Lehman Brothers: the Conservative Party donations

On 15 September 2008, investment bank Lehman Brothers filed for bankruptcy, transforming a credit drought into the worst financial crisis since the Great Depression.

In his speech this afternoon billed as “the Conservative strategy for the recovery”, George Osborne spoke of drawing “the correct conclusions from the last two years”. What better way to provide perspective and context to this than to reference the demise of Lehman’s – occurring exactly a year ago today. A speechwriting slam dunk, surely?

Unfortunately for Boy George, other factors may explain the omission of this obvious milestone from his address. In the run up to the largest corporate bankruptcy of all time, the Conservative Party received donations of a quarter of a million pounds from top Lehman Brothers executives, including previously reported secret donations to Osborne’s private office which were concealed from parliamentary authorities.

Financier Roger B Nagioff donated £120,000 to the Tories under David Cameron and another £25,000 before that. He oversaw Lehman Bros’ fixed income division while the company lost more than a quarter of its value and left the sinking ship – only eight months after his appointment was hailed as a “major event” by the company – to “spend more time with his family“. He soon bored of impersonating The Waltons and set up JRJ Investments with another Lehman Bros banker and Conservative Party donor, Jeremy M Isaacs.

As CEO of Lehman Brothers’ operations in Europe and Asia, Jeremy Isaacs controlled 40% of company operations and received a ‘golden goodbye’ of $5 million as 4,500 London staff were ordered to clear their desks. Isaacs donated nearly £100,000 to Conservative Central Office prior to the collapse and was also one of five wealthy donors funding shadow chancellor George Osborne’s office, the names of whom were only disclosed after Osborne was forced to do so by standards commissioner John Lyon. Isaacs was one of several bankers who, according to The Times, “were generously remunerated while overseeing forays into risky commercial real-estate investments that helped to bring the company down”.

And where the money trail ends the development of Tory policy begins. Lehman director Christopher Gent was appointed by George Osborne to his ’Tax Reform Commission’. Gent was a member of Lehman Brothers’ Compensation and Benefits Committee, presumably responsible for approving a package for Jeremy Isaacs which would see him pocket £43 million in 2006 and 2007, as well as their Audit Committee, which might have something to do with, erm, risk?

Six-figure donors to political parties are treated to some serious face-time by party bigwigs. One year on from the bankruptcy of Lehman Brothers, serious questions remain about the political and financial connections between George Osborne’s office and figures at the heart of a company viewed as an exemplar of laissez-faire recklessness.

Perhaps Boy George can shed some light on the matter?