Tony Blair's Disappearing Act

By Catherine Mayer

Delivering responses as crisp as his shirt--and displaying a confidence as miraculously uncreased after months at the center of a storm over alleged corruption--Tony Blair on Feb. 6 submitted to a very public interrogation. He has twice answered police questions--as a witness, not as a suspect--in Britain's so-called cash-for-honors affair, becoming the first serving Prime Minister to be grilled by the cops. But this was his biannual appearance before a top parliamentary committee, a set-piece occasion that always provides insights into government policy. This time, as the chief witness genially pointed out, one question alone sent members of Westminster's low-tech press corps scrambling to uncap their pens--a question that dominates politics in Britain: When will Blair go?

The Prime Minister has already given a general answer: soon. Back in September he promised to relinquish the keys to 10 Downing Street before this fall. He declared an intention more recently to carry the flag for Britain at the G-8 and European Union summits in June. That indicates a narrow summer timetable for the anticipated swift transition of power to his Chancellor of the Exchequer, Gordon Brown. But as Blair looks forward to the 10th anniversary of his first election victory, on May 1, London's famous chattering classes are wondering if he'll make it that far. An alliance of raucous opponents on the right and left, amplified by the noisy media, demands his head now, saying he should resign pending the police investigation into allegations that honors, such as seats in the House of Lords, may have been offered in exchange for party funding. Blair is keeping his head down and continues to work to secure his legacy as one of Britain's most successful premiers ever--presiding over continuous economic growth, pushing through record spending on health and education, moving within sight of a peace deal in Northern Ireland. He might have expected to string out his departure like the kind of grizzled rock stars whose company he evidently enjoys, squeezing in a few, poignant farewell gigs. Yet the loudest voices in the crowds are baying for him to leave the stage.

Blair isn't ready to just disappear. "You'll have to put up with me for a bit longer," he told the BBC's famously pugnacious interviewer John Humphrys last week. And at Downing Street, which always looks more like a film set than its screen simulacrums, people are doing their best to act out that message of business as usual. An aide reels off the day's wearying list of prime-ministerial meetings and appointments, before revealing the anguish behind this glassy efficiency in a voice lowered to a whisper: "It reminds me of the end of the Clinton era. It's a witch hunt."

The scandal threatening the reputation of a man once known as Teflon Tony involves alleged impropriety behind closed doors. But the police inquiry launched in March 2006 isn't concerned with besotted interns or sexually promiscuous leaders. Blair and the New Labour Party he created in his dapper, middle-class image are suspected of getting too close and personal with money.

On the face of it, this is a simple story. Last year political opponents of the government asked the police to investigate reports that Labour Party sources might be offering honors such as knighthoods and peerages in return for donations to the party. That would contravene a 1925 law drawn up to ban the peddling of titles after Liberal Prime Minister David Lloyd George, a venal realpolitiker, exploited his powers of patronage for the benefit of party coffers. Four wealthy businessmen--all recommended by Labour for peerages, although their names were later withdrawn from contention--admit that they secretly made loans to Labour before the 2005 general election but say the cash was given on commercial terms and so did not have to be disclosed. In April 2006, the police extended their inquiry to look at the finances of all the main political parties and began to interview witnesses. That month a government adviser called Des Smith--who allegedly told an undercover reporter that financial backers of privately subsidized schools called city academies could expect to be rewarded with honors--was the first to be arrested. (And the first to be let off: prosecutors have now said there is insufficient evidence to pursue charges against him.) Last July, Blair's friend and fund raiser Lord Michael Levy was also arrested and, like all other parties in the investigation, denies any wrongdoing. Since then, the inquiry has trudged along at a snail's pace, entwining more Downing Street employees and providing media sensations in thin news weeks. One of Blair's close associates says Downing Street had made contingency plans in case charges were leveled before last September's Labour Party conference, a sign of how long this has dragged on. Another member of Blair's inner circle speaks of "death by 1,000 leaks."

The police deny they are the source of the rumors and theories swirling through London, and even hardened conspiracy theorists--never in short supply in London's clubland--find it hard to explain what the boys in blue would stand to gain from such indiscretions. Still, each week, the stories pop up--and are then denied. One of the Prime Minister's advisers is said to have an explosive personal diary of events (he denies it); Downing Street is said to have a second, secret e-mail system ("stuff and nonsense," says an aide). But the idea that there's no smoke without fire is deeply rooted in British public life, and a pall hangs over Downing Street. "Britain remains a very clean political system, but you have this public sense of something being up," says Sunder Katwala, general secretary of the Fabian Society, a left-of-center think tank. He speaks of a "corrosive lack of trust" that is undermining the credibility of the political system. There's little evidence that voters are worried about whether honors were waved hypnotically in front of round-eyed donors. Three-quarters of respondents to a new poll say "these kinds of things have always gone on." But after close to a decade in office--and with the horror of Iraq, for which Blair is personally blamed--many in London's always frenzied media-and-politics village have decided that enough is enough. "What [this scandal has] become is a symbol of disengagement," says Katwala. "There's a strong link being made in the media by people who feel Iraq is still unfinished business and that this might be the next big thing. Is this where Blair gets caught?"

Still, while the affair has its concealed agendas--Iraq and a loathing of Blair's support for George W. Bush, a President Britons rate as substantially more dangerous to world peace than Kim Jong Il--the Prime Minister is the author of his predicament. His troubles have their roots in the days when his party reveled in a deep-seated hostility to the running dogs of capitalism. "In 1983 we still had a manifesto committed to nationalizing key parts of industry, promoting an agenda that was set against every interest of British business," says Ed Owen, a former government adviser. After being crushed by Margaret Thatcher in that election, says Owen, Labour decided that it had to prove it was "now the party that would provide the means by which industry and business could flourish." But Labour lost elections in 1987 and again in 1992, when it was defeated by the unpopular Tory government of John Major, itself mired in accusations of sleaze. Katwala calls that last outcome "astonishingly traumatic," and Labour's coming generation--Blair to the fore--set about ensuring that the party could never again sink so low. The result, says Katwala: "a degree of overcompensation" in the courtship of the business vote--and its cash.

Labour needed that cash. At the beginning of the 1990s, the party was close to bankruptcy. Most of its income came from labor unions, but union membership had dwindled, and party membership, another source of funds, had more than halved from a high in the 1950s of 1 million. (It is now less than 200,000.) Blair took over the helm of the party in 1994 and with the help of Levy, a self-made multimillionaire who started his fortune managing middle-of-the-road rock bands, began romancing the business community. The strategy paid off handsomely; business rushed to back Blair as his star rose, and his party triumphed.

Early on, there were hints that this new friendship did not always smell as fresh as it might have. Just six months into Blair's premiership, Labour was forced to return a $1.7 million donation from Bernie Ecclestone, boss of Formula One motor racing, after suggestions, denied by both sides, that his largesse might have influenced the government's decision to exempt the sport from a ban on tobacco sponsorship. But back then, Blair was untouchable. "I'm a pretty straight sort of guy," he told the BBC's Humphrys in an early encounter. Today that sort of charm doesn't wash with a public made cynical by revelations about dodgy dossiers on Iraq's weapons of mass destruction.

A similar disaffection greets Labour's protestations that it has already introduced reforms to the funding of politics and is considering more of them. "We dined out on this legislation to make the system more transparent. We quite rightly took credit for being the first government to do so after the years of John Major's sleaze," says a Labour insider. "So even the perception that we are seeking to evade our own legislation is terribly damaging." Proposals to restructure the House of Lords and tighten procedures for appointing peers, arrived on Feb. 7, clanging like a door on an empty stable.

Cleaning up British politics--and getting Labour finances, still in a parlous condition, back on track--will be a problem for the next Prime Minister. Blair's challenge is to seize back control over the manner and timing of his departure. It won't be easy. The investigation trundles on, although detectives appear to have shifted their focus from the original accusations of corruption toward the possibility that some of those questioned may have deceived investigators. (World-weary Washingtonians may now recite that old mantra: "It's never the crime. It's the cover-up.") Blair is determined not to stand down before the inquiry reaches a conclusion, believing this would be interpreted as an admission of guilt. But the longer the case goes on, the longer it encourages those who just can't stand Blair, and perhaps never could. Whether that does Britain much good is another matter. "This country's reputation for political leadership will suffer if we drag his reputation through the dirt," says the Downing Street aide. That may be true, but if anyone in London cares, they're keeping mighty quiet.