Who is Peter Mandelson, and why have his Epstein ties shaken the British establishment?

By Christian Edwards, CNN

London (CNN) — Britain’s political class is being shaken by a scandal the scale of which typically comes around only once in a generation, and the man at the heart of it was once seen as the savior of the party that is currently in power.

Peter Mandelson, a former British ambassador to the United States who is credited with helping to create the modern version of the Labour Party that propelled Tony Blair to power in 1997, is now facing a criminal investigation stemming from the US Justice Department’s latest release of material relating to disgraced financier Jeffrey Epstein.

Mandelson, 72, is accused of passing on market-sensitive information that was of clear financial interest to Epstein in the wake of the 2008 financial crisis. Gordon Brown, Britain’s prime minister at the time, said Tuesday that he has written to the police with information relevant to its investigation and slammed Mandelson for his “inexcusable and unpatriotic” act.

The scandal may have been less potent if Mandelson — who was twice previously forced to resign from government due to his ties to wealthy individuals — had not been plucked from the private sector by Prime Minister Keir Starmer to serve as Britain’s ambassador to Washington, despite his well-known friendship with Epstein.

Although Starmer fired Mandelson as ambassador after just seven months in Washington during the fallout from an earlier release of Epstein files, the prime minister’s initial decision to appoint him has snowballed into a crisis for his beleaguered Labour government, which could yet result in more political scalps.

Who is Peter Mandelson?

Dubbed, somewhat melodramatically, the “Prince of Darkness” for his Machiavellian approach to power, Mandelson became Labour’s director of communications in the 1980s. He helped turn a party seen as sclerotic and captive to trade unions into the polished, market-friendly project known as “New Labour,” which eventually won a landslide election in 1997 under Tony Blair.

Having helped propel Labour to power, Mandelson was appointed “minister without portfolio,” which allowed him to attend cabinet meetings and gave him broad powers across the government. But little over a year into the role, he was forced to resign in 1998 for failing to declare a loan he obtained from a millionaire colleague to help him buy a house.

Despite leaving in disgrace, he returned to the government the next year as trade secretary, before resigning again in 2001 over claims that he used his position to influence a British passport application from a wealthy donor.

Mandelson then left the government for Brussels, serving as the European Union’s commissioner for trade from 2004 to 2008. He returned a third time to help revive the ailing government of Prime Minister Gordon Brown as it grappled with the fallout from the 2008 financial crisis, this time serving as business secretary.

After Labour lost the 2010 general election, Mandelson spent more than a decade in the private sector. Last year, however, he was tapped by Prime Minister Keir Starmer for the role of British ambassador to the US. The decision was seen at the time as risky: Starmer wanted a political heavyweight to hold his own in the Washington of US President Donald Trump. So he traded Karen Pierce — a career diplomat seen as a safe pair of hands — for the more mercurial Mandelson.

When did the Epstein links emerge?

Starmer’s decision backfired within months. In September, the US Justice Department released a book compiled for Epstein’s 50th birthday in 2003, in which Mandelson had penned a handwritten note describing Epstein as “my best pal.” He was also pictured in a bathrobe sitting with Epstein.

The scandal swelled after British media reported a trove of emails between Mandelson and Epstein, in which the veteran Labour politician expressed support for his friend, despite the financier’s 2008 conviction for soliciting prostitution from a minor.

“I think the world of you and I feel hopeless and furious about what has happened,” Mandelson wrote. He gave Epstein advice, suggesting he fight back using techniques from Sun Tzu’s “Art of War.”

Days before Trump’s second state visit to the United Kingdom, which Mandelson had helped plan and in which he was expected to play a key role, Starmer dumped him as ambassador. The Foreign Office told CNN at the time that the emails showed that the “depth and extent” of his relationship to Epstein is “materially different from that known at the time of his appointment.”

What did the latest files show?

The Justice Department’s latest release of files shows the depth and extent of their relationship was greater still. Among the documents is an email exchange from 2009 in which Mandelson, while serving as business secretary in Brown’s government, appeared to leak to Epstein detailed policy measures that the cabinet was considering in the wake of the 2008 financial crisis.

In another exchange from December 2009, Epstein and Mandelson discussed Britain’s plans to impose an additional tax on bankers’ bonuses as a punitive, one-off measure following the crash. Mandelson appeared to suggest that the head of JP MorganChase should call Alistair Darling, then Britain’s finance minister, and “mildly threaten” him. According to Darling’s memoirs, published two years before his death in 2023, the call was duly made.

Mandelson also appeared to tip off Epstein that the European Union was planning a €500 billion bailout to prop up the euro, also in the wake of the financial crisis.

Newly released bank statements also appear to show that between 2003 and 2004, Epstein paid a total of $75,000 into bank accounts linked to Mandelson. Email exchanges suggest that the financier may have sent £10,000 to Reinaldo Avila da Silva, Mandelson’s husband, to help fund his osteopathy course.

A spokesperson for Mandelson told British media that neither the former ambassador nor da Silva “has any record or recollection of receiving payments in 2003 and 2004 or know whether the documentation is authentic.” CNN has been unable to contact Mandelson.

What happens now?

Sacked as ambassador, Mandelson remained a member of Britain’s House of Lords, the upper chamber of Parliament. However, facing a growing outcry this week, the speaker of the House announced that Mandelson will quit the Lords on Wednesday.

His problems will not end there. The Metropolitan Police said Tuesday that it has launched an investigation into Mandelson for alleged offenses involving misconduct in public office, following the latest release of Epstein files by the US government.

Brown said he has provided the Metropolitan Police with information relevant to its investigation of Mandelson’s communications with Epstein. The former prime minister said Mandelson’s alleged leaking of information to Epstein was “an inexcusable and unpatriotic act at a time when the whole government and country were attempting to address the global financial crisis that was damaging so many livelihoods.”

Why is it a problem for the British government?

Mandelson’s latest disgrace has created a huge political headache for Starmer. Opposition parties have questioned Starmer’s wisdom in appointing Mandelson as ambassador despite his history of scandals.

“The scandal, sleaze, and speed of (Mandelson’s) downfall only increases the scrutiny on (Starmer’s) decision to send him to Washington,” said Kemi Badenoch, the leader of the Conservative Party.

Nigel Farage, leader of the populist Reform UK party, who is himself mentioned 32 times in the Epstein files, said Starmer made a “grave, grave error of judgment” in appointing Mandelson as ambassador.

Starmer has fiercely criticized Mandelson, saying that passing on sensitive information was “disgraceful” and that he had “let his country down.”

Mandelson resigned from Labour on Sunday, saying he did not want to cause the party “further embarrassment.” Despite his Teflon qualities, it is not likely that Mandelson’s latest disgrace will be followed by rehabilitation as before.

In 1998, in his attempts to distance the Labour Party from its socialist roots and confirm its newfound embrace of free markets, Mandelson — then Britain’s trade secretary — said that, so long as everyone paid their taxes, the Labour government was “intensely relaxed about people getting filthy rich.” Now, Mandelson’s own proximity to the filthy rich appears to have precipitated his final downfall.

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