Lord Blencathra threatens legal action

(CNS): Following the publication by the UK’s House of Lords Sub-Committee on Conduct of the official report dismissing complaints against the director of the Cayman Islands London Office, Lord Blencathra, the Tory peer who is paid to promote the interests of Cayman in the UK and Europe, issued a statement to Cayman News Service saying that he was seeking legal advice on whether to take action against those in the UK who initiated the “libel” that provoked the complaint and any news outlets overseas who repeated it. Meanwhile, there has been no statement from the London Office concerning the revelations that the UK is planning to impose drastic tax information sharing rules on its dependencies, including Cayman.

In his report, the Commissioner for Standards Paul Kernaghan cleared Blencathra of breaching the House of Lords Code of Conduct. Citing a report of the Sub-Committee on Lords' Interests (as it then was), he stated: “The distinction between advocacy and advice is crucial. Inevitably, however, there are borderline issues. These may place too great a burden on the judgment of the individual Member and may lead him to cross the boundary between what is legitimate and what is not.

"Members willing to take money in return for parliamentary services place themselves in great danger of crossing the boundary, knowingly or inadvertently. Even when a Member's intention is limited to obtaining information, the very fact of approaching, on behalf of paying clients, MPs, other Lords, Ministers and civil servants, may give rise to a perception of advocacy and lobbying. The impression can easily be given that not only advice but also advocacy has been bought by the client. Whether or not a Member has indeed crossed the boundary from the permissible depends on the facts of each case."

The complainant in the case was made by Labour MP Paul Flynn, who wrote to the commissioner requesting that he investigate Lord Blencathra on the basis of an article in The Independent on 17 April 2012.

The complainant alleged that Lord Blencathra provided parliamentary services to the government of the Cayman Islands Office in the United Kingdom. The complainant specified five instances where it is alleged that occurred, and provided a transcript of a press conference given by Lord Blencathra on Cayman27 in which he spoke about his role.

The Commissioner found Lord Blencathra not to have breached the Code of Conduct, finding that the instances complained of did not amount to the provision of parliamentary advice or services.

In his statement addressed specifically to CNS, Lord Blencathra said, “This was always a bogus complaint fabricated by the discredited Bureau of Investigative Journalism. That is an organization funded by Labour Party supporters. Its ethos is anti-Conservative, anti-Lords, anti-IFCs and anti-Thatcher. The journalist and the Independent explicitly made those links in the article in order to discredit me as well as making the highly libelous allegation that my expenses were subject to special scrutiny which is a lie.”

“Now that the Commissioner has exonerated me I have consulted the lawyers acting for Lord McAlpine [a Tory peer who was wrongfully identified in a BBC documentary as a paedophile] who is also taking action against the Bureau of Investigative Journalism. Depending on the legal advice, it is my intention to take action against those in the UK who initiated the libel and any news outlets overseas who repeated that libel.”

Neither the Bureau of Investigative Journalism nor The Independent have received any correspondence from Lord Blencathra on his intentions regarding possible legal action.

Lord Blencathra was appointed director of the London Officer a year ago and it has since been revealed through an FOI request that he and his consultancy company, Two Lions, are costing the public purse more than CI$19,500 per month. Redacted correspondence between Blencathra and Cayman civil servants implies that his appointment was timed to ensure that he could attend the London meeting the premier had with the OT minister at the time, Henry Bellingham, in November 2011, during which McKeeva Bush signed the Framework for Fiscal Responsibility agreement, which the premier now says he did under duress.

The details of Blencathra’s contract, revealed through the freedom of information request, shows that government felt in the “changing global financial circumstances” that the London office needed to expand its traditional goals to include strengthening the relationship between the Cayman government and the FCO, as well as other UK and European organisations, and actively promote Cayman in the business communities there. The contract also points to the need for someone to help identify opportunities for development and inward investment to diversify the Cayman economy and expand the islands’ revenue base.

The contract states that Lord Blencathra and his firm, Two Lions Consultancy, had been identified as having the experience and skills to undertake the proposed expansion of the London Office, working alongside the deputy director, Charles Parchment, who would continue to take on the more traditional duties of the London office. According to the Department of Commerce and Investment, the London Office, not counting the Department of Tourism side, has three staff members, and its budget for 2011/12 totalled CI$817, 763. 

According to a release issued at the time of his appointment, Lord Blencathra’s immediate agenda included developing a more comprehensive understanding with the FCO and other governmental organizations in the UK of the financial management of the Cayman Islands, its economy and its day to day operations.

Tasked with promoting the Cayman Islands' interests in the UK and Europe, officials said after his appointment that he would be liaising with and promoting the interests of the Cayman Islands at last year’s Overseas Territories Consultative Council. In particular, the peer would be assisting the CIG in developing the new accord for the Overseas Territories with the UK government.

Now that it has been revealed that the UK may impose “Son of FATCA” rules on its OTs and Crown Dependencies, CNS has asked Lord Blencathra via email what action has been, or is being, taken by him, the London Office or Two Lions in response to this news, and also what effect this will have on the offshore financial services industry and, in particular, the Cayman Islands.

We also asked: “Given this latest development, can you say if the Cayman Islands London Office has been in any way effective in changing the narrative in Europe or the UK concerning the negativity towards the Cayman Islands since you were appointed as director? If so, can you specify what you have achieved?”

But although we received earlier that day the statement concerning his personal issues, there has so far been no response to our enquiries concerning these latest moves by the UK.

See Standards Commissioner's full report

Related articles:

‘Son of FATCA’ talks in UK (CNS Business 30 November 2012)

UK commissioner clears Lord (CNS 7 October 2012)

UK Lord costs £14k+ pcm (22 June 2012) 

Lord gets top UK Cayman job (CNS 14 November 2011) 

David Maclean: expense claims of MP who led fight to keep payouts secret (The Telegraph 17 May 2009)