Hedge fund tycoons bankroll Liam Fox office as Werritty affair deepens

[Magda Hassan]

Tory donor links to Adam Werritty increase pressure on Liam Fox

Millionaire Michael Hintze, the Tory donor who indirectly funded Adam Werritty, the friend and self-styled adviser to defence secretary Liam Fox, has tens of millions of dollars invested in defence companies through his hedge fund.

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Michael Hintze, an Australian former Goldman Sachs banker Photo: REX

2:07PM BST 14 Oct 2011


One of the companies in which tycoon Mr Hintze's hedge fund CQS invested benefited from an announcement made by Dr Fox in July this year in his role as defence secretary, according to the Financial Times.

CQS had £21.5million invested in L-3, a high-tech US communications firm, at the time Mr Fox awarded it a contract to provide the Ministry of Defence with new "Rivet Joint" aircraft.

CQS only has a small portion of its total assets invested in defence-related positions and there is no evidence or suggestion that CQS's funds profited directly in any way from the association of Mr Hintze with Mr Werritty or Dr Fox.

The MoD said on Thursday that the contractor was chosen by the US government and the decision to select the firm had been made under the previous government. Up until now L-3's contract was not publicly released.

The Australian-born businessman Mr Hintze, who is said to be worth more than £500million, has given the Conservative Party and Tory MPs almost £1,437,830 over the past decade. One of his companies has lent the party a further £2.5million.

His firm CQS is found to have paid for flights and accommodation for a 2007 trip by Dr Fox to Mauritania and then again later that year to a conference in Florence.
In October 2008, he flew Dr Fox then Shadow Defence Secretary to Washington. He also supplied a private jet for Dr Fox and Mr Werritty to fly from the United States to London in May this year.
Earlier this week, The Daily Telegraph disclosed that Mr Werritty also had the use of a desk at the London offices of Mr Hintze until last week.
A former girlfriend of Mr Werritty's told The Telegraph: "As far as I was aware, he would get up and unless he had an external meeting he would go there as if it was his office, every day," said the woman, who said she had a relationship with Mr Werritty between April and August this year.
"He literally had an office there, tucked away in the administration area. He was off the floor, he wasn't part of the hedge fund. He was just given a free office space."
It was also discovered Mr Hintze's charitable foundation has also donated over £51,000 to Dr Fox's now-defunct charity The Atlantic Bridge, which was run by Werritty.
One Tory MP said that any evidence that Mr Hintze had interests in defence companies would put Dr Fox in a difficult position:
"This is what makes it into a grey area. It makes it a difficult decision and that becomes a tough judgment call for the prime minister and the cabinet secretary," the MP said.
"Hintze is not motivated by [financial] defence interests," he said, "but a shared ideological agenda [with Mr Fox]. But perception does matter." Sir Gus O'Donnell, cabinet secretary, is leading an inquiry into Mr Werritty's relationship with Mr Fox including possible conflicts of interests.