Delving further, Palast uncovered secret deals and documents – revealed here for the first time – which expose how far the Blairites, and their mentors in the Clinton Administration, are prepared to go to get their way, and what
Blair’s Project is really all about.


In his heart, Tony Blair must hate Britain. This prime minister despises a nation lost in 'How Green Was My Valley', weepy over the shutting of filthy coal pits; fossilized trade unions who chain workers to dead industries rather than build new ones. He cringes at the little bell ringing over the door of the hamlet chemist, so quaint and so maddeningly inefficient; at the grousing farmers with two little pigs, their tiny plots edged with dry stone; and, over his right shoulder, at the rabid blue-hairs who demand he keep the Queen’s nose on the coinage. He gazes with an almost erotic envy at Bill Clinton, Chairman of the Board of America Inc. The prime minister dreams of birthing the Entrepreneurial State, but finds himself caretaker of a museum of 19th-century glories made somnolent by the lullaby of easy welfare and low ambitions.

‘THE PROJECT'
Blair’s burden is that his nation doesn’t understand him. The traditional Left sees in the PM a hypocrite; toady to corporate campaign donors, traitor to Labour Party ideals. A Mr Bob Spooner, writing to the stalwart gazette 'Left Labour Briefing', huffs: ‘Tony Blair has betrayed everything that the early Socialists believed in!’, as if the PM could betray ideals that he never had. Even those who merrily voted New Labour have the uncomfortable suspicion that there is no There in Blair – just an empty suit pulled this way and that by focus-group puppeteers.

Journalists have bought into this myth too. One fool said: ‘Blair is a bionic election machine. He is a box of gears with a smile painted on the front. He could drink a glass of water and smile at the same time. The country is being run by people who are professionals at getting elected – they have no philosophy.’

I was that fool, speaking in a ill-considered interview last year. But one man had it right: Peter Mandelson. Days before he was forced out of Blair’s government in December 1998, for having concealed a loan from Paymaster General Geoffrey Robinson, Mandelson, Blair’s confidant, said: ‘New Labour has to be more than a ruthless electoral machine. It has to be a political party of values and ideals.’

Go ahead and laugh. You do so at your own peril. For Blair has a Project. The Project is moral in design, international in scope, disciplined, principled and evangelical. Tony Blair’s goal is nothing less than the transformation, the salvation, of his nation’s socio-economic soul. Blair has been to the Future, and from its source in Washington has taken the Promethean fire back to Bristol and Bournemouth. Tony Blair may be the most idealistic, visionary leader in the non-Moslem world. That should scare you.

POWERGEN AND 'MINISTER NO'
To truly understand Blairism, it is necessary to follow the detailed pirouettes of day-to-day governing; The Project as it is practiced. So sit down by the cyber-fire and listen to a few exemplary stories – of gas-fuelled power plants, of South American currencies, of fraud in Arkansas. Keep track of names and acronyms – Houston Industries, TABD, Fabrizio – and, always, carefully, follow the money.

We begin in May 1998. While civil servants at the UK Department of Trade and Industry (DTI) busy themselves with an official, publicly-announced, energy review, Blair has quietly handed Geoffrey Robinson, though only Paymaster-General, a minor ministerial post, the real authority over these policies. Robinson is the PM’s Can-Do man, but taking care of PowerGen PLC and its Texas confederates will be a heavy lift even for the multi-millionaire minister and Labour Party sugar daddy.

By 1998, PowerGen, the UK’s biggest electricity company, dictated 85 per cent of the prices bid for wholesale electricity in the England-Wales ‘Power Pool’. Profits were astronomical. But for PowerGen’s chief executive officer, Ed Wallis, mega-profits weren’t enough. He wanted to buy out the English regional power firm East Midlands Electricity. Punters considered it out of the question. Even the Conservative government had turned down his last request to take over a regional electricity company.

And Wallis wanted even more. His ambitions were international. To form a global power conglomerate, he proposed to merge PowerGen with Houston Industries, an unloved group of US power pirates just past a brush with bankruptcy. For their part, the Texans were enticed by the invitation to own a piece of the fixed casino that is the UK power market. But that, too, was out of the question: the Tories had killed a nearly identical American buy-out request during their last days in office in 1997, before the Labour landslide – in response to the taunts of Labour in Opposition. PowerGen’s dual merger scheme – to swallow up both East Midlands Electricity and Houston Industries – looked dead on arrival.

For Geoff Robinson to resurrect this dual-merger deal from the land of the dead, he would have to overcome two formidable obstacles: British law and Margaret Beckett. The law was clear: only the trade and industry secretary, Mrs Beckett, could review and authorise corporate mergers of this kind – not even the prime minister could interfere. Beckett was an Old Labour warhorse, and she was damned if she was going to go easier on the electricity mega-corporations than her Tory predecessor. She had already turned down one US power company merger. In Downing Street, they called her ‘Minister No’.

But the ‘Beckett problem’ was easily solved. PowerGen’s government lobbyist (Peter Mandelson’s former aide) was told that Blair had cut Beckett ‘out of the loop’, and that she would soon be sent to pasture in a post far away from the delicate levers of competition policy. The only problem remaining to Robinson was to work the PowerGen requests in a way which would satisfy the wishes and desires of the man with the ultimate authority over Britain’s energy system: US President Bill Clinton.

A CALL FROM WASHINGTON
According to internal US Embassy files, the Clinton administration communicated three back-channel orders to Blair regarding Britain’s electricity system: keep a lid on Labour’s proposed ‘windfall profit’ tax on the US companies that already owned half the UK electricity system; get this Mrs Beckett out of the way of several American merger targets; and let US power companies build gas-fuelled power plants in the UK.

This last demand was the most trouble. Gas power plants wiped out jobs in British coal mines, workplace of some of the Labour party’s most stalwart supporters. In the heat of the 1997 election campaign, Labour had immoderately promised to save the mines. To keep this promise, Margaret Beckett had slapped a moratorium on the building of new gas plants.

Clinton did his best to move her. His top man, commerce secretary Bill Daley, phoned Beckett at the DTI to explain the US government’s shopping list. He got no satisfaction. The Americans were getting testy. Even the US Embassy got into the act, slipping strained communiqués under Beckett’s door as a crucial 4 June 1998 Cabinet meeting approached.

For Geoffrey Robinson, however, crisis was opportunity. He had a scheme that could take care of PowerGen’s needs and Bill Clinton’s with one stroke. If the government could arrange for the Trade and Industry Secretary to reverse policy and bless the PowerGen/East Midlands merger and, at the same time, PowerGen were to commit to a big contract for British coal, despite its premium price, the DTI could then grant US companies waivers from the moratorium on building new gas plants without causing the loss of those last beastly jobs in the coal pits.

Secretly, near the beginning of June, Robinson met with PowerGen’s Ed Wallis. On 27 July , Margaret Beckett was removed from the DTI. On 22 September, her replacement, Peter Mandelson, agreed to PowerGen’s takeover of East Midlands Electricity. The next day, PowerGen signed contracts for 25 million tons of British coal. The government granted a series of waivers to US power companies, then removed the moratorium on gas plants altogether.

WOLVES IN WOLVES' CLOTHING
What may appear to the ethically rigid as a creepy little fix, a deal on the very edge of the law, is, to the New Men of New Labour, a series of sword thrusts at the knots of government gone sclerotic with legalisms. That is why the real work of governance requires movers and shakers of business, the Geoffrey Robinsons, to move and shake the system, and to get the damned thing done.

But let’s not reserve all the kudos for Mr Robinson. For according to the US commerce secretary’s confidential briefing notes, it was Tony Blair himself who stepped over his minister, Beckett, to ‘intervene to water down the gas moratorium.’

What on earth would move the prime minister of Britain to hop like a bunny to Bill Clinton’s bidding – to let America swallow his own nation’s power industry, then lighten the US investors’ tax load, to grant special waivers to Texan corporations which ultimately, contracts or not, will seal Britain’s coal mines?

For the answer, we must step back for a wider view. While US power companies were first on Blair’s gift list, other adventuring Americans were also wiping their feet on the golden doormat at 10 Downing Street. The international head of Wal-Mart, the retail behemoth of Arkansas, swallowed British supermarket chain Asda following an unprecedented private meeting with the PM himself. Blair has waved in US prison company Wackenhut, private health corporation Columbia, bribe-tainted lottery firm Gtech, televangelist Pat Robertson and his Internet bank, and, of course, Monsanto, to test its strange harvest in English fields. Not one, but a stable of Trojan Horses that Blair sees as a thrusting stud pool to breed with the mangy local stock.

Just who are these characters washing ashore? Take Wackenhut. Blair’s home secretary Jack Straw, the most perfected of the creatures in Dr. Caligari’s Cabinet, granted Wackenhut several contracts to run private prisons and detention centres in Britain for children and asylum seekers – just after an announcement of the criminal indictment of 30 of its employees and executives in Texas for sexual and other offences. Previously unseen evidence indicates that Straw’s office deliberately tinkered with the bidding process to give this troubled US company the contract over a lower-cost offer from Straw’s own Prison Service.

Don’t look for the pay-off; this fix was a matter of principle. The home secretary seethes with his master’s revulsions, and could not possibly turn back a prison to government bureaucrats and unions.

For Blair is a transoceanic Candide: the US embodies the best of all possible economies. If in the process, American wolves roam the English countryside and a few little old grannies go missing, if the Wal-Mart dragon torches the rural high street, that too serves the purposes of his economic Darwinism.

THE ANTI-INDUSTRIAL REVOLUTION
‘With a flexible labour force, you too can replicate America’s prosperity!’ US treasury secretary Larry Summers lectured his London School of Economics audience in December last year, while the prime minister bit his lip with jealousy.

There was something false in Summers’ tune. If you measure prosperity by the number of billionaires spewed up by the stock market, then America can’t be beat. However, by that un-modern measure annual earnings, the American worker is beaten: real production wages have fallen by 3 per cent over a decade and a half, even though national productivity rose by 14 per cent. The new wealth – all $8.7 trillion created by the production surge – has shifted to the top 20 per cent of the population: the asset owners. That is the fuel powering the stock market’s rise.

This is not a bubble, but a plan. In the 19th century, Enclosure drove England’s starving rural poor into Dark Satanic Mills, while the stock market boomed. But it was this cruelty which laid the foundation for a century of British economic and political supremacy. The great disproportioning of national wealth – what Marx derided as ‘surplus value’ – was the necessary multiplication of what today’s economists call ‘formation capital’.

And here we go again. Robert Reich, The Project’s sound-bite philosopher, set out the basis of the Blair-Clinton programme in his book The Work of Nations. The new world, Reich tells us, will belong to ‘symbolic analysts’ and ‘information manipulators’; in other words idea manufacturers.

The dirty business of actually making things will be left to declining nations of ‘routine producers’. This may sound like a load of hot gas, but it moves the people who think for Clinton and Blair. The populace must be yanked from today’s no-longer-Satanic mills and factories into risky, shifting new cyber-crafts, most not yet even conceived. Union work categories, job security, industry-tied pensions and all the other amenities of inflexibility must be swept away to prepare for the New Economy.

THE PROJECT LISTENS - TO RUPERT MURDOCH
Rumour has it that Blair won’t wipe his backside without taking a poll. In fact, though, the Downing Street Policy Unit couldn’t care less what the public wants. What they want to know is not what people want but how what Blair wants can be sold to them.

For example, Britain’s trade unions were ensnared into endorsing New Labour’s alluringly named ‘Fairness at Work’ proposals, dressed up as they were with an arousing employee-rights preamble. In all reality, Fairness at Work would best be called ‘Unions: The Final Solution.’

A brilliant paragraph inverts the entire purpose of Fairness at Work. Unions must win not just a majority of workers’ votes in order to be recognised by corporations, but also 40 per cent of an entire ‘bargaining unit.’ As the employer, not the workers, defines this rubbery ‘unit’, no union can win such a ballot without employer approval, as in the US. This poisoned clause was worked out between the Government and Rupert Murdoch, says a Murdoch lobbyist (recorded unawares) in return for a curb on his tabloid newspapers’ criticism.

Favours and donations don’t motivate this back-channel chatter – though, like any experienced geisha, neither Clinton nor Blair give away what they can sell. Ultimately, their faith demands that all proposed laws, rules and budgets are first confessed to businessmen with one question: ‘Have we strayed?’

BOOGIE NIGHTS IN BRAZIL
Old Labour cannot help but think of The Project as a coup d’etat by the faction of their party who sneer at singing The Red Flag at Blackpool conferences. But this view is small and provincial. Blairismo is in fact the UK subsidiary of an international community encompassing Clinton, Mexico’s Zedillo, and a wide group of similar modernisers. Their golden child is Brazilian president Fernando Henrique Cardoso, whose new Brazil will provide the transforming Miracle for the Third Way religion much as Chile provided the genesis fable for Thatcher’s free market cosmology.

However, in the summer of 1998, all this was threatened. Cardoso’s re-election to the Brazilian presidency hung by a thread: his ability to maintain the stunningly high value of Brazil’s currency, the real. The World Bank and International Monetary Fund dangled a loan (ultimately $41billion) to prevent the real’s collapse, but they would hand over nothing until after the elections.

One humid night that July, Blair’s minister-without-portfolio Peter Mandelson samba’d until dawn in Rio with a young man named Fabrizio. So reported Britain’s moral watchdogs, the tabloids and the Tory opposition. What the minister did without his portfolio is none of our damn business, but there were other, more important, names on his dance card – Cardoso and the British Chamber of Commerce of Sao Paolo, in particular. For there was something in Brazil more attractive to Mandelson than an expendable boy toy: the Gas Company of Sao Paolo and other state assets, worth one hundred billion dollars which British and American companies believed was rightly theirs, despite Brazilian resistance.

To Brazilians, an Englishman shaking his booty may be a little off-putting, but no scandal. What really caused a ruckus there was Mandelson, a foreigner, endorsing Cardoso’s re-election on national television – supposedly a slip of the tongue, but actually brilliantly crafted. For Mandelson’s seemingly accidental endorsement was a clear signal to Brazilians that only Cardoso had the safe hands into which Euro-American leaders would place the bail-out cheque.

Three months later, Cardoso squeaked back into office. And three months after that, in January 1999, with Cardoso’s re-election secured, the US Treasury gave the nod, a trap door opened, and Brazil’s currency plunged through, dropping 40 per cent. Crisis has its uses. To pay its new multi-billion dollar debts, Brazil held a fire sale. British Gas picked up the Sao Paolo Gas company for a song. As Brazil sank, US power companies picked up the Rio and Sao Paolo electricity companies and a pipeline.

LONDON, CAPITAL OF BRAZIL
The only way to test the flexibility of a workforce is to see how far it will bend without snapping back and resisting. On 23 November, just days before Mandelson, now Trade Minister, was scheduled to return to Brasilia for his lambada with Cardoso, World Bank brass flew into London to lay out what it modestly titled its ‘Master Plan for Brazil.’ At its centre was a checklist of the bank’s five measures for a ‘flexible public sector workforce’: ‘Reduce Salary/Benefits; Reduce Pensions; Increase Work Hours; Reduce Job Stability; Reduce Employment.’

The World Bank, and its Latin stepchild, the Inter American Development Bank (IDB) instructed the Britons in the game plan for implementation, including the bankers’ rewrite of Brazil’s constitution. Five days later, Mandelson’s well-briefed contingent arrived in South America... without Mandelson himself. That week, the UK press broke the story of Mandelson’s Saturday Night Fever in Rio from his earlier visit, and it seemed impolitic for him to return at that moment.

BLAIR'S STIGMATA
To place Mandy’s Brazilian shenanigans in context, let us move back across the Atlantic to Britain. In December last year, Blair addressed a group of empathetic men of industry, in a speech that was widely reported by the British press. ‘I bear the scars on my back!’ he whined to his audience. The PM was wounded in combat with civil servants armed with rolls of red tape, stopping these Entrepreneurs from doing the nation’s work. Over in the US, Clinton’s New Democrats have launched their own war of extermination against safety and environmental controls, but unlike Blair, have too much cool to wave a bloody shirt. Rather, under Vice-President Al Gore’s direction, the New Dems are, ‘Re-Inventing Government’.

To make sense of all this, we must review the Principles of The Project. The Blair-Clinton nexus believes that ‘information’ is more than the means for accelerating business; it is the product itself. This leads them, for example, to their fanatical and politically costly defence of Monsanto (and Lord Sainsbury, owner of the genetic modification accelerator patent). Like AstraZeneca and its ilk, Monsanto must be seen not as a technology manufacturer, but an information business like Microsoft or News International. It makes no difference that Monsanto sends information via DNA rather than satellite dish.

Indeed, this new info-agri-industry has a special place in The Future: it will reverse the effect of the Green Revolution, which diminished America as the globe’s agricultural colossus. As seed DNA and animal hormone becomes proprietary and its reproduction obliges payment, US dominance is restored. Britain, patent generator, will fly under America’s commercial wing, (although Blair’s recent acknowledgement of potential GM danger may affect this). But this new industry is doomed unless Blair and Clinton can cut down their nemesis: the Little Man with the Rule Book, the bureaucrat.

Over the past century, horrors from child labour to thalidomide led to increasing limits on free-running commerce. In democracies, these expectations for safe food, environment, health and work express themselves in rules and regulations. Now, they have to go.

ENTER MONSANTO AND THE TABD
On 22 January 1998, a package arrived for the head of a tiny research division of Canada’s health ministry from Protiva, a Monsanto company. It contained three volumes of confidential documents passed to Monsanto’s lobbyists from an official in the US Food and Drug Administration, Dr. Nick Weber. The purloined documents contained official doubts about Monsanto’s milk hormone, bovine somatotropin (BST) which, despite Monsanto’s efforts to conceal it, made test rats ill. The cache from Monsanto could help the company’s defenders undermine opponents of BST’s approval by the Codex Alimentarius.

If you’ve never heard of this organisation with the toothsome medieval name, that’s deliberate. Until 1996, Codex Alimentarius merely dispensed advice to nations too poor to fund their own food safety bureaucracies. But that year, the World Trade Organisation politically modified Codex, transforming it into a Super-Agency armed with the authority to issue ‘Rebuttable Presumptions’. No nation can now deny entry of a product it deems dangerous if it is blessed with the WTO’s rebuttable presumption of harmlessness. Rejection brings down a deadly hail of trade sanctions.

This puts the WTO in perspective. Trade is its name, not its mission. If a nation cannot block a product, it cannot block its local manufacture. Get rid of your old Leninist images of imperialism, of the Opium Wars, where British and American guns opened foreign markets to Western products. The WTO reaches beyond busting tariff barriers to smashing down each nation’s internal regulatory authority. The aim is nothing less than reversing a century of expanding public scrutiny and control of industry.

The transformation of Codex into a deregulation police force is a big step toward worldwide ‘MRA’ – Mutual Recognition Agreements. In raw form, MRA means a product or process approved in one nation is approved in all – for medical devices, GMOs, oil spill prevention requirements, and more. MRA is the Holy Grail of the Trans-Atlantic Business Dialogue.

The what?

In 1997, in his private meeting with Britain’s Trade Secretary Beckett, US Commerce Secretary Daley instructed the new UK minister, ‘TABD is the most influential business group advising governments on U.S.-EU commercial relations. Conclusion of the long-sought MRA shows how influential the TABD can be in moving governments to act on business priorities. Your encouragement,’ Daley said, ‘would be helpful.’ (How much easier it must have been for the American when Beckett was replaced by Mandelson, who required neither tutoring in the ways of the powerful nor embarrassing written communications explaining Clinton-sensitive requests.)

The Trans-Atlantic Business Dialogue was conceived by Ron Brown, Clinton’s first Commerce Secretary and party chief who died in an air crash in 1994 on a sales trip to Bosnia. TABD is a working group of 100 of the West’s most powerful CEOs. Each of TABD’s corporate potentates is paired with a top-level government agent in the USA or Europe. Take a look at the TABD’s secretive ‘Implementation Plan,’ dated October 1999, which targets 33 key environmental, consumer and worker protection laws in selected nations to defeat or de-fang.

The USA is not exempt. TABD has determined it must put an end to America’s unique right of individual citizens to sue corporate wrongdoers. As always, TABD’s case against control of industry is cloaked in the sheep’s clothing of Free Trade. Laws compensating victims of industrial damage, ‘represent an impediment to exporters’. TABD would, for example, absolve Exxon from paying the $5billion in punitive damages ordered by the courts as punishment for the Exxon Valdez spill.

In May 1998, at a ceremony in Birmingham, Blair and Clinton swore allegiance to the TABD’s programme. To the media, the christening of the ‘Transatlantic Economic Partnership’ was just another anodyne summit press conference, but to business lobbyists in the know, this marked an extraordinary commitment to take apart, brick by subtle brick, any of the structures of government which might impede the new commerce.

BILL, TONY AND CORPORATE AMERICA: IS IT REALLY LOVE?
On 13 November 1998 the New York Times printed a truly curious letter, ‘IT’S TIME TO REPAY AMERICA,’ by Tony Blair. Britain’s PM thanked Bill Clinton and the whole of the United States for introducing him to the simple pleasures of bombing selected dictators and to leadership the American Way. ’Governments should not hinder the logic of the market ... results not theology ... free from preconceptions and bureaucratic wrangling.’ It was a wee bit embarrassing, like getting a Valentine dipped in perfume from an office mate. Tony thought it was love; Bill thought it was just a business relationship.

Bill Clinton can put on a pair of shades and blow a mean Heartbreak Hotel on his sax. He feels our pain – and two women have signed legal affidavits swearing he felt theirs. Bill is a manipulative scamp – and you’ve got to love him for it. It’s only fair: he knows the men of industry who lend him their golf carts will return to their true home, the Republican Party, as soon as the New Dems show they can be beaten. He learned that the hard way in 1994, when business deserted the Business Democrats. In the meantime, he figures they’ll be happy to fill the campaign kitty, so long as, at the end of the day, the Sao Paolo gas company falls into their hands.

But Blair is different: he believes. He can’t help it. He has none of Bill Clinton’s cynical cool. Dr. Faustus had the advantage of knowing he sold his soul to the Devil; he could always redeem the pawn ticket. But the Prime Minister, giving over Britain’s high streets to Wal-Mart, jails to Wackenhut, fields and supermarket shelves to Monsanto, is convinced he’s sold his nation’s soul to Santa Claus. The Americans will sprinkle the elf dust of commerce know-how over his laggardly island and – presto! – Enterprise will take flight. How sad to see his affections so abused. Only in the ineluctable electoral defeat will he realise, as they say in Arkansas, he’s been kissed, but he ain’t been loved.

Special thanks to Antony Barnett (Observer), Rob Evans and David Hencke (Guardian), Erik Wesselius (Corporate Europe Observatory), Robin Ramsey (Lobster), Dr James Ciment (New School for Social Research) – and others to whom I am grateful, but who cannot be named.

Gregory Palast writes a column for 'The Observer' . His commentaries have appeared worldwide, and he has been called ‘America’s number one expert on government regulation’. His ‘Lobbygate’ expose in 'The Observer' in 1998 exposed the influence of corporate lobbyists within the Blair government, and was named ‘Scoop of the Year’ by the Industrial Society. He is recipient of the David Thomas Award for Writings on Secrecy and Democracy.