Doubts over 'Dome saviour'

He is one of the richest men in America and when he offered to finally lift the curse of the Dome the Government embraced him with rapt enthusiasm. After false starts, apparently unstoppable haemorrhaging of public money and allegations that the great white tent at Greenwich was little more than a vain monument to exalt New Labour, Philip Anschutz appeared as if in answer to a prayer. He and his vastly wealthy partners promised to take on the Dome and turn it into something viable, prompting a rush of gratitude so fulsome the Government gave the whole thing away on a promise the British taxpayer would share future profits.

How does that deal look today, a mere four months later? Mr Anschutz, it has emerged, is under investigation in the United States for an alleged part in what New York Attorney General Eliot Spitzer claimed was a "fraudulent scheme".

The disclosure comes soon after revelations that Mr Anschutz made £250 million from selling shares in his company just before the price collapsed. The company, Qwest Communications International, is at the centre of investigations by the US Department of Justice and Securities and Exchange Commission after it admitted exaggerating profits and using improper accounting procedures.

Mr Anschutz is also under fire from shareholders, employees and pensioners. Some claim his companies have left them broke.

As it dawns on ministers that the saviour of the Dome was, perhaps, not quite what they had hoped for after all, an awkward question is being raised: what was done to check him out? An Evening Standard investigation has revealed that serious doubts were being expressed over Mr Anschutz's business affairs well before the Dome deal was signed. The reclusive billionaire has also attracted suspicion and criticism in the United States for his support of the Christian Right and an extreme anti-homosexual organisation. Did ministers know all this when they handed over the Dome to him and his partners? If they didn't - why not?

Philip Anschutz is the sort of man who can dazzle, merely on his reputation. If there is to be a Howard Hughes of the 21st century, he is a frontrunner. Forbes Magazine currently lists him at number 36 on the American rich list with a net worth of around £3 billion, some of it derived from the film industry for which, like Hughes, he shares a passion.

That is not to say he enjoys Hollywood-style exposure. He is the most private and well-concealed of tycoons, prompting Forbes to dub him "... the richest American you've never heard of."

He does not give interviews, he has rarely been photographed. Indeed, few people can claim to really know this 62-year-old business phenonemon, which is a pity, because his own life could yield a rich movie script.

He was born in Great Bend, Kansas, where endless wheat fields, white-hot summers and a Calvinist credo form the character of young men. Bob Dole, the veteran Republican presidential candidate, and a close friend, lived down the road. Mr Anschutz was the son of a wildcat oilman whose fortunes depended on drilling holes in the right place.

By the time the young Philip had graduated from the University of Kansas, with an honours degree in finance, too many holes had come up dry. The family firm was in dire straits and he gave up thoughts of his own career in business to help out.

In 1967 he hit a gusher, a well that promised to produce oil. What he did next was to set a pattern for his career and, in the process, lay the foundations of a legend. He borrowed enormous sums of money and bought up surrounding land.

The next day, a spark ignited his entire holding, threatening to bankrupt him. Then, in the Sixties, there was only one man who could deal with such fires, the celebrated Red Adair. There was just one problem. Anschutz couldn't afford him. So he contacted Universal Studios, who were making a film on Adair at that time, and he persuaded them to pay him $100,000 for the film rights to Adair fighting his fire. Within 15 years, he had sold a slice of his oil interests to Mobil for $500 million.

Anschutz began buying up railway shares and in 1988 took control of the mighty Southern Pacific Railroad. Then came his leap into telecommunications. His company, Qwest Communications International, became one of the major players in America and he used its financial muscle to acquire huge leisure interests. They include the LA Lakers basketball team and other sports assets across America and Europe. The London Knights ice hockey team is owned by Anschutz Sports. His expansion into cinemas in the United States and development of the Staples Center, a huge shopping and sports complex in Los Angeles. appeared to equip him perfectly for the role of taking on the Dome. Under his stewardship, ministers confidently hoped, it would become a glittering venue for pop and sports events, a Madison Square Garden for Europe.

When Mr Anschutz appeared among those bidding for the Dome, Lord Falconer, the minister charged with its disposal, was, by all accounts, at the end of his tether. Two competitions to find a use for the building had failed to produce anything worthwhile, although they cost £10 million to run. The Dome was costing around £300,000 a month in upkeep alone and the political embarrassment of the place was beyond anything the Government could cheerfully countenance. Did this influence judgments? The question is relevant because Mr Anschutz does not, for all his brilliance, appear to be the kind of businessman who would naturally find favour with New Labour, although his family credentials are impeccable.

He lives with his wife Nancy, whom he met when he was 16, at a house he designed himself on a five-acre plot in the Polo Club, a residential enclave that houses a concentration of old moneyed families in Denver, Colorado. The couple's three children are grown up, but the family is said to be close-knit and in constant touch. Mr Anschutz, like many tycoons, is something of a driven man and rises at 4.30am to go for a run. He has completed 16 marathons, is a competitive skier and climbs in the Himalayas.

"He's a very decent human being - very, very generous," former Colorado governor Dick Lamm said. Mr Anschutz is certainly generous to the causes he supports. The Republican Party is one, but it is his help for organisations like Colorado for Family Values that might cause discomfort in New Labour circles. The group is ferociously anti-gay and blames homosexuals for paedophile activity.

His Anschutz Foundation channels large sums to conservative causes including the Institute for American Values, which campaigns against single parenting, and a group that agitates against internet pornography, Enough is Enough. But it is his business connections that might prove most unsettling for a Government desperate to avoid further controversy over the Dome. The Dome and 189 acres surrounding it were given to a company-called Meridian Delta Ltd, of which the British property company Quintain owns 49 per cent and the European arm of the Australian concern, Lend Lease, owns 51 per cent. The Anschutz Entertainment Group is Meridian's partner and will have responsibility for developing and running the new Dome venue.

The partners say they are currently finalising development plans to be submitted to Greenwich Council by the end of this year. They include turning the Dome into a 20,000-seat arena. A budget of £200 million has been set aside for the project. The site was handed over in exchange for a pledge that future profits will be shared with the Government. Lord Falconer predicted £550 million over the next 25 years.

The deal was negotiated by English Partnerships, the Government's agent for disposal of the Dome. English Partnerships was charged with exercising due diligence and researching the background of bidders. The Anschutz Entertainment Group passed its scrutiny. But our investigation revealed that there were concerns over the way Anschutz companies were being run even before the Dome deal was concluded. In the early summer of 2001, a row erupted between Mr Anschutz's Qwest and senior analysts at Morgan Stanley Dean Witter. The analysts argued that the company had exaggerated the value of its pension fund and a stake it held in a European telecom company, KPNQwest.

Morgan Stanley insisted that the $7 billion stake in KPNQwest was really worth no more than $2 billion - Qwest at first disputed this, then agreed to a revaluation of $4.8 billion, slashed in July to $1.3 billion because the company said it wanted a "very conservative treatment" of the holding.

Morgan Stanley also claimed Qwest was being over-optimistic about the value of its pension plan so that it could inflate its income and had been boosting its revenue artificially by selling off key pieces of its telecom network. At the time, the company said there was nothing unusual in either practice. Largely as a result of this, Qwest stock plummeted by 64per cent in 2001 to $14.13 by the end of the year. On 11 March this year, with the stock dropping another 31 per cent and credit firms downgrading Qwest, the company disclosed that the Securities & Exchange Commission had opened an informal inquiry into its accounting practices for 2000 and 2001. Qwest said that it believed the accounts were " appropriate" but "there can be no assurance that the SEC will agree."

Also in early March, workers at Qwest filed two lawsuits saying they had been encouraged to keep their retirement savings in company stock even as senior executives sold shares worth hundreds of millions of dollars. At the end of March - as the Dome deal was reaching a conclusion - Business Week reported that senior executives had unloaded colossal amounts of shares in the first half of last year, before the company's troubles became generally known. On May 2, 2001, Philip Anschutz sold around 10 million shares worth $408 million (around £250 million). Today they would be worth a fraction of that, barely $20 million. Was this revealed by English Partnerships ' researches? The agency told the Standard: "We have done the full amount of due diligence as is normal and necessary for a transaction of this nature and scale. The details remain commercially confidential."

Nick Harvey, the Lib Dem spokesman on cultural affairs, said: "The sort of issues that had already emerged in the United States should have rung very loud alarm bells. If the research did not uncover them, then it was negligent. If it did - and they decided to carry on regardless - then it was reckless."

A spokeswoman for the Anschutz Corporation in London dismissed Attorney General Spitzer's suit as "unfounded and absolutely without merit". She added that neither Spitzer's action, nor Qwest's business affairs in the United States had any bearing on the Anschutz Entertainment Group's commitment to the Dome.

That will comfort some, but others may feel that while the curse of the Dome was once confined to the Greenwich peninsula, it now takes in the frightening and unpredictable difficulties of corporate America.

Additional reporting: James Langton in New York.