Labour is facing questions on whether a series of donations amounting to more
than £380,000 breached the law by using intermediaries to shield the
identity of a major donor.
David Abrahams, a wealthy property developer, yesterday admitted he used
“friends and colleagues” to give substantial sums to Labour over four years
in order to avoid publicity.
The episode threatens to reignite the controversy over donations to Labour
after the year-long police inquiry into whether the party sold peerages to
wealthy supporters, which ended with no charges being brought but cost
millions of pounds.
In a bizarre twist one of the people Mr Abrahams used was a jobbing builder
who so dislikes politics he does not even vote. The other was a woman who
works for him. Both are of modest means.
Around two thirds of the sum that was donated – a total of £222,000 – was
given to Labour in the six months since Gordon Brown entered Downing Street
as Prime Minister, making Mr Abrahams Labour's third largest donor over that
period, behind Lord Sainsbury of Turville and Anglo-Iranian businessman
Mahmoud Khayami.
The Electoral Commission demanded an explanation as Jack Straw, the Justice
Secretary, admitted the donations were “plainly not transparent”.
“Whether these arrangements are within the letter of the law they are plainly
not transparent. I am concerned about them,” he said “I shall ask both the
Electoral Commission and my officials for immediate advice on what action
should be taken.”
Labour began an inquiry to check whether the donations complied with the law
requiring that gifts to political parties over a modest amount are fully
declared. Donations made via third parties are illegal unless the person
behind the donation is also declared or there is a “reasonable excuse”.
The Conservatives said that the revelation raised questions about what checks
Labour carries out on donations it receives and contrasted the bizarre
episode with Mr Brown’s promise to usher in a new type of politics. Mr
Abrahams, 53, who owns a string of property firms in Newcastle, was forced
to admit his donations after it emerged that a builder, Ray Ruddick, 55, who
drives a Transit van and lives in an ex-council house, was registered as
having given £196,850 to Labour since 2003.
Mr Ruddick, who is a director of several of Mr Abrahams’ property companies,
initially denied ever having made donations to Labour, saying he “couldn’t
stand the party nor any politicians” when he was approached over the
weekend. He later said that he had given some money to Labour.
Yesterday, Mr Ruddick laughed off the row and declared he was off to play
bingo. Wearing a tatty brown fleece jacket and carrying an armful of
newspapers, he told reporters: “I have got nothing more to say about the
Labour party donations apart from that today I’m off to the bingo to try and
win the kind of money they say I have. Then I’ll be able to make the kind of
donations they say I have too.”
Janet Kidd, 56, who works as a secretary for Mr Abrahams and is also a
director of some of his companies, is also registered as having given
£185,000 to Labour over a similar period. She lives in a modest,
semi-detached home in Gateshead, Two of their donations, each of £80,000,
were made on the same day in July shortly after Mr Brown became Prime
Minister. The combined total of the donations is £381,850 over four years.Mr
Abrahams insisted he had done nothing wrong but said that, as a “private
person”, he did not want to attract publicity by making donations in his own
name.
He said: “I’m a member of the Labour Party and have been for about 40 years,
since I was 15. I have always been fortunate enough to be able to make
substantial donations to several charitable organisations as well as to the
Labour Party for a number of years.
“But I am a very private person and I did not want to seek publicity. I gifted
money to my friends and colleagues so they could make perfectly legal
donations on my behalf. Donors to the Labour Party get a lot of publicity
and I did not want that.”
Mr Abrahams has strong links to the Labour Party in the North East of England.
He served as a Labour councillor in Tyne and Wear and his late father,
Bennie Abrahams, was Lord Mayor of Newcastle. Mr Abrahams was in the front
row when Tony Blair made a speech to local Labour party figures in his
former Sedgefield constituency in June announcing his decision to stand down
and quit Parliament.
He was selected to stand as a parliamentary candidate for Labour in Rich-mond,
North Yorkshire, against William Hague in 1992 but was deselected after a
gruelling series of rows with the local Labour party over his personal life
and business interests. There were claims that he had presented himself as a
married man with a young son when, in fact, he was single. He blamed the row
on a smear campaign.
The Electoral Commission said that it was too early to comment on what action
it might take, and said only: “We are contacting the Labour Party and asking
them for an explanation about the circumstances of these particular
donations.”
However, Chris Grayling, a prominent member of the Shadow Cabinet, said: “This
whole affair raises a series of serious questions about the level of
scrutiny that the Labour Party carries out into the donations in receives.
All of this is hardly consistent with the new politics that Gordon Brown
promised us.”
The law
- It is a criminal offence to give money to a political party via an
intermediary, or “agent”, unless details of the original donor are declared
too
- The Political Parties, Elections and Referendums Act, passed in 2000 to
force all political donations above £5,000 to be declared, says that the
party receiving the money must be told who it originally came from
- The Act says in section 54 that “where any person [the agent] causes an
amount to be received by way of a donation on behalf of another person . . .
the agent must ensure that, at the time when the donation is received by the
party, the party is given all such details in respect of the donors as are
required . . . to be given in respect of the donor of a recordable
donation.” It continues: “A person commits an offence if, without reasonable
excuse, he fails to comply . . .” Under schedule 20, such an offence is
punishable by up to a year in prison or an unlimited fine or, if a case is
heard in a magistrates court, six months in jail or a fine up to £5,000.
