UKIP: Lord Pearson's company in bribery claim

Not a good start for Lord Pearson. He has only been leader for a couple of days and already the media are turning their sights on him.

An old story resurrected by the Guardian for obvious reasons:

The insurance business that made the fortune of the new leader of the UK Independence party (Ukip) is embroiled in an international bribery scandal that could lead to criminal charges in the UK, according to documents obtained by the Observer.

A detailed indictment served in Costa Rica this month alleges that a subsidiary of PWS, the insurance brokers which Lord Pearson of Rannoch founded and chaired, grossly overcharged the small central American state for its insurance premiums.

The Serious Fraud Office is investigating, and has arrested a number of PWS executives for questioning.

But the company itself will face no penalty if the prosecution succeeds; it has been disposed of to another insurance broker since the scandal broke, and the rump of PWS which holds the liability for any fine or penalty is in liquidation and without funds.

PWS is alleged to have paid bribes of more than $700,000 (£426,000) into a bank account linked to the then Costa Rican president, Angel Rodríguez, and provided a $1.6m slush fund for workers of the state insurance company.

Friends of Malcolm Pearson, the Thatcherite peer elected on Friday as the leader of the anti-European and anti-Cameron Ukip, said he knew "absolutely nothing about the alleged payments".

The indictment alleges that Pearson himself, as company chairman, was warned of the existence of the slush fund by a new Costa Rican regime which was probing corruption allegations as long ago as September 2005. The friends said he had never received the letter from the Costa Rican authorities. It had been diverted from his attention by others in the firm he chaired. One said: "He was contacted by the British ambassador in May 2006, which was the first he knew of it."

According to his friends, the City law firm Freshfields was subsequently called in, and the chief executive of PWS, Julian Messent, resigned, following the visit to Pearson of a delegation from the Costa Rican authorities.

Minutes of the Pearson meeting published in Costa Rica say that, during those negotiations, he offered to co-operate with the central American prosecutors, if no action was taken against the PWS company. He suggested PWS might return any money if the claims were substantiated.

Following complaints of inaction, however, the SFO was called in in 2007. It made arrests, and obtained banking information, which was sent to Costa Rica in August. Pearson said he had been interviewed by police and expected to be a witness if any UK charges were brought.

He added: "It is very regrettable that something like this should happen. But in 1997 when this started, it was regarded as perfectly normal. Under that regime, all the other insurance brokers were doing exactly the same thing."

Julian Messent said he was unable to comment as the inquiry was still in progress. Pearson, an old Etonian, was made Lord Pearson of Rannoch, where he has a Scottish estate, by Margaret Thatcher in the 1980s. He and two others working in his father's insurance business founded PWS when he was 22.

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