Corfugate Scandal Cheers Gloomy Britons

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Sang Tan / AP

British Shadow Chancellor, George Osborne speaks to the media

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Big money is to politicians what kryptonite is to Superman, but Mandelson was given the antidote to his latest exposure by Rothschild. In a startling intervention, Rothschild sent a letter to the Times of London newspaper that instantly moved attention away from Mandelson's links with Deripaska and onto the hapless Osborne. According to Rothschild, Osborne and Andrew Feldman, the chief executive of the Tory party, had met with Deripaska and had discussed with him a possible donation to Conservative coffers.

But the only legitimate sources of party funding under British law are individuals listed on British electoral registers and British companies. Osborne and Feldman vigorously deny soliciting funding from Deripaska, a foreign national, or discussing ways to circumvent the rules. Despite calls led by Prime Minister Brown for an investigation into the matter, the Electoral Commission indicated that it saw no need for such inquiries and Tony Wright, a Labour MP who chaired the parliamentary committee that investigated a funding scandal during Blair's final term, also suggested the Tories were in the clear. "We are not talking about corruption here. We are not talking about law-breaking," said Wright. This was about "a massive misjudgment." Or, as Lord Tebbit, former chairman of the Conservative party and one of Margaret Thatcher's most loyal Cabinet members tartly observed, "if you sleep with dogs, you will get fleas."

For the moment, Osborne and his colleagues are left scratching, but fleas have a habit of jumping and in recent days some reporters have turned their attention to the ties that bind Rothschild and Deripaska and to the impact of the credit crunch on their business interests. Rothschild explained in his Times letter that he was moved to intervene because of Osborne's original indiscretion in telling a journalist about his private conversation with Mandelson. "It ill behoves all political parties to try and make capital at the expense of another in such circumstances. Perhaps in future it would be better if all involved accepted the age old adage that private parties are just that," wrote Rothschild. His letter and a further statement helped one friend, Mandelson, at the expense of another, Osborne. "If this was just about integrity, Nat[haniel] wouldn't have done it," says a member of the financier's circle. "I don't think he realized the storm he was going to create, but there's more to this than meets the eye." As Britain sinks into a gloomy winter, the promise of new revelations should at least bring some small joy.

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