Tory peer hints at shadowy 'Foundation X', links to IRA money laundering

Here's a question: if a respected Tory fixer and peer carefully detailed an enormous and far-reaching conspiracy, what would the reaction of the public be?

That's what seems to have happened on Monday in the House of Lords, anyway: read from column 1538 in Hansard, the official record of such things. In that transcript, Lord James of Blackheath spells out how a shadowy 'Foundation X' offered to pay off the government's multi-billion-pound debts, with no strings attached. He goes into how he personally (and, apparently, proudly) laundered more than £1bn in IRA funds:

Foundation X was introduced to me 20 weeks ago last week by an eminent City firm, which is FSA controlled. Its chairman came to me and said, "We have this extraordinary request to assist in a major financial reconstruction. It is megabucks, but we need your help to assist us in understanding whether this business is legitimate". I had the biggest put down of my life from my noble friend Lord Strathclyde when I told him this story.

He said, "Why you? You're not important enough to have the answer to a question like that". He is quite right, I am not important enough, but the answer to the next question was, "You haven't got the experience for it". Yes I do. I have had one of the biggest experiences in the laundering of terrorist money and funny money that anyone has had in the City. I have handled billions of pounds of terrorist money.

My biggest terrorist client was the IRA and I am pleased to say that I managed to write off more than £1 billion of its money. I have also had extensive connections with north African terrorists, but that was of a far nastier nature, and I do not want to talk about that because it is still a security issue.

Incredibly, when Lord James sat down after his 15-minute speech, the Lords seem to have carried on with their proceedings as if nothing odd had been said. Almost no mainstream-media coverage has been given to the incident, barring an amused FT blog.

Far be it from me to theorise as to the provenance of what the noble peer said on Monday, but isn't it strange how, in the face of such astonishing claims, the collective reaction is 'well how about that then'? This is either genuinely explosive stuff, or the mother of all 419 scams...