The Observer, 1 September 1996Byline: David Leigh and Jonathan Calvert

How To Lobby Your Way To A Fortune: Buy now while Tories last

Profiteers scramble for bargains as Whitehall's left-over assets go on sale

THERE MUST have been a high camp quality to the meetings of the far-right Monday Club in the early 1980s. How else could one characterise an evening in which an elegantly dressed young black man made a speech in a plummy voice, urging the repatriation of other blacks from Britain?

This marked the arrival on the political stage of Derek Laud, then only 21 and secretary to the MondayClub's so-called immigration committee. A decade later, the Observer can disclose, he has been hiredas a lobbyist to use his by now well-developed Conservative connections to help a property firm buy up 58,000 servicemen's homes.

Defence Secretary Michael Portillo is selling off the married quarters as part of the Government's high-rolling Monopoly game, in which Ministers hand out the state's remaining stock of bricks and mortar for cash before the general election.

Derek Laud has political associations with Mr Portillo, who will announce who has won the £1.5 billion deal in the next fortnight.

Mr Laud was until recently a business partner in a lobbying company with the Conservative chairman of the Commons defence committee, Michael Colvin, who has played a key role in manoeuvring the MoD sell-off through a torrent of hostility.

Property tycoon John Beckwith - who, the Observer revealed in July, set up the secretive Premier Club to make donations to Tory funds while pursuing his bid - heads a consortium which now has onlyone rival, led by the Japanese Nomura Bank, to beat. Mr Beckwith also hired Mr Laud's lobbying firm. Behind that move lie the activities of a network of Conservative politicians who try to influence government decisions on behalf of private interests.

Back in 1983, one of the young Derek Laud's mentors was the MP Harvey Proctor, then chairman of the Monday Club committee.

Mr Proctor had gained the notoriety of having invited Enoch Powell to address a meeting at York University in his student days and, later, was exposed for homosexual offences.

Mr Laud's other Monday Club friend was Michael Brown - a second Conservative MP from York student politics. Mr Brown was also homosexual and was eventually 'outed' in the newspapers.

The Monday Club experience was not to last long for them. Mr Brown and another of Mr Laud's friends, John Pinniger, resigned in protest when Mr Laud, who is of Jamaican origin, was allegedly made the subject of racist remarks. But the political connections Mr Laud made were enduring.

The circles he made contact with included men skilled at making money out of 'consultancy'. Among them were the flamboyant young MP Neil Hamilton and landowner and Old Etonian Michael Colvin.

Others included ex- Tory Central Office PR man Ian Greer and his political friend, MP Michael Grylls. High-flyers such as Michael Portillo were politically linked through the Thatcherite No Turning Back group.

In the mid-1980s, some of the group helped British Airways, which was trying to swallow up its rival, British Caledonian. Mr Greer paid Mr Grylls for an introduction to the airline, he said. Mr Colvin got free flights. British Airways also put Mr Portillo on their payroll as a consultant for a period.The brewers, too, got help from the MPs when they wanted to lobby against restrictions. Mr Colvin was on the payroll of the pub landlords' association; Neil Hamilton was a consultant to the Brewers' Society.

Trouble occurred when Mr Greer's firm was hired to lobby for owner of Harrods, Mohammed Fayed. A Conservative junior Minister, Tim Smith, eventually admitted taking cash from Mr Fayed in return for asking parliamentary questions. Mr Hamilton also admitted accepting a free stay in the Fayeds' Ritz Hotel in Paris, and not declaring it.

Meanwhile, Mr Laud had found a berth with a PR firm, Strategy Network International. Again, the milieu was a bizarre one - backing came from apartheid South Africa. Mr Laud hired Neil Hamilton to help the cause. When Mr Hamilton joined the Government, Mr Laud replaced him with Mr Colvin, who got £10,000 for a year's consultancy.

Mr Laud now described himself on various occasions as a book-reviewer to Prince Michael of Kent; a special adviser to the chairman of the Arts Council; a keen fox-hunter; and a 'contributor of ideas' to Mrs Thatcher's speeches.

'On her final night in Downing Street, I was standing behind her as she looked through the curtains out on the street towards the world's assembled press,' he says. 'It was the first time I have ever been in Hello! magazine.'

Two years later he set up lobbyists 'Ludgate Laud' - functioning as a discreet 'franchise' insidethe offices of Ludgate, a financial PR firm. On its board went Mr Colvin.

Mr Laud's job, he said, was to influence government decisions by meeting politicians. 'Ministers who ultimately decide issues must be contacted where appropriate,' he told a marketing magazine. 'Some people think it is shady and unscrupulous, that it abuses access to Government and Parliament.' But this view, he said, was 'all tosh'.

Mr Laud had a Commons pass, obtained because he was registered in 1995 as a 'research assistant' to Michael Brown, co-ordinator of the No Turning Back group.

Last year Mr Laud and Mr Colvin were hired by NTL, a company which wanted the BBC's transmittersto be privatised and sold to them. Mr Hamilton went on the NTL pay-roll, as a member of its 'strategy advisory group'. Mr Colvin had been asking parliamentary questions demanding financial information about the BBC which would have been valuable to NTL but had not declared his interest.

Last December, after the Nolan report banned paid advocacy by MPs, Mr Colvin formally stepped down from his directorship of Ludgate Laud. But by then Ludgate already possessed a new, more controversial, client. Michael Portillo, by now Defence Secretary, decided during 1995 to sell off the entire stock of 58,000 servicemen's married quarters.

Ludgate, the parent group, had been hired in May 1995 by Mr Beckwith, already a millionaire from selling out in 1990 just before the property collapse.

Not only did Mr Beckwith face rival consortia: there was also much public outcry on behalf of servicemen's families. By April 1996, Mr Beckwith signed a specific contract with Derek Laud to engage in 'government relations'. As chairman of the defence select committee, Mr Colvin headed an inquiry into the proposals, and rushed out a broadly supportive report for a parliamentary debatelast July. A threatened Tory revolt fizzled out and Mr Colvin voted for the sell-off.

Mr Beckwith's sole remaining rival is the Nomura consortium, whose PR men are Lowe Bell, headed by the even more influential Sir Tim Bell.

But Martin Roche of Lowe Bell said yesterday: 'Tim Bell is not involved. We have done no political lobbying at all.'

If the result goes Mr Beckwith's way, Derek Laud will chalk it up as the biggest triumph yet for his apparently charmed circle.