The men making millions from refugees' misery

by Martin Bright and Conal Walsh

02 September 2001

Dozens of asylum barons are making fortunes from Britain's refugee crisis, an Observer investigation can reveal. The transport, dispersal, housing and detention of people fleeing persecution has turned into a giant get-rich-quick scheme subsidised by the taxpayer.

One of those set to gain most is colourful French catering billionaire Pierre Bellon, whose Sodexho company runs the controversial asylum vouchers scheme.

Accounts for Sodexho-Pass Limited, the British company he set up to do this work, show it was paid more than £1 million last year by the Home Office. Sodexho has told The Observer that this year it will receive £1.5m to print and distribute around £50m of vouchers, which can be exchanged at supermarkets for food and other essentials.

Bellon is already one of Europe's richest men, with an estimated fortune of more than £1.3 billion.

He went into the private prisons business in 1987, winning a lucrative French government contract, and caused outrage by saying: 'I used to be in the hotel business, but with prisons you can guarantee a 100 per cent occupancy rate.'

Ivan Semenoff, chief executive of Sodexho's worldwide voucher business, said yesterday that administration costs swallow most of the money paid by the Home Office. The company was using the scheme to break into the lucrative UK voucher business. 'We saw this as an opportunity,' he said.

Semenoff said the firm recognised the system was controversial and planned changes to soften its effect include a name change for the vouchers: 'In future we will call them "Welcome Passes".'

Vouchers are just one way that Sodexho makes money from refugees. In a detention centre to be opened near Heathrow on 20 September by its subsidiary, UK Detention Services, the company is planning what refugee groups have described as a 'slave-labour scheme'.

A Home Office document obtained by the National Coalition of Anti-Deportation Campaigns shows that the Government intends to suspend the minimum wage at the Harmondsworth centre. Refugees will be expected to do the work of painters, cleaners and catering there for only £12 a week, equivalent to 34 pence an hour.

If they refuse work but comply with an 'agreed activity programme' they will be paid £6. If they will not cooperate at all, they will be given £4 for cleaning their rooms.

The Refugee Action group challenged the Government to justify plans for education at the centre. A Home Office document says 'children under school-leaving age will have 17.5 hours of study per week'. Yet the Department for Education recommends 25 hours a week.

The Observer has established that Sodexho's Bellon is just one of a number of businessmen cleaning up from the asylum crisis.

In July, Immigration Minister Jeff Rooker admitted the asylum system cost the Home Office £15.4m in 2000 on top of the £26.1m paid in vouchers.

Home Secretary David Blunkett has come under increasing pressure to scrap the scheme, which refugee groups believe has raised racial tension.

Protests led by Bill Morris of the Transport and General Workers Union forced the Government to agree to a review of the system at last year's Labour Party conference. But it is now thought the vouchers will stay because of pressure from Downing Street.

The Home Office last night refused to say how much compensation it would have to pay Sodexho if its three-year contract was cancelled.

Another foreign billionaire with a foot in the British asylum market is American George Wackenhut, whose Wackenhut Corporation runs private prisons across the world. Last year Wackenhut UK won the transport contract for the Government's asylum dispersal scheme, and its coaches now carry refugees around the country.

Wackenhut UK accounts for last year, which also includes its private prison and security business, showed a turnover of £22m. The Home Office refused to say how much of this came from the Government for the dispersal business.

Ministers are concerned about the dozen or so firms which won multi-million pound contracts to house dispersed refugees.

One of the smaller ones, Adelphi Hotels, based in Hove, East Sussex increased its profits from £180,000 to £1.4m after winning a dispersal contract in April last year. Michael Holland, the main shareholder, gave himself a £250,000 pay rise.

Companies House has con firmed it is taking action against two companies, Clearsprings and Landmark Liverpool, which have so far failed to produce annual accounts. Clearsprings confirmed it had a turnover of £2m last year, mostly Home Office money.

Owned by Graham King, an Essex gaming tycoon, it had no experience in housing or refugee work before it took its state contract in April 2000. It now claims to be 'the fastest growing property company in the UK'.

Councils in the North of England have complained to the Home Office that private contractors such as Clearsprings have been dumping asylum seekers in sub-standard accommodation without telling them.

Landmark owns two crumbling tower blocks in Liverpool, where residents have complained of harassment by the firm and staged a hunger strike.

The Liberal Democrat leader of Liverpool council, Richard Kemp, said: 'The Government are responsible. They gave contracts to these companies who are dumping asylum-seekers in our cities.'