Skip to comments.Labour sleaze scandal: Now four Cabinet Ministers in the firing line
Posted on 11/27/2007 4:30:01 AM PST by UKrepublican
Labour sleaze scandal: Now four Cabinet Ministers in the firing line
Four Cabinet ministers are today entangled in the new sleaze crisis engulfing Labour as the threat of criminal prosecutions was raised for the first time.
Prime Minister Gordon Brown, deputy leader Harriet Harman, Aid Secretary Douglas Alexander and Environment Secretary Hilary Benn are all facing questions after being on the receiving end of gifts.
In a highly significant move, the Crown Prosecution Service has been called in to give advice.
The CPS, whose job is to decide when prosecutions are brought for suspected breaches of the law, has held talks with the Electoral Commission, which is the official watchdog over party funding issues.
In addition, the commission wants to question Ms Harman over how she came to receive a £5,000 gift from millionaire tycoon David Abrahams via a go-between, apparently to conceal his identity.
This morning Hilary Benn was forced to explain why he rejected a cheque from Mr Abrahams during his deputy leadership campaign.
The donation was originally submitted in the name of Janet Kidd - one of the businessman's go-betweens.
But Mr Benn was advised by Labour party grandee Baroness Jay that the money was really from Mr Abrahams and it was sent back.
The candidate later accepted a donation in the tycoon's own name.
Speaking this morning, Mr Benn said: "We declined to accept the cheque on the basis that if Mr Abrahams wanted to make a donation he should do so in his own name.
"Subsequently he decided to make a donation as himself and it was accepted. We reported it as we were required to do."
He added that his team had been "completely unaware" of any other donations made by Mr Abrahams under other identities.
It has also emerged Mr Abrahams was granted planning permission for a business park after giving hundreds of thousands of pounds to the party, it has emerged.
In a revelation set to fuel mounting sleaze allegations, David Abrahams was initially banned from building a network of offices on farmland.
But just a year later - and after giving £199,000 through intermediaries - his application was approved.
The bombshell erupted just hours after Labour's most senior party official was forced to quit over the escalating scandal.
General Secretary Peter Watts has admitted he knew Mr Abrahams had been making secret - and illegal - donations to the party.
Many Labour grandees now fear that there will be fresh revelations today in the wake of the highly damaging scandal.
There are already fears that top ranking ministers including Gordon Brown, Hilary Benn, Harriet Harman and Douglas Alexander could become embroiled in the wrangle.
And there is sure to be speculation about the role Mr Abraham's £200,000 donation had in securing planning permission for the business park development.
The shadowy businessman was originally refused approval to build on farmland next to the A1(M) in October 2005.
The Highways Agency imposed a ban - known as an Article 14 - on the grounds that it risked causing congestion to the motorway.
There was also a report that protected badger setts had been found on the site, and Mr Abrahams withdrew the application.
But a year later, his application was approved after the ban was lifted.
In that time his three go-betweens, Ray Ruddick, Janet Kidd and John McCarthy, donated £199,000.
The Highways Agency acts on behalf of the Transport Secretary - who at the time was leading Brownite Douglas Alexander - in deciding whether to grant permission.
Mr Alexander's spokesman strongly rejected any suggestion that he was involved and denied he had ever met Mr Abrahams.
And Mr Abrahams last night threatened legal action against anyone who suggested he had given the money "in exchange for favours".
The developments have been a stinging blow to Mr Brown on the day he launched a political fightback after a series of crises - but saw a poll giving the Tories a 13-point lead over Labour, their biggest since the Thatcher era.
The Prime Minister has been desperate to distance himself from the cash-for-peerages scandal which overshadowed Tony Blair's final months in office.
When he took over, he pledged to bring about a renewal of trust.
But the Abrahams affair straddles the premierships of both men. The Newcastle-based property tycoon admitted on Sunday that he had given £381,850 through two "business associates", builder Ray Ruddick and secretary Janet Kidd, since May 2003.
Of that, £222,000 was handed over after Mr Brown became leader in June, making Mr Abrahams Labour's third biggest donor under Mr Brown.
And it's been revealed that he funnelled a further £167,000 through another intermediary, John McCarthy, a solicitor friend - taking the grand total of hidden donations to £547,000.
Acting Liberal Democrat leader Vince Cable said: "This is a very sleazy business altogether."
And the Tories demanded to know whether the Prime Minister or party chairman Harriet Harman knew that Mr Abrahams's donations were being disguised.
Miss Harman received a £5,000 donation through Miss Kidd for her deputy leadership campaign.
Mr Abrahams, 63, was pictured at Mr Blair's farewell speech at Trimdon colliery in June and is a well-known figure in Labour politics in the North East.
Downing Street said last night that Mr Brown had not had a formal meeting with Mr Abrahams, but did not rule out the possibility that the businessman was present at a Labour event attended by the Premier.
Mr Watt admitted he was aware of the extraordinary donation arrangements but insisted he did not know they were illegal.
He now faces serious questions by the Electoral Commission, which has power to bring in the police if there has been a possible breach of the 2000 Elections Act.
Under the Act, Mr Ruddick, Mrs Kidd, Mr McCarthy and Mr Abrahams could face criminal charges for failing to provide information about donors - which carries a £5,000 fine or a maximum one-year jail sentence.
Mr Watt could also face prosecution because failure by a party to return a donation from an impermissible or unidentifiable source also carries a £5,000 fine or up to one year in prison.
Mr Watt, 38, has been general secretary for two years and was welcomed as a "safe pair of hands" by Tony Blair. He was a nurse before joining the Labour payroll as a local organiser in 1996.
In his resignation statement, he said: "I was aware of arrangements whereby David Abrahams gave gifts to business associates and a solicitor who were permissible donors and who in turn passed them on to the Labour Party and I believed at the time my reporting obligations had been appropriately complied with.
"I take full responsibility for the Labour Party's reporting obligations. Consistent with my own and the party's commitment to the highest standards in public life, it is with great sadness I have decided to resign with immediate effect."
Mr Watt's failure to realise the arrangements were against the rules was seen as extraordinary, as guidance by the Electoral Commission clearly states that anyone acting as an agent must state the original source of the cash.
And his behaviour was all the more questionable as he was general secretary through the cash for honours scandal - which also involved secret donations dressed up as loans.
A former Labour Party treasurer expressed amazement that Mr Abrahams was able to make a series of donations without revealing his identity.
Baroness Prosser said she was "completely astonished" that full checks were apparently not carried out before the party took the donations.
Former sleaze watchdog Sir Alistair Graham told Channel 4 News: "It is a very bizarre situation that the general secretary of what is arguably the biggest political party wasn't aware of the rules, of the legislation, to declare not only the amounts but the actual source of the money."
Sir Alistair said it was an issue for Mr Brown because he had made trust a "central theme of his government".
Shadow Chancellor George Osborne said: "Serious questions remain unanswered about this murky affair. Everything Gordon Brown promised about his premiership - competence, honesty and change - has been blown away in the last few weeks."
Another day, another Labour scandal - and this one is big.
Ultimately they were taking massive donations from a man who was using other people to make the donations - these people had NO IDEA apparently, that the donations were made in their name which is how the lid was blown on this.
The question is - how much did the Labour party know?
It seems alot more than they are letting on.
This could be a big scandal and unlike the cash for honours scandal - there is plenty of evidence.
Odd that I wish we had some UK press over here that would pursue the Clintons and their receipt of ChiCom millions through straw donars that’s been going on for 20 years.
To me, that’s a bigger scandal than this Labour dust-up.
Straight out of the Clinton/Gore playbook e.g. the "vow of poverty" monks giving cheques to Gore or, more recently the donor Hsiu using other ethnic chinese to funnel donations to the Democrats.
Still, in UK, cash-for-honours went nowhere so is this likely to gain any more "legs" than that?
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