Blair the Bungee Jumper

Everyone remembers Monica. do you remember John Huang? There were times during Bill Clinton’s roller-coaster second term when Huang appeared to pose more danger to the President than Lewinsky. His furious fund raising for Democrats among Asian-Americans sucked in illegal foreign funds too. No one ever proved that Clinton gave any favors to these forbidden donors beyond a few snapshots and boiler-plate letters of support. But as the story oozed out of Washington for many months, it revealed a gaggle of hustlers eager to buy access to the White House, and a President too needful of funds for his party to tell them to get lost.

How could Tony Blair, who has drawn so many lessons from Clinton, wander into an Asian fund-raising minefield too? Just before last year’s general election, Lakshmi Mittal, an Indian-born steel tycoon with a house in London, gave $175,000 to the Labour Party. A few weeks later, Blair wrote a letter to the Romanian government backing Mittal’s bid to purchase its national steel company. The newspapers smelled a quid pro quo; Blair countered that his letter was requested by the British ambassador in Bucharest, a professional diplomat, and that he would do the same for any British business. But the story has kept boiling, and Downing St.’s normally smooth p.r. machine has floundered. Contrary to its initial claims, Mittal is not British, his company LNM is not British, and he employs only a few people in Britain. Blair has also been embarrassed by stories that Mittal is lobbying in the U.S. to block British steel imports, among others. Polls show the public, for the first time, considers Blair’s government sleazier than the Conservatives.

By the next election, Mittal may be just another dimly remembered barnacle on Blair’s hull. Voters still overwhelmingly back Labour; in fact its support has risen slightly since the Mittal story broke. What is most revealing is the ferocity of the government’s counterattack. Blair called the affair “Garbagegate,” and his spokesman poured contempt on reporters for continuing to work the story: “I and the country have Mittal fatigue even if you don’t.” So ingrained is the instinct for massive retaliation that Downing St. came out swinging before mastering the facts. Despite its huge second-term majority, the Labour high command retains the habits of a party in opposition, grimly determined to dominate every news cycle, less concerned with truth than winning. They could not even bring themselves to fire one of their doughty band of spinners, Jo Moore, after it was revealed she had suggested burying bad news by releasing it just after the Sept. 11 terror attacks. She was let go only after a flood of leaks against her proved beyond doubt that she was radioactive.

Aides to Blair told me last summer, as he swept to his second landslide, that he was becoming more confident and relaxed in his job. They expected to see that reflected in less emphasis on spin and a greater willingness to delegate power from his highly centralized presidential-style government. Now I think they were lying, to me or to themselves. The control-freak instinct runs too deep. In the face of another Mittal story, Downing St. could no more say, “We screwed up, sorry,” than back Germany in the World Cup.

This runs the risk of becoming a tragic flaw. Blair has staked his future on fixing the country’s creaky public services. He says that pushing authority to solve problems out from the center to the front line is key to improving morale and productivity. But the doctors and teachers at the coal face are still waiting for the autonomy and money to fix things; meanwhile they feel hammered by criticism pouring out of Whitehall. And Blair faces lots of other very tricky problems: restive unions eager to strike, an American President who seems determined to fight a war with Iraq, a passion to join the euro despite strong popular objection, a public that is starting to turn his presidential authority against him, like the woman next to me in a queue at Gatwick Airport caused by the breakdown of both an escalator and an elevator. “Has anyone told the Prime Minister?” she joked. Blair’s pollsters should not find that funny.

Oddly, for a talented man with a huge majority, he will not find it any easier to fix the country’s problems by the next election (probably in 2005) than to keep airport elevators in working order. New funds are starting to flow into public services — though the government’s claims of how much are often as suspect as Enron’s balance sheet — but can they possibly build the hospitals and schools and attract the new doctors and teachers and police needed to change the country perceptibly? The transport system is so creaky and procurement times are so long that the best the government can do over the next five years, many experts believe, is slow its rot. There is no more time for bright ideas. Blair is already sailing over the cliff, praying that the bungee cord is tied tight.

He must hope the economy stays good, and hold on. That was Clinton’s formula; he sailed along on an economic boom and a 65% approval rating even as Washington ripped him apart over Monica. As the going gets tougher, will Blair too retreat to managing perceptions, rather than the country?