From The daily Mail
July 25, 2003: In the middle of that blazing summer, Prime Minister Tony Blair sat at his desk in Downing Street to write to his counterpart in Israel, Ariel Sharon. Three months after invading Iraq, Blair and U.S. President George W. Bush were trying to temper their warlike image by pushing ahead with the 'road map', their Palestinian-Israeli peace plan.
'Dear Ariel,' Blair began, 'it was a great pleasure to welcome you to London last week. I hope you will agree that the visit was very worthwhile and has marked a new stage in relations between our two countries.'
Yet the rest of his cordial letter said nothing about peace or politics. Instead, it was concerned solely with business - a plea to Sharon to let a British Gas-led consortium start work in a vast natural gas field off the coast of the Palestinian Gaza Strip, a deal worth at least £4billion.
Contacts: Tony Blair tours the West Bank city of Hebron on a recent visit
Yet the rest of his cordial letter said nothing about peace or politics. Instead, it was concerned solely with business - a plea to Sharon to let a British Gas-led consortium start work in a vast natural gas field off the coast of the Palestinian Gaza Strip, a deal worth at least £4billion.
There is no suggestion that Blair has ever derived personal benefits improperly. But a Mail on Sunday investigation reveals that he has been mixing business with Middle East politics since the early years of his premiership and that, since becoming a part-time peace envoy on leaving office in 2007, he has exploited his superb contacts to pursue a multi-million-pound fortune.
Some of the most potentially lucrative of those relationships can be traced back to that BG Gaza gas deal - connections that helped pave the way to the opening up of the Arab world's new Eldorado, the colossal and mostly untapped wealth of Colonel Gaddafi's Libya.
'It means "self-enrichment through public office". It doesn't imply anything illegal and in the Middle East it's considered totally normal. Yet it is a little surprising to see a former British Prime Minister and international peace envoy behaving in the same way.'
Blair's Middle East-focused business career has been a triumph. The access to the region's rulers conferred by his position as an ex-PM and peace envoy must have huge attraction for potential clients of Tony Blair Associates, the secretive 'consultancy' that does not publish accounts which he runs with Jonathan Powell, his former Downing Street chief of staff. Its first clients are two of the world's richest families - the royals of Kuwait and Abu Dhabi.
Tony Blair Associates is modelled on Henry Kissinger Associates, an outfit led by President Nixon's former Secretary of State. Fittingly, perhaps, Kissinger was on the jury that awarded Blair the $1million Dan David Prize earlier this year, the 'Israeli Nobel Prize'. Like Blair, Kissinger is employed by American bank JP Morgan. The citation praised Blair's 'exceptional leadership' and 'moral courage'.
Blair has promised to give most of the prize to his Faith Foundation, a charity set up to promote religious understanding. Thanks to his lucrative contract to advise JP Morgan for a salary of £2million a year, he does not need the money.
The Mail on Sunday has confirmed that one of his main roles here is to explore business opportunities in Libya.
Blair has also set up a complex web of private companies known as Windrush and Firerush and their offshoots to channel aid from donors such as Bill Gates of Microsoft to projects in Africa.
Blair tried to talk then Israeli PM Ariel Sharon, above, into a £4bn deal with British Gas
However, Blair's record as a Middle East envoy for the 'Quartet' of the US, Russia, the United Nations and EU is patchier.
'I met him four times and I feel sorry for him,' said Zahir Khoury, a Ramallah magnate who owns construction and telecommunications businesses.
'He came here without any real political backing, and he hasn't achieved anything. But he just wants to stay in the limelight, and he has too many money-making ventures to distract him.
'He doesn't understand that this should have been a 24/7, 365-day job. It's not a hobby to bring peace to the Middle East.'
The Palestinian-Israeli peace process is deadlocked. Blair's area of special responsibility is the Palestinian economy but it remains burdened by Israeli restrictions, with movement into and through the West Bank choked by some 600 Israeli army checkpoints.
Blair's official spokesman claimed: 'We have seen a real change as a result of Tony Blair's efforts. The economy is now flourishing. Palestinians are now able to move throughout the West Bank in ways impossible when we started pushing for changes.'
After a week in the area, I had to differ. Twice I had to wait for an hour trying to re-enter Israel from the West Bank and on a third occasion Qalandia, the main checkpoint between Ramallah and Jerusalem, was unexpectedly closed, meaning a lengthy detour.
Meanwhile, a £400million scheme to build a second Palestinian mobile-phone network is struggling - because Blair has failed to persuade Israel to give it the frequencies that would have made it viable.
Opposition MPs said his simultaneous pursuit of business and peace ought to disqualify him from the job he covets - a return to the world political stage as the first EU President.
'No Prime Minister in modern times would have dreamt of exploiting his position in the way Mr Blair appears to have done,' said David Davis, the former Shadow Home Secretary.
Vince Cable, the Lib Dem Shadow Chancellor, said Blair's dual role was 'extremely inappropriate' because the Arab rulers with whom he is doing business all exert influence on the peace process where he is meant to be an honest broker.
Gaza gas deal
The first big deal in which Blair got involved was perhaps the most important for his long-term future - the scheme to exploit the enormous reserves of natural gas that British Gas discovered 20 miles from the Gaza shore in 2000.
To be sure, the deal makes economic and political sense. At the same time, it gave Blair contacts that would prove of lasting benefit after Downing Street.
At its heart was Mohammed Rashid, a Kurdish tycoon and adventurer with extraordinary connections across the Middle East, who was also financial adviser to the late Palestinian leader Yasser Arafat.
In the Nineties, Rashid, working with two former Israeli intelligence officers, transferred hundreds of millions of pounds held by Arafat's Palestine Liberation Organisation into secret Swiss bank accounts.
Arafat appointed Rashid head of the Palestinian Investment Fund (PIF), a £1billion company set up to make use of PLO funds. It was in that capacity that he brokered the Gaza gas consortium - composed of BG, which holds 60 per cent of the shares, the PIF (ten per cent) and Consolidated Contractors Corporation (CCC), a huge Palestinian-owned construction multinational with subsidiary firms not only across the Middle East but in Britain and America.
Strategy: The pipeline would have come ashore at Ashkelon, above, giving Israel ultimate control of the gas, as Blair pointed out to Ariel Sharon
The deal, if Israel were ever to let it proceed, would benefit the Palestinian economy. About half the gas field's revenues would flow through tax to the autonomous Palestinian Authority, so hugely reducing its reliance on overseas aid - a burden on British taxpayers of more than £100million a year.
That may be one reason why Blair tried so hard to persuade Sharon to agree to it. Under the plan, he pointed out in his letter, all the BG equipment would be beneath the surface of the sea, so rendering it immune from possible attack, while a pipeline would come ashore at the Israeli port of Ashkelon, so giving Israel ultimate control of the gas.
Blair said he 'very much hoped' Sharon would make a 'positive decision', saying the project had 'long-term benefits for Israel'.
Yet as the years have gone by, BG has got no nearer to drilling.
At times, Israeli security concerns have blocked progress; at others, Israel's insistence that it become the gas field's main customer - at well below the market price.
In 2007, the takeover of Gaza by the militant Islamist group Hamas became another obstacle. However, a BG insider who has worked on the project said that Hamas has agreed stringent conditions to let the deal proceed and to ensure that revenue is not spent on weapons.
But Blair's spokesman said: 'It is obviously unable to proceed at the current time due to the situation in Gaza. This is not a project we are working on.'
It could be he simply lacks the time. Blair's predecessor as Quartet envoy, former World Bank president James Wolfensohn, spent weeks at a time working on the job full-time. Blair has claimed he spends at least a week each month in his ten-room office suite at East Jerusalem's poshest hotel, the American Colony.
'But often that's an exaggeration,' said one diplomat who deals with him regularly. 'He'll arrive on a Monday evening and leave Thursday morning. In my book, that's not really a week.'
In any event, by the time Blair left office, the gas deal had in one sense served its purpose. It had given him access to Mohammed Rashid, and through him a route to Libya.
There was to be a further curious footnote. Shortly before Blair left office, two of his closest political cronies became paid advisers to one of the deal's partners, CCC.
Stephen Byers, the former Trade and Industry Secretary, and Baroness Symons, the former Foreign Office Minister responsible for the Middle East, are paid undisclosed sums for undisclosed advice. Byers is also chairman of a British CCC subsidiary, AKWA, which builds sewage works. Both refused to comment yesterday.
Rashid, Libya, Blair and JP Morgan
Even as he wrote his 2003 letter to Sharon, Blair must have known that the Gaza deal's broker, Mohammed Rashid, had acquired an altogether greater importance - as the key figure in a secret intelligence 'back channel' through which MI6 was trying to induce Libya to give up its nuclear weapons programme and so cease to be a pariah state.
Libyan links: Tony Blair has been able to develop a relationship with Libya's Saif al-Islam and his father, Colonel Gaddafi
A worthy political objective in its own right, Blair knew this could have huge commercial side benefits - access to Libya's colossal reserves of oil and gas, as well as huge opportunities for foreign firms to renew its ancient infrastructure.
'Rashid always had good contacts with MI6,' said a Palestinian businessman who has known him for years. 'He met them frequently when he was working with Arafat.'
Libya, he added, was essentially a 'two-man show' - Colonel Gaddafi and his son, Saif al-Islam.
By 2002, Rashid was not only Arafat's but Saif's financial adviser, and spending increasing amounts of time in Tripoli. That autumn, as the WMD storm gathered over Iraq,
Saif asked him to use his British contacts to open talks. 'After further messages had been passed via Rashid, Saif met three MI6 officers in a London hotel,' the businessman said. They were led by Mark Allen - who now works for BP.
Blair's spokesman said 'he has not spoken to or met Mohammed Rashid since leaving office'. Then again, he does not need to. The channel he had opened up allowed Blair to develop his own relationship with both Saif and Gaddafi.
Since leaving No10, Blair has visited Libya numerous times. His spokesman would not state the purpose of his visits.
But a friend of Rashid said: 'If you were JP Morgan, getting Blair involved makes sense. It means you can get close to Saif, and close to his father, and to the heads of the Libyan Investment Authority' - the state-owned body that has some £70billion to invest.
He added: 'Rashid said Gaddafi and all his friends really want Blair to become Europe's President and would do what they can to help him.'
Sources at JP Morgan confirmed that exploring the potential for bank business in Libya is one of Blair's roles. Oliver Miles, Britain's former ambassador to Libya, added: 'He's certainly acting on behalf of JP Morgan but he also has other interests. He's trying to get alongside the investment authority because they have a lot of money to invest.'
Mobile phones for Palestine
Blair's critics in the Middle East say that if his many distractions mean he has made relatively little progress as peace envoy, that may not trouble him.
'For Blair, that's not really the point,' said one diplomat. 'Being envoy has allowed him to remain a player, to attend things like the UN General Assembly, and to look the presidents of Russia and China in the eye.'
One case illustrates his limitations - the setting up of Wataniya, the second Palestinian mobile-phone network. According to his spokesman, 'as a result of Mr Blair's relentless efforts, virtually all of the obstacles have been removed'.
That is not how it looks to Alan Richardson, a Scot who is Wataniya's chief executive. 'I've set up networks in Iraq and Afghanistan,' he said at his office in Ramallah. 'Nothing there was as difficult as this.'
Richardson's problem is that Israel signed an agreement to allow Wataniya to use a 4.8MHz bandwidth - enough to allow it to serve a million subscribers with a high-quality signal. Now, however, citing concerns about 'security', it says it will authorise only 3.8MHz - meaning Wataniya can provide only about half as many lines, and those with a poorer sound quality.
With £400million already invested, Richardson's staff have built 350 transmitters and the rest of the network structure.
'But we just can't meet the subscriber targets with the spectrum provided,' he said. 'We invested in a business plan that was based on false promises.'
Wataniya has been forced to delay its launch several times. Blair, he said, had done his best to help. But to date, there is no sign of progress.
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