The Daily Mail revealed on Sunday that Quartet Middle East Envoy Tony Blair exerted intense pressure on the government of Israel in order to rescue a struggling cell phone company owned by a client of the bank that pays him an annual salary of over $3million.
After leaving the British premiership in June 2007 over his controversial participation in the American-led occupation of Iraq, Blair was appointed as Middle East envoy for the Quartet, a supranational body representing the United States, the United Nations, the European Union and Russia.
The cell phone company, Wataniya, had already built a brand new network in the territories currently controlled by the Western-backed Palestinian Authority but it nearly collapsed before launching its service, jeopardizing a nearly $700million investment due to Israel’s refusal to allow it to use the frequencies necessary to operate.
Acting in his capacity as the international Middle East envoy, Blair helped to save the company by spending months pressuring Israeli Prime Minister Binyamin Netanyahu and his colleagues in a bid to twist their arms into allowing Wataniya to use Israeli frequencies.
An investigation by The Daily Mail revealed that while Blair spoke of the need to get Wataniya up and running in order to boost the PA economy, he was actually serving the interests of JP Morgan. The American investment bank employs Blair as a consultant and has a significant financial stake in Wataniya through Wataniya’s parent company Qtel, an important Qatari client of JP Morgan.
Financial documents have shown that back in 2007, JP Morgan had been one of four ‘mandated lead arrangers’ of a $2 billion loan with which Qtel bought Wataniya from its original Kuwaiti owners. Last year, the bank joined a syndicate that lent Qtel a further $500 million, and became a ‘lead arranger’ for a Qtel bond issue which raised yet another $1.5 billion.
In these deals, JP Morgan would have been paid many millions of dollars in fees and if the loans had gone bad, the investment bank could have been exposed to substantial losses.
“Its original exposure was probably around $200 million,” one Wall Street expert divulged over the weekend. A JP Morgan spokesman refused to comment on the matter but did not deny that Qtel was a significant client.
A spokesperson for Blair said that the former British prime minister had no knowledge of any connection between JP Morgan and Qtel.
Blair’s lobbying efforts on behalf of Wataniya also helped to enrich the family and close associates of PA Chairman Mahmoud Abbas. Critics of the Wataniya cell phone project claim that it is marred by corruption and cronyism, in which the PA’s ruling Fatah party leadership derive lucrative benefits.
Two of the biggest beneficiaries of Wataniya’s investments are none other than Yasser and Tarek Abbas, sons of the PA chairman. Yasser sits on the panel of investors that decides how Wataniya allocates money and a firm run by Tarek has secured a lucrative contract to provide advertising for the cell phone company.
American-educated Tarek runs Sky, the biggest advertising agency in PA-controlled territory. Last year, Sky was awarded a contract to be Wataniya’s lead advertising agent, with both a monthly retainer and further payments for individual campaigns.
Meanwhile, businessman Firas Nasruddin, a friend of both Tarek and his father, owns Hemaya, a security company staffed by black uniformed former fighters from Fatah’s al-Aqsa Martyrs’ Brigades. Hemaya has a contract to provide security for Wataniya personnel and installations and also serves several other firms currently supported by the Palestine Investment Fund, a large pot of money from Western governments and foreign investors ostensibly meant to be used for the benefit of the Palestinian people.
While the fund holds a 43 percent stake in Wataniya, President Abbas’s chief adviser Mohammad Mustafa serves as chairman and CEO of the fund while simultaneously acting as chairman of Wataniya.
Wataniya’s spokesman, Mohammad Nassar said over the weekend that he could not answer any questions about how the Sky and Hemaya contracts were awarded.
IndyNewsIsrael reported in May that The Fatah-led PA passed a law a month earlier banning the sale of Israeli mobile phone cards within its territories and threatening to prosecute any Arab caught violating the ban. Palestinian Arabs were essentially then required to discard their Israeli SIM cards and purchase cards supplied by PA companies like Wataniya. The May report also identified Tony Blair as among Wataniya’s heavyweight advocates.
Blair faced calls over the weekend to publish full details of the myriad business interests that have netted him a personal fortune estimated to be at least $23 million since he left office.
He is reportedly paid not only by JP Morgan but also by the insurance giant Zurich, and his own private consulting firm, Tony Blair Associates, counts among its clients the royal families of Abu Dhabi and Kuwait. A frequent visitor to Libya, Blair has reportedly used his personal friendship with dictator Colonel Gaddafi to explore business opportunities there on behalf of JP Morgan.
Blair’s spokeswoman has meanwhile denied any implication of corruption or cronyism, insisting that Blair’s lobbying on Wataniya’s behalf had nothing to do with any financial ties.
“Tony Blair raised Wataniya at the request of the Palestinian Authority in his role as Quartet Representative along with many others in the International Community,” Blair spokesperson Ruti Winterstein told the Jerusalem Post on Sunday. “He has no knowledge of any connection between QTel and JP Morgan and has never discussed the issue with JP Morgan, nor have they ever raised it with him. Any suggestion that he raised it for any reason other than the one stated to help the Palestinians or that in some way he has benefited from Wataniya is untrue and defamatory.”