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LABOUR is facing an official inquiry into an alleged front organisation, financed by millionaire Muslim businessmen, which has donated more than £300,000 to the party.
The electoral watchdog, which polices political funding, confirmed that it was investigating donations to Labour from a group called Muslim Friends of Labour. Its findings are expected to lead to a full-blown inquiry — the first potential sleaze probe to hit Labour since Gordon Brown became prime minister in June.
Imran Khand, a Glasgow-based entrepreneur, is revealed as a leading financial backer behind Muslim Friends, which funnelled £100,000 a month to Labour between March and June.
As his money is paid to Muslim Friends - rather than directly to the Labour party - his identity has until now remained secret. The Electoral Commission is probing whether Labour has broken laws on the disclosure of donations by hiding the true source of its financing.
Khand is a close associate of Mohammad Sarwar, the controversial Labour MP who chairs the organisation. Sarwar was embroiled in a vote-rigging scandal in the late 1990s which saw him suspended from the parliamentary Labour party. He was later cleared of the allegations in the High Court.
Khand has recently set up a series of companies with a Pakistani arms salesman and is also funding a British parliamentary inquiry into “tackling terrorism” via another organisation.
He has never been publicly named as a Labour donor although Muslim Friends has risen to become the party’s second most generous nontrade union benefactor. It is understood that most Labour Muslim MPs and peers are members.
Muslim Friends, which until recently gave only modest amounts, is set up as an “unincorporated association” which does not publish accounts or reveal the source of its funding. It is registered to a PO box address in south London.
Labour politicians have previously criticised the Conservatives for accepting money from a similar unincorporated association involving Robert Edmiston, a Midlands car dealer.
The watchdog said: “We have raised questions with the Labour party about these donations. We are looking into it. Inquiries are at a preliminary stage.”
Yesterday Sarwar, who is to step down at the next election, refused to reveal who funded the donations. “I will not name names. We have made a decision not to release the information. That is the decision of the board of Muslim Friends of Labour,” he said.
He added that the organisation was “very powerful” and was regularly consulted by ministers drawing up policies of interest to the Muslim community.
Another senior member of Muslim Friends disclosed that Khand was the leading benefactor. He revealed that Sarwar, himself a multi-millionaire, had also provided funding.
One leading Muslim Labour figure said: “I am staggered how much money they are giving suddenly. It started off in the wake of 2001 when Muslims were facing serious challenges, but now it seems to be Sarwar and his friends.”
Last week Khand refused to comment on his donations to Muslim Friends.
Yesterday, when asked to justify its decision to accept donations from Muslim Friends, the Labour party said it would take steps to ensure that donors to the group were made public.

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"soon all EU citizens living in the UK will be able to vote in General Elections and referenda "
Surely this isn't true ?
Stan(expat), USA,
What an absolute disgrace but not surprising given New Labour's track record. They've brought British politics down into the sewer. Surely this must cast questions on Labour's softly softly approach to Muslim issues. With this government it's not cash for questions but cash for policies!! And why so little publicity - the BBC seem surprisingly quiet on this yet the Edwina Currie/John Major affair was headlines for a whole week. What utter hypocrites the Liberal elite are.
MS, Scotland,
Labour wants more and more immigration from wherever. The recent massive influx of EU citizens means a huge electoral dividend for Labour, soon all EU citizens living in the UK will be able to vote in General Elections and referenda - this is Labour's electoral strategy and it is working until the English left find out, but it maybe too late.
francis, Sunderland, England
Thank God British Muslims are supporting British institutions. It doesnât matter if this group is supporting Tories or Labour or Lib Dems - it is still great news. If they had to hide their identities it is the donation system that is the problem and certainly not their fault. At last here is tangible proof that our Muslim neighbours want to live and work alongside the other UK communities and I welcome this as a British apolitical Christian and entrepreneur.
Oh yes and letâs force our politicians to sort out their own funding problems!
Frank, London, England
Under the relevant legislation an organisation which is mostly or wholly made up of members of a political party has to account for its donations which can only be from permissible sources.
MFLD did declare some such donations for the 2005 election (though they may have come under a different section for those)
Hywel, Hebden Bridge, West Yorks
Tony got away with taking backhanders - why shouldn't Gordon do the same?
Mike Bibby, St Albans, England -not EU
So that is why we are getting more pro Muslim laws.
What's next Gordon ? Sharia Law for bigger donations ?
Selling England by the Pound !
Traitors !
David, London, Englandistan
Regardless of the CPS fixing the Levy Turner farrago, there is still the question of the Labour Party's accounts being illegal for the year involved, for similar reasons to the above. When will they get done for that - or will it suddenly be subject to national security ? or be stopped by matters such as "commercial confidentiality", the old PFI secrecy gambit.
This lot are bent as a right angle. Brown makes on difference, just pretends to be. Who will rid us of these meddlesome autarchs?
Jeremy Poynton, Fromeville, 51st State
Interesting that this has not been reported in Scotland. The only reason r. Sarwar got away with the accusations of electoioneering is becasue the main witnesses refused to testify, suspicions of heavy handedness from the local communitiy were never looked into at the time.
an, Glasgow, UK
Oh so muslims are giving money to Labour by the back door.
What a surprise.
Ask yourself what the agenda of these 'Muslims Friends' might be ?
They are not 'Asian Friends'.
They are 'muslim friends'.
You don't have to be a brain surgeon do you ?
Paul Williams, London,
First Lord Levy, now this. Does Labour ever take money from people who put Britain's interests first?
Lesley Davies, Manchester,
I find it very sinister and disturbing that the Labour party is bankrolled to such an extent by our Muslim 'friends'. Now I wonder why they would want to do that and what they would expect in return??
The whole thing has a very nasty smell about it but given Labours track record of honesty, probity and inegrity is par for the course. Can they sink any lower?? The sooner this shower of incompetent self-serving charlatans is voted out the better.
Mark E, Milton Keynes, England
Transparency and open accounting appear to be a thing of the past in government. Cash for honours was the tip of the iceberg, how long before we are allowed to know which directors of companies gaining government contracts have donated to party funds? Try CRB.
M J Tinsley, Newark, England
Will someone tell me why parties are allowed to take these bribes, sorry "donations"?
MPs are well paid for their work. They should pay for their election campaigns out of their own pockets. They should be required to keep detailed accounts of all campaign expenditure and open their bank accounts to inspection by the returning officer. If an MP has nothing to hide then he has nothing to fear, eh?
The current system is wide open to explotation by subversive elements.
David Rochester, Liverpool, UK
This article has finally answered many of my unanswered questions about this government.
Steve P, Leeds, England
So this guy Imran Khand is a friend of MP Mohammad Sarwar. This is of course the same mohammed Sarwar whose son Athif Sarwar was found guilty of cleaning thousands of pounds of "dirty money" in a couple of months. After a six-week trial the jury found Sarwar, 28, of Mearnskirk, guilty of laundering sums totalling £845,000, on numerous occasions in 2003, at the United Wholesale (Scotland) headquarters in Glasgow.
Interesting.....................................
louise, inverclyde, SCOTLAND
First we see New Lab embarking on a mission to bring alledged Muslim radicals to Britain to flourish under its protective wing. Then we see an olive branch held out to the Muslin Council of Britain, an organisation even Anthony Saeedi Bliar refused to break bread with. Now we find out that they are being heavily financed by the Muslim friends of New Labour. Anyone else detect a pattern here?
steve lloyd, swansea, wales
Funding a parliamentary enquiry is not "cash for questions" its "cash for answers".
Dave, Basingstoke,
Sad to say - why am I not surprised! It has been one revelation after another about the financial shenanigans of this NEW Labour party. Interest groups, and dodgy ones at that, seem to be the main supporters now.
kay, leeds,
This government plumb ever lower depths by the day. Can they stoop any lower ?
Rick, Greater London, England
A rather sinister sounding organisation. By chance is it currently applying to for a change in organisation status to a registered charity? This would tie in with Brown's recent airong of the idea of allowing large political donations from charities.
As I thought at the time, this would allow precisely this type of indirect donation from a few wealthy sources to be channelled throught charitable organisations, although I admit I had rather thought it would be The Smith Institute that was a more likely vehicle.
This affair has the smell of a political equivalent of money laundering about it and should be painted with the same colour stain to remind us of the underlying nature of this proposal when the time comes to examine altenrative political funding systems.
It is regrettable and indicative of the level morality within political circles that we can no longer trust the legislature to abide the same set of rules that their laws seek to impose on thiose outside of The House.
Edwin Thornber, Bucharest,
Worryng. Very worrying, as are the lack of comments.
Peter Harrison, Durham, Couty Durham
This article says that Khand is "funding" a British parliamentary inquiry into "tacking terrorism", via onother organisation.
Since when did parliamentary activities (as opposed to party political activities) attract sponsorship?
Is this not akin to "cash for questions"?
Philip Gretton, Inkberrow, Worcs
Now we no why we can`t upset muslims.
N.Riley, Runcorn,
What are they being promised by Labour in return?
Doug, Glasgow,
Er, what about the long established Tory front organisations such as the Midlands Industrial Council which have contributed over £1 million to the Conservatives?
Henry, London, UK
Sounds like the core values and culture of Britain are under attack by Muslims from all quarters. We've had home grown Muslim terrorists trying to make the UK an Islamic state along with their supporters both passive and active. Add to that the raft of imported clerics stirring up trouble and fermenting racists crimes and now followed by a bit of 'bribery' on the side. Finally it all becomes very clear why New Labour seems immune to this destruction of Britain or anyone telling the truth about certain Muslim excess's when they're getting donations from rich Muslim donors. You don't bite the hand that feeds you after all.
Mike, alicante, spain
Uh oh.
Worried, London, England
A business that gives money, but doesn't publish any accounts. I wonder what Companies House and the taxman would say about it... oh, nothing, they are dictated to by New Labour. Business as usual then.
David.E, Liverpool,
Labour politicians have previously criticised the Conservatives for accepting money from a similar unincorporated association.
COME ON!!!!!! one day they say they are going to gain our trust again the next day they take a few backhanders even if it is legal we still dont trust them anymore. they are all full of it all politicians
Dave , london, england