Mayor's aide 'must go' over cash scandal

Andrew Gilligan
7 Feb 2008

Lee Jasper's position has been described as "untenable" by all three opposition parties as damaging emails revealed the extent of his involvement in the City Hall scandal.

The internal London Development Agency emails were released to the London Assembly as it investigates the LDA's funding of 13 suspect projects run by Mr Jasper - Mayor Ken Livingstone's race adviser - or his friends.

The Assembly inquiry was triggered after the Standard identified a number of projects run by friends of Mr Jasper which have been paid at least £3.3 million by City Hall but have produced little, if anything, to show for it.

Assembly members were questioning Mr Livingstone and senior officials of the LDA over the funding scandal today at a special session. Emails released to assembly members show that:

• LDA officials did not want to fund many of the projects but were pressured into doing so by Mr Jasper.

• Mr Jasper repeatedly pestered the LDA to provide more and more funding and prevented it from acting against one project even when it acted "illegally", according to one email.

• Hundreds of thousands of pounds of taxpayers' money was paid to the projects without any paperwork to show what it was for.

• At least £137,000 was paid without even an LDA sign-off.

• A £300,000 contract was awarded to one of Mr Jasper's friends without the normal tender process or competition.

• LDA officers said that one of their board members, whose organisations received more than £1 million from the agency, had "a conflict of pecuniary interest" and may have breached its code of conduct.

The emails contradict claims by Mr Jasper that he did "not get involved" in funding decisions for the projects or have any "day-to-day involvement" with them. They also contradict a claim by Mr Livingstone that there was a "full audit trail" for all the suspect projects.

Brian Paddick, the Lib-Dem candidate for mayor, said: "This is a very sad day, not just for Lee Jasper but for the black community in London. From the evidence that I have seen it appears to me that Mr Jasper's position is untenable and he should resign."

Damian Hockney, assembly member for the One London party, said: "The key question the Mayor needs to answer today is why did he tell us there was a full audit trail for these projects. We can now definitively say that that is simply untrue. If Ken was lying, he should stand down. If Lee Jasper lied to him, Jasper should be sacked."

Richard Barnes, Tory leader on the assembly, said: "Lee Jasper is a dead man walking."

The briefing given to assembly members by officers says there is no paperwork for some of the grants under scrutiny. For another grant of £20,000, the only document in the file is a refusal letter, making it difficult to understand why the money was paid.

Even on some of the largest grants, such as the £535,000 paid to an organisation called Brixton Base, the assembly briefing paper says that the file contains no business case, financial or performance monitoring.

One document paying Brixton Base - now under police investigation over missing money - an additional £137,000 "was never actually signed," the paper says.

In June 2005 Brixton Base, whose patron is Mr Jasper and whose director is his close friend Eroll Walters, was given £21,000 and a brief 10-week lease on part of an LDA-owned building in Kennington to run a training course.

At the end of its lease, however, it refused to leave, relying on Mr Jasper to protect it from the LDA.

One email in June 2006 shows Mr Jasper ordering the LDA to halt eviction proceedings against Brixton Base.

Another email in August says that Brixton Base "illegally" sublet parts of the LDA's building to a number of other organisations from which it was collecting rent. These included another project funded by the LDA.

In September, when the LDA tried to evict Brixton Base again from illegallyoccupied areas of the building, they were ordered to "put a stop to (the) process" by Mr Jasper. The emails also show that

Brixton Base bid for £1.4 million from the LDA to run a "creative hub" in early 2006. It was refused, with officials describing its proposal as "sketchy", "very vague" and "not recommended". Another official wrote on 20 April 2006: "The organisation does not appear to be ready to take on a project of this size in a meaningful way, nor does the project reflect our objectives."

However, by the end of August, following emails sent by Mr Jasper, the LDA had changed its mind, awarding Brixton Base a total of more than £205,000 and a lease on its building.

Mr Jasper then emailed again, saying: "Could you assess what can be done to assist? This project is struggling and needs its agreed funding ASAP." A sum of £15,175 was paid immediately. Another LDA email, in September, says: "This is a project that has the explicit and very loud support of Lee Jasper (a Mayor's adviser.)"

The report to the Assembly says: "It is not clear how this project was approved."

Although the original grant award was £205,000 there were then numerous "extensions"and the total amount paid ended up being nearly treble that. The report to the assembly says: "It is not clear how or why (these) extensions were approved."

Another project under police investigation, the European Federation of Black Women Business Owners, received £25,000 from the LDA, even though it was run by Yvonne Thompson, an LDA board member at the time. The emails show that she lobbied LDA staff to give her the money. It was initially refused, with a rejection letter the only document in the project file. There is no paperwork to explain why it was subsequently paid.

At the same time, Ms Thompson, also a friend of Mr Jasper, got more than £1 million from the LDA for another organisation, the African Caribbean Business Network. This prompted serious concern among LDA officials of "a conflict of pecuniary interest". The emails also reveal that Ms Thompson paid £800 a month from her LDA grants to Brixton Base. A third contract now being investigated by police was awarded to a friend of Mr Jasper's without the required three competitive tenders.

Joel O'Loughlin, and his company, Diversity International, was given a £295,000 contract to run a web-based tool for London business, even though it had no expertise in computers and was based in Liverpool.

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