Osborne denies asking Russian billionaire linked with Mandelson for party donation

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The Shadow Chancellor has denied he sought a donation to the Tory party from a Russian oligarch.

Any donation from a foreign national is illegal.

In a statement to the press today George Osborne admitted that there had been “conversations” about a donation but he did not ask for money and the party did not receive any.

The revelation came in a letter to The Times from Nathaniel Rothschild, a friend of Mr Osborne and Lord Mandelson, who was EU Commissioner for Trade until he rejoined Gordon Brown’s government earlier this month as Business Secretary.

Mr Rothschild alleged that Mr Osborne and Andrew Feldman, the Tory party chief executive, solicited a donation of £50,000 from Oleg Deripaska at a summer gathering in Corfu.

In his letter Mr Rothschild said that ways of ‘channeling’ money from the Russian to the Tories via one of his UK companies had been discussed.

In a statement today the Conservative party said:

“George Osborne has met Oleg Deripaska on five occasions, four of which happened over a weekend in Corfu in August.

“On Saturday January 26th 2008 at the Davos World Economic Forum, Mr Osborne was introduced to Mr Deripaska in the company of others including Peter Mandelson.

“They had a brief group conversation about the world economy.

“On Friday August 22nd while on a family holiday in Corfu, Mr Osborne and his wife were invited onto Mr Deripaska’s yacht by Mr Rothschild. Others present again included Peter Mandelson.

“The conversation involved Russian and British politics. There was no conversation of any kind about political donations.

“That evening Mr Osborne attended a party at the Rothschild villa and sat on the same table as Mr Rothschild, Mr Deripaska and Mr Mandelson. Again, there was no conversation about party funding.

“The following evening – August 23rd – Mr Osborne attended a dinner at a local taverna. Mr Deripaska did not attend but both Mr Rothschild and Peter Mandelson did. The conversation involved the state of British politics.

“The next day – August 24th – Mr Osborne, who had been staying in a rented house but was now staying at the Rothschild villa with his family, mentioned to Mr Rothschild that Andrew Feldman (Tory party chief executive) – who Mr Rothschild had met once before – was holidaying half an hour away with his family and friends.

“Mr Rothschild then invited Mr Feldman to join them for an early evening drink at the villa.

“This was a social invitation and at no point previously had Mr Osborne and Mr Rothschild discussed the possibility of a donation to the Conservative Party from Mr Deripaska.

“Mr Feldman, Mr Osborne, Mr Rothschild and two other house guests gathered on the villa terrace.

“There was a discussion about British and American politics and in the course of which Mr Rothschild suggested to Mr Feldman that his friend, Mr Deripaska could be interested in making a party donation. Mr Feldman had not met Mr Deripaska previously and was not aware who he was.

“At this point Mr Rothschild said that Mr Deripaska owned UK trading companies including Leyland Daf (LDV).

“There was no discussion about how a donation by Mr Deripaska could be concealed or channelled.

“At no point did Mr Osborne or Mr Feldman solicit or ask for a donation, suggest ways of channelling a donation or express any wish to meet with Mr Deripaska to discuss donations.”

The party said Mr Osborne had no further discussions with Mr Deripaska.

Mr Rothschild, who went to Oxford with Mr Osborne, had further discussions about a donation from Leyland DAF with Mr Feldman, who ultimately decided it would not be “appropriate. ”

He is reportedly standing by his account of events as set out in his letter to The Times and is prepared to defend his claims in court.

“Perhaps in future it would be better if all involved accepted the age-old adage that private parties are just that,” he wrote.

This is a reference to Mr Osborne’s revelations to the press that Lord Mandelson had “poured poison” in his ear about Gordon Brown during their meeting at the taverna on August 23rd, just weeks before he accepted a job in his Cabinet.

“A very specific allegation has been made that we solicited a donation from Mr Deripaska and I want to make it absolutely clear that we neither asked for money nor did we receive money,” Mr Osborne said today.

“I certainly regret all the fuss and misunderstanding that has come around this trip to Corfu.”

Lord Mandelson has faced questions about his decision to accept hospitality from Mr Deripaska, the richest man in Russia and head of the world’s largest aluminium company.

When he was appointed Business Secretary three weeks ago Lord Mandelson became the first gay Cabinet minister since 2001.

He left his role as EU Commissioner for Trade to take up the post.

On BBC television on Sunday he attacked “muck-raking stories that have appeared in some of the Conservative newspapers” about his relationship with Mr Deripaska.

“I have a very clear view of my public role and the responsibilities I have in that public role and how I spend my private time,” he said.

“There has been innuendo in the newspapers that I gave favours or I gave benefits as trade commissioner to certain individuals because of my personal friendship with them.

“The entirety of the European Commission, the director general for trade himself, has made clear there is not one jot of truth in that, that it is 100% false.”