Mayor's top aide probed over lost millions

* Ex-street hustler at the heart of city boss's empire
* Runs vibrant hub for 'criminals' and his cronies

Andrew Gilligan

A senior adviser to London Mayor, Ken Livingstone, is under investigation after at least  £2.5 million in City Hall money was channelled to organisations controlled by himself, his friends and business associates.

Lee Jasper, the Mayor's director of equalities and policing, is at the centre of a network of companies which have received large sums of public money from Mr Livingstone while appearing to do little or no work in return.

An Evening Standard investigation has found:

 • Hundreds of thousands of pounds of public money paid to the companies is unaccounted for or has disappeared.

 • Up to  £295,000 is the subject of possible legal action.

 • Some of the companies are dormant or have gone out of business.

 • Several of the organisations are based in the same small room at a business centre in Kennington.

 • The same people, friends or business associates of Mr Jasper - including race activist Errol Walters and businesswoman and reality TV show star Yvonne Thompson - appear as directors or staff members of each organisation.

Mr Jasper, 49, is one of seven policy directors - the London equivalents of civil service permanent secretaries - who work at the Mayor's side developing and implementing policy at the highest level. Mr Jasper has worked for the Mayor since Mr Livingstone was first elected seven years ago, reporting directly to him and earning more than  £111,000 a year. They have been longstanding political friends and allies for many years.

The officials have considerable influence over grants, some paid directly by the Mayor's office and others by Mr Livingstone's wholly controlled economic development body, the London Development Agency.

One grant recipient, Diversity International, controlled by a long-standing friend and business associate of Mr Jasper, Joel O'Loughlin, received  £295,000 in LDA funding for the Diversity Dividend, a web-based tool for London business, even though the business consultancy has no expertise in computers and is based in Liverpool.

The website does not exist, the company has now gone into liquidation and all the money paid to it has vanished. The liquidator, David Hole, told the Standard that the LDA was seeking the return of "substantial" sums from Diversity International and official liquidation documents at Companies House say he is considering taking legal action against Mr O'Loughlin for "trading offences".

Mr O'Loughlin ran a company with Mr Jasper, is currently a director of the campaigning body 1990 Trust, to which Mr Jasper is closely connected, and is described by Mr Jasper as someone he has "known for years and years".

Mr O'Loughlin failed to return repeated emails and telephone calls from the Standard. The LDA refused to respond to any of our questions about Diversity International, despite being given nearly a week to do so.

Another project, Brixton Base, whose patron is Mr Jasper and whose director is Errol Walters, another friend, has received  £287,000 from the LDA over the past two years for "premises" - even though it has occupied an LDA-owned building throughout that time and was charged no rent in the first year, according to mayoral answers to the London Assembly. The Greater London Assembly inquiry is into Mr Jasper's role in funding this company.

The LDA paid at least a further  £230,000 to Brixton Base to equip it as a "creative training hub" for the black community, with a film studio, and to run three short creative training projects.

However, the director of one of those projects, the film-maker Shango B'Song of ITS Cine, told the Standard that he in fact financed the studio and nearly all the spending on the project out of his own pocket - and saw only  £8,000 of the LDA grant given to pay for it.

"From the very beginning of the course, Brixton Base's attitude towards our staff and students was unprofessional, dishonest, abusive and sometimes threatening," said Mr B'Song. One of the directors of Brixton Base, not Mr Walters, "reminded me on numerous occasions that [if I complained] they had 'some gangster friends who would break me up'".

Two sources said that a member of Brixton Base staff, not Mr Walters, had threatened the LDA that its offices would be destroyed by gangs if it refused to renew the organisation's funding. The LDA refused to deny receiving such a threat.

In a letter to the LDA, dated 20 October 2006 and obtained by the Standard, nine of the students on the ITS Cine course complained of "attempted intimidation" by Brixton Base staff - who, they said, also lied to funders and potential funders in their presence that Brixton Base had paid for the studio facilities.

Mr B'Song also complained to the LDA, but told the Standard: "Literally as I was leaving the LDA building after the meeting my phone rang. It was Errol. He said he knew where I'd just been and it was no use complaining to the LDA because he had his people on the inside."

The LDA took no action on either complaint but instead paid a further  £390,000 to Brixton Base. The Standard has been leaked a series of emails between Mr Jasper and senior staff of the LDA which lay bare Mr Jasper's key role in protecting the project. In June last year, even before Mr B'Song's and his students' complaints had been received, LDA officials had severe doubts about Brixton Base and wanted to evict the organisation from its building.

However, in an email seen by the Standard, Mr Jasper ordered the LDA's senior director, Tony Winterbottom, to "ensure that this action [the eviction] is withdrawn immediately and ensure I am consulted on all major decisions affecting [Brixton Base]". We have also seen emails which show Mr Jasper's close involvement in the project's funding applications.

Despite receiving at least  £535,000 to date in LDA grants, Brixton Base's website remains "under construction" and repeated phone calls by the Standard to its listed number over a period of several weeks were never answered.

Mr Walters is also acting director of the Black Londoners Forum, based in the same building as Brixton Base, which has received at least a further  £291,000 directly from the Mayor. The Standard has seen the official funding agreement for  £53,000 of this money which imposes extraordinarily few obligations on the Black Londoners Forum in return for its grant.

The agreement says that in return for the BLF's money all the campaigning it has to do is "support an online petition" against attacks on asylum seekers. This currently contains 97 signatures.

The BLF's real function appears to be to offer enthusiastic support for the Mayor. Its website republishes mayoral press releases word-for-word as its own and it responds to mayoral consultations with glowing praise of his policies. This is then cited by Mr Livingstone as "evidence" that his policies are supported by the black community.

Mr Walters failed to respond to repeated telephone messages, texts and emailed questions sent to him by the Standard. The LDA and the Mayor's office refused to answer any of our questions about Brixton Base and the BLF, despite being given them almost a week ago. Nor would they deny any of the allegations made by Mr B'Song and his students.

One figure in the GLA Brixton Base probe - although not currently under investigation herself - is Yvonne Thompson, a friend of Mr Jasper who accompanied him on a trip to New York at the LDA's expense.

The Standard has established that two organisations controlled by Ms Thompson have received, or are due to receive, a total of more than  £1 million in funding from the LDA. In an apparent conflict of interest, Ms Thompson was a member of the LDA board at the time the grants were approved.

She also chaired the LDA's equality monitoring and review group, on which Mr Jasper is an observer and Errol Walters a "specialist adviser". Ms Thompson insisted last night that she did not sit on any LDA panels which decided funding.

One of Ms Thompson's companies, the European Federation of Black Women Business Owners, received at least  £25,000 from the LDA. However, according to the annual accounts, signed by Ms Thompson as director and on file at Companies House, the EFBWBO has throughout its entire existence been "dormant", receiving no income from anyone, let alone the LDA. Ms Thompson said that the LDA's  £25,000 went to a different organisation and denied receiving any personal benefit.

Ms Thompson is also the president of the African Caribbean Business Network, a non-profit charitable company which describes itself as "spearheaded" by Mr Jasper but which appears to do relatively little to deserve an LDA grant totalling  £990,000 between 2001 and this financial year. In 2005-6, the year of the latest available accounts, the ACBN claimed to have 2,500 members, but the income from membership subscriptions in the accounts suggests that it may actually have had as few as four paid-up members.

In the entire three years 2003-6 - during which time it received  £535,000 from the LDA - the ACBN spent just  £75,000 on "activities in furtherance of the charity's objectives", spending nothing at all in 2005-6. The LDA, its sole funder, was clearly unhappy: that year's ACBN accounts speak of "limited assurances that the ACBN would secure funding for the future".

However, despite LDA officials' concerns, Ms Thompson managed to win a new deal guaranteeing a further  £200,000 payment in each of the following two years.

In April this year, more than a year before the scheduled expiry of her term, Ms Thompson left the LDA board. The LDA refused to say why this occurred. Ms Thompson told us she left because "the LDA's priorities had changed".

Afua Yeboah, a spokeswoman for the ACBN, told the Standard to direct questions about the ACBN's effectiveness to the LDA. She said that subscription income was not an accurate indicator of ACBN membership, claimed the ACBN had delivered 23 events this year and denied that Mr Jasper had any "formal" involvement with the funding of the ACBN.

Ms Yeboah's denials of Mr Jasper's involvement were undermined, however, when Mr Jasper accidentally copied the Standard into an email exchange with her, revealing that he supervised ACBN's response to all our questions.

In one of the emails, sent at 8.46pm yesterday, Mr Jasper orders Ms Yeboah to "now prepare your letter of complaint" to the Standard before our article was even published.

Another associate of Mr Jasper's, Simeon Grossett, described on the ACBN website as "Mr Networker", is a director of the Black Londoners Forum, a co-director of the ACBN and also has his own company, BEM Community Enterprise, which also appears, from its latest accounts, to have received substantial LDA funding, though the LDA refused to confirm this.

The Standard has discovered that the "statement of activities" shown in BEM's accounts to justify its funding is precisely the same words every single year, simply cut and pasted from one year to the next. BEM's claimed office and "training centre" turns out to be a firm of Brixton solicitors, which told us it merely acted as a forwarding address.

Despite being given since last Thursday to respond to our findings, the LDA has refused to answer any of our questions about any of the organisations it funded. Among the questions it declined to answer was how the funding decisions were made, what benefits, if any, the organisations had delivered for the black community and what Mr Jasper's role was in each case.

The Mayor's office refused to answer any of our questions either, although it has had them since Friday, or to discuss the GLA inquiry, instead accusing the Standard of conducting a "campaign targeting black and ethnic minority organisations".

Mr Jasper insisted last night that he did "not get involved" in grant funding decisions, something which at least one of the leaked emails seems to cast doubt on. "I don't take a day-to-day overview of what's happening at Brixton Base," he said. "I'm just the patron, the champion." He sidestepped questions about his relationship with Errol Walters and said any problems at Brixton Base had been "minor matters".

The Standard has learned that the current GLA inquiry, conducted by the authority's chief executive, Anthony Mayer, is the second into Mr Jasper's involvement in Brixton Base within the past six months. The first one cleared Mr Jasper, but was condemned as inadequate and insufficiently probing. In a letter dated 30 October, Mr Mayer says he will have the matter investigated again.

One member of the LDA board, Eric Ollerenshaw, last night described the Standard's findings as "incredible" and said: "We may have to seek the views of the Audit Commission. There's going to have to be an immediate and proper investigation into these allegations [about all the companies], because it calls into question our whole monitoring procedures."

The London Assembly member Richard Barnes last night called for Mr Jasper to be suspended and said: "If the Mayor doesn't take action, he is condoning what went on."

What people say on the net:

Livingstone and Jasper. Almost like a comedy act isn't it? It would be if it weren't so serious. Remember two of Bethnal Green's finest gentlemen Ronnie and Reggie? They used to set up companies called Long Firms. They would buy lots of merchandise on finance terms then pull the plug without paying the bill. Still it's ok to be generous with other people's money.

- Paul Fretwell, Benfleet, Essex, England

Ken should go and I think it is elections early next year no? Should he not be budget-limited? Or that he is increasing the Red Ken C-taxes on motorists going into London is why?

- Jacqueline, Hampstead, London

Well that's what happens when black people emulate the worst type of European and loose all that Caribbean honesty and spirit. Thankfully not everyone has sold out.

- Trueforeigner, London Town