(Feb 6): Peter Mandelson played no role in facilitating the award of a £240.6 million data-analytics contract to Palantir Technologies Inc, the UK’s Defence Secretary John Healey said after opposition parties raised questions over the process.
The contract, awarded without competitive tender by the Ministry of Defence in December, has attracted scrutiny in the wake of a scandal over Mandelson’s relationship with convicted pedophile Jeffrey Epstein. Mandelson co-founded Global Counsel, which lists Palantir among its clients on the most recent register of its lobbying interests.
Over the months that Mandelson held the post of US ambassador last year, he played a key role in Prime Minister Keir Starmer’s visit to Washington. On that trip, the premier toured Palantir’s offices and spoke with chief executive officer Alex Karp. Palantir and Global Counsel did not immediately return requests for comment. Mandelson declined to comment.
Mandelson was an influential Labour Party power broker for decades until he resigned his membership on Sunday amid a fresh scandal over the extent of his ties with Epstein. The Metropolitan Police this week said it would pursue a criminal investigation against him, after a new release of emails by the US Department of Justice appeared to show him leaking commercially sensitive government information to Epstein while serving in the last Labour government.
At the time, Mandelson’s December 2024 appointment to the Washington role was controversial in part because he simultaneously retained a stake in Global Counsel, the firm which advises Palantir. The disgraced former politician still owns a 20% stake, after struggling to dispose of it.
Healey met with Karp in September to launch a new strategic partnership. According to that arrangement, the company would provide technical support for software within the ministry and invest up to £1.5 billion in UK defence.
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Two months later, the Ministry of Defence extended an existing Palantir contract for “data analytics capabilities supporting critical strategic, tactical and live operational decision making” for a further three years.
“Peter Mandelson has no influence on any MOD contracts,” Healey said in an interview with Bloomberg. “The Palantir decision was mine.”
“Palantir offer unique capabilities with a unique track record and that’s why we’ve struck the agreement with them,” he added. “The deal we struck with Palantir is going to significantly reinforce the innovation of our forces and it will reinforce the safety of this country.”
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The agreement comes amid the faltering of a broader commitment between Starmer and President Donald Trump to deepen ties by expanding investments by US technology companies in the UK.
The original defence contract, costing £75 million, was awarded by the Conservative government in 2022 — also without a competitive process. The Tories also awarded Palantir a £330 million contract to overhaul the National Health Service’s (NHS) patient data system in the UK in 2023.
The company employed Fleetwood Strategy, a firm co-founded by then-prime minister Rishi Sunak’s election guru, Isaac Levido, in the run-up to procuring that contract, according to a register of its lobbying interests.
As the polls show a fracturing of UK politics away from the traditional Labour-Conservative duopoly, Palantir has also been working to cultivate ties with Reform UK, the ascendant right-wing party led by Nigel Farage.
At the World Economic Forum’s annual meeting in Davos last month, Farage was the only senior British politician to appear at a drinks party held by Palantir which ran late into the night. It recently hired Charles Carlson, a former press officer at Reform.
The previous Tory government’s own award of contracts to Palantir hasn’t stopped them from calling for the government to scrutinise the last year’s defence contract. Tory party leader Kemi Badenoch said the contract “needs to be looked at very, very closely”. Green Party leader Zack Polanski, who has led his party to fresh highs in polls of voter intention, told the BBC’s Newsnight programme that Palantir’s NHS contract should be voided.
In the US, the software company has come under pressure over its dealings with US Immigration and Customs Enforcement, or ICE. It has increased its federal government contracts following an escalation of immigration-enforcement efforts as part of the Trump administration’s push to crack down on undocumented migrants.
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