Senior figures in Keir Starmer’s government had reservations over the appointment of Labour Party grandee Peter Mandelson as the UK’s ambassador to Washington, transparency documents have revealed.
Mandelson was sacked from his plum diplomatic post in September last year after further details of his friendship with multimillionaire paedophile Jeffrey Epstein emerged.
A 147-page document released by the Cabinet Office yesterday showed that Starmer was warned in December 2024 that former New Labour cabinet minister Mandelson’s appointment posed a “reputational risk” because of his association with Epstein, who died in 2019.
The document release – prompted by a “humble address” from MPs last month – also referenced concerns from national security adviser Jonathan Powell and Sir Philip Barton, who was permanent secretary at the Foreign, Commonwealth and Development Office at the time Mandelson’s appointment was proposed.
A “due diligence” report on Mandelson, provided to Starmer on 11 December 2024, notes that the peer’s relationship with Epstein appeared to have commenced around 2002 and had continued after the financier’s conviction for procuring an under-age girl in 2008.
It notes that Mandelson had reportedly stayed in a house belonging to Epstein in June 2009 when the peer was the UK’s secretary of state for trade and Epstein was in jail. The report says the relationship between the two men continued after Labour lost power in 2010 and Mandelson left office.
In addition to his relationship with Epstein, the due diligence report identifies Mandelson’s work with the Global Counsel strategic-advice consultancy – which he founded – and his track record of resigning from ministerial roles as further potential reputational risks.
It notes that both of Mandelson’s resignations related to “financial matters, including high-profile donors to government”.
Elsewhere, the document bundle includes minutes of “fact finding” calls conducted by Mike Ostheimer, general counsel to the prime minister, with senior figures in the Starmer administration on 12 September last year, the day after Mandelson was sacked.
One of the conversations is with Powell – once himself seen as a candidate to be the UK’s ambassador in Washington DC.
According to the document, Powell described Mandelson’s appointment as having been “unusual” and "weirdly rushed”. It states that Powell recalled that Barton “also had reservations around the appointment”.
Peer sought £547k payoff – but only got £75k
The document bundle also reveals that Mandelson sought a severance payment of £547,201 after he was stripped of his ambassadorial role, which came with an annual salary of £161,318.
A 6 October letter from FCDO perm sec Sir Olly Robbins to chief secretary of the Treasury James Murray says the £75,000 settlement proposed for Mandelson broke down to £40,330 in lieu of three months’ notice plus a “termination payment” of £34,670.
Robbins said severance-paymet negotiations with Mandelson “began with a request by the individual to pay out the remainder of the four-year salary costs of the fixed term appointment”. That would have amounted to £547,201, he said.
“The severance payment we are requesting is significantly below this and amounts to just over five and a half months' salary (which includes the individual’s contractual entitlement to three months’ notice pay),” Robbins wrote.
“Given three months is a contractual obligation, and given the highly political nature of the withdrawal, this is a reasonable settlement that would allow HMG to announce that the individual is no longer employed.”
Speaking in parliament yesterday, chief secretary to the prime minister Darren Jones said the PM had taken responsibility for Mandelson’s appointment as US ambassador and had “acknowledged that it was a mistake”.
“While the documents point to public reports of an ongoing relationship between Peter Mandelson and Jeffrey Epstein, the advice did not expose the depth and extent of their relationship, which became apparent only after the release of further files by Bloomberg and then the United States Department of Justice,” he said.
Jones said there were specific documents related to Mandelson that the government would have liked to release yesterday, but which the Metropolitan Police had asked to remain unpublished to avoid prejudicing ongoing inquiries.
Mandelson is currently the subject of a Met investigation into potential misconduct in public office, prompted by revelations in the DoJ files.