POWER POLITICS
ENGLAND'S hopes of hosting the 2018 World Cup have suffered a setback with president Sepp Blatter appointing the controversial billionaire leader of Australia's rival bid to Fifa's prestigious World Cup organising committee.

There are no British members on the 31-man committee overseeing the next tournament in South Africa, but it includes members from America and China, also potential bidders.

The choice of Frank Lowy, 77, president of Australia's federation and the world's biggest shopping mall owner, to join Fifa's inner circle, is hard to fathom. He has never been a player in Fifa politics but has entertained some of its leaders on his 242-foot yacht Ilona, one of the world's largest.

Lowy, said to be worth £2.3 billion, will have unparalleled opportunities to press Australia's case to stage 2018. On the World Cup committee are 15 of the 23 members of Fifa's executive committee who will make the decision. Lowy said, "it is wonderful recognition of the growing credibility and reputation of Australia within the global football community."

Australia's media is jubilantly describing Lowy's Fifa appointment as "a shot in the arm" for their bid.

Lowy's Westfield company is building a £1.6 billion mall at White City in West London, due to open at the end of October. He was welcomed to Downing Street by Gordon Brown in early July after winning the contract to build the East London Stratford shopping development at the gateway to the 2012 Olympics site.

But Lowy's image was dented later that month when his family was pilloried by a US Senate committee investigating alleged tax evasion.

Westfield is one of the biggest mall operators in America and Lowy's son Peter, an American citizen living in Beverly Hills, was summoned to Capitol Hill to explain why $68 million was laundered through Zurich, the British Virgin Islands and Delaware on its way to an anonymous account in Liechtenstein.

Peter Lowy, accompanied by "super-lawyer" Robert Bennett, who defended President Bill Clinton during the Monica Lewinsky scandal, refused to answer questions, invoking his Fifth Amendment right against self-incrimination.

The Australian tax authorities are currently investigating Frank Lowy and his secret Liechtenstein account.

In 1992 and again in 1994 he had to settle large claims. Last week he said, "I do not believe I have done anything wrong".

Lowy was involved in controversy six years ago when he admitted payments to Tony Blair's friend, former pop music promoter Lord Levy, to "advise on the UK retail market." He denied using Lord Levy to buy access to Ministers.

In 2007 he was embroiled in a corruption investigation into Israeli Prime Minister Ehud Olmert but was subsequently cleared. Between 1994 and 2007 he was a non-executive director of the Daily Mail's parent company.

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HIDDEN CASH
U S Senators were told that the Lowy family millions were hidden in a bank owned by the Liechtenstein royal family, who have occupied a seat on the International Olympic Committee for the last 70 years. The current member is Princess Nora.

The chairman of their Liechtenstein Global Trust is Princess Nora's older brother, Prince Philipp. The CEO is her nephew Prince Max. Some of LGT's secret documents, deeply embarrassing for Princess Nora and her family, have been posted on the internet by the Senate committee.

The bank was denounced in Washington in July for running an "Al Capone" campaign of "economic warfare against the United States". Senator Carl Levin, chairman of the Permanent Subcommittee on Investigations, said the royal family's techniques for hiding money from tax officials "unfold like spy novels, with secret meetings, hidden funds, shell corporations, captive foundations and complex offshore transactions spanning the globe".

He added that the bank is "a willing partner, and an aider and bettor, to clients trying to evade taxes, dodge creditors, or defy court orders."

In 1996 Frank Lowy negotiated with the royal bank to hide $68 million from Australian authorities. After a meeting in London an excited LGT executive wrote to his colleagues, "Lowy seems to have been very pleased with our service and would like to invite Prince Philipp, and two other officials to London this summer for a special occasion."

Senator Levin said an "ingenious set-up" allowed Lowy to "deny with a straight face" that he and his family were beneficiaries of a tax haven that hid assets from Australian tax authorities. The royal family made $476,000 in fees.

The scandal erupted in February when German tax officials admitted paying nearly $7 million to Heinrich Kieber, 43, a rogue employee of the LGT bank who stole the details of around 1,400 accounts.

Kieber, who also sold 12,000 pages of records and secret memos to the US authorities revealing tax scams involving hundreds of millions of dollars, is now on a witness protection programme, reportedly hiding from drug cartels and Russian and Balkan organised crime gangs who have put a $10 million price on his head.

In Britain, Inland Revenue officials admit paying Kieber £100,000 for information on around 100 Britons who used the royal family bank. More stolen documents have gone to Italy, France, Spain, and Australia.

About 300 wealthy Britons who salted away £1 billion in Liechtenstein are being investigated by the UK tax authorities. Revenue & Customs officials expect their investigations to last up to three years and subsequent criminal trials could overshadow the run-up to the London Olympics in 2012.

A bank spokesman said, "LGT's practices were consistent with accepted industry standards of the time and do not reflect the way in which LGT conducts business today."