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[February 23, 2006]

THE MINISTER AND A GBP350,000 'GIFT'

(Daily Mail Via Thomson Dialog NewsEdge)AS HE HOLIDAYS in Florida with his Cabinet Minister wife Tessa Jowell, international lawyer David Mills may be wondering whether his future will be accepting another invitation to Sunday lunch with Tony and Cherie at Chequers or being locked away for up to 12 years in an Italian prison cell.

In two weeks' time, a judge in Milan will decide whether Mr Mills, who has grown rich as a legal fixer for big business, should stand trial for perjury.

This is in connection with evidence he gave at two trials involving one of his major clients, Silvio Berlusconi - the billionaire Italian Prime Minister who is a close personal friend of Tony Blair - for which he was allegedly rewarded with a GBP350,000 'gift'.

And in April, he will learn whether he must face further charges of tax fraud and money laundering.

The way that Culture Secretary Tessa Jowell, one of Tony Blair's closest ministers, has managed to continue with her trademark fixed smile, as though nothing is amiss in her life, is certainly a tribute to her politician's skill.

Even after 27 years of marriage, she still talks of how much she loves David, whom she married after they had left their respective spouses. Mr Mills is smooth and shrewd and, over the years, has managed to bat away a string of controversies, some of which have been linked to the political circle into which he has been naturally drawn by his wife.

He is a close friend of Peter Mandelson and plays occasional golf with Alastair Campbell.

He is also the brother-in-law of Dame Barbara Mills, the former Director of Public Prosecutions who is married to his elder brother, John, an ironic family attachment for a man whose papers have now been seized on two separate occasions during police raids.

The first of these was ten years ago when officers of the Serious Fraud Office, accompanied by members of the Guardia di Finanzia, a branch of the Italian police involved in combating economic crime, seized 15 boxes of papers from offices in London relating to a company of which Mr Mills had been a director.

The second raid was on February 10 this year, when Metropolitan Police officers raided his one-man legal practice in St James's Street, SW1.

They went there at the request of the Italian authorities and took away a computer and documents.

Throughout this entire period, Mr Mills has continued to insist that he has done nothing wrong. When the Daily Mail spoke to him in Florida yesterday, he said: 'We have complete documentary evidence of the truth, and that's all that needs to speak.' Clearly, he believes he can extricate himself from the apparently damning evidence being considered by the judge in Milan.

This includes a letter which he admits he wrote to his accountant on February 2, 2004, in which he referred to evidence in court that he gave some years earlier in a trial involving 'Mr B'.

The crucial paragraph, which the Italians claim to be a smoking gun, says: 'I told no lies, but I turned some very tricky corners, to put it mildly . .

. (and) kept Mr B out of a great deal of trouble that I would have landed him in if I had said all I knew.' This allegedly relates to evidence he gave at two trials, in 1997 and 1998, when Berlusconi was tried for bribery and tax evasion. He was convicted at both trials, but these were later overturned.

In his letter, Mr Mills explained to his accountant that GBP350,000 was put into a hedge-fund for him as 'a gift' by a person 'connected to the B organisation'. At that stage, he was still a prosecution witness and so, he wrote: 'It needed to be done discreetly.

And this was a roundabout way' (of doing it).

Italian prosecutors allege that when they put the letter in front of him during questioning in 2004, he signed a confession admitting that the money was paid to him by one of Berlusconi's aides in return for his 'discreetness'.

Mr Mills, a man known for his hardheaded brilliance going back to his Oxford days, now claims this admission was wrung out of him by 'hostile and frightening' interviewing techniques over a period of ten hours at the end of which, he claimed this week: 'I was exhausted, frightened, and I just wanted out. I simply said: "Write something down and I will sign it." It was a classic forced confession.' Later he added: 'Why I chose to do that, I will never ever know. It was completely dotty.' 'Dotty' is not a word that is usually associated with David Mills.

Ambitious, clever, ingenious, pushy - these are the epithets that are normally used to describe him. And these are the qualities that have been so valued by his ultra-rich clients for the best part of 30 years.

But they have also taken him into areas where a Cabinet Minister's husband is, perhaps, unwise to go, involving such diverse activities as the sale of tanks to Pakistan and aircraft to Iran, about which more later.

The fact is, almost from the moment they first met, Tessa Jowell and David Mills, now 61, have been the subject of controversy, a situation which, if anything, has brought them closer together.

Mills, the son of a captain in the Seaforth Highlanders, was privately educated and went to University College, Oxford, before being called to the Bar in the mid-Sixties. He married a psychoanalyst, Margaret, and they had three children as he worked as a barrister for ten years.

During this time he also became a Labour member of Camden Council in North London, and it was there that he met the young and idealistic Tessa Jowell, a doctor's daughter, fellow Labour councillor and former social worker who was assistant director of the mental health charity, Mind.

Despite both being married, they began seeing each other and, in 1976, Mills left his wife and three young children. The following year, Tessa left her husband, Roger Jowell, an alderman on the same council whose name she continues to use in her political life.

By 1978, Tessa, then 30, and Mills, 34, were living together, and when Tessa was chosen to fight the Ilford North by- election in January that year, her relationship with Mr Mills was already attracting adverse attention.

The couple were still awaiting the finalisation of their respective divorces, and Tessa Jowell was forced to answer some awkward questions about her private life.

Jowell lost Labour's marginal majority and the seat was won by Tory candidate Vivian Bendall by 5,500 votes.

She fought and lost the constituency again in 1979 - the year she married Mills at Camden Register Office. It wasn't until 1992 that she managed to get a seat in Parliament (as the Labour MP for Dulwich).

Jowell and Mills were always a couple in parallel. As she worked in pursuit of the high political office which she eventually achieved, he was equally ambitious as a lawyer.

So ambitious, in fact, that just before their marriage, he took the highly unusual step of abandoning his prestigious, but unspectacular, career as a barrister and retraining in order to set up in business as a commercial solicitor.

It was a shrewd decision which, intriguingly, coincided with a tempting offer from the leading Italian law firm of Carnelutti for the Italian-speaking Mills to set up their London office.

This was the moment that David Mills was introduced to the convoluted and sprawling business empire of Silvio Berlusconi. It was still many years before the tycoon entered politics, but he was already busily buying his way into television stations, newspapers, property, the glamorous AC Milan football team and building a 75,000-population town.

By the early 1980s, Mills had become such a trusted advisor to the Berlusconi empire that he was put in charge of creating a complex web of offshore companies on behalf of Il Dottore(The Doctor), the nickname by which Berlusconi is called by his employees.

These companies sprouted like mushrooms in tax havens all over the world, including the British Virgin Islands, Luxembourg, Panama and the Channel Islands . . .

Berlusconi, it was alleged by the Italian authorities, would later use these companies to evade tax, bribe judges and make illegal payments to footballers - all of which he vehemently denies and which, significantly, David Mills insists he had absolutely no knowledge of.

'I was like Hertz,' he maintains.

'They don't know what their rented cars are used for. I created the companies but had no knowledge about their use. I had no reason to suspect Berlusconi's business to be dishonest.' Mills was handsomely rewarded for his expertise and was able to buy a large and beautiful country house in the Cotswolds where he and Tessa, with their son and daughter, could spend idyllic weekends away from the handsome Camden townhouse where they have lived all their married life.

But Berlusconi was far from being David Mills's only powerful client.

There was also the Neapolitan shipbuilder Diego Attanasio, on whose behalf he gave evidence in 1998 when the magnate was convicted of bribery. Mills told the court he was 'outraged' at the slur on his client.

Mills now says that the GBP350,000 payment he is alleged to have received from Berlusconi in 1999 actually came from Attanasio.

However, the shipping man says it couldn't have - because he was in jail at the time. He adds: 'I can't exclude the possibility that Mills took it. I remember giving Mr Mills some blank documents and other items. I accept that having such total faith in Mr Mills may seem unusual, but you must understand his social status.

'He is a qualified lawyer, with a lovely office in the centre of London, and he is the husband of one of Tony Blair's most senior colleagues.

He was a person who you could trust completely.' Even Mills concedes that his closeness to the heart of political power has been no bad thing. 'It is perfectly true that I have privileged access - but I am a moral businessman,' he declares.

This access led to another embarrassing episode for Mills and for his wife.

In 2003, it emerged that Mills, who was the British representative of an Iranian trading firm (he learned Farsi so he could speak to the Iranians in their own language) had asked the then Foreign Trade minister, Baroness Symons, for advice on a GBP125 million deal to sell British Aerospace passenger jets to Iran.

He raised the matter informally at a private dinner party in Oxford hosted by Vernon Bogdanor, the distinguished professor of government, when he sat next to the Trade Minister. His problem was that the planes that Iran wanted used American-built engines, and the U.S. had invoked a trade embargo with Iran - a country described by President Bush as part of an 'axis of evil'.

Mills also subsequently wrote to Baroness Symons about this problem.

Mills's easy familiarity in government circles is evident from the way that the Minister personally arranged for the British embassy in Washington to give its advice. She then wrote to him from her government department as 'Dear David' and advising him to 'tread very carefully' over the issue.

She also warned that raising the profile of the case would only make it more difficult to overcome the embargo. Finally, she invited him to get back to her if he needed more advice, and signed the letter 'Liz'.

Nor was Iran the only politically sensitive country with which Mr Mills was associated in huge deals.

In 1996, he set up banking arrangements to handle payments in a GBP300 million military contract for the Ukraine to sell 320 tanks to Pakistan.

The indirect involvement of a Cabinet minister's husband in an arms deal was revealed by a newspaper eight years later, just when the Indian Prime Minister, Dr Manmohan Singh, arrived in Britain as a guest of Tony Blair.

India had fought three wars with Pakistan and the disclosure hugely embarrassed the Government.

Again, last year witnessed another disturbing example of David Mills's closeness to the Government when, with damaging claims being made in Italy about his involvement in the Berlusconi affair, it emerged that a senior civil servant working for Ms Jowell at the Culture Department had issued a press statement on Mr Mills's behalf.

In what was described by Shadow Culture Secretary Theresa May as a 'staggering' breach of Cabinet ethics, Paddy Feeny, the department's head of news, emailed a statement from Mr Mills to London's Evening Standard newspaper denying any wrongdoing in the Berlusconi affair.

Mr Feeny, a seasoned figure, later said he acted for the Minister's husband off his own bat. Mills denied any knowledge of the statement.

Then there is the matter of Mills's application to practise law in the rapidly expanding and oil-rich Emirate of Dubai last October. A 'moral businessman' he may be, but when he came to a question about whether he was, or had been, the subject of 'any government or regulatory investigation', he answered a firm 'No'.

For a man whose business colleagues and friends say he has a 'calculating and very fast mind', this was an extraordinary oversight.

Could he really not remember the 1996 police raid in which 15 boxes of his papers were seized? Had he forgotten his trip to Milan just a few months earlier in which he spent ten hours being questioned? Had he, indeed, forgotten that confession which he signed?

Now, as David Mills prepares for probably the biggest battle of his colourful career, he knows he can count on the loving and unswerving support of his 57-year-old wife.

'Tessa believes in him utterly,' says a New Labour friend. 'She's as proud and protective of him as he is of her.' Yesterday, the holidaying Culture Minister politely declined to comment on her husband's predicament as she returned from a 45-minute workout in a gym near the GBP2million waterfront villa where they are staying with friends. She flashed her trademark smile, but for once, the usually talkative Minister had nothing to say.

Today, they are returning to London, flying back into the storm which is likely to involve Ms Jowell facing questions in the House of Commons about her husband's business relationship with Berlusconi - questions which will not exactly please Tony Blair, as he and Cherie have holidayed with the Italian Prime Minister.

As for David Mills, he continues to display his usual confidence. 'I've dug myself a bloody great hole,' he said in Florida, 'but I also have the means to get out of it.'

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