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Saturday, October 15, 2011

Secret cash trail that meant Fox had to go: Defence Secretary resigns after claim he 'personally asked Tory donor to fund his best man'


  • Transport Secretary Philip Hammond is named as his replacement at the MoD with Justine Greening taking his job
  • Dr Fox admits he 'mistakenly allowed the distinction between my personal interest and my Government activities to become blurred'
  • 'The consequences of this have become clearer in recent days,' he said as he quit
  • David Cameron says he is very sorry but 'understands reasons'
  • Shadow Defence Secretary Jim Murphy says 'this was unavoidable and inevitable'

Resigned: Dr Fox, pictured here yesterday, today stood down as Defence Secretary after a week of allegations about his relationship with Adam Werritty
Resigned: Dr Fox, pictured yesterday, has stood down as Defence Secretary after a week of allegations about his relationship with Adam Werritty
Liam Fox resigned last night amid allegations that he asked a wealthy Tory donor to fund his best man and former flatmate Adam Werritty.
Dr Fox quit when he learnt he was to face a torrent of new claims about damaging conflicts of interest between Mr Werritty’s backers and his role as Defence Secretary.
He fell on his sword after the millionaire money men turned on him and deliberately leaked details of how £157,000 was paid to Mr Werritty to let him fly around the world with Dr Fox.
Today the Mail reveals that venture capitalist Jon Moulton agreed to fund Mr Werritty’s globetrotting after he bought a defence company that makes components for aircraft including RAF fighter jets and troop transporters.
In a shattering blow to Dr Fox’s credibility, Mr Moulton, who gave Mr Werritty’s company Pargav £35,000, made the explosive claim last night that Dr Fox solicited his cash.
He said: ‘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.’
Damaging news about the money trail came as Dr Fox learnt that Cabinet Secretary Sir Gus O’Donnell made it clear that he was likely to find the Defence Secretary in serious breach of the ministerial code of conduct.
Senior figures on the Tory backbenches had also let it be known that they thought he should go.
Earlier Mr Werritty, who had styled himself as Dr Fox’s adviser despite having no official role, had been quizzed for a second time by an official working for Sir Gus. She found his answers about his activities confusing.
Knowing he might be forced out, Dr Fox telephoned David Cameron at around 2.30pm to say he would quit.
Sources said the Prime Minister was ‘taken aback’ when he received Dr Fox’s call at his constituency home.
Mr Cameron had been at pains to give the Defence Secretary space to clear his name, partly because of his reluctance to offer up ministerial scalps to media firestorms but also because he knew the Right of the Tory Party would react with fury if he was seen to cut Dr Fox adrift.
‘The PM was waiting for Gus O’Donnell’s report which was due early next week,’ said a close ally. ‘But this drip-drip of allegations meant Liam thought he was dying a death by a thousand cuts.’
 

Dr Fox was replaced by Transport Secretary Philip Hammond, whose job went to rising star Justine Greening, the Economic Secretary at the Treasury.
LIAM FOX LETTER.jpg
Dr Fox had tried to brazen out the scandal for nearly two weeks but gave up yesterday after the publication of details about Mr Werritty’s money men opened the floodgates to new claims about conflicts of interest.
The Mail can reveal that Mr Moulton, a longstanding donor to Dr Fox, paid £60million for defence firm Gardner UK in February 2010. Eight months later he gave money to Mr Werritty.
Clearly disgusted with the way his affairs were dragged into the public sphere, Mr Moulton said: ‘I will not be doing this again.’
He insisted that neither he nor his associates had ‘sought or received a benefit of any form from Pargav’.
But his donation occurred during the Government’s Strategic Defence Review which meant £5billion of cuts. The RAF aircraft which used Gardner’s components escaped unscathed.
Adam Werritty and Liam Fox in 2007 in Middle East. Senior Tories predicted Dr Fox will have to resign after details emerged about the tycoons who paid for Werritty to follow him around the world
Adam Werritty and Liam Fox in 2007 in the Middle East. Senior Tories predicted Dr Fox would resign after details emerged about the tycoons who paid for Werritty to follow him around the world
Dr Fox’s exit became inevitable after the intervention of PR man Lord Bell, who helped orchestrate a meeting between the Times newspaper and hedge funder Michael Hintze.
The Times was given access to accounts from Pargav, whose sole director was Oliver Hylton, a charity adviser to Mr Hintze’s hedge fund CQS. The accounts detailed Mr Werritty’s spending on first class flights and five-star hotels as he followed Dr Fox around the world. They also revealed his lavish expenditure at restaurants and the purchase of a £2,000 suit.
Lord Bell confirmed last night he was present at the meeting. He said: ‘Oliver Hylton offered information relating to Pargav and this has been reported.’
Dr Fox arrived at his constituency home in Tickenham, North Somerset, in the back seat of a black BMW with the window blinds drawn.

A MAVERICK RIGHT-WING POLITICIAN WHO LOVED HIS PARTY

Maverick: Dr Fox with Margaret Thatcher at his 50th birthday party in Whitehall last month
Maverick: Dr Fox with Margaret Thatcher at his 50th birthday party in Whitehall last month
Liam Fox has often raised eyebrows at Westminster with his colourful personal and professional life.
He is renowned for his sociable nature and, earlier this year, laughed off criticism over his decision to go to the pub when Ministry of Defence officials were helping co-ordinate the evacuation of UK nationals from Libya.
In doing so, he compared himself to Sir Winston Churchill, joking: 'It's a bit like asking Churchill if he regrets having a drink during World War Two.'
Few middle-aged Tory men can claim to be friends with a glamorous Australian pop star but Dr Fox counts Natalie Imbruglia among his close pals.
His parties are legendary and last month a gathering he organised to mark his 50th birthday attracted former prime minister Baroness Thatcher, who had been forced to miss an event held at Downing Street in honour of her own 85th birthday last year.
A hard-line right-winger, his relationship with No 10 has at times been strained, particularly after two highly-critical letters he wrote to Prime Minister David Cameron found their way into the press.
He also managed to cause upset when he described Afghanistan as a broken, 13th century country on the eve of a visit there by fellow Cabinet ministers William Hague and Andrew Mitchell, a move which reportedly earned him the nickname "13th century Fox" among officials.
His traditional right-wing views have secured him a strong powerbase within the party but he failed in his bid to become party leader in December 2005.
Before becoming an MP, Dr Fox worked both in the NHS and as a civilian army medical officer. He has credited his military work with convincing him of the Government's need to look after the armed forces.
Born and raised in East Kilbride, Scotland, he attended the local comprehensive school before going on to study medicine at Glasgow University.
After working as a GP in Somerset and Buckinghamshire, he successfully contested the rural Somerset seat of Woodspring, now North Somerset, in 1992.
The newly-elected MP soon became a polished Westminster performer thanks to his prize-winning debating skills, rising quickly through the ranks of Tory MPs and arriving at the Foreign Office in 1995.
In opposition, the anti-devolutionist was given charge of the constitutional affairs brief before taking over responsibility for health from Ann Widdecombe.
The Scot was made party chairman in 2003 under then-leader Michael Howard, and his slick, reliable performances often saw him named as a potential successor.
In 2005 he married long-term girlfriend Jesme, a fellow doctor from the same area south of Glasgow.
In an interview shortly before the big day, he said: 'I know that some people use smears and I have heard them for years. They'd say "Why are you not married? You must be a playboy or a wild man or gay", or whatever. Well, I'm getting married in December and I'm perfectly happy with my private life.'
During the general election campaign last year, his Tower Bridge flat was burgled while he was at home and the thieves made off with his car and laptop.
That incident resurfaced damagingly this week when it emerged that Dr Fox had not been alone, as reporters were told, but had a male friend staying in the guest room.

Dr Fox quits: Timeline to his resignation

Best man: Liam Fox on his wedding day with best man Adam Werritty who has been at the centre of the political storm
Best man: Liam Fox on his wedding day with best man Adam Werritty who has been at the centre of the political storm
Here is a timeline of events leading up to Liam Fox's resignation as Defence Secretary:
1998: Liam Fox, then an opposition spokesman for constitutional affairs, meets Adam Werritty, a student at Edinburgh University who is 17 years his junior.
1999: Dr Fox appointed shadow health secretary.
2002/03: Mr Werritty stays as a flatmate in a spare room at Dr Fox's London home.
2002: Mr Werritty becomes consultant at a firm called UK Health.
2004: Mr Werritty works as a paid intern for Dr Fox and receives a Commons pass. He also becomes director of UK Health Group, of which he and Dr Fox are shareholders.
2005:
December 6 - Dr Fox moves to defence brief in David Cameron's shadow cabinet.
December 17 - Mr Werritty is best man at Dr Fox's wedding to Jesme Baird.
2006: Mr Werritty becomes director of a group called Security Futures, which later folds.
2007: Mr Werritty appointed UK executive director of the Atlantic Bridge charity, founded by Dr Fox to promote Anglo-American relations.
2009: Dr Fox and Mr Werritty visit Sri Lanka together.
2010:
April 22 - Burglary at Dr Fox's London home while his wife is away.
May 12 - Dr Fox is appointed Defence Secretary in Mr Cameron's first Cabinet.
June 4 - Dr Fox and Mr Werritty attend conference in Singapore.
June 7 - Dr Fox and Mr Werritty meet in Dubai.
July 3 - Mr Werritty joins Dr Fox for an informal dinner in a Florida steakhouse with US general John Allen, the commander of international Isaf forces in Afghanistan.
August 6 - Dr Fox meets Mr Werritty during weekend leave in Dubai.
September 30 - Atlantic Bridge loses charitable status after Charity Commission rules it is a group fighting for a political cause. Trustees later agree to close it down.
October 20 - Mr Werritty attends a meeting he has set up between Dr Fox and Sri Lankan foreign minister Gamini Peiris at the MoD.
December - Mr Werritty is present at a private meeting in London between Dr Fox and Sri Lankan president Mahinda Rajapaksa.
December 2 - Dr Fox and Mr Werritty at conference in Bahrain.
December 17 - Dr Fox in Dubai for meetings, Mr Werritty present in a 'personal/business capacity'.
Trusted minister: Dr Fox with Conservative leader David Cameron in Lashkar Gah, Afhanistan, in December 2009 while the Conservatives were in opposition
Trusted minister: Dr Fox with Conservative leader David Cameron in Lashkar Gah, Afhanistan, in December 2009 while the Conservatives were in opposition
2011:
January 23 - Dr Fox and Mr Werritty meet in Dubai 'in a private capacity'.
February 6 - Dr Fox attends a dinner arranged by Mr Werritty in Tel Aviv.
February 17 - Dr Fox and Mr Werritty take skiing holiday together.
April - Mr Werritty meets businessman Harvey Boulter of private equity firm Porton Group and suggests he may be able to fix up a meeting with Dr Fox to discuss his company Cellcrypt, which makes military communications equipment. Dr Fox introduced to Boulter 'in passing'.
April 14 - Dr and Mrs Fox take holiday in Abu Dhabi with Mr Werritty.
May 22-25 - Mr Werritty is present at political meetings with Dr Fox in US and accompanies him on private flight back to UK on party donor's aircraft.
June 12 - It emerges that a multimillion-pound lawsuit is being brought by Porton and the MoD's civilian research arm Ploughshare Innovations against US conglomerate 3M for its alleged failure to develop a technology for detecting the superbug MRSA.
June 17 - Dr Fox meeting with Mr Boulter in a Dubai hotel, organised by Mr Werritty after the businessman bumped into him in a restaurant the previous day.
Later that day, Mr Boulter emails 3M lawyers urging them to settle the lawsuit and telling them that he has discussed with Dr Fox the possible withdrawal of a knighthood from the company's British boss, Sir George Buckley. His email results in 3M launching a blackmail suit.
June 24 - MoD issues Dr Fox's denial that he discussed the 3M dispute with Mr Boulter.
June - Defence Secretary learns that Mr Werritty is using business cards bearing the parliamentary portcullis and describing himself as Dr Fox's adviser, and tells him to stop.
July 9 - Dr Fox visits Sri Lanka to deliver Kadagamar Memorial speech. Mr Werritty is in the audience.
August 5-19 - Dr Fox on holiday in Spain with family and friends including Mr Werritty.
August 8 - The Guardian reports on Dr Fox's meeting with Mr Boulter. The Defence Secretary confirms Mr Boulter did raise the issue of his dispute with 3M but denies the knighthood was discussed.
August 19 - The Guardian names Mr Werritty as broker of the meeting with Mr Boulter, noting that he describes himself as an adviser to Dr Fox but is not an employee of the MoD.
September 15 - In a written ministerial answer to Labour MP John Mann, Dr Fox states: 'Mr Werritty is not an employee of the Ministry of Defence and has, therefore, not travelled with me on any official overseas visits.'
October 5 - It is revealed that Mr Werritty has visited Dr Fox at the MoD in Whitehall on 14 occasions since he took office. Dr Fox insists the meetings were 'not in an official capacity'.
October 6 - Dr Fox denounces what he says are 'baseless allegations' about his links with Mr Werritty and asks MoD permanent secretary Ursula Brennan to carry out an internal inquiry to establish whether there has been any breach of national security or the ministerial code.
October 7 - Dr Fox's visit to Libya is overshadowed by media reports of his links with Mr Werritty.
October 8 - Mr Cameron demands an interim report by the start of the next week.
October 9 - After a phone conversation with the Prime Minister, Dr Fox issues a statement accepting that he was wrong to meet Mr Boulter in the absence of officials and recognising that the "misleading impression" may have been given that Mr Werritty was an adviser, rather than a friend.
October 10 - Dr Fox gives a statement to the Commons, in which he apologises for blurring the lines between ministerial responsibilities and loyalties to a friend, but denies wrongdoing.
Mr Cameron receives interim report from Ms Brennan, which states that it was "not appropriate" for material from Dr Fox's diary to have been made available to Mr Werritty.
Downing Street says it is clear that 'serious mistakes' have been made and Cabinet Secretary Sir Gus O'Donnell is ordered to take over the inquiry.
MoD releases a list of 40 meetings between Dr Fox and Mr Werritty either in the MoD's Whitehall offices or on trips overseas.
October 11 - Mr Werritty interviewed by Cabinet Office officials as part of Sir Gus O'Donnell's inquiry.
October 12 - It emerges that a younger man was present in Dr Fox's flat at the time of last year's burglary. A press conference scheduled during Dr Fox's visit to Paris is cancelled. "Friends" of Dr Fox suggest that Mr Werritty may be a Walter Mitty-style fantasist, to the reported annoyance of the Defence Secretary.
October 14 - Dr Fox resigns.

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