need to take any offer of assistance at Knockroon seriously, such are the challenges.”
In a profile of Mr Mackinnon of its website, PFBC states that as a trustee, Mr Mackinnon “oversees the built environment activities of the North Highland Initiative on behalf of its patron, the Duke of Rothesay,” a project which included restoring historic buildings.
Mr Mackinnon has since strengthened his relationship with the prince’s network of charities and companies. Last April, he was appointed as a director of Community Capital Limited, an environmental consultancy firm controlled by PFBC, where he listed his occupation as ‘chief planner’, despite retiring nearly three years previously.
It is not the first time Mr Mackinnon has been embroiled in a conflict of interest row. Five years ago, he was accused of having a “cosy and inappropriate relationship” with Andrés Duany, a US architect and close friend of the prince involved in several large-scale developments in Scotland.
In 2008, the two men joined the prince and former First Minister Alex Salmond at the Palace of Holyroodhouse for a conference on sustainable communities. Two years later, Mr Mackinnon attended a seminar at Holyroodhouse where the prince personally thanked him for the “marvellous” work in seconding Scottish Government and local authority planning staff to his charitable foundation.
Mr Rennie said: “Although there is no financial gain involved there are some questions about the adherence to the government rules in this case. If the rules are not being adhered to in this case what confidence can we have that they are being adhered to in other cases?
“We need to know whether the close association between and Mr MacKinnon and the foundation had an effect on the actions of Mr MacKinnon when he was the chief planner.”
A spokeswoman for the Scottish Government said: “Mr Mackinnon’s role as a trustee at the Prince’s Foundation for Building Community was approved by the then permanent secretary without conditions, in line with the rules covering such appointments.
“His prior dealings with the organisation were considered to be only those expected given his former head of profession role as chief planner, and, furthermore, the unpaid appointment could not be construed as a reward. There was therefore no conflict with roles at the time any grant consideration was made in 2010.”
Mr Mackinnon was not available for comment.
Personal suggestions by Princes Charles for street names in his Ayrshire eco-village development were rejected amid fears over sectarian connotations.
In a stand off which pitted the prince’s literary tastes against west of Scotland realpolitik, the majority of his proposals for the Knockroon development in East Ayrshire were snubbed by the representatives from the community.
Two potential street names drawn up by the prince were thrown out amid fears they might be seen to be linked with “sectarian concerns” and Rangers and Celtic football clubs.
Correspondence obtained by The Scotsman through Freedom of Information legislation shows that at a meeting of interested parties in the Knockroon project – a group including councillors, community councillors, housebuilders and the prince’s charity staff – Gowan’s Green was one of several names put forward by Charles that “received less favourable responses.”
An account of the meeting by Mark Greaves, Scottish programme manager of the Prince’s Foundation for Building Community, noted that “it was suggested to avoid the use of colours ‘green’ or ‘blue’ in names due to associations with Celtic and Rangers football clubs and sectarian concerns.”
Another street name suggested by Charles, Greenmantle – named after John Buchan’s 1916 Richard Hannah thriller – was rejected for the same reason.
It was one of 17 names put forward by the prince for Knockroon. But just three were accepted by the local authority.
In a letter to Andrew Hamilton, the development director who helped Charles turn his Poundbury development in Dorset into a reality, Mr Greaves broke the bad news that the majority of the prince’s suggestions had been met with negative responses by members of the Knockroon Community Liaison Group
They included names such as Wandering Willie’s Wynd, Blind Harry’s Wynd, Shanter and Balwhidder Brae.
Other names, Mr Greaves explained, were “viewed either ambivalently or with a mixed response.” They included Tillietudlum (“attendees either loved it, or hated it; very little middle ground on this one,” Mr Greaves observed) and Ellangowan (“too ‘Ayrish’, though others thought it ‘sounds nice’.”)
Redgauntlet, another of Charles’s ideas, “did not generate much response either way,” Mr Greaves reflected, before adding: “Though one of the local members of a rather leftish persuasion appreciated the ‘red’ in it.”
Mr Greaves went on: “Many of the above were not viewed positively as concern was voiced that the names perhaps carried too strong associations with literary or historical figures or works and/or geographical references to areas out with the locale, eg Sir Walter Scott to the east coast of Scotland.”
In her letter to Mr Hamilton, sent two months after he relayed Charles’s vision for the street names, Fiona Lees, chief executive of East Ayrshire Council, sought to soften the blow that all but three had been snubbed.
She wrote: “I think it is important that I say at the outset how thrilled local people were to learn that His Royal Highness Prince Charles had taken the time to consider the matter personally.
“I am sure that it is because of His Royal Highness’s greatly appreciated engagement that local people and our elected members have taken the additional time to reflect on the proposals resulting in some very lively and creative discussions.”
Luxury private members’ clubs owned by Russian and US billionaires are among a spate of Scottish firms owned by wealthy foreign nationals that have claimed millions of pounds in taxpayers’ money via the Covid-19 job retention scheme.
The high-end clubs, one of which charges super-rich members £95,000 a year to access its grouse moors and Victorian hunting lodge, are ultimately controlled by companies in offshore low tax jurisdictions. One claimed as much as £1.15 million via the Treasury initiative, which is being wound up on Thursday.
Other prominent recipients of furlough money include Donald Trump’s Scottish businesses. They claimed up to £1.54m during the pandemic, despite the fact the former US president’s Turnberry resort made scores of redundancies.
The job retention scheme was introduced last spring to support struggling businesses and prevent mass unemployment, but the vast sums being paid to firms with opaque corporate structures or which have made swingeing staffing cuts will reignite debate over how the pandemic has exacerbated social inequalities.
The numbers of billionaires in the UK jumped by a record 24 per cent over the past year, with their combined wealth increasing by around a fifth.
There is no suggestion of illegality on the part of those billionaires whose firms accessed payments, but given Covid-19’s calamitous impact on public finances, the payments have sparked anger.
Dame Margaret Hodge MP, chair of the all-party parliamentary group on anti-corruption and responsible tax, said it was “totally unacceptable” that billionaire business owners with firms in tax havens could “take advantage” of public funds. She accused the UK government of being “irresponsible” by failing to include conditions to its Covid-19 financial support.
Scotland on Sunday cross referenced HM Revenue & Customs furlough payment datasets with Companies House records to establish how some of Scotland’s wealthiest and notable foreign business figures accessed funding. The data only covers banded payments between December 2020 and June this year, meaning that 12 months’ worth of claims remain unknown.
Over that seven month period, the firm behind Skibo Castle, which is now run as “one of the world’s most prestigious private clubs,” claimed up to £1,150,000. Membership of the Carnegie Club – named after Skibo’s one-time owner, the Scots-American industrialist and philanthropist, Andrew Carnegie – is priced at £9,500 per annum, in addition to a £30,000 joining fee.
The 8,000 acre property is owned by Ellis Short, the US founder of the private equity fund, Kildare Partners, and former owner of Sunderland football club. The Sunday Times rich list puts his fortune at £880m, up £20m on last year.
Skibo Ltd’s most recent annual accounts show it turned a profit of £603,000. Its ultimate parent undertaking, Scytherbolle Ltd, is registered in Bermuda. A spokeswoman for the Carnegie Club said it was “unable to comment” when asked a series of questions by Scotland on Sunday.
It is not the only exclusive members’ club to utilise the furlough scheme. The company behind the 22,000 acre Tulchan estate in Grantown-on-Spey claimed up to £130,000.
Tulchan has an illustrious history, having played host down the years to Edward VII, George V, and George VI, as well as US president Teddy Roosevelt and prominent business figures such as William Vanderbilt and J.P Morgan.
It was bought four years ago by Russian vodka billionaire, Yuri Shefler, for a reported £25m, and is home to what is billed as “the most private of private members’ clubs”. The annual fee starts at £95,000 a year.
Forbes puts Mr Shefler’s net worth at £1.67bn. Tulchan’s ultimate parent company, the Tulchan Trust is based in Guernsey. The Speyside estate did not respond to enquiries.
Balnagown Castle Properties, controlled by Egyptian billionaire Mohamed Al Fayed, the Harrods owner, claimed up to £40,000. The firm oversees the 92-year-old’s 65,000 acre estate in Easter Ross. Its ultimate parent company, Ocarina Trustee AG, is based in the tiny principality of Liechtenstein.
Mr Al Fayed and his family have a fortune worth around £1.7bn, up £25m on last year. Balnagown did not respond to enquiries.
Elsewhere, Mr Trump’s Turnberry resort, which is ultimately owned by a New York-based state grantor trust in the 75-year-old’s name, claimed up to £1,325,000. The RMT union, which said that at least 66 jobs have been lost at the South Ayrshire business since last summer, has described its use of the scheme as an “abuse”.
Mr Trump’s Aberdeenshire property claimed as much as £220,000 over the same period. The Trump Organisation did not respond to enquiries.
Turnberry is not the only business to claim furlough money while overseeing cuts. Highland Spring, which is owned by Mahdi al-Tajir, one of Scotland’s richest men, received as much as £360,000.
The firm closed one of its plants and made 27 redundancies during the pandemic. Its parent company, Park Tower Holdings Establishment, is registered in Liechtenstein.
A spokeswoman for the Highland Spring group said the furlough scheme helped it to protect “as many jobs as possible”, and support the firm’s “long term sustainability” at a time when it experienced a downturn in trading.
Blackford Farms, the firm behind the 20,000 acre al-Tajir estate in Perthshire, claimed up to £70,000. Its ultimate parent firm, Ciara Investments Group, is incorporated in the British Virgin Islands. Another al-Tajir company, Ochil Developments (UK) Ltd, which is also controlled by Park Tower Holdings Establishment, received up to £175,000. Mr al-Tajir’s fortune has been put at £1.68bn, up £18m on 2020.
Dame Margaret, the Labour MP and veteran tax campaigner, told Scotland on Sunday: “It is totally unacceptable that billionaire business owners with companies based in tax havens have been able to take advantage of public funds through schemes like the furlough.
“From the outset of the pandemic, I urged the government to add conditions to its financial support schemes such as transparency, environmental responsibility, workers’ rights, or fair tax conduct.
“But instead of doing the right thing and strengthening corporate conduct, this irresponsible government was too busy handing out dodgy contracts. It’s high time they learnt the true value of the taxpayers’ pound.”
Alison Thewliss MP, the SNP’s shadow chancellor, said: “Multinational companies who have generated mass profits throughout the pandemic – especially those who are owned by entities in tax haven jurisdictions – should absolutely consider repaying the money given to them during the crisis.
“However, the UK government must also heed the warnings and shore up its tax system in order to prevent more overseas tax avoidance scandals, as demonstrated in this report.
“Sadly though, the only tax changes we have seen from this Tory government is a hike in National Insurance which fails to target the millionaires with unearned wealth, and hammers those on the lowest incomes.”
Alex Cobham, chief executive of the Tax Justice Network advocacy group, said that while the overall benefits of the job retention scheme were clear, there were concerns that businesses that benefited from public support did not use the fund as intended, or “meet their basic societal responsibilities to pay tax”.
“Both of these hinge on whether or not there is sufficient transparency to hold businesses accountable,” he added. “Where businesses structure themselves via secretive jurisdictions such as Liechtenstein or the majority of the UK’s dependent territories, from Guernsey to the British Virgin Islands, they are typically much less transparent – and the overall risks of unaccountable and antisocial behaviour rise.”
Pat Rafferty, Unite’s Scottish secretary, said: “The job retention scheme was specifically designed to prevent mass unemployment, and to help keep businesses and workers afloat during a period when the economy was in free-fall.
“Yet, we see billionaires and major companies, many of them with dubious employment practices, taking full advantage of this scheme while cutting jobs, terms and conditions, and offshoring UK public funds to tax havens such as Bermuda and the Channel Islands.
“The fact that none of these companies have done anything apparently illegal goes to the heart of the issue. Unite argued that the furlough scheme should have come with conditions attached to it and not literally giving a blank cheque to rogue employers.”
A spokeswoman for the Treasury said: “The furlough scheme has been instrumental in protecting nearly 12 million jobs during the pandemic, and our Plan for Jobs has contributed to there being nearly two million fewer people now expected to be out of work than was previously feared.
“We expect businesses to abide by the spirit of the scheme and they can voluntarily pay back money claimed if they no longer need the support.”
JPI Media Publishing, the owners of Scotland on Sunday, claimed up to £1m via the furlough scheme.
Steven Mnuchin’s ties to luxury Edinburgh development – from Scotland on Sunday
One of Donald Trump’s most senior cabinet members and his Scots wife have close ties to a trust spearheading plans for a contentious luxury housing development in one of Scotland’s most sought after neighbourhoods, Scotland on Sunday can reveal.
The entity, known as the Rockshiel Trust, intends to build swaths of modernist townhouses and apartments in a coveted conservation area in Edinburgh.
The trust is among a slew of Scottish property holdings and Bank of Scotland accounts worth up to £9m that have been disclosed by Steven Mnuchin, the US Treasury secretary.
Documents filed with the Office of Government Ethics (OGE), a Washington DC-based agency of the US government tasked with preventing conflicts of interest in the executive branch, show Mnuchin listed at least five properties in the capital as part of the multimillion pound international portfolio of assets he has with his wife, the Edinburgh-born actor Louise Linton.
However, the US Treasury Department stressed that Mnuchin, 56, has no financial interest in the Rockshiel Trust, and that it was only disclosed on his OGE forms due to his wife’s interest in it.
Linton, 38, is a beneficiary of the trust, which stands to make a sizeable windfall if its plans for 17 properties in west Murrayfield’s Kinellan Road are greenlit. The average house price on the street stands at nearly three quarters of a million pounds.
The Treasury Department declined to comment on why a series of shareholdings held by Linton in other Scottish companies have not been disclosed by her husband.
Neil Findlay MSP said that at a time when Edinburgh is suffering from an affordable housing crisis, the plans by those “linked to the heart of the Trump administration” are the “last thing” the city needs.
While neighbours in Murrayfield are unaware of the involvement of the controversial couple in the proposed multi-story housing development, the plans have already attracted scores of objections to date.
A series of photo montages submitted to the City of Edinburgh Council’s planning department reveal the trust has applied to build ten five-bedroom townhouses, five three-bedroom apartments, and two two-bedroom apartments in the upmarket area.
The cluster of three and four storey modernist buildings would be located in the current grounds of Rockshiel, an imposing 19th century villa located.
As part of the development, extensive excavations would lead to the loss of an ornamental pond in the villa’s grounds and with it, a slice of the city’s Georgian heritage.
According to John Lawson, an archaeology officer with the local authority, the pond itself may pre-date the villa and is “archaeologically significant.”
Given the grounds of the neighbouring Belmont House, an A-listed Italianate mansion, were landscaped by William Playfair, the architect credited with shaping the capital’s modern-day cityscape, the pond could be even more important.
Lawson said that if the Rockshiel site was associated with Playfair, it could be considered as being of “national significance.”
However, the Rockshiel Trust insists Playfair had no role in the creation of the pond, which it described as a “dangerous” and “flooded” quarry.
Murrayfield Community Council has also objected to the plans, pointing to a “strong feeling” in the community that the development would be “undesirable.”
In all, some 48 objections have been lodged against the scheme, with the council’s roads authority also recommending that the application be refused on the basis that its planned 52 car parking spaces would constitute a breach of local authority parking standards.
The Rockshiel Trust lodged the planning application with the council in January. It was withdrawn last month, following feedback from planners. However, it intends to resubmit a redesigned blueprint.
A spokesman for the trust said it is domiciled in the UK. Land records in the General Register of Sasines show Linton’s father, William Hay, disposed of the villa and the grounds at Kinellan Road to Rockshiel’s trustees in 1997.
Findlay, the Labour MSP for the Lothians, said the development would serve only to profit those behind the trust.
He said: “Edinburgh is going through a housing crisis. We see more and more people sleeping in the streets every day and families unable to secure affordable accommodation in the city they were born in.
“Now we see someone linked to the heart of the Trump administration developing a prime area of the city, seeking to maximise their return. This application sounds as though it is the last thing that Edinburgh needs.”
He added: “Should the application be refused, the Rockshiel Trust will have the right of appeal over the community because the Scottish Government joined with the Tories in the recent planning bill to deny communities equal rights of appeal in the planning process.”
The raft of Scottish assets detailed by Mnuchin in his filings to the OGE raises several other questions for the man responsible for stewarding the largest economy in the western world, not least over his valuation of the Rockshiel Trust’s landholdings.
The documentation shows Mnuchin claims the trust’s real estate is worth as little as $15,000 (£12,440).
While the land set aside for the housing is undeveloped, Registers of Scotland records show properties on Kinellan Road have fetched as much £1.3m.
Zoopla, one of the UK’s largest online property sites, states that the average house price on the street stood at £748,539 as of last month.
Mnuchin’s financial disclosure also details three commercial properties in Edinburgh with a top value of $5.3m (£4.4m), another residential property in the capital worth up to $5m (£4.1m), and three other Bank of Scotland accounts containing as much as $365,000 (£302,000).
While the OGE rules compel officials like Mnuchin to disclose their spouse’s assets and income under the US Ethics in Government Act of 1978, Scotland on Sunday has learned his disclosure does not include several of Linton’s shareholdings in her homeland.
Companies House records confirm she is one of three shareholders in Linton Hay Properties Limited, which is registered at Rockshiel villa’s address. The company is Linton’s family’s property management firm. The other shareholders are her brother, David, and sister, Suzanne.
In 2016, it attempted to convert a lock up garage in Edinburgh’s Murieston Road into a studio flat, but the plans were rejected on the basis that the 29m² of floorspace “would not result in the creation of a satisfactory living environment.” The application was subsequently approved on appeal.
Linton Hay Properties is not listed in Mnuchin’s OGE paperwork, nor is Linton’s shareholding in Melville Castle Limited, as detailed in the most recently available annual returns on Companies House. Linton spent her teenage years in the castle in the Midlothian village of Lasswade. It is now run as a luxury hotel and wedding venue.
The OGE has yet to certify Mnuchin’s latest financial disclosure, with the watchdog taking issue with his decision to sell his stake in a film business called StormChaser Productions to Linton, who was his fiancee at the time.
A spokesman for the Rockshiel Trust said: “Louise Linton is a beneficiary of the trust. She is not a trustee and has no involvement in the administration of the trust, which is domiciled in the UK.
“The pond is actually a dangerous, seven metre-deep, flooded quarry and was not designed by William Playfair or any architect. The rock extracted from the quarry was used to build some of the garden walls in the local area.”
He added: “The proposed development is consistent with several other completed developments in the area and will offer both townhouses and apartments.
“The planning application has been withdrawn so that the development can be redesigned in line with feedback from the council’s planning department.”
A spokesman for the US Treasury Department said: “The secretary has no financial interest in Rockshiel Trust, and the only reason it is on his financial disclosure is because of Ms Linton.”
Linton did not respond to a request for comment sent via her film production company.
Mnuchin and Linton have become one of the highest profile couples of the Trump administration and, say their critics, totems of its brash, wealth-focused culture.
Trump and his wife, Melania, were among the guests when the couple married at a ceremony officiated by vice-president Mike Pence in June 2017. It did not take long before the newlyweds became embroiled in controversy.
According to ABC News, Mnuchin requested the use of a £20,000-per-hour US air force plane to fly him ad Linton to Scotland, France, and Italy on their honeymoon.
The request was later cancelled, but just two months after their wedding, Linton joined her husband on a US military flight to Kentucky, uploading an Instagram photo in which she included hashtags promoting luxury brands she was wearing, including Hermes and Valentino.
When she was criticised by another Instagram user for apparently flaunting her wealth, Linton taunted the woman for not earning as much as she does and for contributing less in taxes. She later apologised, and Mnuchin reimbursed the US government for his wife’s travel.
Prior to entering public office, Mnuchin was a Goldman Sachs banker who went on to carve out a career in movie production, with credits on blockbusters such as The Lego Batman Movie and Suicide Squad. Forbes estimates he has a personal fortune in the region of £320m.
Linton was widely lambasted in 2016 for writing a memoir about her gap year in Zambia in which she claimed she feared she would be raped or murdered by Congolese rebels. It was later removed from sale after a series of factual inaccuracies came to light.
The Fettes-schooled actress has assumed a comparatively low-profile of late, busying herself with her film production firm. She recently wrote, produced, directed, and starred in ‘Me, You, Madness’ a comedy with a “big message” about love and family, in which she plays a sociopathic bisexual serial killer. It has yet to secure a distribution deal.
In an interview with Los Angeles Magazine in June, Linton was asked her advice for others in her position.
She replied: “Run, don’t walk, straight to the Office of Government Ethics and ask them to take you through their lists of guidelines and rules.”
Nazi loot claim over Burrell tapestry from Scotland on Sunday and The Scotsman – A series of articles looking into the claims of Jewish heirs that the Burrell Collection owns a looted Nazi artefact.
ONE OF Britain’s most esteemed art collections is at the centre of an extraordinary legal wrangle with the heirs of a Jewish philanthropist whose multi-million pound treasure trove of artefacts was plundered by the Third Reich, Scotland on Sunday can reveal.
The Burrell Collection has been served with a formal “spoliation” claim from lawyers acting on behalf of relatives of Emma Budge over a rare tapestry which has formed part of the Glasgow institution’s inventory for more than seven decades.
In a potentially embarrassing case for Scotland’s largest local authority, the descendants of the German-American collector claim the 16th century Swiss artefact was sold off as part of a forced auction in the late 1930s.
The German lawyer working for the heirs said it was “very important” to return the work, adding that museums should not have such “stigmatised” items in their collections.
It comes seven years after Glasgow City Council made an ex-gratia payment to two Jewish families over a Jean-Simon Chardin painting in the Burrell Collection which had been sold 70 years previously to meet a wrongful Nazi tax demand.
If upheld, the latest claim will prompt questions over whether the local authority, which owns the museum, and Glasgow Life, the arms-length organisation which manages it, carried out a sufficiently thorough review of the provenance of the collection in the aftermath of the Chardin controversy.
Lothar Fremy, a specialist in restitution law at the Berlin-based Rosbach Fremy, is acting for the anonymous heirs. He told Scotland on Sunday the tapestry – entitled The Visitation – did not belong in the museum, and that he was hopeful of a resolution being reached soon.
He said: “It’s very important to return these artworks. For the museums, they should not have these stigmatised items in their collections. The collection was auctioned off under duress. Emma Budge’s heirs had to start new lives so they really didn’t think very much about this collection. This only came up after the Washington Conference Principles [a 1998 agreement among scores of nations to resolve issues relating to Nazi-confiscated art] were brought out.”
Glasgow Life is seeking specialist advice after being served with the claim via the Spoliation Advisory Panel, an expert group set up by the Department for Culture, Media, and Sport to scrutinise the claims of heirs who lost possession of cultural rarities during the Nazi era. It is understood, however, that if the panel finds in the heirs’ favour, it may seek to offer them payment.
The Budge Collection, comprising around 1,500 paintings, tapestries and prized porcelain, was sold under duress in one of the largest forced auctions of the Nazi era. The sale took place in 1937 in a so-called “Jew auction” at Paul Graupe, a leading Berlin sales house which also sold the Chardin painting. Although some works from the Budge Collection have been recovered, the whereabouts of the vast majority remain unknown.
The tapestry first belonged to an unnamed private collection in Frankfurt, and was later acquired by the Budge Collection in Hamburg. Sir William Burrell then took ownership of it on or before 8 August, 1938 from art collector John Hunt, who provided the shipping magnate with numerous prized items. It is not known when or how Hunt acquired the work.
The antiquarian and collector, along with his German-born wife Gertrude, has been the subject of numerous allegations linking him with notorious dealers in Nazi-looted art, including Adolf Mahr, an Austrian who headed the Nazi Party in wartime Ireland.
An expert group appointed by the Royal Irish Academy ruled in 2006 that an investigation into Hunt was “justified both by its lack of provenance records and by the discovery of the Hunts’ relationship with a dealer who is known to have trafficked in confiscated art”. Although the group decided there was no definitive evidence linking Hunt with Nazi dealers, the allegations surrounding the tapestry are likely to reignite the debate.
Anne Webber, co-chair of the Commission for Looted Art in Europe, said: “One of the issues this case raises is how many looted works remain undiscovered in British collections, waiting to be reunited with their rightful owners? It also raises the question of whether British museums should be more pro-active in seeking out the rightful owners of works they believe may be looted.”
A spokesman for Glasgow Life, said: “We are offering every assistance to the Department for Culture, Media and Sport’s Spoliation Advisory Panel. However, while the inquiry is ongoing, it would be inappropriate to comment before evidence is presented.”
In a statement, Glasgow City Council said: “As with all such requests, if the claim is valid, the council will comply with the relevant law.”
IT IS a labyrinthine international quest to recover billions of pounds worth of rare art and rectify the evils of the Third Reich.
The dark days of the Nazi regime saw a vast quantity of artworks across Europe plundered. Many prized artefacts, such as those belonging to Emma Budge, were sold for a fraction of their real price at so-called “Jew auctions”.
“The Nazis stole every artwork they could from Jews throughout Europe, and not only Jews, though they were the primary target. Poles, political opponents and other were also looted,” said Anne Webber, co-chair of the Commission for Looted Art in Europe.
The spoils were spirited the world over to both public and private collections, with the proceeds from the sales placed in blocked bank accounts. Efforts to reunite works with rightful owners is, in some instances, near impossible.
“There were scores and scores of forced auctions like the Budge sale, and the majority of items from them have not been recovered. They were bought by dealers and collectors from Europe and America who came to Germany for the sales. Many of them have been circulated and sold on several times,” said Webber.
The rise of the restitution movement in the 1990s has sought to exact moral justice for the heirs of original owners by returning the works or gaining compensation. From the Washington Conference Principles of 1998 through to the Holocaust (Return of Cultural Objects) Act 2009, a series of legislative instruments have been introduced to quicken proceedings. At the same time, museums around the world have been encouraged to search their collections to ascertain any items of uncertain provenance.
In Scotland, such investigations reached a climax at the turn of the millennium, with the treasures held by Glasgow’s civic fathers paid close scrutiny. In May 2001, Glasgow City Council acknowledged a “very real threat” that some of its artefacts had a sinister past. The authority published a list of 232 artworks whose background could not be fully accounted for during the Third Reich era, including works by Picasso and Cézanne. The list included 55 paintings and drawings from the Burrell Collection.
Five months later, the council was approached by lawyers acting for the heirs of five Jewish shareholders of a Munich art gallery, laying claim to Pâté de Jambon, a still life attributed to Jean-Baptiste-Siméon Chardin. The 18th century still-life had been sold in 1936 at the Berlin auction house of Paul Graupe to Julius Bohler, a Munich dealer. A few days later, Sir William Burrell bought the minor work for £647, bequeathing it to Glasgow in 1944.
Estelle Morris, the then arts minister, was among those who put pressure on the council to make amends. “The British public would be unhappy to know that a museum in this country contained a work which had been identified as being wrongfully separated from its rightful owners, and nothing had been done to right that wrong,” she said. After a case which ran for five years Glasgow City Council agreed to make an ex-gratia payment of £10,000 to the heirs, with the painting remaining in the city.
A key question resulting from the Budge tapestry allegations is whether its doubtful provenance was established during the 2001 search, and if not, why not. Information has been provided by Glasgow Life to Cultural Property Advice, an advisory service set up by the Museums, Libraries and Archives Council, which states that the tapestry has an “incomplete provenance.” So far, Glasgow Life – established in 2007 – has been unable to confirm when that fact was established.
Research by Scotland and Sunday, however, has uncovered a common denominator between the Swiss tapestry and the Chardin – the Graupe auction house. A sale of a large chunk of the Budge Collection was held at that Berlin venue between 2 and 29 September 1937, the catalogue of which is included in a tranche of Nazi-era German sales records digitised earlier this year by the Getty Research Institute.
The Budge sale, described as “one of the highest quality collections in Germany,” includes a lot detailing a tapestry with the same biblical Visitation scene. Last night, Lothar Fremy, the Berlin lawyer working for the Budge heirs, who has recovered several works from museums around Europe, confirmed the tapestry in question was the one subject to the claim.
One major player in the restitution process is the spoliation advisory panel, an expert group set up 13 years ago by the Department of Culture, Media, and Sport to assess claims of looted Nazi art.
Since its formation, it has ruled on 12 cases, and approved seven claims. Designed as an alternative to litigation, the panel considers the arguments before it, taking into account the “moral strength” of each side. Its 11 members – who include Professor Peter Jones, a former trustee of the National Museums of Scotland – conduct investigations in the strictest confidence, but if they uphold a claim, can put forward a number of recommendations, including the artefact’s return, or an ex-gratia payment.
In case of the Budge tapestry, the value of which remains unclear, it is understood the panel was first made aware of its circumstances last October. It is currently assessing the claims to the tapestry. It is expected the panel will report before the year’s end. If the heirs’ claim is upheld, authorities in Glasgow may seek to make a similar ex-gratia payment to the Chardin case.
Difficulties persist, however. Burrell’s will stipulates his collection must remain in Glasgow in its entirety, while the Burrell Collection is not covered by the 2009 act. Nearly seven decades after the demise of the Third Reich, the complex saga of looted Nazi art is no nearer an end.
THE DISCOVERY of a suspected looted Nazi artwork in a major Scottish collection may have been made following a simple Google search carried out by investigators, it has emerged.
The Burrell Collection, one of the nation’s showpiece cultural centres, has become embroiled in an international dispute over a rare 16th-century tapestry sold under duress during the Third Reich.
As revealed in Scotland on Sunday yesterday, the Glasgow City Council-owned collection has been served with a formal spoliation claim from the relatives of Emma Budge, a noted Jewish philanthropist whose prized artefacts were sold under duress in Berlin between 27-29 September, 1937.
For decades, her family have used lawyers and art experts to scour museums in an attempt to rebuild the collection. However, it is understood the claim against the Burrell was established thanks to an internet search. It comes as Lothar Fremy, the Berlin-based lawyer acting for the Budge heirs, told The Scotsman he is preparing at least one other spoliation claim against another unnamed British art institution.
Mr Fremy said: “I am working with some art researchers and they picked [the tapestry] out. Don’t ask me exactly how they did, but sometimes in the modern world you can just Google certain things.
“The Budge Collection is very well documented, we have descriptions for every single piece, and for most of the items we even have photos, so this really helps a lot.”
Glasgow Life, the arms-length organisation that manages the Burrell Collection, is assisting the Spoliation Advisory Panel, an expert group set up by the Department for Culture, Media, and Sport. Glasgow City Council said it will “comply with the relevant law” should the heirs’ claim be upheld by the panel.
The tapestry, entitled The Visitation, first belonged to an unnamed private collection in Frankfurt, and was later acquired by the Hamburg-based Budge
Collection. However, it was sold in September 1937 in a so-called “Jew auction” to Paul Graupe.
Sir William Burrell took ownership of it on or before 8 August the following year from art collector John Hunt. It is not known when or how Mr Hunt came into possession of it, but he has been the subject of allegations linking him with Nazi art dealers. Information surrounding the tapestry’s uncertain provenance has been lodged with the Cultural Property Advice website, but it remains unclear when Glasgow Life first became aware of the item’s past.
A spokesman for Glasgow Life said: “As with all UK museums services, We have proactively listed any object which may have unsure provenance on the government’s official website.”
Queen Mary: Mayday for a Scottish Monument from Scotland on Sunday – An investigation into the confidential surveys detailing hundreds of millions of pounds of repairs required to one of the most esteemed liners of the Clyde’s shipbuilding heyday
The RMS Queen Mary, one of the world’s most famous ships and an enduring icon of Scotland’s industrial prowess, is facing a precarious future after a confidential report identifying the need for hundreds of millions of pounds worth of vital repairs, a Scotland on Sunday investigation can reveal.
The first comprehensive inspection of the historic Clydebank-built ocean liner in a generation has uncovered a catalogue of faults which, unless addressed, could lead to the vessel being mothballed within a decade.
The marine survey of the 83-year-old ship, now a permanently moored tourist attraction in California, specifies that “urgent” repair work will cost as much as £235 million. Conservationists say the way the ship has been treated is “criminal” and that if the legacy of “irresponsible” custodianship is any guide, her demise is “inevitable”.
One veteran naval architect has told Scotland on Sunday that the ship’s condition is so perilous that she could sink if attempts were made to tow her. Politicians in Scotland have led calls for an international fundraising campaign to restore the former Cunard liner, and urged Prime Minister Theresa May to put pressure on the US government to step in.
The ship, which once played host to presidents, prime ministers, and royalty, and transported nearly a million troops during the Second World War, has in recent years, been used for pole dancing competitions and a “haunted maze” attraction occupy several decks. A half-century after she was bought by the Californian port city of Long Beach, the parlous state of the ship’s fabric has intensified fears for her viability.
The marine survey has not been released to the public, but Scotland on Sunday can reveal it indicates repairs in the region of £195m to £235m are required as a matter of urgency. Authorities in California have been told the essential work should be carried out within a decade.
Around a tenth of the bill – $23,560,326 (approximately £19,250,000) – is designated for “critical” work. A breakdown shows £2.4m is needed to tackle problems with the side shell and bridge wing, with the same sum recommended to carry out structural repairs to the ship’s floors. Some £2m is quoted for structural work on the tank, hull and propeller.
The bill includes a further £3.2m for repairs to the internal structural suspension and fire panels, as well as £2.2m to prime, paint and rust-treat her exterior. Urgent repair work is identified for the ship’s roofing, decks, electrics, pump systems, lighting, mechanical rooms, lifeboats, and sewer systems.
Wyn Davies, a veteran naval architect who co-authored the marine survey, said the ship’s interiors have been “badly neglected,” with a pressing need to install a pumping system to address leakages, otherwise “corrosion will proceed unchecked” and the ship’s structure will “become fragile in due course”.
“The cutting out of everything was not well finished. There’s a large amount of corrosion within the vessel,” he added. “One of the problems is we don’t actually know how bad the steelwork is internally. We know that the tank top, which is the inner shell of the double-bottomed tanks, has been penetrated by corrosion in places and we also know there is water on top of it, which is not helping.”
After the Queen Mary retired from service, the city of Long Beach paid £2.8m to secure her as a landmark attraction, outbidding New York by just £40,000. When she arrived on 9 December, 1967, she was met by more than a million people lining the shore, before a four-year refit programme converted her into a floating hotel.
The result saw visitors from all over the world follow in the footsteps of former passengers such as Elizabeth Taylor, Fred Astaire, Winston Churchill and JFK, but an array of ambitious business projects floated over the following decades sank without trace.
In the early 1990s, executives at the then leaseholders, Walt Disney, were frustrated in their attempts to incorporate the Queen Mary into a £2.3 billion maritime theme park and pulled out. Separate blueprints for a casino, science fiction museum, monorail, and sports stadium also foundered. The custodians after Disney’s lease ended, Queen’s Seaport Development, filed for bankruptcy.
Bill Cwiklo, a past curator of the Queen Mary, said the 77,000-ton ship has been accorded the reverence of an “old Holiday Inn” and, he claimed, was last painted a quarter of a century ago. “The city council and various leaseholders have spent a fortune ruining her,” he said. “We all wanted to see her the way she was when she arrived in 1967, but it has been mucked up and the public is supposed to be grateful.”
Michael Davisson, a campaigner for the ship’s restoration, points out that her celebrated interiors are also suffering, with many original rooms “half intact” and “destroyed”. He said: “People here are rather complacent with the way the ship is cared for, stressing that we should be glad that the ship is at least still here, but very little of the ship is actually ‘still here’ and much of it is disappearing on a regular basis.”
Diane Rush, a former president of the Queen Mary Foundation, is even more scathing. “Past custodianship of the Queen Mary has been irresponsible if not criminal,” she said. “With the ship’s maintenance, if the future mirrors the past, the results are inevitable. City administrators and leaseholders that benefit most from the ship’s profits seem to take her for granted.”
The ruin of the transatlantic liner, hailed by George V as “the stateliest ship afloat”, can be traced back to the 1970s conversion. “The work that was done to take out components for the refit was not carried out to the highest standards, shall we say,” Davies explained.
The overhaul saw the ship’s guts removed – the steam turbo alternators, boilers, propulsion turbines and bulkheads. To compensate for the loss in weight, her double-bottomed tanks were filled with water and drilling mud, with an impressed-current system installed around her hull’s outer shell to protect internal steelwork. That, at least, was the theory.
The marine survey has identified corrosion and leakages in the inner shell of the tanks. Any repair work, Davies stressed, will be hindered as a consequence. “Because the weight has been taken out, the ballast has to stay in,” he said. “So it has to be moved a very short distance whenever work is being done on the steelwork which surrounds it.”
Other naval architects, however, believe the extent of the repairs required could further jeopardise the vessel, which is listed on the US National Register of Historic Places. Dr Stephen Payne, who designed the Queen Mary 2, Cunard’s current flagship, said the urgency of the repairs required action “in the space of a year”, but even that process could prove ruinous.
“One of the problems would be getting her out of Long Beach to a dry dock,” he said. “I would be worried about the condition of the double-bottom, because if that is paper thin, when you start towing it, undue strain could open up seams and she could sink where she is.”
The latest entity to be tasked with safeguarding the Queen Mary is Urban Commons, a Los Angeles real estate firm which, after several years of negotiations, signed a deal last year with the Long Beach authorities to become leaseholder until 2082. Urban Commons intends to spend £12m modernising the 346-room hotel and converting her boiler room into a nightclub. Yet the big money – around £200m – is earmarked for regenerating the surrounding 45-acre waterfront, with plans for a hotel, marina, amphitheatre, and Ferris wheel.
So far, however, there has been no confirmation of how the company intends to address the extensive disrepair detailed in the marine survey. Cwiklo believes there is a need for transparency. “If Urban Commons can raise that kind of money, will they further adapt the ship for entertainment, or will they spend it on real restoration work to represent the Queen Mary as she was built?” he said.
Asked by Scotland on Sunday what timetable and funding mechanisms it has in place, Taylor Woods, the company’s principal, said it had a “real commitment” to making the Queen Mary a leading attraction, with “a clear focus on restoring the ship and rolling out new creative programming to draw more visitors”.
He added: “Not only are we in full swing making necessary structural renovations and repairs to restore the Queen Mary to her glory days, we are working closely with the city on a master plan to develop the surrounding waterfront land to create a dynamic entertainment destination unlike anything else offered in Southern California.
“We see this as a once in a lifetime opportunity to help shape the future of a storied landmark, and we are honoured to have a hand in this transformation.”
The master plan is being driven by the city-appointed Queen Mary Land Development Task Force, but documents show “maintenance and operation of the ship” are not under its “purview”. The Long Beach government has stepped in to provide £18.7m towards “significant structural and utility deficiencies requiring urgent attention”.
The money consists of a £14m construction bond, secured against oil revenues, and £4.7m from reserves. However, another city document raises questions over where the remaining hundreds of millions of pounds will come from. It emphasises “no new funds will be used to address these urgent repairs”.
While an initial lease stated repair funds would be generated via passenger fees and base rent, the conditions of a revised lease that was eventually signed reveal those revenue streams will service the bond debt until 2024. The lease, seen by Scotland on Sunday, absolves Long Beach of responsibility for making good the ship’s faults, stating that the “landlord shall not be required to maintain or make any repairs or replacements of any nature or description whatsoever to the leased premises or the improvements thereon”.
Mary Rohrer, executive director of QMI Restore the Queen, a not-for-profit organisation raising funds for the ship’s preservation, said “smoke and mirrors” surrounded the city financing. “There’s no detail of what the bond will be used for, it’s a mystery,” she added. Doubts over how the full repairs will be underwritten have also been raised by Laura Doud, Long Beach’s city auditor, but officials refused her request for time to conduct due diligence on the lease.
“The disrepair is a legacy issue, but there has been no oversight of the lease and no analysis of the repair requirements,” a source at the municipal government said. “The entire project has been mismanaged. The ship will be the casualty.”
Kerry Gerot, public affairs officer for the City of Long Beach, stressed the authority “places a high importance on the preservation of the Queen Mary”. She said: “As part of the recent lease negotiations, an enhanced emphasis on ship preservation was a major focus area. Through the new lease, there is now a dedicated funding stream to fund historic preservation of the ship.
“Through that new funding stream, the city and Urban Commons are jointly committing $23m to jump-start the most critical improvements, demonstrating a joint commitment to fund Queen Mary preservation projects.” On the subject of the marine survey – compiled by Wyn Davies Consultancy, John Fidler Preservation Technology, Burness Corlett Three Quays and Simpson, Gumpertz & Leger – Gerot said the city did not have the “actual entire finalised study to release”, but would do so “as soon as it is available to us”.
John Keisler, director of economic and property development at the authority, added that the only repair projects that have been “prioritised” are the $23m worth of “critical” works.
In the town that gave the Queen Mary to the world, news of her condition has been met with dismay and anger in what is Scotland’s year of history, heritage, and archeology. Martin Docherty-Hughes, MP for West Dunbartonshire, was born and raised in Clydebank. His constituency office looks on to the site of the former John Brown’s shipyard, where the ship – forged from 150,000 tonnes of raw steel and ten million rivets – was launched in 1934.
“This is a litany of disasters as far as I’m concerned, and it is particularly galling for the community of West Dunbartonshire,” he said. “This isn’t just about a ship, but the men and women who built her. We will seek to hold to account the city of Long Beach, who took her in good faith, to maintain and restore that ship to the way she was handed to them.”
Gil Paterson, MSP for Clydebank, agreed: “The Queen Mary is one of the finest vessels ever built and her grandeur and craftsmanship have never been replicated. I would be horrified to think that because of deterioration in the superstructure, we could lose what is quite frankly irreplaceable. It should really be a protected heritage site and the whole world should take notice. There should be an international fundraising campaign to help repair this ship.”
Following Scotland on Sunday’s investigation, Docherty-Hughes is to write to Downing Street demanding pressure be put on the US government to intervene. He said that in principle, there was no reason the Queen Mary should not return to the Clyde.
“I’m sick to the back teeth of people at home and abroad who’ve tried to appropriate this region’s cultural heritage,” he said. “The Queen Mary seems to be rotting from the inside, the Queen Elizabeth is a burnt out hulk in Hong Kong, and the QE2 is draped in the metaphorical dustsheets of the Arabian peninsula, yet we’re told that we’re not fit enough to retain and restore these types of vessels within our own community.”
Conservation groups in California also believe the Queen Mary’s homeland could have a vital role to play in her future. Rohrer has held talks with Bernadette Greene, Britain’s deputy consul-general in Los Angeles, who, by coincidence, hails from Clydebank.
“I’ve had people from Scotland tell me Long Beach should just return the ship, and we’ve looked at aligning ourselves with people in Scotland with the desire to invest and have a voice here,” said Rohrer. If there is a glimmer of hope among the Queen Mary’s well-wishers, it is tempered by the knowledge that the grand old lady’s time is fast running out. “For me, losing the Queen Mary would be like the death of a dear friend or family member,” reflected Rush. “The ship’s real value will only be known when she is no more.”
Three-year-olds among those treated in hospital for obesity from The Scotsman – An investigation into how the obesity crisis gripping Scotland has extended to toddlers and pre-school children, with nearly 200 youngsters receiving NHS treatment for the condition
CHILDREN as young as three are receiving hospital treatment on the NHS for obesity, The Scotsman can reveal. Almost 200 youngsters have received treatment for one of the gravest health problems facing the country in recent years, amid warnings the problem is worsening.
In a damning example of the scale of the challenge faced by public health authorities, a three-year-old is among those who have recently been admitted due to obesity. Leading researchers said the number of children being admitted was a “tragedy” that would only increase unless urgent action is taken to address the issue.
They said the figures highlighted a “vicious cycle of obesity” which is not being properly tackled by the Scottish Government or Westminster, and made the case for a “radical rethink” of how the country is dealing with the problem. The condition can lead in later life to health problems, such as heart disease, diabetes and osteoarthritis.
The data, released under Freedom of Information legislation, shows that last year, NHS Highland treated a three-year-old for obesity. Over the past five years, it says it has treated four children “aged four or under”, and 38 children in total. Twenty of them were teenagers at the time they were discharged. The board said it was not appropriate to provide further information on the treatment the children received, citing confidentiality and data protection.
NHS Greater Glasgow and Clyde said at least 18 children under eight and 57 aged between nine and 15 had been dealt with in the same five-year period. NHS Fife said it had had 32 instances of childhood obesity, plus 11 children admitted with obesity-related conditions.
In Lothian, 32 children were admitted to hospital. There were five with a “primary diagnosis” of obesity admitted in Dumfries and Galloway, while NHS Borders said “less than five” children had been discharged with a diagnosis of obesity.
Tam Fry, of the National Obesity Forum, said: “It’s quite remarkable that children so young are being treated. The trend of obese children is going up, and it will continue to go up: it’s a tragedy. Although the numbers involved are small at the moment, there will be a far greater problem in the future unless there is a wake-up call.”
Dr Ian Campbell, a Scottish GP and honorary medical director of the Weight Concern charity, suggested that, in some cases, young children may be admitted for genetic hormonal problems or because their parents could be “unaware or unable to provide adequate care”.
He said: “It’s quite shocking that children of this age are being admitted. It highlights the complexity of a problem which is sometimes beyond parental control and which is not easily solvable, even by medics. It’s also about political will to change the environment and legislate against unhealthy practices.”
While health boards did not disclose the treatments they administered, national clinical guidelines state children with serious obesity-related diseases should be referred to hospital or specialist paediatric services.
Orlistat, a drug that blocks the absorption of fat in the body, can be prescribed for severely obese adolescents. The use of surgery is recommended only for adolescents past puberty. But the health board responses highlight inconsistencies in how obese children are diagnosed and treated.
NHS Lanarkshire, for instance, said it “does not record obesity as a specific condition”, while NHS Ayrshire and Arran has “no record” of admissions and “would not routinely admit a child for treatment of obesity”. Similarly, NHS Tayside said it “does not admit children into hospital for childhood obesity”.
Mr Fry said: “What concerns me most is that doctors are in denial themselves. Parents don’t perceive obesity and need to be informed by the medical profession. The guidelines which exist are woefully lacking and there needs to much more concerted advice.”
Dr Campbell agreed, saying: “If there is unequal practice across different regions, there must be winners and losers, which is unacceptable.”
A spokeswoman for the British Medical Association in Scotland said: “It is of concern that so many young children have required specialist treatment for obesity-related conditions in Scottish hospitals.
“Childhood obesity is a ticking time-bomb which leads to ill-health in adulthood, so it is important that there is an opportunity to manage obesity at the earliest opportunity.”
Official statistics released last month by the Scottish Government showed 14.9 per cent of primary one children were classified as overweight, obese or severely obese in 2011-12.
In an attempt to reduce that figure, ministers set a target of having 14,910 children being offered “healthy weight intervention” between April 2011 and next March – an ambition described as “completely insufficient” by Mr Fry.
A Scottish Government spokesman said: “Tackling this issue requires engagement and participation right across Scottish society. That is why we are investing over £7.5m between 2012 and 2015 on projects to enc rage healthy eating.
“We are focusing on community initiatives in deprived areas and early-years, where evidence suggests the greatest impact can be made.”
Tory candidate revealed as ‘banking whistleblower’ from The Scotsman – An investigation into a prospective Conservative MP’s involvement in a $1.3bn lawsuit between the Libyan Investment Authority and Goldman Sachs.
A CONSERVATIVE parliamentary candidate fighting a west of Scotland seat is a “banking whistleblower” at the centre of a billion-dollar lawsuit between the Libyan government and one of the world’s largest investment banks, Scotland on Sunday can reveal.
George Jabbour, who is standing in Inverclyde in May’s general election, was a senior analyst with Goldman Sachs who raised concerns over the institution’s dealings in complex derivative trades with the Libyan Investment Authority (LIA), a fund which safeguards the nation’s oil riches.
He now runs Ethos Capital Advisors Ltd, which works with a roster of sovereign wealth funds in the Middle East and north Africa. The firm has been involved with the LIA, which is suing Goldman in the High Court in London over allegations an investment portfolio sold to it by the bank lost the fund around £780m.
One Conservative MP hired by Syrian-born Jabbour as a consultant toldScotland on Sunday his role was to encourage decision makers in Libya to “take action”. Crispin Blunt, a former prisons minister, said Jabbour had a “terrific moral story” and the party was “lucky to have him”. The chairman of the local Conservative association, Graham Brooks, described the 33-year-old as a “banking whistleblower.”
Yet voters in Inverclyde looking to find out about Jabbour’s background will find no mention of his extraordinary past in investment banking on the Conservatives’ website. In his biography, he describes himself as an “engineer”, a reference to his civil engineering degree from Damascus University.
Jabbour, who became a British citizen in 2011, first visited Scotland last summer, where he campaigned for Better Together, making more than 3,000 telephone calls to voters. Prime Minister David Cameron later wrote to thank him for his “colossal effort.”
But his career to date has revolved around investment banking. During his time at Goldman, he was involved in derivative investments with the LIA and later raised concerns that the authority did not fully understand the transactions.
As part of its court case, the LIA, which presides over a £42bn fund, claims the bank made profits of around £162m on the trades. Papers lodged with the High Court state that Jabbour and another former Goldman employee have confirmed to Enyo, the LIA’s legal representatives, that “they have relevant information which they are prepared to discuss with Enyo”.
However, the documents add that Goldman refused to allow Enyo to speak to them “under the pretext of the former employees’ ongoing duties of confidentiality”. Goldman has said the LIA’s claims surrounding the trades are without merit and it will defend them vigorously. The case is expected to come to trial next year.
After being laid off by the bank, Jabbour went on to found Ethos Capital Advisors Ltd, a London-based firm which has worked with the LIA and other clients. Jabbour hired Blunt as a consultant who was paid £15,000 for encouraging the Libyans to take action against Goldman.
Jabbour yesterday declined to comment.
Children held overnight in police custody from Scotland on Sunday – A Freedom of Information investigation into the hundreds of children detained overnight in police custody across Scotland. Some of the children held were as young as 12, while teenagers were detained for as long as 88 hours.
CHILDREN as young as 12 are among hundreds who have been held overnight in police cells in Scotland over the past two years. Some youngsters have been kept in custody for several days, with one 15-year-old boy being detained for more than 88 hours.
The practice, which goes against a United Nations treaty protecting children’s human rights, has been described as “disturbing”, while Scotland’s Commissioner for Children and Young People warned police were in breach of the law.
The data, released under Freedom of Information legislation, also flags up significant disparities across the country. Whereas officers in some areas, such as Grampian, say they did not detain a single child overnight during the period, the practice was routine elsewhere, despite a series of recommendations to overhaul and streamline the system outlined in an HM Inspectorate of Constabulary for Scotland inspection five years ago. No reasons were given as to why the detentions had taken place.
In the former Lothian and Borders force area, 187 children aged 15 or under were held in custody overnight, defined as a period which started before and ended after midnight. They included two 11-year-olds, ten 12-year-olds, and 21 13-year-olds.
Although most children spent only a few hours in custody, the records include a 14-year-old boy arrested and held for more than 36 hours, and another 14-year-old boy held for more than 26 hours. One 15-year-old boy arrested in 2011 was held for more than 88 hours. The same year, two 15-year-old boys were arrested and held for more than 37 and 34 hours respectively. In 2012, meanwhile, one 15-year-old boy was held for more than 59 hours after being arrested, while a 14-year-old boy was arrested and held for more than 21 hours.
In Tayside, the force detained 124 children aged 15 or under overnight during 2011 and 2012. They included eight 12-year-olds, six of whom were held for up to eight hours, and three 13-year-olds detained for up to 24 hours. The former Northern Constabulary said it was not able to disclose the hours, but a nine-year-old, a ten-year-old, nine 11-year-olds, 37 12-year-olds, and 67 13-year-olds were among 664 detained children.
Not every force disclosed information. The former Fife, Dumfries & Galloway, and Central Scotland regions cited excessive costs, while the former Strathclyde Police said the information requested was not obtainable. This suggests the number of child detainees held in breach of the law may be significantly higher.
The length of time spent in custody by some of the children goes against Article 37 of the UN Convention on the Rights of the Child. It states that the arrest or detention of a child “shall be used only as a measure of last resort and for the shortest appropriate period of time”. The Criminal Procedure (Scotland) Act 1995 says a child should not be kept in custody other than in exceptional circumstances, such as where they face a charge of homicide. Even then, they should be in a place of safety other than a police station.
Tam Baillie, Scotland’s Commissioner for Children and Young People, said: “It is clear that there are very significant variations in practice and this is a matter for concern. The fact that we are missing data from a very large section of the country may mean that the situation is worse even than this data indicates.
“It raises a question of consistency of practice, and if one area can produce a return of no children held in police custody it begs the question of why others produce such high returns. If some forces were not monitoring the use of police custody for children and as a result were unable to assess trends in their area, then presumably ministers did not have the oversight necessary to judge whether we were meeting our obligations in respect of domestic and international law.”
He added: “I have a concern that the number of children held is high compared to the number of children appearing in the Sheriff Court. We may be continuing to unnecessarily or inappropriately detain children in police custody. My hope is that a single police force will bring consistency.”
Alex-Cole Hamilton, head of policy at children’s charity Aberlour, said: “This data is deeply concerning. It’s something you might read about in more draconian societies, and it’s symptomatic of the fact we credit children with the mental capacity to decide between right and wrong at an incredibly early age, but don’t give them the rights that should go along with that.”
Chief Superintendent Ciorstan Shearer, of Police Scotland, said: “The safety and welfare of children is paramount when considering their detention in custody, and wherever possible a child will be released on an undertaking as quickly as possible. If this is not possible, police and social work staff working alongside parents and guardians will look for alternatives to detention in a police office. A decision to detain a child is made on a case-by-case basis.”
A Scottish Government spokeswoman said: “Children will only be kept in police custody as a last resort. Police have the powers, on the written authority of an inspector, to hold children in certain circumstances when it is in the interests of justice.”
World’s leading auction house linked to organised crime from The Scotsman – The question of due diligence at leading auction houses is of growing concern to art trafficking experts, who cite several cases where lots being sold at auction have links with organised criminals. Thanks to the insight of the team at Trafficking Culture at the University of Glasgow, numerous such items have been advertised in Christie’s catalogues
THE world’s leading auction house has withdrawn from sale more than £1.2 million of ancient artefacts identified by an expert at a Scottish university as having links to organised criminal networks in Europe, The Scotsman can reveal.
Eight rare antiquities have been pulled from auction by Christie’s over the past six months after a University of Glasgow academic uncovered images of them in archives seized from Italian art dealers convicted of trafficking offences.
The latest tranche of treasures were due to be sold at auction in London tomorrow, but after Dr Christos Tsirogiannis notified Interpol and Italian authorities, they were removed. Last night, the auction house vowed to work with Scotland Yard to scrutinise the items’ provenance.
Dr Tsirogiannis, a research assistant at the university’s Scottish Centre for Crime and Justice Research, discovered the four lots catalogued in the confiscated archives of Giancomo Medici and Gianfranco Becchina, and warned Christie’s was failing to carry out “due diligence”. Medici was sentenced to ten years in prison in 2004 by a Rome court after he was found guilty of conspiracy to traffic in antiquities. Becchina, a Sicilian antiquities dealer, was convicted in Rome four years ago of trafficking in plundered artefacts.
Dr Tsirogiannis, a forensic archaeologist, has access to their photos and documents via Greek police and prosecutors. The items accepted for tomorrow’s antiquities sale date back to 540BC. They include an Attic black-figured amphora and an Etruscan terracotta antefix. Cumulatively, they are worth close to £100,000. It is the second time in six months Dr Tsirogiannis has highlighted the dubiety of items being sold through Christie’s. The value of the eight withdrawn lots exceeds £1.2 million.
Dr Tsirogiannis, a member of Trafficking Culture, a Glasgow-based research programme which compiles evidence of the contemporary global trade in looted cultural objects, said: “Christie’s continues to include in its sales antiquities depicted in confiscated archives of convicted art dealers. Sometimes they sell the lots but nearly every time they withdraw them.
“I don’t understand why they can’t do due diligence beforehand. Clearly, it’s not taking place. Christie’s say they don’t have access to these archives which is not true. Every auction house, dealer and museum should refer to Italian and Greek authorities, who would check for free before the sales.” Dr Donna Yates, of Trafficking Culture, added: “Do they contact antiquities trafficking experts before their auctions? No, never. Do they make public whatever provenance documents they have for a particular piece? No, never. I can only conclude that they don’t take this particularly seriously.”
A spokeswoman for Christie’s said: “We have withdrawn four lots from our upcoming antiquities sale as it was brought to our attention that there is a question mark over their provenance, namely, that they are similar to items recorded in the Medici and Becchina archives. We will now work with Scotland Yard’s art and antiques unit to discover whether or not there is a basis for concerns expressed over the provenance.”
She said Christie’s would never sell any item it has reason to believe was stolen and called on those with access to the Medici and Becchina archives to make them “freely available.”
Leading scientist suspended amid ‘research misconduct’ investigation – from Scotland on Sunday
One of Scotland’s most decorated young scientists is under investigation for misconduct amid allegations he falsified and duplicated crucial research, a Scotland on Sunday investigation can reveal.
Dr Robert Ryan, who has received nearly £1.1m in grants for his pioneering work in molecular bacteriology, has been suspended from his senior post at the University of Dundee.
The allegations are a blow not only to the credibility of the university – a world leader in life sciences – but institutions around the world with whom Ryan collaborated.
The award-winning Wellcome Trust senior research fellow is at the forefront of global research which could lead to new treatments for cystic fibrosis and has received extensive public funding.
But it is alleged he used identical images across multiple papers, claiming they were different strains. In some cases, it is alleged the evidence was flipped or rotated, which could indicate an “intent to deceive”, according to one source.
The extent of the alleged misconduct is unclear, but the source indicated it is alleged to have spanned “a number of years” and involved numerous prestigious journals.
As the author or co-author of 28 published papers, Ryan is regarded as one of Europe’s outstanding young microbiologists, having won a clutch of awards including the coveted Fleming Prize.
He is a principal investigator at the university’s division of molecular microbiology, where he oversees a nine-strong research laboratory, but it is understood his research group has been dissolved, with PhD students and staff scientists reallocated elsewhere. A formal investigation led by university vice-principals is ongoing.
The source said: “This is a huge development for the scientific community and his field.”
Ryan’s field of work is highly specialised but seen as essential in efforts to develop potential treatments for diseases such as cystic fibrosis. He specialises in understanding the signalling processes that occur within and between pathogenic bacteria during chronic infections.
The area of research is key to improving the treatment of bacterial infections due to the global rise of antibiotic resistance.
Since moving to Dundee from University College Cork in February 2013, he has won several high profile prizes. They include the Society for General Microbiology’s Fleming Prize, awarded annually to recognise “outstanding research” by a microbiologist in the early stages of his or her career; the Royal Society of Edinburgh’s Patrick Neill medal, given to emerging researchers who have demonstrated “outstanding ability”, and the Society for Applied Microbiology’s WH Pierce Prize, awarded to microbiologists under the age of 40 who has made a substantial contribution.
Last October, meanwhile, he was recognised as one of the rising stars of his field after being accepted into the coveted Young Investigators network of the European Molecular Biology Organisation.
In addition to the prizes, Ryan has received considerable research grants over the years to support his work.
In 2014, he was awarded a Lister Institute Research Prize Fellowship, which seeks to nurture future leaders of biomedical research. It included £200,000 to support Ryan’s research over a five-year period.
Other support has included: a £320,000 CFMATTERS grant for research into cystic fibrosis; a Leverhulme Trust Network Grant of £125,000 to support a research programme aimed at understanding the role that bacterial cell-to-cell signalling plays in various polymicrobial diseases; and grants totalling £415,000 from Science Foundation Ireland, a statutory body based in Dublin.
According to the University of Dundee’s website, the sum received by Ryan in the form of grants is even higher. It cites the CFMATTERS award was for £900,000.
A source said: “Big grants like this make careers – if he’s got them dishonestly over someone else, that’s an issue.
“Also, PhD students and post-doctoral researchers elsewhere might be wasting time doing experiments that will never work if his papers are dodgy.”
In a statement, the University of Dundee said: “There is an ongoing investigation into an allegation of research misconduct. In order not to prejudice in any way the outcome of that investigation, we are unable to comment further on it at this time.
“The university has clear policies relating to research misconduct, and any such allegations are thoroughly investigated.”
It added that a member of staff has been suspended pending the investigation being completed.
A spokeswoman for University College Cork (UCC) said: “UCC understands that there has been an allegation of research misconduct in relation to a member of staff at the University of Dundee.
“UCC does not comment on the staff or internal processes of other institutions. Should any action be warranted by UCC in due course, UCC will follow up at that point.”
A spokeswoman for the Wellcome Trust, the world’s largest medical research charity, said: “Wellcome takes allegations of research misconduct seriously. We expect institutions to investigate any allegation of misconduct, as the University of Dundee are doing in this case, and we would consider taking action only if allegations are upheld.
“As the university’s investigation is ongoing we are unable to comment further.”
Professor Barry Plant, the co-ordinator of CFMATTERS, an EU-funded cystic fibrosis research consortium of universities, hospitals and businesses, said: “I can confirm that CFMATTERS is aware of his suspension. Any potential decisions regarding the project and Dr Ryan will be made in close collaboration with the EU Commission funders once the Dundee investigation is completed.”
Kate Law, director of the Lister Institute, said: “We are aware of these allegations and are confident that the university is carrying out a full and fair investigation. It would be inappropriate to comment further at this stage.”
No-one from the Leverhulme Trust was available for comment.
Ryan was not available for comment.
Better Together film ‘made in BBC studios’ from The Scotsman – The independence referendum drew focus on the BBC’s impartiality and journalistic standards like never before. In a series of stories I wrote about how a cinema advertisement for the Better Together group was filmed at the corporation’s Scottish headquarters, and of the controversy surrounding a shadow cabinet secretary being paid to present an independence-related discussion show (the MSP later backed out of the project after my articles).
BBC Scotland was last night embroiled in a major row over its impartiality amid concerns it flouted its own editorial and commercial guidelines by allowing a Better Together cinema advertisement to be filmed at its headquarters using the corporation’s in-house crew.
The Scotsman can reveal that the advert – shown on screens nationwide as part of the pro-Union group’s campaign ahead of the independence referendum – was produced at a studio in the BBC’s Pacific Quay base in Glasgow normally used for quiz shows.
The filming, described by Better Together as a “commercial arrangement” between a sub-contracted production company and the BBC, appears to fall foul of a number of the broadcaster’s internal guidelines.
The rules warn of damage to the corporation’s standing if it is seen to be associated with “inappropriate” third parties such as political parties and lobbying organisations. Any commercial activity with such groups that could “potentially undermine the BBC’s editorial integrity” must be referred, in advance, to its editorial policy department, the guidelines add.
BBC Scotland last night insisted there has been “no breach” of its guidelines, stating that political parties are allowed to use the corporation’s facilities on a “commercial basis.” But veteran former BBC broadcaster Derek Bateman warned management at Pacific Quay were operating in a “grey zone” and said the public perception of the advert’s production would be that “the BBC is working hand in glove with Better Together”. He said: “The BBC seem unable to define what’s appropriate behaviour and what isn’t.”
The Scotsman has learned that Rob Shorthouse, director of communications at Better Together, was among those present in the BBC Scotland studio when the minute-long advertisement was being made.
It was filmed at the beginning of April in Pacific Quay’s studio B, used to film popular BBC network programmes such as The Weakest Link and Eggheads. The high-profile advert featured testimonies from five young Better Together supporters.
Under the BBC’s fair trading guidelines – designed to ensure the corporation’s commercial activities do not impinge on its wider reputation and values – there are explicit procedures set out for dealing with politically affiliated bodies. Guideline 4.64 warns that “the value and reputation of the BBC brand may be damaged if any part of the BBC is seen to be associated with inappropriate third parties”.
Guideline 4.65 adds: “Any activity involving a third party that could potentially undermine the BBC’s editorial integrity must be referred, in advance, to the editorial policy department. Examples of such organisations include: political parties, government departments and foreign governments; lobbying organisations…”
The process of creating the advert saw Better Together hire BD Network, a Glasgow-founded creative agency with offices in Shoreditch and Melbourne. BD Network then sub-contracted the job to Early, a production firm co-founded by Martyn Smith, a former executive producer at BBC Entertainment, who recruited participants and booked the Pacific Quay studio.
The corporation declined to reveal how much it received, citing commercial sensitivities, but it is understood the hire fees amounted to between £5,000 to £7,000. The ad spot proved divisive when it was screened across scores of cinemas last month. Amid growing unease over similar adverts from Yes Scotland, major cinema chains including Odeon, Cineworld and Vue took a collective decision to ban all referendum advertising from their venues.
Mr Shorthouse told The Scotsman that Better Together became aware the BBC Scotland was being used for the advert “pretty early” in the project’s development, adding: “I decided that I wanted it made in Scotland, not London – so I knew pretty early on in the process that the only option was the studios at the BBC.” Asked if Better Together had misgivings about using the state-funded broadcaster’s facilities for the advert, he said: “No. This was a commercial arrangement between a production company and the BBC.”
Mr Bateman, the former BBC Scotland broadcaster, said: “The BBC helps parties make party political broadcasts at election times which is legitimate, but in a case like this, as with the CBI row, they’re walking a pretty tightrope. Anybody reading about it in the heat of the referendum debate will think the BBC is working hand in glove with Better Together. What on earth do they think the public are going to think about it?”
SNP MP Pete Wishart said: “I really do hope that the BBC pay clear attention to its own particular guidelines when it comes to this kind of production and that they are able to justify absolutely that they have not breached any of their guidelines.
“I am aware that Pacific Quay, as part of value for money arrangements, makes itself available to outside organisations and they have to always be careful about how this kind of arrangement looks to the public.”
Blair Jenkins, chief executive of Yes Scotland and a former head of news and current affairs at BBC Scotland, said: “It is incumbent on all public service broadcasters – of which the BBC is one – to remain impartial in all matters relating to the referendum, the most important constitutional vote in Scotland in hundreds of years.”
Asked if the film was referred to and cleared by the BBC’s editorial policy department, a Pacific Quay spokesman said BBC Scotland “knew what the production was for and editorial policy were aware of it”. He went on: “There has been no breach of editorial guidelines as BBC facilities are made available to organisations and businesses who want to use them, including political parties, on a commercial basis.
“During the 2012 local election campaign, the SNP produced a party election broadcast in our Dumbarton studios. Again, that was hired out in accordance with our fair trading policy and there was no editorial association with the BBC in the broadcast.”
A spokeswoman for the BBC Trust said: “We note BBC Scotland’s statement that there has been no breach of the BBC’s editorial guidelines and correct policy was followed. The trust has no plans to investigate this.”
BBC Scotland has been criticised for paying a Labour MSP to co-present a new programme which will debate key independence referendum issues.
Senior staff at the corporation have expressed disquiet over the appointment of Kezia Dugdale, Labour’s education spokeswoman, in a paid role as a presenter of Crossfire, a Radio Scotland political show set to debut this Sunday. The arrangement contradicts a ruling from the BBC’s governing body that payments to a then Labour shadow minister at Westminster for her part in a similar programme breached guidelines.
It is understood BBC Scotland was last night considering late revisions to the programme. The corporation refused to confirm or deny Ms Dugdale’s involvement in Crossfire but said it was still “formalising the format” for a show that “will be presented by a journalist” with pundits from across the political spectrum.
However, Radio Times lists Ms Dugdale as one of two presenters, the other being Andrew Wilson, a managing partner at strategic communications company Charlotte Street Partners, who served as an SNP MSP until 2003. Both recorded a pilot on Sunday for the programme that is replacing the long-running Headlines.
A BBC Scotland source said management have failed to adhere by their own rules by appointing Ms Dugdale, a member of Scottish Labour’s Truth Team – set up to “monitor all SNP and Yes Scotland interviews, press statements and briefing papers” – in the run-up to September. “[Kezia] is being paid. How much, I don’t know. Enough that she will have to declare it,” the source explained.
“They can’t hide behind Andrew [Wilson]. He has been out of the parliament for 11 years. Kezia is a front-bencher. She should not be being paid. But I know she is expecting pay, as she has said to a colleague that it will have to be declared.”
The BBC’s editorial guidelines make clear it “should not normally pay MPs, or others clearly identified as representing political parties, for appearances or other contributions to any BBC output in which they are speaking as a member of their party or expressing political views”. They can, where appropriate, receive a “limited and realistic disturbance fee” along with expenses.
Contrary to independence referendum guidelines, it is believed Ms Dugdale’s appointment was agreed before Alasdair MacLeod, BBC Scotland’s head of editorial standards and compliance, and Ric Bailey, chief political adviser, were informed.
In 2012, the BBC Trust upheld a complaint over five payments of £839 and one of £869 to then shadow public health minister Diane Abbott for appearances on BBC1’s The Week over a 15-month period after she joined the Labour front-bench. The trust ruled that “a realistic disturbance fee would have been appropriate under the guidelines”. Former Radio Scotland presenter Derek Bateman said: “This is another example of dismal mismanagement and not knowing their own rules.”
SNP MSP Clare Adamson, a member of the education and culture committee, said: “Impartiality is covered by the editorial guidelines of individual broadcasters. As part of the historic Edinburgh Agreement, both the Scottish and UK governments agreed the importance of ensuring that broadcast coverage during the independence referendum period is impartial – and it is important that all programmes adhere to these standards.”
A spokesman for BBC Scotland said: “We are formalising the format for a radio programme that will begin this Sunday. “It will run for 12 weeks up to the referendum, will be presented by a journalist, and will feature a number of pundits from both sides of the referendum argument. We will release further details of the programme, including the line-up of the first programme, in due course.”
Despite repeated inquiries from The Scotsman asking if Ms Dugdale’s remuneration for Crossfire went beyond nominal fees, her office did not respond.
Missing Michelle from Scotland on Sunday – An extraordinary story of malevolence, suffering, and yet, survival, the Cleveland abductions made headlines around the world. In the days after the horror came to light, two women were able to return to their families. The third, Michelle Knight, shunned visits from her mother and grandmother as she recuperated from her ordeal in hospital. Very little was known about Ms Knight at that point – I decided to look into the circumstances of her life before, and during, her time in captivity, and it quickly became clear she had endured a great deal of anguish.
IN A life defined by torment, Michelle Knight has seldom had cause for celebration. When she bore her only child, it was a moment of light which followed one dark chapter and preceded others to come. Her son, according to relatives, was the legacy of a brutal gang rape at the age of 17, which led the student to drop out of high school and embark on an uncertain parenthood under the roof of her mother, Barbara, in Cleveland’s West 60th Street. The student, a keen artist, had grown up in the archetypal suburban street, where she tended the vegetable patch and fed the neighbour’s pet pony. Where once she harboured ambitions of becoming a firefighter or a veterinarian, she imbued hope in little Joey, resolving to one day complete her education and provide for him.
It was a simple, universal ambition, but one unrealised. Barbara Knight became involved in an abusive relationship with a man called David Feckley, who was convicted of child endangerment after breaking the infant’s arm. Amid concerns for Joey’s safety, he was taken into care. On 22 August 2002, around the time she was scheduled to attend a custody hearing into her son’s fate, Michelle Knight was spotted near her cousin’s house at the nearby West 106th Street and Lorain Avenue when a Hispanic man offered her a ride home. She was not seen again until last Monday, when she ran out of a darkened room on the second floor of 2207 Seymour Avenue and threw herself into the arms of Anthony Espada, a patrol officer with Cleveland Police, reportedly shouting over and over, “You saved me!”
Six days have passed since, and despite the innumerable harrowing details which have informed a shocked world of Ariel Castro and those he kept prisoner for more than a decade, Michelle Knight is the spectre of this American tragedy. Her fellow captives, Amanda Berry and Gina DeJesus, have returned home from their scarcely believable ordeal, embraced by relatives on the steps of front porches festooned with stuffed toys, cards and flowers as they begin the long, arduous journey to convalescence.
Knight, however, remained in Cleveland’s MetroHealth Medical Centre until Friday evening, as medics assessed her facial injuries and a loss of hearing in one of her ears. Throughout it all, she shunned requests from her mother and grandmother to visit.
Instead, it has fallen to strangers to embrace her. Late on Thursday evening, a group of community activists gathered outside the Immanuel Evangelical Lutheran church in her honour. Gathered barely a block away from Seymour Avenue, those assembled released 80 balloons in a flurry of bright colours, some bearing messages such as “Congratulations!” and “I Love You”. How else, they perhaps wondered, could they articulate what Knight has been through? She is now a woman of 32, but in the public realm, remains the youngster captured in an undated, grainy photograph taken in the years before her abduction, the only picture of her the family had. Even after the suffering has come to an end, her narrative does not allow for the happy ending her nation yearns for.
During those 11 long years, Knight, together with Berry and DeJesus, was forced into an existence of Castro’s base machinations which stripped away the thin veneer of civilisation. The women’s birthdays were replaced with anniversaries marking their respective abductions, when it is alleged Castro marked the dates courtesy of a taunting, macabre ritual of cake and dinner. On Christmas Day 2006, meanwhile, long after Joey had been taken into foster care, a new family was forged in inexplicable ways. A leaked police report claims Knight, then aged 25, was forced to help deliver Berry’s child by Castro in a plastic children’s paddling pool. She told police that Castro threatened her life if the baby did not survive childbirth, and had to resuscitate the infant after it stopped breathing.
Knight herself claims she was left pregnant by Castro on no fewer than five occasions. Each time, the report states, he “starved her for at least two weeks, then repeatedly punched her in the stomach until she miscarried”. All the while, Castro maintained a banal facade, tinkering with his motorcycle, cutting the grass or cooking ribs on the grill.
In the world beyond the ropes, padlocks and shackles of his dilapidated two-storey white clapboard home, other rituals were taking place, the most visible of which were carried out by Berry’s mother, Louwana Miller. In a half-life consumed by the mystery of what happened to her 16-year-old daughter after she left her job at Burger King on the corner of Lorain Avenue and West 110th Street on 21 April 2003, she strove to keep her plight in the spotlight, holding prayer rallies and candlelight vigils or posting flyers as she retraced what should have been Berry’s two-mile route home. One journalist in Cleveland, Regina Brett, was telephoned every few months by Miller, who would address her as honey, and plead for another story in print. “Louwana was angry,” Brett recalled. “She didn’t trust the police so she put her own phone number on the flyers.”
Nancy Ruiz, the mother, of DeJesus – kidnapped on 2 April 2004, three months before her 14th birthday – waged her own tireless campaign, often joining forces with Berry’s relatives to distribute flyers together, and speaking extensively to the media. In private, every night at dusk she would retreat to her porch and light candles in honour of her daughter. For a time, Barbara Knight too conducted her own observances, periodically venturing alone through the blue-collar streets of Cleveland’s West Side, posting missing person flyers bearing Michelle’s details. However, she later moved to Florida, and some relatives believed Michelle had disappeared of her own volition. Her grandmother, Deborah, said there was a belief that the young mother had absconded after being upset at losing custody of Joey, and was living with friends.
On Wednesday, the disconnect at the heart of the Knight family was laid bare when Michelle’s twin brother Freddie, who was estranged from his parents as a teenager, revealed he was unaware his sibling was missing. “I didn’t know my sister was kidnapped,” he revealed. “My mother never tells me anything.”
For years, Knight’s life was in stasis, existing in an abject hinterland between abductee and runaway which, coupled with her legal status as an adult, meant her fate was not subject to the same level of scrutiny from authorities as her fellow captives. A cursory missing person’s report filed by her mother the day after she was last seen made reference to an undisclosed mental condition that caused her to become confused by her surroundings, and told how she went by the nickname, “Shorty”. To no avail, Cleveland Police checked a local hospital, the morgue and a relative’s house, before conducting follow-ups in May and then November of 2003, when a detective noted: “No new info available at this time. This report will remain invalid until new leads develop.”
The same month, 15 months after she dropped out of sight, the force removed her name from an FBI database because they were unable to contact her mother to verify the then 22-year-old was still unaccounted for. Doubts have since emerged that the force’s policy on such matters at the time stipulated that an officer must make sure that a missing person had been found before removing them from the National Crime Information Centre files. Whereas the circumstances of Berry and DeJesus were being given the oxygen of publicity – relayed via major national television programmes such as America’s Most Wanted and the Oprah Winfrey Show – investigations into Knight’s whereabouts proved scattershot from thereon in.
In one instance, on 1 December 2004, an unnamed officer attempted to reach her personally by telephone. “I tried to reach Michelle Knight… with negative results,” he wrote in the case file. In the grisly hindsight afforded by events of the last week, Ed Tomba, Cleveland Police’s deputy chief acknowledged that his force’s efforts had been “geared toward” Berry and DeJesus. Knight, he added, “was the focus of very few tips”.
Judy Martin, the founder of Victims of Tragedy, a Cleveland-based support group for people who have lost a loved one through murder, and one of the activists who let balloons soar in Knight’s honour, believes wide-ranging institutional faults are to blame, saying: “She fell through some big, huge crack in whatever the system was 12 years ago.”
The pain meted out by Castro was not, of course, borne exclusively by the Knight family. In 2006, the parents of DeJesus endured further anguish when police dug up the garage floor of a residence after receiving a false tip that their daughter was buried there. The same year, meanwhile, Berry’s mother succumbed to heart failure at the age of 44. Bret Vinocur, the founder of a child advocacy organisation set up to help trace missing youngsters, worked with Miller on her case, producing handmade buttons featuring the girl’s photograph in the hope of sparking a fresh line of inquiry. Although Miller’s desperation would later lead her to a television psychic who informed her Berry was dead, Vinocur is in no doubt she never lost faith in the cause. He said: “She died of a broken heart because she lost her daughter but I don’t think she died because she lost hope… she never lost hope.”
For the women themselves – “the ultimate definition of survivors,” according to Stephen Anthony, the FBI special agent in charge of the investigation – the vast gulf left in their lives by Castro is manifesting itself in all kinds of ways. Berry has returned to her family not just ten years older, but as the mother to Jocelyn, a six-year-old who has spent her entire life in captivity. Lydia Esparra, a longstanding family friend of DeJesus, revealed how in the hours which followed her homecoming on Wednesday, one relative engaged her in her second language. Confused, DeJesus turned to her mother, and quietly explained: “I don’t understand Spanish anymore.” There are other forgotten victims, not least Castro’s other children, such as Angie Gregg. A childhood friend of DeJesus, she said she would never speak to her father again after learning of what he had done. “They definitely are not a reflection of myself or my children,” she said of his actions. “We don’t have monster in our blood”.
As for Knight, who has a younger sister she has never met, there is speculation she will begin a new life in the DeJesus household, living with the woman who has become her surrogate sister in the most loathsome circumstances. The world heard from her for the first time on Friday, just before she was discharged from hospital. The statement issued by the MetroHealth Medical Centre, just three sentences long, was most notable for what it omitted to mention. “Michelle Knight is in good spirits and would like the community to know that she is extremely grateful for the outpouring of flowers and gifts,” it read. “She is especially thankful for the Cleveland Courage Fund. She asks that everyone please continue to respect her privacy at this time.”
Later the same day, it emerged Barbara Knight had retained a lawyer in order to try to obtain access to her daughter. “Barbara just wants to be a part of the healing process,” explained her attorney Jay Milano. Grandmother Deborah Knight is hoping for a similar role. Her house, located a few miles away from where Castro made his prison, has been decked out with balloons, flowers and stuffed toys. Only time will tell if her granddaughter will visit, let alone move in. She alone will discover if reconciliation and atonement warrant a place in her recovery from a tyranny of evil. The present is not the time for celebration, but the darkness that has claimed her son and the last decade of her life has lifted. There is a faint light ahead.
A Crude Cover-Up? from Scotland on Sunday – The European Commission’s announcement of an investigation into some of Big Oil’s behemoth’s over alleged price-fixing understandably generated widespread coverage. But exactly how are prices set in a market which has an acute influence on everyday items like cosmetics and plastic bags? The answer is a blend of trust, intuition, and interpretation.
ASK Ali Abbasi how much he spends on petrol in a year and he will roll his eyes, hunch his shoulders, and wearily recount the sacrifices he and his family have been forced to make. A father-of-two, it costs him £83 to fill his Vauxhall Vectra. Five years ago, it was under £60. “You’re talking over a thousand pounds of a difference. We wanted to go to Turkey last year but we just couldn’t afford it,” he says, pointing to his car. “It all went on the everyday things.” A 37-year-old Glasgow businessman striving to provide for his family, he seldom gives thought as to why the price at the pumps has seen such a steep rise. He has no stake, no interest in the financial markets, and is unfamiliar with last week’s allegations of illegal collusion at the heart of the energy commodity trade. But ask if it might have cost him his fortnight in the sun and he adopts the natural suspicion of the British consumer. “I’ve no idea about any of that,” he replies, before pausing. “But I wouldn’t put it past them.”
Others share his distrust, not least authorities in Brussels. Last Tuesday it emerged three global powerhouses of the oil industry – BP, Royal Dutch Shell, and Statoil – along with Platts, a price reporting agency (PRA) whose judgment is regarded as gospel, are facing allegations of price fixing. The firms have confirmed they are the subject of an investigation by the European Commission (EC), the executive arm of the European Union, likely prompted by a senior whistleblower who has gone against his trade’s long-standing code of omerta. The scope of the inquiry questions the very integrity of a Byzantine enterprise worth billions of pounds that exists outside the net of statutory regulation. In essence, it is alleged some companies may have tried to manipulate the process by which oil prices are set by reporting distorted figures, and preventing other firms from submitting their own prices. Should investigators shine a light on errant practises, it could prove just as damaging for the complex realm of the commodities market as the London inter-bank lending rate (Libor) fixing scandal was for financial traders. Anyone found guilty of participating in the alleged cartel could face criminal prosecution, while the companies involved would face the prospect of fines in the region of several hundred million pounds.
This is not, however, an issue which affects a gilded few oligarchs and corporate chieftans in London, Moscow, and Texas. In a statement, the EC pointed out that even “small distortions” of assessed prices can have a “huge impact” on oil prices, potentially harming “final consumers”. The demographic of victims might include any family in Scotland with a car. Yet the repercussions, if proven, would not end there. They would trickle down from tankers, railways, and pipelines to cast a shadow over everyone. From household heating bills and cosmetics through to plastic bags and airline tickets, the reach of oil is far and wide, and while the transactions conducted in this arcane sector of the markets may be of scant interest to Abassi and the public at large, the fact is that they exert an acute and persuasive influence on innumerable facets of ordinary life.
An elaborate blend of trust, intuition, and interpretation, the process by which oil prices are calculated is the legacy of Warren Platt, a Delaware-born journalist who covered the local police beat and sports action at the turn of the 20th century. Fascinated by the rise of John D Rockefeller’s oil empire, he took a sideways step in 1909 when, aged just 25, he borrowed £1,640 from a personal insurance policy and set up his own monthly publication, National Petroleum News.
Envisaged as a way of promoting transparency in the burgeoning industry, the title proved a success, and by 1923, Platt began producing the Oilgram, a two-page newsletter mailed to subscribers the same day it was produced, using the mimeograph technique patented by Thomas Edison. Crude by today’s publishing standards, the Oilgram came complete with images of horse-drawn tank wagons. Its raison d’être, though, was the flurry of price and market information. All of a sudden, the denizens of the nascent US petroleum movement could pour a bourbon and study benchmark prices. Ninety years on, the principles of that niche enterprise remain in place, and Platt’s brainchild is the bible of Big Oil.
Every day, Platts uses a methodology known as Market on Close (MOC) to compile bid, offer, and transaction prices for trades in oil products, using information voluntarily provided by oil firms. Journalists and editors at the firm analyse the data during a half-hour period which begins at around 4pm in London. Known in the trade as the ‘Window’, its workings bind modern technology to old- fashioned techniques. A huddle of staff gather around computer screens to scroll through reams of numbers, while other reporters hit the telephones and instant messenger services to gather additional information and use their judgment to scrutinise what they are told. Once the collating is done, the firm publishes a final trading price for the numerous commodities. That information is used by other firms as a benchmark when they sell their oil products – such as petrol or jet fuel – to customers.
Although there are several other PRAs, Platts is dominant. Overseeing an industry worth £1.6tn a year, it is part of the McGraw-Hill financial behemoth, which enjoys annual revenues of more than £4bn. Observers in the oil business say the company has occupied a vacuum left by regulators, giving it immense power over the price of physical commodities markets such as Brent crude. “Platts is the main price reference for the physical oil market,” says Olivier Jakob, an oil consultant at Petromatrix in Switzerland. “If you were to close Platts tomorrow, you would have a very big problem.”
With power comes responsibility and throughout its history Platts has always made clear that it can only report the information it receives from oil firms, even if its accuracy turns out to be in doubt. Indeed, a passage from the 1954 edition of its Oil Price Handbook and Oilmanac still resonates today. “Information is deemed to be accurate and complete but is necessarily supplied without guarantee as to that completeness or accuracy.”
The burning question for the EC is whether the data used by Platts has been selectively disclosed. In his probing study of the oil industry, The Squeeze, Tom Bower relates an example of how its ‘Window’ is open to exploitation, citing a practice called ‘all-day capture’ or ‘shower deals’. He writes: “A trader who was contracted to buy, say, six tankers of oil with four million barrels would sell 600,000 barrels at a low price into the Platts window to depress the published price and, by fixing the bottom of the market at the end of the day, would hope to manipulate a low price for the six tanker he was contracted to purchase the following day.”
The EC’s inspectors spent several days last week at the Canary Wharf offices of Platts, going through laptops for information relevant to their investigation. Whatever the outcome, critics of the oil pricing strategy believe it is long overdue an overhaul. Quentin Willson, the campaign leader of Fair Fuel UK, said: “Currently the price reporting of this trillion dollar industry is overseen by a few unknown journalists and we have no idea of their standing, integrity or moral probity. That definitely isn’t good enough. There are dozens of decent, honest people out there with haversacks of integrity who could stand as incorruptible supervisors of the global oil price. If the industry has nothing to hide they’d have no objections to more transparent oil price reporting.”
Yet the subject has been far from hidden. Only last October, Total, the French oil giant, informed the International Organisation of Securities Commissions (IOSC) that figures are on occasion imprecise. In its submission to a questionnaire from the umbrella body for the world’s financial watchdogs, the company said: “The published prices do not always represent those of the market with the same degree of accuracy … the quality of the reporting is not always consistent over time. While certain price reporting agencies have pricing processes that are reproducible using the underlying data, others do not (the principal difference being the use of ‘judgment’ that may bias prices away rather than toward the market).”
Last year, meanwhile, a whistleblowing trader wrote to Robert Halfon, a Conservative MP, alleging daily manipulation of prices in the oil market. In turn, Halfon informed the Office of Fair Trading (OFT), but four months ago, the authority said it had decided against a full investigation into petrol price fixing. Competition in the sector, it said, was “working well,” and it had received “no credible evidence” to the contrary.
In light of the EC’s investigation, the organisation is now in the firing line for what many regard as its supine efforts. “The response from the OFT was limp,” said Halfon. “They carried out an investigation to stave off political pressure. It was a sweetener and they have massively let us down. They need to get their act together and have a full inquiry. They should be the ones raiding offices, not just the European Union investigators. So too, Angus MacNeil, the SNP MP, believes the OFT has questions to answer. He said: “The EU has shown another UK institution to be failing and therefore methodology and approach of the OFT needs to be looked at carefully.”
Under EU competition rules, companies that engage in anti-competitive behaviour can be hit for up to a tenth of their turnover, a sizeable sum in the case of each of the firms under scrutiny, even if the punishments pale against those meted out to BP in wake of the Gulf of Mexico oil spill. But the growing disgust surrounding the allegations has increased the political pressure and prompted calls for extreme sanctions, such as windfall taxes imposed on the guilty. Prime Minister David Cameron has reserved judgment on the role of the OFT, but vowed action will be taken if the EC uncovers wrongdoing. “There is obviously the full force of the law available,” he said after news of the allegations broke. “Let’s let the investigators do their work. If this has been happening it is very, very serious and major consequences will follow.”
Ironically, the investigation may have the unwanted consequence of adding another layer to the sector’s impermeability rather than cutting through it. In the aftermath of the EC’s statement, the share price of BP remained largely unchanged, a sign that the markets regard the looming scandal as no match for political tensions or terrorism when it comes to impacting on bottom lines. There are also concerns that the fear of negative publicity could deter companies from submitting information to PRAs, weakening the effectiveness of the system.
In the meantime, all eyes are on the EC. With no legal deadline, quite how long its inquiry will take remains to be seen, although industry observers pinpoint the end of 2014 as a conservative estimate. The EC has stressed that its unannounced inspections were only a “preliminary step” into its probe of suspected anti-competitive practises, and the swiftness with which it fulfils its task depends on the complexity of the allegations and the co-operation of those they have been made against.
For the Abassi family, and millions like them across the country, the dealings of the commodity markets continue to prove obscure. Until the EC reports back, all that really matters to them – the price at the pumps – remains unchanged. It may be traded in an impenetrable matrix, but oil always has, and always will be, a human story.
‘One young lad said he was on a mission to die’ – An investigation into the scourge of heroin in Dumfries, from The Herald. The issue of the opiate and the criminal activity surrounding it rightly generates significant press attention every other day. However, the official statistics tell only one side of the story. I spent some time in the south-west of Scotland to explore the grim, ironic reality of Scotland’s efforts to rid itself of the drug.
MARK McKeand was only a boy when he was startled awake by the sound of gunfire. It was around half-past one on a Saturday morning when the figure in a black woolly hat ran into the front garden of his family home and stood there for 30 seconds, unloading round after round from an Uzi machine gun. The house, in a quiet cul-de-sac of Dumfries, was raked by bullets, leaving holes in the masonry, the front door, windows, and even some of the living-room furniture. One shot ripped apart a gas supply pipe, forcing police to evacuate nearby streets. Upstairs, the 15-year-old cowered in a bedroom alongside his nine-yearold brother, Gary, and their mother, Jackie. The intended target was not a mother and her young children, but the father, Maurice, who was out at the time. A bricklayer by trade, he had become involved in drug dealing. The failed shooting was an act of retribution from a spurned rival – and, for Mark, a terrifying introduction to the chemical underworld in the south-west of Scotland.
A decade on, he was to find an even darker conclusion. Last weekend, the 25-year-old was discovered dead in a small hostel in a picturesque street of the rural town. While a trickle of people passed along Academy Street’s quaint row of cycle shops, florists and cafes below, Mark was alone in his room, injecting heroin. There was no gunfire or screaming – only silence as his body slumped forward, his face burying into a duvet as the life drained out of it. It was not the first overdose death in recent times. Just six months before, McKeand’s father, Maurice, succumbed to his own heroin problem.
The tragedy which hard-drug addiction brought to the lives of the McKeands is felt widely throughout many families in Dumfries and Galloway. Official figures put the number of addicts in the region at 1,800, but that only covers those who have approached counsellors or treatment services for help. The true figure, police sources and frontline services suggest, stands nearer to 3,500. Last year, a Scottish Executive report showed that while drug misuse has dropped throughout Scotland’s main cities, the problem has risen sharply across the nation’s rural swaths. With the urban markets reaching saturation point, researchers have suggested growing numbers of dealers are relocating to towns such as Dumfries, which witnessed a 52 per cent increase in reported incidences of drug misuse in the three years between 2000 and 2003. Indeed, despite being ranked eleventh out of the country’s 32 local authority areas in terms of population, it boasts the unwanted title of the fourth worst region for problem drug use.
Sources working one-to-one with problem drug users in the south-west indicate that Mark McKeand fell victim to a particularly powerful strain of heroin that has been circulating throughout the town’s network of addicts. Like many users in the region, his habit had been disrupted by two severe heroin droughts over the summer, leaving his tolerance level dangerously vulnerable to purer batches. At least six users have recently testified to one frontline support service about the virulent strain, three of whom themselves suffered near-fatal overdoses. One former associate of several major drug dealers in the area, some of whom are still trading, told The Herald that the heroin is around 70 per cent pure and is coming from the Strathclyde area. Dealers there are trying to entice urban customers who use cocaine. For those forced to go cold turkey in the south-west, it is too strong.
It is, however, not only the powerful batch that poses a risk. Existing dealers in Dumfries, keen to meet demand, have been cutting the drug with potentially fatal fillers, or “bash” as it is known on the street, which can lead to thrombosis. The main agent used is diazepam, but other substances being used include codeine, brick dust and, in one gruesome instance which saw a young woman developing blocked veins, Polyfilla. Some users, fearful of taking a chance, have sought to substitute the drug with large quantities of diazepam, or ‘squiggly G’s’. Imported cheaply from India and Pakistan, and available for just a couple of pounds, a handful will act as a long-lasting stopgap. There has, however, been an increase in fake diazepam, which in some instances has turned out to be horse tranquilizers. The drug can also lead to paranoia and violence; combined with heroin, it can lead to overdoses. The already-damaged drugs community is now further wracked by the fear that every hit could be the last. “It doesn’t just feel like a normal charge you’re getting, ” one gaunt 19-year-old heroin user told me. “It’s the relief that’s the real high ? knowing you’re still okay. That’s as good as the drug.”
The scourge of problem drug use has been the focus of concerted efforts on the part of Dumfries and Galloway Constabulary. Despite its limited resources, the rural force last week disclosed details of an ongoing operation which has successfully wiped out several major arms of the class-A supply network in the region. Operation Round-Up, which began in the spring of 2003, has so far resulted in the imprisonment of upwards of 100 dealers, along with the seizure of drugs with a street value of more than £300,000, and over £300,000 in cash. In all, those waves of dealers targeted are serving a collective prison sentence of more than 70 years. Chief among the operation’s successes has been putting an end to two significant cartels. By initially focusing on low-level dealers who sell to feed their own habits, the police worked their way up the chain, identifying those criminals with a greater profile and the select few described as “crime kingpins”.
One such individual was Scott Ritchie. Last December, police raided 16 properties throughout Dumfries, culminating in the arrest of a dozen people. The raid found heroin worth £1,650, along with £330,000 in cash and £23,000 in jewellery scattered across disparate addresses. Ritchie, his girlfriend Martine Dickson and his long-term associate John Nicholson were reported for numerous offences related to dealing. They were imprisoned in May, receiving 10 years, four and a half years and three and a half years respectively. Like many high-profile dealers, Ritchie’s network of associates was extensive. It encompassed 12 people; the 41-year-old and Nicholson oversaw the operation. Two money holders helped launder the proceeds through a used-car business, while below them were two tiers of pushers; four runners, or “bullies” as they were known; and four street dealers. Throughout it all, Ritchie would know who was dealing for him in and around Dumfries, though he never met low-level dealers face to face. He was, sources claim, savvy in terms of running his empire like a business, but far from bright – upon his arrest, he was found to have drugs on his person. After he was removed from the streets, Ritchie’s place was taken by Robert Beauly, who, like Ritchie, did not use drugs himself. His operation was far less clinical, and more hands-on. Working in a close-knit, four-strong gang, Beauly was known to enforce his patch with violence, and was not slow to assert his power. In April, however, Beauly was apprehended with £27,000 worth of heroin. Following a search of other premises, a further £27,000 in cash was discovered. Last month, the 40-year-old, who had 53 previous criminal convictions, was sentenced to 10 years, having pled guilty to being concerned in the supply of heroin worth £140,000 in Dumfries between last December and April.
The networks of Ritchie and Beauly represented a significant supply filter of heroin in the area. That they have been severed is rightly seen by all as cause to congratulate the police. It is, however, a bitter irony that the success of Operation Round-Up has, in the eyes of some, proved a catalyst for the influx of extra-pure and cut heroin – as opposed to eradicating it. Police officers on the street have reported anecdotal evidence that increasing numbers of addicts are embarking on a “cleaning up” process. Certainly, while many users are sceptical of methadone programmes, compared to the cocktail of heroin available it is regarded as the lesser of two evils. Indeed, there can be little doubt that the force now views the problem of tackling drug-dealing as one that requires a holistic, multi-agency approach. Operation Emperor, which targeted dealers in the area, predominantly in Stranraer, represented the force’s first major commitment to tackling dealers. Over 2002 and 2003 it led to the imprisonment of four major drug barons and 64 dealers. Among those captured was John Ringland, who ran a £1.9m heroin network stretching from Liverpool to Glasgow. A feared figure in Stranraer, he showed little remorse for one user who ran up debts, setting him alight and throwing him from a bridge. Ringland was jailed for eight years, as was Andrew McCreadie, who was another notorious figure in the community.
What the police did not take into account, however, was that simply taking away the supply did not remove the demand. Detective Inspector Brian Anderson, a pivotal figure in Operation Round-Up, says: “With Emperor, we didn’t anticipate the impact taking out the dealers would have on users. It was a huge opportunity missed at the time. We thought operational success meant us showing the press a huge bag of drugs, but we learned from that for Round-Up. Now we’re engaging with the drug-action team and other service providers. We’re more mindful of users’ health. Once the doors are kicked in, we’re in contact with all the agencies involved, getting them in earlier and earlier.” The problem, however, is that once again demand outstrips supply. Shopfront services in Dumfries, predominantly the first port of call for users and their families seeking help, say excessive waiting times for treatment services are preventing many people from escaping the cycle of criminality and addiction.
Mark Frankland, education manager of the First Base Agency, a small charity in the centre of the town which offers support services for users, says that people face a minimum wait of three months before they are even assessed, let alone offered treatment. Indeed, the latest figures from the National Waiting Times Information Framework Report, which details how long it takes for clients of drug treatment services to receive support, highlights the problem in the southwest. In some instances, users were forced to wait more than a year from the point of referral before they were assessed. Even at that stage, they had yet to receive prescribed drug treatments or rehabilitation. In Glasgow, the time between referral and assessment is around a week. “I think the police have been unusually successful with Operation Round-Up, ” reasons Frankland, whose average client is just 18 years old. “Sadly, we wouldn’t agree with them that it’s leading to a cleaningup process. What we’ve seen over the past three years is a cycle. With every major arrest of a dealer at the head of a supply network, there’s been a drought of heroin in the area for a month or two. The problem is, in terms of sheer professionalism, the police are simply miles ahead of (the) treatment services. It’s one of the most successful forces in Scotland, and deserves to be congratulated, but it doesn’t mean addicts are coming off heroin. We get people coming in distraught looking to be put on a methadone programme, but there’s a three-month waiting list, minimum. By the time an assessment for them becomes available, another dealer has filled the gap, and they’re back on it.”
One difficulty with the existing referral system, Frankland suggests, is that the waiting lists are operated through individual doctors’ surgeries which are “not remotely transparent.” While some of the lists move swiftly, others are painfully slow. In one instance, a young user reached number two on his GP’s list, yet it took a further seven months for him to receive an assessment. “It’s often the case that sons and daughters are told by their parents that unless they seek help for their problem, they’ll be cut off, ” Frankland says. “And many do go looking for treatment, but they’re in limbo, waiting for an assessment for months. Their families think they’re lying, but it’s not their fault – it’s the system.”
Jim Parker, lead substance-misuse officer with the Dumfries and Galloway Alcohol and Drug Action team, says the area is on target to bring overall waiting times for heroin users down to four weeks by the end of this year, and down further to a fortnight by the close of 2007. “We have a large number of intravenous injectors and a steady number of referrals to treatment services. But now we’ve learned from Operation Emperor of how a police operation can have wider knock-on effects and we’re making sure all the agencies are aware of what’s happening, ” he says. The police do run an established arrest referral scheme, which offers users help at their first point of contact with police and the criminal justice system. It sees 30 to 40 people assisted from custody at Dumfries and Stranraer each month. According to PC Ian Marshall, a substance-misuse officer, the scheme offers the chance to help people at the lowest point of their cycle as they are kept in police custody. Taking it to its natural conclusion, the force is even planning to advertise the signposting programme on the ceilings of holding cells.
Gradually, though, the gaps in the market left by Ritchie and Beauly are being filled. One reformed addict, still in contact with several major dealers in the area, told The Herald that heroin networks, both established and new, are in operation in Dumfries. Speaking on the condition of anonymity for fear of reprisals, he said: “Ritchie and Beauly might have gone, but there are dealers who’ve already stepped into their shoes – about four or five big guys and lots of smaller fish. I know one guy that’s just out of prison who’s made strong contacts with suppliers in Glasgow, and there are people still dealing ecstasy, smack and coke . . . people known to the police who’ve been left alone for years. It might be the case they’re informing, I don’t know. As well as [users in Dumfries] there’s still a run of users who come from Stranraer to Dumfries to get their fix, and it’s inflated the market here. If you’re looking to become a serious dealer putting out about 10 grams a day, Dumfries is an attractive place to come.”
Increasingly, the scourge is taking grip of a younger demographic. Last year, an eight-year-old – understood to have been born to a drug-addicted mother – and a nine-year-old from the region were two out of three Scots children under the age of 10 who entered drug rehabilitation. Those working regularly with addicts are also aware of several dens known as “open flats” operating in the area. They are owned by young single mothers, 18 or 19 years old, who happily invite youngsters seven or eight years their junior to come and play PlayStation and watch DVDs. With a few pounds in their pocket, they are offered diazepam, an ecstasy tablet or a half-line of speed, for cut price. Heroin, though, is free. Among the area’s 15 to 25 age group, some seven per cent are users. Regular visitors soon become part of the operation and, using mountain bikes, become couriers. Some 15-year-olds have been known to travel around town with as much as two or three kilos of heroin. At a quick £50 for delivery, it is easier than a paper round.
Indeed, for teenagers the trade offers a quick, disposable income. Seven children under the age of 16 were reported for dealing drugs last year. One 17-year-old in the area was known to have traded diazepam in vast quantities. Importing the fixes from India over the internet at 50 pence a time, he then sold them for double that price. Most days he would make around £400 profit, selling an astonishing 800 tablets. For all involved, the fight against drugs will continue. Detective Inspector Anderson, while pointing out that there have been increasing droughts of heroin along with increased self-referrals, knows people are still able to get hold of a fix. “We’re not naive enough to discount the fact that some people will be going outside the area to other dealers, or getting heroin that’s not as pure, ” he says.
Operation Round-Up is ongoing. Last week, police searched a house which they believe is linked to a dealer looking to move in to the area. “If there are no heavy-duty dealers, then vulnerable people have more choice to seek help, ” he added. “These dealers are very violent individuals who exert pressure on people and give them sample bags.” Mark Frankland, meanwhile, has little doubt about how to prevent yet another generation being lost to heroin in Dumfries. When First Base started three years ago, he says, the town was in denial about its heroin problem. Now, he increasingly has to comfort users and their families frustrated at the waiting lists. “There’s a whole variety of projects which are receiving a lot of public funding, and they’re helpful, but they don’t have the immediate impact of frontline treatment services, ” he says. “Even the police’s arrest referral scheme, which is a good initiative, does little good – people may be directed towards treatment, but they’re still waiting months to get it. Families of users feel like they’re banging their head against a brick wall all the time. I met one young lad who sat in front of me and told me he was on a mission to die. His father had died from an overdose, and he seemed hell-bent on going the same way. It’s torturous to see.”
It is a bitter anecdote, which could be about the short life of Mark McKeand. But the sad truth is that it is a story which many people – too many people in Dumfries – can imbue with their own sorrowful details of a life consumed by addiction.