Liam Fox resignation: Adam Werritty money trail was final straw

Jetset lifestyle revealed in detail of donations to self-styled adviser's company forced defence secretary's hand

By Thursday evening, even friends of Liam Fox feared he would have to resign after months of disclosures about his undeclared relationship with his best man, Adam Werritty.

The final revelation that appears to have forced the defence secretary to buckle came on Friday from documents which showed that his self-styled adviser had received £147,000 from companies which had paid for a jet-set lifestyle.

Those who had paid money to Werrity's company, Pargav Ltd, included a corporate intelligence company with alleged close links to Sri Lanka, a property investor who lobbies for Israel and a venture capitalist.

The money, according to the donors, was supposed to help foster peace initiatives. In the process, it paid for five-star hotels and first-class travel for Werritty. And at some of the destinations, he had met Fox in the company of heads of state and foreign generals.

The disclosures of a money trail and further undeclared meetings were, it seems, to prove crucial in the decision by Fox to stand down.

It emerged on Friday that Werritty was the hidden hand behind Pargav Ltd, a not-for-profit company. According to the Times, six different financial entities had paid £147,000 – up to £35,000 each – to the company since October last year. The entities include Tamares Real Estate, an investment company owned by Poju Zabludowicz, a Tory donor who is also the chairman of and major donor to Bicom, an organisation that lobbies on behalf of Israel.

Zabludowicz, 57, who was born in Helsinki and now lives in Hampstead, is one of Britain's richest men. He has some investments in the arms industry – his father built up the Israeli arms company Soltam in the 1950s after working closely with Shimon Peres, who was then the director general of the Israeli defence ministry.

A spokesman for Zabludowicz said he owned a "legacy" arms business in the US, but added that it was not a significant part of his empire. Most of his assets were now in property, he said.

"Any suggestion that he has benefited from this relationship [with Pargav] would be completely wrong," he said. "For many years, Poju Zabludowicz has helped fund not-for-profit organisations, not individuals, due to his passion for the promotion of peace and understanding between peoples in the United States, Europe and the Middle East."

Another firm, G3 Good Governance Group, a private intelligence company, made a reported donation of £15,000 to Pargav, which was intended to go towards charitable work.

The private company, which provides advice on risky overseas investments and investigative services, has attracted little attention from the media until this week. It styles itself as an "independent strategic advisory firm" offering "insight, analysis and advice to help leaders make informed decisions and realise value in complex situations". It says it places the "highest priority on integrity, discretion and trust".

It operates out of an undistinguished building in Mayfair and has been chaired by Chester Crocker, the US assistant secretary of state for African affairs under President Ronald Reagan, since at least 2005.

With another office on Madison Avenue in New York and a network spread around the world, the firm reportedly has 32 analysts.

Interest in the links between G3 and Fox was aroused earlier this week when it emerged coincidentally that the Sri Lanka Development Trust was also based at the same building as G3. The trust was set up by Fox to rebuild the country's infrastructure using private finance and is now based in Edinburgh. Crocker refused to comment. One of his allies had told the press that he had no involvement with Sri Lanka and had not heard of the trust.

Perhaps the most damaging disclosures showed that many of the financial transactions of Pargav corresponded with the 18 destinations that Werritty and Fox visited together over the past 16 months.

Reports claim that £583.34 left the company's accounts on 21 December to pay The Palace, a five star resort in Dubai. Ministry of Defence records showed that Fox was also in the UAE city from 17-22 December.

Pargav's finances, according to reports, track Werritty back to Dubai in June, when he fixed a meeting with Fox for Harvey Boulter, a British businessman.

In Sri Lanka the following month, the accounts reportedly showed that Werritty withdrew £117.73 from the Hatton National Bank.

Records at Companies House show that Werritty is not the director of Pargav, despite being its only prominent employee. Oliver Hylton, a charity adviser to a hedge fund, told reporters on Friday that he had signed up as its director after being asked by Werritty. He said that Werritty was an "adviser of some sort" to Fox. "Adam is a good and honest man. He has just been making a living," he said. Hylton added that he had met Werritty through Tory donors.

Another reported Pargav sponsor was Michael Lewis, 52, the vice-chairman of Bicom until 2007 and boss of Oceana Investments. A Conservative party donor, he also gave £13,832 to Atlantic Bridge, the charity set up by Fox and run by Werritty from Fox's parliamentary office. Lewis donated £5,000 to Fox's leadership campaign in 2005.

There have been other intriguing connections between Fox's best man and Bicom, which is devoted to seeking a more supportive environment for Israel.

It also paid for Werritty's flight and hotel bills when he attended a conference in Israel in 2009 to speak about Iran.

Bicom's former communications chief is Lee Petar, who left Bicom several years ago to form Tetra Strategy. Emails seen by the Guardian show that Petar had been working to arrange a meeting between Boulter, a private equity boss based in Dubai, and Fox or Werritty since March this year.

Following this week's media storm surrounding Fox, the donors to Pargav may now be ruing the day they got involved with Werritty. Jon Moulton, a venture capitalist who has been listed as making several donations to Pargav, issued a statement following Fox's resignation claiming that Fox had lobbied him for money on Pargav's behalf.

"Before the last election, I had made several on-the-record donations to support Dr Fox following a request to do so from a Conservative party fundraiser.

"After the election, I was asked by Dr Fox to provide funds to a non-profit group called Pargav involved in security policy analysis and research and, after obtaining written assurances as to its activities, I provided personal funding to Pargav.

"Neither I, nor any of my associates, have sought or received a benefit of any form from Pargav. I have not received an account of Pargav's activities, nor have I been involved at all with Pargav, since funding. I will not be doing this again," he said.


Rupert Neate, Rajeev Syal and Rob Evans

The GuardianTramp

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