Mandelson: ‘lapse of judgment’ to accept Epstein money for osteopathy course

Lord Mandelson has insisted Jeffrey Epstein’s money did not influence his actions in office as the police assess his links with the disgraced financier.

The Metropolitan Police are reviewing reports of alleged misconduct in a public office over accusations that the peer leaked sensitive information from the heart of government to Epstein.

Files released by the US Department of Justice apparently showed Lord Mandelson passing information to Epstein while the peer was a cabinet minister in Gordon Brown’s government.

In a Times interview conducted before the latest allegations came to light, Lord Mandelson admitted to a “lapse in judgment” over Epstein’s funding of an osteopathy course for the peer’s husband Reinaldo Avila da Silva in 2009, at the time the government was dealing with the global financial crisis.

The files contain reference to a £10,000 transfer from Epstein.

“In retrospect, it was clearly a lapse in our collective judgment for Reinaldo to accept this offer. At the time it was not a consequential decision,” he said.

Lord Mandelson rejected the suggestion this left him open to bribery claims, with Epstein lobbying him to change banker bonus rules.

“There was non-stop discussion from the entire industry about reforming the banks and how to strike the right balance in regulation,” Lord Mandelson said.

“The idea that giving Reinaldo an osteopath bursary is going to sway mine or anyone else’s views about banking policy is risible.”

The peer – whose place in the House of Lords is in question – insisted he had “absolutely no recollection” of receiving payments totalling 75,000 US dollars (around £55,000) from Epstein between 2003 and 2004 as bank details in the files release by the US Department of Justice indicated.

He suggested he did not want to fully exit public life, saying that “hiding under a rock would be a disproportionate response to a handful of misguided historical emails, which I deeply regret sending”.

He told the newspaper that none of the recently released Epstein files “indicate wrongdoing or misdemeanour on my part”.

But pressure is mounting on the Government to legislate to strip him of his peerage if he does not resign voluntarily from the upper house and to remove his membership of the Privy Council.

Former deputy Labour leader Baroness Harman told BBC Radio 4’s Today programme that Labour’s manifesto pledge to remove disgraced members from the House of Lords will be “got on with”, adding: “In the meantime, I think the Prime Minister could be advising the King to stop him from being a privy counsellor.”

Lord Mandelson is on a leave of absence from the Lords and Lady Harman suggested “it would be good for the Lords to pass a motion to say that he’s not to reapply to come back in”.

She said: “I was of the view that Peter Mandelson was untrustworthy from the 1990s, but he was appointed by Tony Blair, he was appointed by Gordon Brown, and appointed again by Sir Keir Starmer.

“But even I, who had a view that he was untrustworthy, I could never have believed that, Gordon Brown having appointed him to the cabinet, that he would sit in that cabinet and leak information whilst the government was struggling to protect the country from the global financial crisis.

“Even I have been shocked at the degree of his wrongdoing.”

Government minister Karin Smyth said his continued membership of the Lords brings shame on the institution.

She told Times Radio: “It is shameful. It does shame politics, and that’s why the Prime Minister was clear that he doesn’t think that Peter Mandelson should continue to be a lord.

“But that isn’t in the Government’s direct gift. It requires primary legislation, and that requires also being passed by the Lords. We don’t have majority in the Lords, which is why it needs to be approached on a cross-party basis.”

The Government hopes to modernise disciplinary procedures to allow for the removal of peers who have brought the House of Lords into disrepute, rather than have a new law targeted directly at Lord Mandelson.

The country’s top civil servant, Cabinet Secretary Sir Chris Wormald, is reviewing Lord Mandelson’s association with Epstein while he was a minister.

The documents indicate Epstein was sent details of internal discussions from the heart of the UK government after the global financial crisis.

Lord Mandelson, the then-business secretary, appeared to tell Epstein he would lobby ministers over a tax on bankers’ bonuses in 2009, and to confirm an imminent bailout package for the euro the day before it was announced in 2010.

In June 2009 he passed on what he called an “interesting note that’s gone to the PM”, an assessment by Mr Brown’s adviser Nick Butler of potential policy measures including an “asset sales plan”.

Epstein responded by asking “what salable assets”, with a reply from a redacted email address saying “land, property I guess”.

The financier was also sent an analysis of business lending in August 2009 drawn up by government minister Baroness Vadera.

The sender of the message to Epstein has been redacted, but Lord Mandelson was involved in the government email thread.

The Metropolitan Police said on Monday officers had received “a number of reports relating to alleged misconduct in a public office” after the files were released, and that they would be reviewed to determine if they meet the criminal threshold for investigation.

A Government spokesperson said: “It is rightly for the police to determine whether to investigate and the Government stands ready to provide whatever support and assistance the police need.”

Former prime minister Mr Brown said he had asked Sir Chris to investigate the disclosure of “confidential and market sensitive information” during the global financial crisis.

Nick Macpherson, former permanent secretary to the Treasury, suggested that then-chancellor Alistair Darling had suspicions about leaks at the time.

“Alistair Darling and the official Treasury were always aware that investment banks had an inside track to Number 10. But the brazen nature of that inside track is rather breath-taking,” he posted on BlueSky.

Mr Darling’s former special adviser Baroness MacLeod told Sky News: “The leaking of that information was, at best, immoral… whether or not it’s a criminal offence, I don’t know enough to be able to say.

“But it was a terrible, terrible breach of trust.”

She said her former boss, who died in 2023, would have been “shocked at the scale of this treachery”.