The Profits of Penzance: Part Three
School porn, the Panama Papers, Leo Di Caprio, and the island of Sarawak collide
The other week I detailed some background to escandalo about an itsy bitsy little firm called Place Group, which was almost given a massive joke mountain of billions to bring about Net Zero in the UK, but not really, but yeah, but no, and how the story largely vanished, and why I think it still matters.
The Profits of Penzance: Part One
In 2020 the MP for a constituency encompassing Newmarket racecourse, then-Health Secretary Matt Hancock, gave oversight of Covid Test and Trace to Jockey Club board member Dido Harding, and awarded Covid contracts worth almost £777 million to Grand National sponsor Randox, paymaster of disgraced lobbyis…
Then last week I looked at the oddly incestuous corporate structures developed by only two (unrelated) people, who are both a bit cringe on the Book of Face.
This post is very long, so make yourself a beverage first. It’s also completely bonkers! Welcome to new subscribers – and huge thanks to The cuddly yet ferocious Bear for sending some of you my way. Service of a reasonable length will resume next week.
It’s all punctuated by Drag Race gifs because Pride Month[s]. And let’s face it, we need something fabucious to get us through reading about fucking hedge fund grifters and the endless gurgling sounds of public funds and assets being sucked into insatiably venal private maws. Right then.
This is where things go fascinatingly global. Some philosophers and physicists say everything’s connected if you look deeply enough, and when it comes to this story they ain’t wrong, hunty.
I’ll zoom in on one company connected to the two people given the Net Zero ‘contract’, BPET, before looking at the contract itself, and the company awarding it. But before we return to Penzance, we’re popping to Panama and Malaysia.
In April 2016, the German newspaper Süddeutsche Zeitung (SZ) released 11.5 million leaked documents belonging to Panama-based law firm Mossack Fonseca, exposing a network of over 214,000 tax havens used by politicians, public officials, celebrities, and financial entities from around 200 countries. SZ and the International Consortium of Investigative Journalists worked together to decipher the encrypted ‘Panama Papers’, which still create ripples now and then. Offshore business can be legal, but some shell corporations created for clients by Mossack Fonseca were used for tax evasion, money laundering, fraud, and getting around international sanctions.
Journalist Clare Rewcastle Brown hails from Sarawak, a Malaysian state on the island of Borneo, and used to work for the BBC World Service. She runs the Sarawak Report and has covered financial crimes and scandals, including one named 1MDB after the state-owned strategic development company 1Malaysia Development Berhad.
The scandal boils down to loadsamoney, some of which began as development aid given to the company by its government but ended up in private hands. The Panama Papers allowed Rewcastle Brown to trace where some of the 1MDB fortune ended up: much of it with bagman and PetroSaudi director Tarek Obaid. I’ll let her explain how it appears to have been used to fund free schools:
Using a web of off-shore vehicles, he and fellow director Patrick Mahony secretly invested some of the millions they obtained in illegal backhanders from Malaysia’s Development fund in a private education company that bought up some of the UK’s poshest private schools …
Documents acquired by Sarawak Report reveal that the two men are the secret funders behind Bellevue Education, a fast growing business, which has acquired 12 lucrative schools since 2010 …
The Bellevue Education Group, previously named The Really Great Education Company Limited, is run out of England but primarily owned by two vehicles named Plato One and Plato Two based in Hong Kong. These are in turn controlled by Mahony together with an off-shore company owned by Obaid called Maplehill Property Limited (BVI).
You see, Bellevue Place Education Trust (BPET) is called that because it’s a partnership between Bellevue Education Ltd and Place Group Ltd. And she’s not just saying there’s a tenuous connection being used to smear BPET. She’s going further in saying this laundered money was invested in Bellevue Education, so therefore benefits BPET.
Bellevue Place is a new model for education delivery in the state sector. The Trust is a joint venture between two organisations who are passionate about providing high quality education provision. They bring together the very best of the fee-paying Independent sector – Bellevue Education Ltd – experienced in running 15 independent schools in the UK and Switzerland; with a highly-regarded education consultancy – Place Group – with experience in the state sector for efficiency of supply in setting up new schools and converting academies, along with driving value for money and compliance.
– From the BPET website
The Sunday Times reported on 10 April 2016:
The company’s website says: “Bellevue Education operates seven primary free schools across London and the southeast through a joint venture.” It helps operate the schools in a charitable venture called the Bellevue Place Education Trust (BPET), in east London."
The biggest shareholder is Obaid via a BVI company called Maplehill Property, which was formed by Mossack Fonseca … [it] has been caught up in a money laundering investigation after a deal with a Malaysian fund called 1MDB.
In response, BPET (not Bellevue Education) said:
Bellevue Place Education Trust wishes to be very clear that the Bellevue shareholder who made an investment in Bellevue Education via a company registered by Mossack Fonseca in the British Virgin Islands has no connection with the Trust. …
Bellevue Place Education Trust is a not for profit charity that was approved by the Department for Education to manage and maintain state funded free schools. The Trust is a separate, independent organisation from Bellevue Education that is solely focused on offering high quality education provision to its pupils. We have some fantastic staff and governors who are supporting the delivery of this vision and we aim to see off these allegations as promptly as possible, enabling us to focus on our core purpose.
BPET chief executive Mark Greatrex told Schools Week:
I had never heard of the chap [Obaid] and he has no involvement with the running or governance of the trust.
You can read why this raised eyebrows, beautifully outlined, in this Schools Week article. Not least because Mark Malley and private equity investor Marwan Naja were both BPET trustees while holding ‘top jobs’ at Bellevue. (Mark Greatrex, by the way, was a director of the MAT [aka Starbucksised collection of former state schools] called E-ACT, which has a history of escandalos itself). I truly enjoy the simple but side-eyed chart that Schools Week made (see above).
1MDB had $1.83 billion stolen, just over a billion going to Jho Low and the rest to PetroSaudi. The latter invested much of theirs in a so-called oil drilling project off the coast of Venezuela, but this too was wreathed in allegations of criminality and corruption. It was said to be payment for ‘brokering’ a billion dollar joint venture in 2009 between 1MDB and PetroSaudi, but was really fronting Low’s theft from 1MDB.
Mahoney almost immediately bought a £6 million Notting Hill town house. As Rewcastle Brown points out, this is all money that could have benefitted children in Asia with limited access to education, but instead helped educate already-privileged English children.
The National Union of Teachers were concerned enough about the connections to produce a long and detailed dossier calling for a DfE investigation, in which they stressed the dubious nature of the ‘I don’t know her’ claim by Greatrex:
Patrick Mahony – the individual identified by the Sarawak Report as co-owner of Plato One and Plato Two – is director and “Chief Investment Officer” at both Bellevue Education Group and Bellevue Education International. He is also a director, along with Tarek Obaid, of Petrosaudi Energy and Trading (UK) Ltd – a UK-based arm of PetroSaudi International, the oil company founded by Obaid. …
Both Bellevue Education and Bellevue Education International have the same correspondence address as Petrosaudi Energy and Trading (UK) Ltd. This is also PetroSaudi’s UK address.
Low used his loot to buy properties in Hollywood and NYC, hang with slebs, and buy luxury suck up gifts for some of them. Leonardo DiCaprio returned pressies to US authorities, including Marlon Brando’s Oscar and art by Basquiat and Picasso. Red Granite Pictures received bungs, which the Department of Justice said funded production of Daddy’s Home, The Wolf of Wall Street, and Dumb and Dumber To, seizing royalties from all three. Low was personally thanked in the credits of Wolf, which is HILARIOUS, no? Am gagged.
Oh yeah, and Goldman Sachs also got involved in terrible ways, because of course they did. Jesus tapdancing christ on a scooter.
The company you keep, eh? Was Place Group obliged to know about the investment background of Bellevue Education while working closely with the people of that company to deliver ‘non-profit’ education to children who would otherwise be at state schools with transparent funding? Yes, of fucking course. Every last detail down to the penny, if your reputation is tied up with them.
1MDB filed a suit against defendants Obaid, PetroSaudi, former director Mahony, Deutsche Bank, Coutts & Co (Switzerland), and JP Morgan (Switzerland) in May 2021. A California Court ruled in November that £340 million frozen in the account of London lawyers Clyde & Co by PetroSaudi was stolen from 1MDB. As at 2022, Obaid and Mahony were being examined on criminal charges in Switzerland and both are wanted in Malaysia. I’ll be giving you updates on everyone embroiled in all this next week.
Oh hey, guess who else is linked to PetroSaudi because he lobbied for them for $65,000 a month plus 2% commission and had a do-not-disclose-this-awkward-fact-I-don’t-know-her clause about it in the contract? Who flirted and dated with some of the most influential Chinese political leaders and introduced them to PetroSaudi? Why, it’s former-Crime Minister Tony Blair! Knock me down with a feather.
On a related but slightly side note I won’t go into too deeply as we all have lives to live, Place Group – aka Claire Delaney and Simon Rule – is also linked to a global network of ‘edu-grifters’, one of the key showrunners of which is Ron Packard, a mate of Donald Trump. He runs and is a trustee of Aurora Academies Trust (AAT). As this excellently detailed article states, “That an American businessman can simultaneously control a charter school in Cleveland and an academy in Crawley shows how far state-funded education in this country has been transformed since 2010.” *deep sigh*
AAT’s Gatwick School was linked to Mosaica Education, a for-profit operator of US charter schools, also running schools in the Middle East and India with a super-culty approach to education. I can say this because I once nearly managed one of their schools in Kuwait but got freaked out by their ‘system’.
The Crawley Free School Trust was established in late 2012 to open “a new all-through (4-16 years) school near Gatwick Airport with an emphasis on global education, business, entrepreneurship, science and technology”, with key Mosaica players appointed as directors. The ‘proposer group’ had just two partners: Place Group Ltd and Mosaica Education Inc.
Delaney and Rule became directors of the Trust. The Crawley Free School, aka the Gatwick School, opened in 2014. But Mosaica had more debt with one of the USA’s privately-held public sector [emphasis mine] financial services companies, Tatonka Capital Corp., than it could service. Mosaica went into receivership, and Tatonka (which, guess what … also operates charter schools!) took over some of its assets. The Crawley Free School Trust was dissolved in 2018.
Back to the main show. You can read about what the ‘framework agreement’ between Place Group and E2BN involved, or at least how they presented it, here via a compliant ‘news’ outlet. The model was, not what Delaney and Rule’s Place Group usually does, but what Delaney and Rule’s Schools’ Buying Club and Place Group Consultancy usually do, or did. If you need something (school cleaning services, to start a free school), they’ll advise you and/or source suppliers for you, of course taking their cut. They called their new branch of this Everything Net Zero. Your One Stop Shop for passing on climate change action to a middle man!
They thought they’d somehow find the time to run all those schools and help others run schools or buy things for schools or ‘consult’, but also tender competitions to help public bodies buy support on ‘greener’ construction, design, energy, estates, technology, transport, waste management, and water from ‘leading sustainability organisations’, aka access to a list of pre-approved suppliers on pre-agreed terms. For this it would receive, in its own words, a “very small framework levy that suppliers pay if they win contracts”.
The framework was awarded, after loads of … nah, I’m kidding … zero tendering, by the East of England Broadband Network (E2BN), a not-for-profit group formed by a collective of local authorities to secure value-for-money broadband for eastern schools, ‘but now offering wider buying support to schools nationally and even abroad’, whatever that means. I guess that means Everything Net Zero? But where does abroad come in? (E2BN’s own website is a bit shite for ICT specialists, imho).
I found a 2015 chat between its secretary Christopher Kastel and an end-user of E2BN’s software, working together to find out why ‘nude ladies’ wasn’t being filtered from results on school computers.
So then I had a chat with someone who used to work for E2BN, who described it as “an ex LEA quango … no oversight money pit … [back then] with minimal staff, dependent on contractors/consultants to pursue ideas (largely framed by contractors) … E2BN was established alongside LGFL (London Grid For Learning) to spread high speed broadband to schools in the noughties. They then backed virtual learning environments, with different providers winning bids to back different companies. Most of the market was exploded by Moodle, an open source software created by universities. Porn filters sounds about right.”
That last bit was responding to my insights about E2BN and naked laydeez. Porn filtering is really hard, apparently. He added, “Computers aren't good at picking up nudity and tend to ban [competitive swimmer] Adam Peaty, whilst allowing black and white nudes. The months spent on language suppression alone ... It's remarkable the amount of English language with swear words in them, Essex has a particular problem.” We see you, Essex. Hey, girl, love you lots.
He added, “Real aberration in this £70bil green contract? Very odd … Perhaps they are simply exploiting an old framework agreement/legacy quango … I would at least expect a serious green company involved in the action — something like B-corp or Zellar would be ideal.”
You’ll recall from my first instalment that the Good Law Project (GLP) wrote to E2BN for answers about this agreement. Failing to receive any, it sought judicial review, at which point E2BN got SCAR-ED, and the whole thing was dropped.
Relatedly, the GLP won a judicial review against the government regarding its Net Zero ‘strategy’. The High Court ruled on 18 July 2022 that the Crime Monster’s [typos stay] ‘strategy’ was inadequate and unlawful because the proposals were vague and there was no realistic implementation plan. That is, it called the government out for just pulling really important things out of its arse as usual.
How then were companies like E2BN and Place Group already planning their plans to be part of that plan? There wasn’t even a proper plan yet. You could say that at least somebody was doing something, but if you did I’d remind you that Everything Net Zero was about action by and compliance of public bodies. Compliance with what? It was unrealistic at best, and that’s being kind. Don’t business people go on loads of training days to listen to how to have ‘SMART goals’ over and over again?
Speaking of unrealistic:
This is either a ‘micro-company’, as it’s considered by Companies House, or it is not. Do these look like the offerings of a business which doesn’t even require auditing, offerings made to every public body in the country? Is a ‘micro-company’ able to crow, ‘Over the past 18 years we have supported the delivery of billions of pounds of quality infrastructure and services, and saved the public sector millions’? Cakeism. I’m honestly surprised that both companies were surprised that they had some explaining to do.
Then again, they made a £4 billion agreement between themselves in 2020 about facilities management, Everything FM, and no one noticed. Score!
If you look at a statement by an Everything FM-approved supplier, you can see the model Everything Net Zero aka Place Group/E2BN hoped to adopt before the GLP scuppered it. Place Group was to decide who was in a supply chain for every public body in the country; a quite incredible amount of power and influence for a ‘tiny’ private company to hold. And granted by who? Another company cut from the same cloth, sizewise. The DfE doesn’t know her. Everything Sketchy.
Where did Place Group learn this model from? Well, perhaps from the government, via Becta, a non-departmental public body/charity/limited company funded by the DfE and its predecessors, when Place Group themselves became approved suppliers in ICT. (Oh, they do ICT too! Or did. These people are amazing. They should work at a circus spinning plates. Is that how they know E2BN? The more I learn about them, the more I’m reminded of this …
I stumbled upon a suggestion that Place Group isn’t even owned by Delaney and Rule themselves, but was bought out by Wey Education for £1.7million, Wey itself then being swallowed up by even bigger education-not-for-profit-except-for-profit-though-really Inspired Education. But the trail went cold beyond a Memorandum of Understanding, so have to leave that there for now.
Wey was incorporated and capitalised as a shell company with a view to acquisitions by a corporate financier and a stockbroker in 2006. A Dr. Atkins, who was chair of OFSTED from 2006-2010, afterwards established an education sector consultancy, aimed at the ‘developing market promoting and serving academies and free schools’, and became involved with Wey. Here’s an interesting case about that, if you enjoy case law, describing such schools as “favoured by government policy … In that sector, her contacts with education professionals and the DfE would be very useful.”
“Place Group is better known for its work supporting free schools than decarbonisation.” No shit, Sherlock. But these are the hands that the UK’s public sector contribution to averting climate change, mass extinction, climate migration, drought, and *gestures wildly* all of it, almost rested in. They don’t even use apostrophes correctly on LinkedIn, or know how to make a Facebook post shareable without an intervention. Will climate change be turned around by ‘consultancies’? Will the problem be solved by the same system that caused it? There’s an Einstein quote about that. We’re doomed, doomed I tell you.
Twitter was aflutter with the assumption that these people had direct connections to Conservative Party power and finances, a la pandemic profiteering. I could find no evidence of that, aside from Michael Gove being very kind to their business model when he was still allowed to have anything to do with education. Not on a personal level, necessarily – I mean that he drove a bandwagon called free schools and they were smart enough to ride on it.
Oh, and Mark Greatrex started out working on academies … within the DfE.
But does it matter? That’s not how things work anymore. Public and private used to be separate. Now they’re more separate than ever, because the government says, “Hey, do what the hell you want, make loadsamoneyyyyy with little regulation.” What both Place Group and E2BN do used to be done within local authority procurement teams and similar.
It’s private firms benefitting from stealth privatisation of public services, and their former public education jobs and connections, like seagulls on a beached whale, justifying it by saying ‘we only get a little cut’. When it came to that closely-averted contract, 1% would be £700 million, you guys. For two people.
You can really see the ‘invisible hand of the market’ at work in all this, can’t you? Clammy handshakes, behind closed doors, but not invisible due to something Adam Smith never envisaged: Google. I’ll bet if he was around today, he’d have a consultancy company called Everything Going Quietly Private.
The bit of his ‘invisible hand’ theory that’s rarely talked about is that ‘individuals acting in their own self-interest’ is supposed to lead to outcomes of great public good. You’ll forgive me if I remain unconvinced, after digging into these connections. Fuck you, Ayn Rand. And you, Sniffy Gove. The invisible hand is smothering the potential of everyone not involved and profiting from these legalised boondoggles. Of our society itself. Everything Sucks.
Next week: are all these people still up to all this? Are there more Everything Whatever contracts? Has anyone at all who deserves it gone to prison, ever?
I edited and published a new collection about austerity yesterday. Purchasing it will support a community of independent writers in Wales who give a shit about austerity and all the people it kills. Diolch yn fawr iawn.