British News & Issues

Afghanistan’s election commission cancelled the second round of a presidential poll today and declared President Karzai the winner after the last-minute withdrawal of his only rival.

The Independent Election Commission (IEC) said the decision was made because of the cost and risk of organising the vote on Saturday, and because a one-horse race would raise doubts about the president's legitimacy.

"The Independent Election Commission declares the esteemed Hamid Karzai as the president ... because he was the winner of the first round and the only candidate in the second round," Azizullah Ludin, the Karzai-appointed IEC chief, told a packed news conference.

Asked if he was concerned that President Karzai did not have a legal mandate, he told reporters: “We are the commission and we have decided.”

There was no immediate response from Abdullah Abdullah, who withdrew yesterday in protest at Mr Karzai’s failure to meet his “minimum conditions” for a fair run-off, including the dismissal of Mr Ludin.

The United States and its allies here had been pushing for the cancellation of the run-off, fearing low turnout, further fraud and Taleban attacks, and for a power-sharing deal between the two men.

Few had expected the IEC to formally declare Mr Karzai the winner today as he won less then 50 per cent in the first round following the invalidation of more than a million of his votes because of fraud.

The international community had been encouraging Mr Karzai and the IEC to seek a ruling from the Supreme Court – without which Dr Abdullah and other opponents could still dispute Mr Karzai’s mandate.

But most UN and Western officials welcomed the IEC's announcement nonetheless as a signal that Afghanistan’s two-month election crisis might finally have produced a definite – if flawed – result.

Among them was Ban Ki-moon, the UN Secretary General, who met both Mr Karzai and Dr Abdullah earlier in the day as part of efforts to broker a power-sharing deal that would allow the run-off to be cancelled.

"I welcome today's decision by Afghanistan’s Independent Election Commission to forego a run-off vote and to declare Hamid Karzai as the winner of the 2009 presidential elections," Mr Ban said in a statement.

"I congratulate President Karzai," he added.

Downing Street said Gordon Brown had personally congratulated Mr Karzai.

"The Government welcomes the decision by the Independent Electoral Commission," a No 10 spokesman said.

"The Prime Minister has spoken to President Karzai to congratulate him on his re-election. They discussed the importance of the president moving quickly to set out a unifying programme for the future of Afghanistan."

Meanwhile, UN and Western officials were understood to be still trying to broker a deal under which Mr Karzai and Dr Abdullah would divide up ministries, provincial governorships and other posts between their allies.

They almost reached a deal yesterday, before Dr Abdullah’s announcement, but the talks fell through at the last minute, according to diplomats.

Mr Karzai's camp ruled out a coalition with Dr Abdullah yesterday, but the President is now under increasing international pressure to bring his former Foreign Minister back into government for the sake of national unity.

Both Mr Brown and Hillary Clinton, the US Secretary of State, strongly suggested yesterday that Mr Karzai should seek an "inclusive" government.

Diplomats said the US and its allies had accepted that Mr Karzai would remain as President, but were trying to ensure that his next government was inclusive enough to be a credible partner in the fight against the Taleban.

"There's a resignation that Karzai is the player we are going to have to deal with, but he is being told in no uncertain terms, that he is a wounded animal,” one senior Western official told The Times.

“In the eyes of the Afghan people and in the eyes of the international community he has to rebuild his credibility. The first test will be his cabinet. If we see thugs, criminals and drug dealers in the cabinet, international support will wither."

Coleen Rooney, the wife of England footballer Wayne Rooney, has given birth to a baby boy.

The child, who the couple have named Kai Wayne Rooney, was born at 2.20pm at Liverpool Women’s Hospital, their spokesman said.

The spokesman added: “Mother and baby are both absolutely fine. Wayne and Coleen are thrilled with the wonderful addition to their family life.”

The name Kai, a variant of Kay, reportedly means "rejoice" in Finnish. According to another report, the name has Welsh, Scandinavian and Greek roots and means "keeper of the keys". It is also a unisex Hawaiian name meaning "the sea".

He has branded homosexuals satanic, deployed cloud–seeding fighter jets to ensure good weather on bank holidays and ordered riot police to break up anti-Kremlin demonstrations. As mayor, Yuri Luzhkov has ruled Moscow with an iron fist for the past 17 years.

But with only two years of his fourth term left to serve, the populist mayor is coming under a barrage of criticism which some believe could signal the beginning of the end for Russia’s third most powerful politician.

The most common criticism levied at Luzhkov is that he has used his influence to help the business interests of Yelena Baturina, his wife of 18 years and Russia’s wealthiest woman.

In an unprecedented public attack, Vladimir Zhirinovsky, the pro-Kremlin ultranationalist leader, last week called for Luzhkov to resign for presiding over “the dirtiest and most corrupt local government in the history of Russia, one which is the stage for the worst kind of fraudulent schemes”.

Zhirinovsky also accused the mayor of fixing recent local elections to favour a pro- Kremlin party.

In a recent opinion poll, voters were asked whether “you believe the rumours about Luzhkov being corrupt and that he provides business assistance to his own wife”; 61% answered yes. Just 1% dismissed the rumours as “definitely not true”. The mayor’s popularity has plummeted to 36%, down by nearly half since April.

“The campaign against Luzhkov is being waged by proKremlin forces. There is an order to hound him, but we won’t take part in this,” said Sergei Mitrokhin, leader of the liberal Yabloko party, which, in a sign of the Kremlin’s grip over parliament, has lost all its deputies.

“We don’t want to see him removed because then they could appoint somebody who was unelected and who would do to Moscow anything the Kremlin happens to want.”

In September Boris Nemtsov, a leading opposition politician, published a report in which he accused city hall of awarding lucrative contracts to Baturina’s construction company, Inteko, at the same time as her husband has presided over Moscow’s greatest building boom since the Stalin-era. Critics accuse Luzhkov of allowing city hall to pull down hundreds of historic buildings to make way for glitzy building projects.

“We’ve irrefutable proof,” claimed Nemtsov, “that Luzhkov favoured Inteko while signing permits for commercial development, making Baturina the richest woman in Russia.”

Leonid Gozman, another member of Russia’s beleaguered opposition, publicly called for Luzhkov to be held responsible for Moscow’s rampant corruption.

Baturina, 46, and Luzhkov, 73, have vehemently rejected all accusations and are suing both Nemtsov and Gozman. Luzhkov described Nemtsov’s report as “full of lies”.

The mayor said he had filed about 10 lawsuits a year for the past 17 years — many of which were linked to claims about his wife’s business success. “It’s an impressive figure,” he said.

Baturina, who rose from being a factory worker to Russia’s only female dollar billionaire — said by Forbes magazine to have a post- financial-crisis fortune of £550m — has rejected claims she owes her rise to Luzhkov. Some Russian experts believe her real fortune to be greater than Forbes’s estimate.

In a further blow to the image of Moscow’s first couple, Shalva Chigirinsky, formerly one of the city’s biggest property and oil tycoons, recently claimed in papers submitted to London’s High Court that Baturina secretly owned a stake in an oil producer.

According to Chigirinsky, he entered into a partnership with Baturina in 1999 because “no major projects can proceed in the city without her backing”.

Baturina has said that the claim of a partnership in the oil producer with Chigirinsky is “not only incorrect, it’s the opposite of the truth”.

Some Moscow insiders say the campaign against Luzhkov began after Vladimir Putin, the prime minister, shut down a sprawling wholesale market on suspicion that it was selling smuggled goods.

The market was owned by Telman Ismailov, a close friend of Luzhkov’s, who is believed to have angered Putin by spending £40m on an extravagant party to launch a new hotel in a Turkish resort.

Despite the economic crisis, Ismailov flew in 242lb of beluga caviar and paid Paris Hilton, Sharon Stone and Richard Gere to attend the opening party of the Mardan Palace, which boasts 560 rooms and a five-acre pool and cost £1 billion to build. Ismailov’s subsequent problems were interpreted by some as a warning shot to Luzhkov, who also attended the party.

“In my view we are seeing the beginning of the end of Luzhkov’s long reign,” said a former Kremlin aide who knows the mayor. “He’ll either be asked to step down before the end of his term or will be told not to run again.

“Either way, the Kremlin is starting to look around for someone to take over one of Russia’s most lucrative and powerful posts.”

With difficult state elections and a crucial military decision looming, President Barack Obama sat down with his wife Michelle last month to give an in-depth magazine interview about a subject that has hitherto not ranked highly on the White House political agenda — the state of the first couple’s marriage.

The president used the occasion to complain that when he recently hopped aboard Air Force One to fly his wife to New York for dinner and a Broadway show, “people made it into a political issue”.

Obama went on to insist that his marriage was “separate and apart from a lot of the silliness of Washington”. He then proceeded to discuss his romantic ups and downs in startling detail with a reporter from The New York Times Magazine.

Publication of that unusually candid interview highlighted an intriguing contradiction that has begun to haunt the Obama White House. The president’s family has become one of his most valuable political assets. Yet the attempts by the Obamas to shield their private lives from scrutiny are increasingly being subverted — by the Obamas themselves.

When the interview appeared on the paper’s website ahead of publication today, it prompted a flood of reader reactions from “They are a beautiful couple” and “exceptional role models” to “Why should I care about their marriage?” and “This stuff is none of my business”.

There were also several expressions of concern, echoed privately by Democratic strategists, that the openness of the Obamas about what Michelle described as the “bumps” in their relationship, may help turn a historic presidency into a soap opera. “All this scrutiny cannot be good for a marriage,” worried one of the readers of the Times.

The sense that the Obamas are flirting with disaster by parading their happy family life was magnified by Michelle’s Marie Antoinette-like appearance this week on the cover of Glamour magazine — at a time when many Americans continue to lose their homes or jobs every month.

In the interview with Glamour, Michelle discussed her fashion choices and appeared to tease her husband: “One thing I’ve learnt about male role models is that they don’t hesitate to invest in themselves.” The timing and content of the piece prompted Sally Quinn, a veteran Washington style-watcher, to suggest that the first lady had been badly advised.

“I’m not sure if I had been her adviser I would have said for her to do the Glamour cover because it might begin to trivialise her and what her role is,” she said.

The enthusiasm for the Obama family has until now obliged most Republicans to bite their tongues when discussing Michelle and the children, but there were mutterings last week that the president might be using his enviable private life as a diversion from awkward political realities — notably the prospect this week of Democratic defeats in elections for state governors in New Jersey and Virginia.

“Funny how every time there’s a crisis we end up reading about Michelle,” noted one Republican insider. “It’s great to see that the first couple have such a wonderful relationship,” added a Times website reader. “Now can the president please get down to solving the country’s problems?”

Yet even the hardest-nosed Washington operatives confessed last week that reading about the Obamas’ love life was a lot more fun than ploughing through 1,900 pages of the revised healthcare bill.

In their tell-nearly-all interview, the Obamas came across as a thoughtful, sensible and undeniably appealing couple who have nonetheless experienced the professional and personal strains that any working couple would recognise.

At one point Michelle expressed frustration at her secondary role after the years she spent as a high-earning hospital executive in Chicago: “Clearly Barack’s decisions are leading us. They are not mine, that’s obvious,” she said. “I’m married to the president of the United States, I don’t have another job.”

That the marriage experienced “bumps” came as no surprise: Richard Wolffe, a Newsweek journalist, has already described in his book on Obama’s rise how Michelle at one point became “angry at [Barack’s] selfishness and careerism; he thought she was cold and ungrateful”.

Asked if their marriage had come close to rupture, Obama told The New York Times: “That’s over-reaching it. But I wouldn’t gloss over the fact that that was a tough time for us. There were points in time where I was fearful ... that she would be unhappy.”

Michelle said the strains had been “sort of the eye-opener to me, that marriage is hard. Going into it, no-one ever tells you that. They just tell you, ‘Do you love him ... what’s the dress look like’?”

Valerie Jarrett, the couple’s close friend and White House adviser, said last year’s campaign had initially caused problems when Michelle was depicted as bitter and unpatriotic. Yet she eventually became a valuable surrogate, impressing huge crowds when her husband was absent.

“They both rallied to each other’s defence and support,” said Jarrett. “By having to work hard at it, it strengthened their marriage.”

In the White House, the couple seems to have settled into a comfortable routine of public affection and teasing — Barack sometimes addresses Michelle as Flotus (first lady of the United States) but both sought to dispel the notion that everything in the White House rose garden is pink.

“The strengths and challenges of our marriage don’t change because we move to a different address,” said the first lady. The image of a flawless marriage was “the last thing we want to project . . .this perfection that doesn’t exist”.

Currently condemned to a photogenic but stultifying life as chief fashion plate and do-gooder, Michelle is widely assumed in Washington to be desperate to sink her teeth into a meaty political issue.

Yet she protested, a little too fiercely some thought, that she was “so not interested in a lot of the hard decisions that he’s making ... I have never in my life ever wanted to sit on the policy side of this thing”.

Those latter remarks were in striking contrast to the magazine article’s portrayal of the Obamas as the model of a modern presidential couple. Many Democrats who supported Hillary Clinton, now Obama’s secretary of state, have noted that Michelle seems closer to Laura Bush, wife of George W, in choosing a non-political role.

Hillary Clinton, who famously took an aggressive role in presidential policy-making, notably on healthcare, was the “truly modern and transformational first lady”, noted one of her Democratic supporters. “Michelle has proven to be utterly conventional.”

Yet the bottom line for Obama remains the state of the economy and the progress of the wars he is fighting abroad. While Michelle’s approval ratings remain buoyant, the president’s continue to slide. A poll last week showed only 31% of Americans believe he can control federal spending (down from 52% at his election) and only 28% believe he can heal political divisions (down from 54%).

For all Obama’s glamour and sophisticated intellect, he is in danger of being seen as a failing politician. And familiarity with the details of his private life may quickly turn to contempt.

Alistair Darling is preparing to plough billions more of taxpayers’ money into Royal Bank of Scotland to take the government stake in the bank from 70% to as high as 84%.

A Treasury announcement this week will confirm RBS is signing up to a controversial deal to pump £270 billion of problematic loans into a state-backed insurance scheme.

As part of the deal, the government will pour up to £19 billion of additional capital into RBS by taking up an issue of “B” shares. The subsequent increase in the taxpayers’ stake will leave the bank virtually nationalised, with a small portion of shares left in the hands of private investors.

The further capital injection comes despite attempts by the bank to renegotiate the insurance deal, which takes place under the Government Asset Protection Scheme (Gaps).

The terms have ended up being even more onerous for the bank, with RBS now expected to shoulder an additional £20 billion of losses on its own balance sheet before it claims on the government insurance.

The scale of the state aid at RBS has also prompted a savage response from Brussels, which is imposing penalties on all European banks bailed out during the financial crisis.

Neelie Kroes, the European competition commissioner, has ordered RBS to sell its Churchill and Direct Line insurance operations, a network of more than 300 branches, and large parts of its investment bank. An outline agreement was reached between Kroes and Stephen Hester, the RBS chief executive, on Friday.

The outcome is harsher than the bank expected. It was already committed to reducing its balance sheet by 40% and selling off a slew of international businesses. RBS attempted to sell its insurance arm under former boss Sir Fred Goodwin but the sale plans were dropped shortly after Hester arrived. Hester thought insurance would form a central part of the bank’s recovery plan.

Kroes has enforced the break-up of RBS after taking a stand against the Gaps programme. She is said to object to the concept of states taking potentially huge liabilities for years into the future.

Lloyds Banking Group, which is 43% owned by the taxpayer, was also destined to join the Gaps programme. However Eric Daniels, its chief executive, has managed to escape the scheme after lining up a £21 billion fundraising, which will be unveiled on Tuesday.

This will involve a £14billion rights issue and a £7billion debt swap. In addition £5billion will be raised from disposals, including Cheltenham & Gloucester, Intelligent Finance internet bank and some Scottish branches.

Meanwhile, UK Financial Investments (UKFI), the taxpayers’ investment arm, has started to search for about 12 new executives to beef up the Lloyds management team.

Lord Myners, the City minister, has forced those banks advising RBS and Lloyds to cut their fees.

Silvio Berlusconi today said he would not resign even if he was convicted of corruption as a new trial date was set for later this month.

The Italian Prime Minister, 73, now faces two trials following the loss of his immunity from prosecution.

Last month the Constitutional Court overturned a law which Mr Berlusconi pushed through Parliament shortly after being elected last year giving him immunity as long as he held high office. The Court said this infringed the principle that all Italians are equal before the law.

In the first trial to be resumed Mr Berlusconi will be accused in Milan on 16 November of tax fraud and false accounting over the acquisition of TV film rights by Mediaset, his media company. Milan prosecutors say Mediaset bought the rights at an inflated price from two offshore companies controlled by Mr Berlusconi.

Today judicial sources said a second trial would start shortly afterwards, on 27 November. In that case Mr Berlusconi is charged with paying a $600,000 bribe to the British tax lawyer David Mills, estranged husband of Tessa Jowell, the Olympics Minister, to withhold evidence in court on Mr Berlusconi's behalf in corruption trials in the 1990s.

Last week the Milan appeals court upheld a four and a half year sentence against Mr Mills for accepting the bribe from Mr Berlusconi. The Court of Cassation, Italy's highest appeals court, has until April 2010 under Italy's statute of limitations to decide whether to convict Mr Mills definitively or acquit him. In Mr Berlusconi's case this time limit is extended until 2011 because of the period during which the case against him was suspended because of the immunity law is taken into account.

In interviews with Bruno Vespa, a leading television presenter, for a forthcoming book Mr Berlusconi repeated his frequent claim that the prosecutions brought against him were politically motivated and that he has "the support of the people". Extracts from the book were published today in the Italian press.

"I still have faith in the existence of serious magistrates who hand down serious verdicts, based on facts," he said. "If there were a conviction in trials like these, we would be facing such a big subversion of the truth that I would feel even more duty bound to stay in my post to defend democracy and the rule of law."

Mr Berlusconi, who has scarlet fever and has not been seen in public for two weeks, last week phoned a television discussion show from his sickbed to launch a ten minute diatribe against "Communist" magistrates and judges as well as the "left wing" press. After the Constitutional Court ruling last month he claimed he was "the person the most persecuted by the judiciary in all history."

Mr Berlusconi has also been dogged by sex scandals since May when Veronica Lario, his wife, demanded a divorce, saying she could not "stay with a man who frequents under age girls". She also said he needed help for "sex addiction" and had offered political posts to television showgirls. Magistrates in Bari are investigating claims that showgirls and "escorts" were paid to attend Mr Berlusconi's parties in Rome and Sardinia.

Supporters of Mr Berlusconi, including il Giornale, owned by Mr Berlusconi's brother Paolo, family, have said that the resignation last week of Piero Marrazzo, the centre Left governor of Lazio region, over a scandal involving transsexual prostitutes is proof that the Left "does not have the moral high ground" in criticising Mr Berlusconi's private life.

The Left points out that however Mr Marrazzo was not Prime Minister and that, whereas he took the "honourable course" and stepped down, Mr Berlusconi has refused to do so despite being accused of having spent the night of the US Presidential election a year ago with a prostitute.

Italian press reports said aides to Mr Berlusconi had sought to "get him off the hook" over the impending trials by introducing a Parliamentary measure amending the statute of limitations to shorten still further the time allowed for a conviction and appeal in corruption cases.

The measure had been included in a package of EU directives due to be "nodded through" in Parliament, reports said. This however had been blocked by deputies and senators in Mr Berlusconi's own coalition who noticed the clause and objected that it had "nothing to do with Europe".

Cracks have begun to appear in the coalition, with Giulio Tremonti, the Finance Minister, and Gianfranco Fini, the Speaker of the Lower House and co-founder of the ruling People of Liberty party, tipped as successors if Mr Berlusconi falls.