Fox’s special adviser led a jet-set lifestyle unfettered by rules

Special advisers are usually paid by the state and constrained by a Whitehall code of conduct. By contrast,Adam Werritty received £147,000 to finance a jet-set lifestyle of networking via first-class flights and luxury hotels — unfettered by any such rules.

The crisis for Fox began a week ago when it was reported that his former flatmate had brokered a private meeting in Dubai with a company seeking to transfer sensitive technology to Libya’s rebels. Werritty’s business card claimed he was an “adviser” to the defence secretary.

Even then Fox’s aides insisted the meeting was coincidental. Yet on Monday night the government released a list of 40 meetings between Werritty and Fox,18 of them overseas,undermining any such idea.

For days no one could explain what Werritty did or how he sustained his expensive lifestyle. But it was increasingly clear the younger man acted as an informal aide,nurturing Fox’s links with rightwing allies at home and abroad.

On Friday details finally emerged of a group of backers — including former Tory donors — who had paid money into Pargav Ltd,a company set up just after the general election. It is not clear what all the donors hoped to gain by footing the bill for Werritty’s trips. One,the venture capital investor Jon Moulton,thought the money would go towards a “security policy analysis research organisation”. He was “not very happy” to find out where it ended up.

Perhaps more damagingly,it emerged Moulton’s donation came at Fox’s personal behest. That revelation would have undermined the defence secretary’s supposed ignorance about Mr Werritty’s activities.

Of the other donors,several shared the Atlanticist,free-market,pro-Israel outlook of Fox himself.

Poju Zabludowicz,a softly spoken Finnish billionaire whose wife is among London’s foremost buyers of modern art,donated through one of his companies,Tamares Real Estate. A strong Zionist,he has been a friend of Shimon Peres,Israel’s president,since his childhood in Israel. He is also very close to Benjamin Netanyahu,the Israeli prime minister,and chairs a pro-Israel lobbying group called Bicom.

Meanwhile,£30,000 was donated by Michael Lewis of Oceana Investments,who owns a large stake in Foschini,the South African fashion house. Lewis was formerly deputy chairman of Bicom. He agreed to make annual payments,first to Fox’s Atlantic Bridge,a charity promoting US-UK relations,then to Security Futures,Werritty’s consultancy,and then last December to Pargav.

Another exotic backer is an investigative company called G3,chaired by former Reagan-era US diplomat Chester Crocker. G3 used to share a London address with the Sri Lanka Development Trust,a mysterious vehicle set up by Fox that was used to pay for his trips to that country.

In addition,the role of Michael Hintze,the billionaire fund manager,has been thrust into the spotlight because his hedge fund,CQS,provided Mr Werritty with a desk at its London office. Hintze’s charitable donation was also a key financial contributor to Atlantic Bridge and this year it lent £60,000 to the US wing of the group.

Perhaps more significant is that one of his key lieutenants,Oliver Hylton — who advised CQS on its charitable activities — was sole director of Pargav and as such was responsible for dozens of Werritty’s travel payments.

What finished Fox off,senior Conservatives told the FT,was when other Tory donors complained on Friday that media inquiries were making them uncomfortable. “It was beginning to upset a lot of Conservative sponsors and intrude into personal lives,” said one.

A Whitehall inquiry into Werritty continues but it is not yet clear if it will address several unanswered questions. Why did the businessmen give money to Pargav? Did any other Tories know about the set-up? And what other introductions did Werritty broker?

Additional reporting by Sam Jones,Daniel Schäfer and Kiran Stacey

© 2011 The Financial Times Limited