Stephen Smith accepts responsibility for inviting Epstein associate Lord Peter Mandelson into Australia House

Stephen Smith has accepted responsibility for the decision to invite disgraced Labour Lord and Epstein associate Peter Mandelson to speak at Australia House, contradicting the Department of Foreign Affairs and Trade, which attempted to lay blame for the blunder at the feet of former Liberal treasurer Joe Hockey.

Mr Mandelson was invited to a function at the High Commission in the UK in November 2024, at which time Mr Smith, a former cabinet minister in the governments of Kevin Rudd and Julia Gillard, was serving as Australia’s top diplomat there.

The event was held before Mr Mandelson was appointed the UK’s ambassador to the United States. Mr Mandelson was sacked from the role last September over his well-documented friendship with Jeffrey Epstein, which continued long after the financier was convicted for paedophilia.

The release of the Epstein files showed Mr Mandelson was forwarding sensitive government information to the financier, and he is now being investigated by British police.

The scandal has rocked the Labour Government and the UK Prime Minister Keir Starmer is under fire for the “weirdly rushed” process that was involved in appointing the Blair-era spin merchant. Sir Keir’s chief of staff, Morgan McSweeney, a protege of Mr Mandelson’s, has been sacked over the appointment.

When asked why the Australian government hosted Mr Mandelson, a DFAT spokesman tried to lay the blame at the feet of Joe Hockey, who served as Australia’s treasurer between 2013 and 2015 and as ambassador to the United States during the first Trump Administration.

“The event at Australia House was a moderated policy discussion on Australia-UK-US relations following the US election and was proposed by an external organisation, Bondi Partners, with Lord Mandelson invited in his capacity as a prominent UK political and trade figure alongside former Australian Ambassador to the United States Joe Hockey,” the spokesman said.

“The discussion focused on international policy and trade issues and was attended by more than 50 guests, including Australian journalists based in the UK.

“The Australian Government unequivocally condemns the crimes of Jeffrey Epstein and stands with victims of abuse.”

Bondi Partners is the strategic advisory firm Mr Hockey founded, based in Sydney and Washington DC and also operates in London.

Mr Hockey, who has been in London this week meeting British MPs, including the Labour peer and veteran Australia-watcher John Spellar, told The Nightly that he had had nothing to do with Mr Mandelson’s attendance.

“I’d never heard of Mandelson before; we had nothing to do with the invitation to Mandelson, it was extended by the High Commission,” he said, when contacted.

“It was hosted by the embassy, and it was a good collaborative event.

“Stephen Smith said he had the inside track that Mandelson was going to be the ambassador, and he thought it was appropriate that he should be discussing the US relationship.

“I don’t think the embassy should be embarrassed that they had inside knowledge that Mandelson was about to be appointed as ambassador.”

Mr Smith has since returned to Perth after his posting to London ended last year.

He said Mr Hockey had proposed hosting an event on the implications of the US election but that the invitation to Mr Mandelson was his decision, and one that he would not repeat.

“The decision to invite Mandelson was mine as high commissioner. This was to broaden the discussion to focus on the implications of the US election outcome for both Australia and the UK, including on AUKUS,” Mr Smith said.

“My recollection is at the time there was already public speculation that Mandelson, given his then standing as a former UK Cabinet Minister and EU Trade Commissioner, could become UK Ambassador to the US. This was borne out by the announcement of his appointment on 20 December, less than a month after the event was held.”

“At the time, I was not aware of Mandelson’s involvement with Epstein (nor was Mr Hockey). Were I aware, he would of course not have been invited to any such event.”

Mr Mandelson’s ongoing friendship with Epstein, after his conviction, was reported in the British press, including in 2023 when the Financial Times obtained a JP Morgan report that said Mr Mandelson stayed at Epstein’s Manhattan flat.

Despite attempting to claim the event was proposed by Bondi Partners, DFAT posted images of the event on the Australian High Commission’s official social media pages.

The photographs included Mr Smith and the current Deputy High commissioner, career diplomat Elizabeth Bowes who was posted to Washington when Mr Hockey was ambassador.

By contrast, there are no photos of the event on Bondi Partners’ public profiles and there was no corporate branding promoting the firm at the event.

Mr Smith’s panel was held on the same day that he lost his bid to become chancellor of Oxford University. The news broke as Mr Mandelson, who was twice sacked from government during the Blair-Brown eras, was speaking, and he was repeatedly photographed looking at his phone throughout the discussion.

The event was moderated by the ABC’s Europe correspondent Kathryn Diss. Journalists in London were invited but were told the discussion was to be held off the record, meaning it could not be reported. No reason was given for the reporting restrictions and Mr Hockey said he did not request them.