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Money doesn't stink...

Thursday 10 May 2012
by Solomon Hughes
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I came across a new player on the Tory top table recently. The latest returns for the Electoral Commission show the Tories have a new donor called Lycamobile.

This firm gave the Conservatives £176,000 in the last two quarters, making it the party's third-biggest benefactor with top-level access to the Prime Minister.

Lycamobile sells cheap international mobile phone calls to what it calls "expatriate and ethical global niche segments that want to make high-quality affordable international calls."

The firm doesn't run any phone lines. It buys bundles of calls from other phone companies and sells them on.

It's one of several "mobile virtual network operators" selling calls to migrant workers.

This sounds like a very useful service to a needy group. But cash for Cameron seems odd - many of Lycamobile's low-paid migrant customers have done badly from Cameron. He's made crossing borders harder and kept wages lower.

But many things seem odd about Lycamobile. The firm, owned by millionaire Subaskaran Allirajah, promises cheap calls - but its offers have repeatedly been found misleading.

Last July Lycamobile ran adverts saying: "Call India, Pakistian and Bangladesh landlines for only 1p a minute."

The Advertising Standards Authority (ASA) banned this misleading ad for playing down the fact that the rates shot up after 15 minutes.

In February a Lycamobile leaflet given out from the firm's street stalls offered "1/2p a minute" international calls.

But the ASA banned this ad for misleading customers both about extra connection fees and over rates that increased after 15 minutes.

Sri Lankan-born founder and chairman Allirajah is used to this problem. His other firm Lycatel sells cheap international phone cards.

It was investigated by phone regulator Ofcom in 2010 after many customer complaints.

Lycatel escaped prosecution, but only by giving written undertakings promising to change its ads and make sure information presented to purchasers was "clear, intelligible and unambiguous, including for example connection fees, maintenance charges and the fee charged at the end of a call."

The firm has problems with other regulators. Companies House - the British regulator of companies and an executive agent of the Department for Business, Innovation and Skills - is threatening to strike Lycamobile and Lycatel off its register and "dissolve" both firms because their accounts are late.

And if you look at those accounts, they show that both firms had a combined turnover over the last three years approaching £400 million.

But despite having spare cash to give to the Tories, their accounts showed no profits. Consequently they paid no corporation tax.

On top of its trouble with regulators and its misleading adverts Lycamobile is also having a fight with its employees - in Lyon, France.

The trouble came out of the company's gritty street-sales technique. Lycamobile is fighting a street-battle with rival British firm Lebara to sell cheap mobile calls to ethnic-minority French people. It has a "poster team" running around newsagents and kebab houses sticking posters up.

According to the local press it is a cut-throat business, with shopkeepers not getting paid for displaying Lycamobile posters as promised and employees not getting bus travel and overtime paid.

These "galley slaves" revolted and took a day's strike action demanding lunch and bus money and better conditions.

Lycamobile is currently trying to sack a third of its Lyon staff by way of revenge, but union confederation CGT is sticking up for the poster team.

So there we have it - a firm that misleads customers, pushes its workers around and breaks company rules.

Lycamobile is a natural friend to the Tories.

More than a touch of reality"

Morning Star reviewer Jeff Sawtell recommended gritty police thrillers Elite Squad and Elite Squad 2: The Enemy Within when they were in the cinema.

If, like me, you are a sucker for macho cop dramas but also like political films I can thoroughly recommend a rental.

These Brazilian blockbusters offer semi-fictionalised accounts of the elite cop squad BOPE as it deals with drug-dealers and corrupt cops with vicious brutality.

I've got a high tolerance for tough hombres in violent films, and Wagner Moura (above) does brooding anger brilliantly as the authoritarian Colonel Nascimento.

But the two movies also provide highly political pictures of corruption, especially Elite Squad 2, where Nascimento finds he is actually serving a system where a mix of corrupt politicians, bent police and a blow-hard right-wing TV presenter are squeezing cash from the poor and secretly attacking everyone who stands in their way.

Essentially it's the Rupert Murdoch story with guns. Politicians are "elected and sponsored by organised crime and supported militias" and the administration is filled with "crooks impersonating the people's representatives, illegitimately elected."

Through the street-fights, the double-crosses and the corruption of the economic and political system Colonel Nascimento learns that "the system doesn't have a central command or a board of directors, my friend.

"The system is a cold-blooded mechanism. An articulation of loathesome interests."

There are individual centres of power among the shadow businesses, and they act in concert, but they do so because their needs align rather than through perfect co-ordination.

We can certainly see the "loathesome interests" failing to act smoothly together as former friends like James Murdoch and Jeremy Hunt try to ditch each other.

Nascimento is able to fight back - but he knows that while he "sent a lot of dirty politicians to prison, the system resisted, the system will give a hand to save an arm.

"It reorganises itself, it articulates new interests and creates new leaders. When conditions are favourable the system will persist."

All very gripping. One only hopes that Colonel Miliband can do the brooding, angry turn-on-the-corrupt act as well as Nascimento. Elite Squad is a great film - but you can't always count on the hero turning up so promptly in real life.

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