Files show British prime minister was warned of 'reputational risk' in appointing Mandelson

LONDON (AP) — British Prime Minister Keir Starmer was warned that Peter Mandelson ’s friendship with convicted sex offender Jeffrey Epstein exposed the government to “reputational risk,” but he still appointed him as ambassador to the United States, documents released Wednesday show.

Starmer fired Mandelson after nine months in the job when new details of the relationship with Epstein emerged, and now faces a political storm over the appointment. The newly published files show the prime minister ignored red flags raised by his staff when he appointed the savvy but controversial Mandelson to the U.K.'s most important diplomatic post.

Mandelson was briefly arrested last month by police investigating allegations he passed sensitive government information to Epstein a decade and a half ago.

Concerns were raised in a document sent to Starmer in December 2024 when he was considering appointing Mandelson, an elder statesman of the governing Labour Party, to a diplomatic post seen as vital to establishing relations with U.S. President Donald Trump's administration.

A “due diligence report” prepared by senior civil servants summarized a relationship between Mandelson and Epstein that ran from at least 2002 — the year Mandelson "facilitated” a meeting between Epstein and then-Prime Minister Tony Blair — to 2019, the year of Epstein's death.

The document notes that “Mandelson reportedly stayed in Epstein’s house while he was in jail in June 2009” for sexual offenses involving a minor, and cites a 2019 report commissioned by JPMorgan which said Epstein had “particularly close relationship” with the then-Prince Andrew and with Mandelson.

It also spelled out unrelated reputational issues over Mandelson’s work in a previous Labour government — when he twice had to resign over financial matters — and his work at Global Counsel, a lobbying firm he co-founded.

Despite the red flags in the documents, Cabinet minister Darren Jones said the due diligence “did not expose the depth and extent” of Mandelson's friendship with Epstein. He said Mandelson had lied to Starmer about the friendship.

“Peter Mandelson should never have been afforded the privilege of representing this country,” Jones told lawmakers in the House of Commons. “I reiterate for the House that the prime minister deeply regrets taking him at his word. It was a mistake to do so.”

Starmer fired Mandelson in September after an earlier release of documents showed he had maintained contact with Epstein after the financier’s 2008 conviction.

Further details about Mandelson’s ties with Epstein, revealed in a huge trove of files published by the U.S. Department of Justice in January, raised new questions about Starmer's judgment, driving opponents and even some members of the governing Labour Party to call for the prime minister’s resignation.

Starmer survived the immediate danger, but his position remains fragile, even though he never met Epstein and is not implicated in his crimes.

The 147 pages of documents published Wednesday were released after lawmakers forced Starmer’s government to disclose thousands of files about the decision to name Mandelson to the key diplomatic post at the start of Trump’s second term.

The government says the files will show Mandelson misled officials.

The documents are being published in batches after review by Parliament’s Intelligence and Security Committee. Police have asked the government not to release files that could compromise their criminal investigation into Mandelson.

The documents published Wednesday note that Mandelson was asked questions about his relationship with Epstein, and say the prime minister's communications director was "satisfied with his responses.”

The responses themselves have not yet been published because of the police investigation.

And the files raise more questions for Starmer. After Mandelson was fired, National Security Advisor Jonathan Powell told the prime minister’s lawyer that he had raised concerns about “the individual and reputation” and found the appointment process “weirdly rushed,” the documents show.

Ed Davey, leader of the opposition Liberal Democrats, said Starmer had made a “catastrophic failure of judgment."

Conservative lawmaker Alex Burghart said that while Mandelson might have lied to the prime minister, "he wasn’t lied to by this due diligence document.

“The prime minister knew all he needed to know. It was on him. It’s on him now. He let his party down. He let his country down. I very much doubt that either will trust him again.”

The Epstein files released in January suggest that Mandelson sent market-sensitive information to the convicted sex offender when he was the U.K. government’s business secretary after the 2008 financial crisis. That includes an internal government report discussing ways the U.K. could raise money, including by selling off government assets.

Mandelson also appears to have told Epstein he would lobby other members of the government to reduce a tax on bankers’ bonuses.

Mandelson, 72, was arrested Feb. 23 at his London home on suspicion of misconduct in public office. He has been released without bail conditions as the police investigation continues.

He has previously denied wrongdoing and hasn’t been charged. He does not face allegations of sexual misconduct.

He has been forced to resign from the House of Lords, and has lost his 157,000 pound ($210,000) a year ambassador's salary. The documents show that after being sacked Mandelson asked for a 547,000 pound payoff, the rest of his four-year salary.

In the end, the government gave him 75,000 pounds.

A print out copy of the documents released by the British government are photographed in London, Wednesday, March 11, 2026, and show officials believed there was a "reputational risk" to appointing Peter Mandelson as the U.S. ambassador because of his relationship with convicted sex offender Jeffrey Epstein. (AP Photo/Frank Augstein)

A print out copy of the documents released by the British government are photographed in London, Wednesday, March 11, 2026, and show officials believed there was a "reputational risk" to appointing Peter Mandelson as the U.S. ambassador because of his relationship with convicted sex offender Jeffrey Epstein. (AP Photo/Frank Augstein)

Britain's Prime Minister Keir Starmer leaves 10 Downing Street to attend the weekly Prime Ministers' Questions session in parliament in London, Wednesday, March 11, 2026. (AP Photo/Frank Augstein)

Peter Mandelson, the former U.K. ambassador to the United States, leaves his house in London, Tuesday, March 10, 2026. (AP Photo/Kin Cheung)

Peter Mandelson, the former U.K. ambassador to the United States, leaves his house in London, Tuesday, March 10, 2026. (AP Photo/Kin Cheung)

Peter Mandelson, the former U.K. ambassador to the United States, leaves his house in London, Tuesday, March 10, 2026. (AP Photo/Kin Cheung)

DUBAI, United Arab Emirates (AP) — The United States is warning shipping companies that they could face sanctions for making payments to Iran to safely pass through the Strait of Hormuz.

The alert posted Friday by the U.S. Office of Foreign Assets Control adds another layer of pressure in the standoff between the U.S. and Iran over control of the Strait of Hormuz.

About a fifth of the world's trade in oil and natural gas typically passes through the strait at the mouth of the Persian Gulf in peacetime.

Iran effectively closed the strait to normal traffic by attacking and threatening to attack ships after the U.S. and Israel launched a war on Feb. 28. It later began offering some ships safe passage by detouring them through alternate routes closer to its shoreline, charging fees at times for the service.

That "tollbooth” effort is the focus of the U.S. sanctions warning.

The payment demands could include transfers not only in cash but also “digital assets, offsets, informal swaps, or other in-kind payments,” including chartibale donations and payments at Iranian embassies, OFAC said.

“OFAC is issuing this alert to warn U.S. and non-U. S. persons about the sanctions risks of making these payments to, or soliciting guarantees from, the Iranian regime for safe passage. These risks exist regardless of payment method,” it said.

The U.S. responded to Iran's closure of the strait with a naval blockade of its own on April 13, preventing any Iranian tankers from leaving and depriving Iran of oil revenue it needs to shore up its ailing economy.

The U.S. Central Command said 45 commercial ships have been told to turn around since the blockade began.

The warning came as U.S. President Donald Trump swiftly rejected Iran’s latest proposal to end the war between the countries.

“They want to make a deal, I’m not satisfied with it, so we’ll see what happens,” Trump said Friday at the White House. He didn't elaborate on what he saw as its shortcomings but expressed frustration with the Iranian leadership.

“It’s a very disjointed leadership,” Trump said. “They all want to make a deal, but they’re all messed up.”

Iran’s state-run IRNA news agency reported Iran handed over its plan to mediators in Pakistan on Thursday night.

The shaky three-week ceasefire between the U.S. and Iran appears to be holding, though both countries have traded accusations of violations. The standoff is increasingly putting pressure on the global economy, driving up prices and leading to shortages of fuel and other products tied to the oil industry.

Negotiations continued by phone after Trump called off his envoys’ trip to Pakistan last week, the president said. Trump this week floated a new plan to reopen the critical passageway used by America’s Gulf allies to export their oil and gas.

Iranian Foreign Minister Abbas Araghchi has briefed many of his regional counterparts on the country's initiatives to end the ear, according to his social media. He also held talks Friday with European Union foreign policy chief Kaja Kallas, who is in contact with the EU’s Gulf partners.

Fu Cong, the Chinese ambassdor to the United Nations, said Friday that maintaining the ceasefire is “the most urgent issue" as well as bringing together the sides to resume good faith negotiations “to make sure that the ground is laid for reopening of Hormuz.”

Foreign Minister Wang Yi “has been on the phone almost constantly” with representatives from all sides, Fu said, adding that China supports Pakistan’s efforts to mediate between the parties.

Fu stressed the root cause of the tremendous suffering in Iran and neighboring countries and the growing turmoil in the global economy, especially in developing countries, “is the illegitimate war by the U.S. and Israel.”

Edith Lederer at the U.N. contributed to this report

A tanker, left, and a car carrier are anchored at sea in the Gulf of Oman near the Strait of Hormuz, as seen from the coast near Khor Fakkan, United Arab Emirates, Friday, May 1, 2026.(AP Photo/Fatima Shbair)

Cargo ships are seen at sea near the Strait of Hormuz, as viewed from a rocky shoreline near Khor Fakkan, United Arab Emirates, Friday, May 1, 2026. (AP Photo/Fatima Shbair)

Men gather along the shore, some crouching and watching a game, as a mix of bulk carriers, cargo ships, and service vessels line the horizon in the Strait of Hormuz off Bandar Abbas, Iran, Monday, April 27, 2026.(Razieh Poudat/ISNA via AP)

A man stands in the water, appearing to fish, as bulk carriers, cargo ships, and service vessels line the horizon in the Strait of Hormuz off Bandar Abbas, Iran, Monday, April 27, 2026.(Razieh Poudat/ISNA via AP)

An Emirati patrol boat, left, is near a tanker anchored in the Gulf of Oman near the Strait of Hormuz, as seen from a coastal road near Khor Fakkan, United Arab Emirates, Friday, May 1, 2026. (AP Photo/Fatima Shbair)