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A key associate of former mayoral aide Lee Jasper was arrested today by police probing the City Hall grants scandal.
Greg Nowell, who ran a scheme linked to Mr Jasper, was seized by Met detectives investigating money laundering.
It is the first arrest since a fraud investigation was launched into a string of projects linked to Mr Jasper after concerns over how public money was being spent were raised by the Evening Standard.
He quit last week as the Mayor's race adviser after sexually charged emails were published in which he said he wanted to "honey-glaze" a married mother of three, a woman whose projects received £100,000 from City Hall on Mr Jasper's recommendation.
Mr Nowell, 61, was being questioned at Belgravia police station after the arrest at his Harrow home. Documents were seized at two other homes, in Tottenham and Croydon. Mr Nowell ran the Green Badge Taxi School, a project in Clapham which was set up purporting to offer courses in the “knowledge” for would-be taxi drivers from ethnic minorities.
It was funded by the London Development Agency and its annual reports showed that grants were gained thanks to the “strong support of Lee Jasper”.
But the Standard revealed in December that cash from the project, which received at least £280,000 from the LDA and £70,000 from Transport for London, never operated properly and never had
more than a handful of students.
Mr Livingstone welcomed today's development, saying: “We've gone back and asked the police to look into this and they've made arrests.
“If people steal from the LDA we would want them to go to prison. But to put into the context of the thousands of grants being given out, the police at the LDA's request are looking into some six or eight of these.”
Mr Nowell ran the Green Badge Taxi School with Clive Grey, both of whom were associates of Mr Jasper.
A director of the scheme, Joe Ahmed-Dobson, was an LDA official responsible for administering the grant to Green Badge when it received it in 2002.
A Met police spokesman said today: “Today police executed three search warrants at residential addresses in Harrow, Tottenham and Croydon in connection with the investigation into fraud allegations referred to the Met about six organisations that received public funding.”
The other five companies being investigated are Brixton Base, Diversity International, Ethnic Mutual, The European Federation of Black Women
Business Owners and the Deshbangla Foundation.
Green Badge was the first of the projects to be formally investigated by police after Vauxhall MP Kate Hoey wrote to Sir Ian Blair asking for an
inquiry in December last year.
The grants scandal has overshadowed the run-up to the Mayoral campaign as Mr Livingstone fights to battle off allegations that Mr Jasper helped
groups obtain grants which then did little or nothing to justify them.
Mr Jasper, 50, was personally appointed by Mr Livingstone as his director of equalities and policing.
The married father of nine robustly denied any wrongdoing but was forced to quit after the suggestive emails were leaked.
His messages to Karen Chouhan, 49, severely embarrassed Mr Livingstone.
Ms Chouhan was revealed to have been involved in two organisations which received funding from the LDA. In one email Mr Jasper wrote: “I want to
honey-glase (sic) you, let you cook slowly before a passionate embrace.”
He signed off as General Jasper.
In another, he wrote: “I love thee (sic) feet, ankles, legs, thighs, bum and belly, arms, head and brain.”
One of Mr Livingstone's senior aides admitted to the London Assembly that Mr Jasper had behaved improperly in using his Greater London Authority email to send the personal messages.
Today Mr Livingstone claimed that he was the victim of an “orchestrated and totally manufactured” campaign to oust him from power and replace him with Tory rival Boris Johnson — and that one of his aide's phones had been bugged.
He suggested that Australian political consultant Lynton Crosby, Mr Johnson's strategy chief who is known for aggressive campaigning, could be responsible for some of the negative stories about his team.
“You clearly don't employ Lynton Crosby if you want to clean up a campaign. For the first time in my life I can actually see the benefits of a rigorous deportation policy,” he said.
“It's clearly going to be very dirty and very unpleasant. I'm sure we'll move onto my private life at some point and the private life of some of my aides.”
He added: “One of my senior advisers realised that their phone was being bugged. It was fairly old technology so clearly it was not MI5.
le.do WE ALL NEW THIS WOULD HAPPEN Ha ha ha ha lefty pricks
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