‘Under pressure’: UK politician sent Epstein details of Australian mining tax

London: A former British cabinet minister sent Jeffrey Epstein private documents about an Australian “super profits” tax on global mining companies at the height of a 2010 political fight over the ambitious scheme to raise $9 billion a year.

Peter Mandelson, who is facing calls for a police inquiry into his ties to the sex offender, sent the documents with his personal view that “pressure needs to be maintained” on the Australian government so it would compromise on its plan.

The documents are among millions of files released by the US Department of Justice last Friday and show that Mandelson obtained an analysis of the Australian tax by mining giant Xstrata in June 2010 and sent this on to Epstein.

The correspondence adds to concerns about the way Mandelson kept Epstein informed of business and political developments, given separate files that showed he sent Epstein a confidential UK policy document about asset sales in June 2009.

Mandelson was removed from his post as British ambassador to the US last September over his friendship with Epstein, but is under renewed pressure after the latest disclosures, which lead him to resign from the Labour Party on Sunday.

The exposure of his June 2009 email, which he sent when he was a senior minister with access to confidential briefings, led to calls in London on Monday for a police investigation into his conduct.

The June 2009 document was a policy brief written by special adviser Nick Butler and addressed to Gordon Brown, the then-UK prime minister, to canvass options on asset sales to raise billions of pounds and avoid the need for tax increases.

This generated Epstein’s interest and led him to ask Mandelson: “What saleable assets?” In reply, Mandelson said he guessed it would mean property sales.

British Prime Minister Keir Starmer has criticised Mandelson over his conduct, but is yet to comment on whether it should be the subject of a police investigation. The chief secretary to the prime minister, Darren Jones, told the House of Commons on Monday that the conduct “falls far below the standards expected of any minister” but said a criminal investigation was a matter for police.

The new disclosures about the mining tax centre on an email from Mandelson to Epstein on June 13, 2010, when mining companies including BHP, Rio Tinto and Xstrata were warning the government that the policy would cost jobs, curb investment and cut growth.

Mandelson sent his analysis of the politics to Epstein by forwarding an email he had earlier sent to another person, whose name is redacted in the document.

“The pressure which the industry has applied, with the strong focus on jobs and social impact, is clearly having an effect on a government which is already under pressure,” Mandelson wrote.

“This pressure needs to be maintained so that everyone understands the clear consequences of the govt’s proposals.”

Kevin Rudd announced the Resource Super Profits Tax as prime minister on May 2, 2010, in response to a major tax review, proposing to raise $9 billion a year from the new tax in order to cut other taxes.

The mining industry launched a vigorous campaign against the policy, bruising the government. Rudd was forced out of office by Julia Gillard and Labor powerbrokers on June 24 that year, elevating her to the prime minister’s job. After a negotiation with the mining industry, the RSPT was replaced by a more modest Minerals Resource Rent Tax, or MRRT, on July 2.

“There will come a point when it is harder, not easier, for the government to concede ground,” Mandelson wrote in his analysis to the unknown recipient.

“The Rudd government will want to (or at least give the impression) that they are conceding from a position of strength, not weakness. I think you will want to secure a compromise before this issue is thrown into the heat of the election battle.

“I would suggest that you start to accept that there is no ideological reason why the industry should not be making a greater contribution to society, especially given the constrained economic times, but that this should be done on the basis of fairness.”

Mandelson concluded: “Looking forward to seeing you on the 2nd July. This email comes free, gratis, for nothing!”

The Labour Party had lost the UK election weeks earlier, on May 6, and Mandelson was no longer a minister. He had access to briefings on the mining industry campaign on the Australian tax, however, and included this in his email to Epstein.

Mandelson’s correspondence included a letter from then-Xstrata chief executive Mick Davis to a range of industry executives. The email chain released by the Department of Justice redacts the name of the person who forwarded the Davis email to Mandelson before he sent it on to Epstein.

Davis set out a strategy to encourage community members, contractors, suppliers and others to speak up in public against the tax.

“The Minerals Council of Australia is continuing its TV and radio campaigns which also focus on the potential impact on Australian livelihoods within and outside the mining sector,” he wrote.

“However, we must be realistic on the outcome of this issue. In my view we are destined to pay more tax (somewhat less than what is being proposed!) – but we must and will fight for a proper and legitimate tax structure and not what we have been presented with so far.”

Epstein, who made a fortune through his business connections and deals, followed the markets closely and exchanged business and political information.

The documents disclosed on Friday do not show any meeting between Epstein or Mandelson with Davis at Xstrata.

Epstein expressed regular interest in Xstrata, and sent emails earlier in 2010 saying it was looking for a chairman. Later, in December 2011, he said in an email from St Moritz, Switzerland, that he had met Ivan Glasenberg, the billionaire who led mining group Glencore and was also a director of Xstrata.

“Interesting guy, smart and tough as steel,” he wrote of Glasenberg.

The Parliamentary Budget Office released an analysis five years ago, commissioned by the Greens, that found the abandonment of the RSPT had cost the federal budget $69 billion in foregone revenue.

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