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Lord Peter Mandelson told Jeffrey Epstein in 2009 that the boss of JPMorgan should “mildly threaten” Britain’s chancellor over a tax on banker bonuses proposed by the government in which Mandelson was serving as business secretary, according to newly released documents.
The revelations add further pressure to Mandelson, after the FT reported that he received £75,000 from Epstein beginning in 2003 and that his husband also took money from the convicted sex offender. On Sunday night Mandelson said that, in an effort to avoid causing the party “further embarrassment”, he had resigned from the Labour party.
Emails released by the US Department of Justice show Mandelson, who served in government under successive Labour administrations, trying to “amend” a supertax on bank bonuses announced by then chancellor Alistair Darling in December 2009.
The policy meant that bonuses over £25,000 would pay an additional 50 per cent tax rate. It was introduced in the wake of the financial crisis at a time when there was widespread public anger at the banking sector. Mandelson was business secretary and de facto deputy prime minister at the time.
A week after Darling announced the measure, Epstein, who was well-connected on Wall Street, was messaging Mandelson with suggestions for how Mandelson could soften the policy, according to the emails.
“[A]ny real chance of making the tax only on the cash portion of the bankers bonus,” Epstein wrote in an email on December 15.
Mandelson responded within minutes: “Trying hard to amend as I explained to Jes last night. Treasury digging in but I am on case.” Epstein replied with: “let me know before jes please”, in an apparent reference to Jes Staley, then a senior banker at JPMorgan.
Two days later on December 17, Epstein emailed Mandelson asking whether Jamie Dimon, chief executive of JPMorgan, should “call darling one more time?”
Mandelson replied, saying: “Yes and mildly threaten.”
Dan Neidle, head of think-tank Tax Policy Associates, said: “It is quite extraordinary for a serving government minister to advise a foreign bank to threaten the chancellor in order to reduce its UK tax bill.”
Lord Mandelson told the FT on Sunday that his concerns about the bankers’ bonus tax reflected wider concern in the financial services industry.
“Every UK and international bank was making the same argument about the impact on UK financial services,” he said. “My conversations in government at the time reflected the views of the sector as a whole, not a single individual.”
After leaving government in 2010, Mandelson went on to set up an advisory firm called Global Counsel, which has included JPMorgan on its roster of high-profile clients.
Darling stuck to his guns with the tax, which ended up raising more than £2bn from the banking sector, although he later regretted the policy.
Documents showing the conversations were buried in a vast tranche of 3mn documents released by the DoJ, which also included papers showing transfers of large cash payments from Epstein to Mandelson in 2003 and 2004 and to his partner Reinaldo Avila da Silva in 2009 and 2010.
Mandelson sent Epstein another email on Christmas Day 2010, at which point the Labour veteran was no longer in government, referring to his desire to work with JPMorgan.
“If I am going to do something for JPM, it should be a discreet Global Counsel project, something that does not directly compromise my Lazard relationship and which also does not trample on Tony (Blair’s) territory,” he wrote. Blair was a paid adviser to Dimon at JPMorgan from 2008.
“My aim is to acquire enough knowledge and networks in time to participate in real deals. I do not want to live by salary alone. That’s why I need to do as much as possible to build with JPM.”
An internal investigation by JPMorgan in 2023 revealed that Epstein had claimed to have brokered meetings between Staley and both Darling and Mandelson at Davos.
An ensuing exchange recounted in the report suggested that Staley was interested in the pending sale of the non-North American units of Sempra Commodities by Royal Bank of Scotland, which was forced to divest the unit following a UK government bailout. Months later, JPMorgan bought the business for $1.7bn.
Other documents have shown Mandelson using a speech in New York in 2010 to pan Barack Obama’s attempt to rein in US banks by limiting their risk taking — having dined the previous night with Epstein at his Manhattan mansion.
In his resignation letter to the Labour party Mandelson wrote: “I have been further linked this weekend to the understandable furore surrounding Jeffrey Epstein and I feel regretful and sorry about this.
“Allegations which I believe to be false that he made financial payments to me 20 years ago, and of which I have no record or recollection, need investigating by me.
“While doing this I do not wish to cause further embarrassment to the Labour Party and I am therefore stepping down from membership of the party.”
JPMorgan declined to comment.
Additional reporting by George Steer