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Harriet Harman was under growing pressure in the sleaze row engulfing Labour last night as she was forced to pay back £5,000 given to her by a property developer who has secretly bankrolled her party to the tune of £600,000.
Ms Harman had taken the money to help to pay off the debts from her successful Labour deputy leadership campaign. But yesterday she looked vulnerable after it emerged that Hilary Benn, a fellow candidate, had rejected similar offers from a “middleman” acting for David Abrahams – as had Gordon Brown’s leadership campaign team.
Ms Harman was in further difficulties after she refused repeatedly to say if she had in fact solicited the money from the intermediary, Janet Kidd, rather than having had it offered to her. The Times has learnt from other donors to Ms Harman’s campaign that her team actively sought funding from them because they were on a list of people giving to Labour.
The Prime Minister faces further embarrassing questions about the conduct of his party when he attends the Commons today. He has already said that Labour is to pay back the £600,000 from Mr Abrahams given through middlemen because it had not been “lawfully declared”.
Last night it was revealed that one of Mr Brown’s senior officials wrote a personal letter to Mr Abrahams thanking him for his “help and support” for the party over the years. The letter from Jon Mendelsohn, Mr Brown’s chief election fundraiser, suggests that senior members of the party knew about Mr Abrahams’ contributions. There was more da mage yesterday as a fourth intermediary was named as a Labour donor. However, Janet Dunn denied knowledge of the £25,000 donation in her name and said that she had not knowingly written a cheque to the party.
The denials raised the question of whether more serious offences had been committed if Mrs Dunn was falsely portrayed as a Labour donor. A sense of farce infected the scandal as she and her husband revealed that they were, in fact, Tory supporters.
Ms Harman said of Mrs Kidd: “I do not know whether my campaign team contacted her or she was contacted by campaign team.” But Labour and Tory politicians were asking why Ms Harman, who is married to the party’s treasurer, Jack Dromey, did not raise questions about the source of the money – in particular as her rival Mr Benn was told by his supporters.
At his Downing Street press conference Mr Brown failed to give the deputy leader his unqualified backing. It was only after repeated questioning that he accepted that he “had confidence” in her. Officials later contacted reporters to say that his support for Ms Harman was “unambiguous”.
Mr Brown took the general issue of the donations head on by announcing that Labour was paying back the £600,000, and said that the way the payments had been made had been “completely unacceptable”. But he insisted he had known nothing about the arrangements until they were about to break in a Sunday newspaper.
Paying back the money will do nothing to help Labour’s troubled finances: the party faces debts of more than £20 million, including £14 million in outstanding loans.
The Prime Minister said he was appointing a retired judge and a former bishop to advise the party on changes to procedures, one of five reviews into the affair. But the pressure intensified with the disclosure that the Crown Prosecution Service (CPS) had been in contact with the Electoral Commission, which is investigating the affair. It would be up to the CPS to decide whether to bring criminal charges if the commission concluded that the law had been broken.
Mr Brown’s comments marked a rapid U-turn after Diane Hayter, the chairman of Labour’s ruling National Executive Committee, had said only hours earlier that there was no need for Labour to repay the donations. “The money was given completely legally – these donors were completely entitled to give to us, and there was nothing illegal about the donations.”
Mr Brown has acknowledged that he may have met Mr Abrahams, but he said that he had no recollection of having ever discussed funding matters with him.
Chris Grayling, the Shadow Work and Pensions Secretary, said Mr Brown appeared to have “hung his own deputy out to dry”.

Sam Coates's blog about Westminster, politics and spin
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The brown stuff calling for an 'independent' review will do no good whatsoever because the corruption of nulabor is so absolute its cancer has infected every tier of government, every institution, and every government organisation that is claimed to have government oversight, including, in South Yorkshire, the police. The civil service has, to a large extent, and almost completely in Yorkshire and the North-East, become a corrupt political device controlled by nulabor HQ.
martin brighton, sheffield,
This has descended to the level of farcical. Brown probably shied away from an election because labour cannot afford to fund one, and are desperately hoping in the meantime to get the public to fund political parties.
These people say the economy is safe in their hands, yet have to break the law continually in order to fund themselves.
Will we soon see the second Prime Minister in history to have his collar felt by the police, a la Blair? At least there is a bit of consistancy in the handover.
Its a pity Abrahams did not send his funding by disk, we might all have got a share.
malcolm pugh, birmingham, england
What are the tax implications for this carousel,and other Loans to Government.It becomes mind boggleing this toing and froing of cash.Who now pays the piper.
derek bevan, huntingdon/cambs, England/UK
If John Major had faced such a scandal 10 years ago he and most likely his government would have been forced to resign. What we are talking about here is fraud and breaking the law. New Labour and by implication the Labour Party has dragged public affairs so low into the gutter the best that Gordon Brown can do is launch another enquiry. The scandal just reflects the levels Labour Party politicians are prepared to go to stay in office and to pay for the expensive spinning machine it has employed since it was first elected. A vote of no confidence, I say.
DC, London,
Lord Whitty........doesn't he have something to do with Gordon's favourite charity, the Smith Institute for Gordon Brown's Affairs
S read, Chepstow,
If someone uses another persons identity, without the victims knowledge, to carry out an illegal act then isn't that identity theft? Also if the receipient/beneficiary of this crime knows that this was done are they not a party in the crime? I ask because if this were anyone else other than a minister then the long arm of the law would be onto them pronto.
simon, uk,
In the dim and distant past, there was a clear and distinct dividing line. The Conservative Party was funded by Business, the Labour Party was funded by the unions.When Thatcher broke the unions, she broke the Labour party. Labour funded by Business is no longer Labour and is struggling to conceal its true identity from the people it purports to represent by hiding its benefactors behind innocent dupes.
Martin Mills, Tunbridge Wells, Englland
The pantomime now in power looks set to stay there, whatever gloomy facts are revealed; they have not heard of the phrase, 'honour among thieves' and connot even spell 'resignation' or even 'capitualtion'....poor old Brown - he is beginning to look a bit like Blair after many years in the driving seat....take a rest Gordon before it is too late. Even that lower mouth tremble as you speak is travelling to most other parts of your anatomy as you face crisis after crisis>>>>>
Derek Clifton, Andover, Hapshire, England
How does anyone sign a cheque to a political party for 25,000 without "knowing"?
If I had signed a cheque for that amount I would know.
R Bingham, Lauzun, France
There have been no reports of any donations in the name of Abrahams (save for that to Hilary Benn) so why did Mendelsohn write an effusive letter to Abrahams? And so recently?
We are told that Mendelsohn is "very close" to the PM and it is simply not believable that the PM was not aware opf the contributions to the Labour Party by Abrahams - the third largest donor apparently.
This goes to the heart of the affair and, coincidentally, the heart of the Government.
Jim MacPhail, Edinburgh,
OK, folks - let's have a competition to see who can come up with a modern, Nulabour definition of the words "capitalist" and "socialist":
On your Marx - get set - go!
Edmund Burke, Kingston upon Thames, England
B Berry of Shepperton,
Can you see now why the planning decision making process is now being taken out of local hands?
Now where is that unemployed builder and how can I get some cash through to the appropriate central government channels?
Pete Balchin, Solicitor , Bristol, UK
----It's time for the Government to go! General Election Now!
Sonya Porter, Woking, England -- UK
What next -- does or did Mr Abrahams have any connections with Northern Rock ?
H. Hudson, tunbridge wells, kent
I wonder whether the builder, secretary etc are going to getto keep "their" money?
Wade, London,
Why is it that "funding scandles" and "cash for honours" etc always seem to involve politicians in the shadows involved with Labour so called "Friends of Israel".
Could this also explain why we have such a lopsided Middle East foreign policy at times?
Michael J, Leicester, UK
I see them as power hungry idiots filled with a desire to take the place of our aristocracy - as a permanent elite. They are empire building and do not care what the foundations of that empire are - as long as those foundations exist.
Why was it possible to download that info at the IRS? Why was no safeguard in place?
Why does Brown not know about his own donors?
Why is Prescott's son inheriting his seat?
Why does a government actively encourage mass immigration so that immigrants can do the jobs we don't want to, then say that the welfare system needs to be changed so that people will work?
How can a government that massively underestimates the levels of immigration dare to tell us just how competent it is?
Why is a company director responsible for anything that goes wrong during his watch, but a Prime Minister not responsible?
And how can an unelected man who is clearly not a leader, continue to lead a country that does not want him?
anne goodman, Bournemouth, Dorset
The equation is simple. People in business have funding but not political power. People in politics have access to political power but not funding. Both groups actively seek each other out in a currupt courtship that undermines democracy.
Remove the need for funding political parties and this courtship is undermined. Stop all campaigns. A politician or a party that is undertaking a campaign can not fully discharge its responsbility to govern.
Politicians and parties seeking selection should submit a pre-formatted 'bid' or 'job application form' covering their record/experience and their proposals, with no opportunity to knock the other party or candiate. The same could apply to any body wishing to influence government policy.
A person who wants something from you can't possibly have your best interests at heart. The link between politicians and interest groups has to be broken.
G Lafferty, Sheffield
Gary Lafferty, Sheffield, UK
Well done Abrahams-that's well and truly stiffed the Labour party-that will teach them to deselect you!
Mike B, Trowbridge, ---UK
Gordon Brown will be in hiding yet again today. Whilst he can't hide physically at PMQs, he'll be hiding behind the smoke screen of yet another 'investigation'.
Robert, Luton,
This illustrates yet again the total contempt in which New Labour holds us all.
By New Labour, I mean the whole sorry crew, from our Geat Leader (following on from his predecessor the Dear Leader) to his deputy and his whole smarmy new cabinet.
The Great Leader of course nears equal responsibility got everything that has happened in the last ten years (which he would now like to distance himself from), since he voted in support of everything, including the illegal bombing of Serbia (one of our strongest allies in WWII) and the killing of civilians there, and the illegal war in Iraq and the forging of evidence to support it.
Now they think they can lie to us about just about everything with absolute impunity. Thank God for a vigilant Press !
Christopher Lord, London, UK
Ms Harman said of Mrs Kidd: âI do not know whether my campaign team contacted her or she was contacted by campaign team.â - the usual political doublespeak? It's either one or, er, both
Chris Zielinski, Brazzaville, Congo
We have Inquiries coming through are ears noses eyes and mouths.
I know let us have an Inquiry into whether we should have an inquiry about inquiries and then let us ignore their recommendation and have an Inquiry into why we did that.
What about some action!!
Norman Mazure, London, UK
I was trying to draw five hundred pounds from my bank account (for a cash wedding present) and was interrogated by cashier as to why I wanted to withdraw MY money, what it was for etc. etc.
I complained to the manager, who smugly told me this was quite OK for his staff to do this, 'money laundering precautions'. I pointed out that any self respecting crook wouldn't use his poxy bank to launder a few hundred quid. I expect I am on some secret black list now ...
Gabrielle, London,
A couple of comments come to mind in this mess.
If Mr Brown's and Mr Benns's teams realised there was something fishy about the donations being offered, why - in view of recent history of financial fiascos in the party - didn't they make it known to all their colleagues to at least be on the lookout for similar donations coming in?
The donor obviously doesn't need this money, having been happy to give it to the Labour Party. It is now proposed to return it to him. Rather than reward him, for what has been an obviously devious action, couldn't the money be passed on to one of the many deserving charities? How about to medical care for impoverished countries? At least it could then be of huge benefit to the needy.
Mike Stimson, Nottingham,
There is indeed something to be said for the principle that an insolvent party should not be allowed to make the government. Any administration (business, poltical party or whatever) in financial difficulties is highly vulnerable to all sorts of malpractice.
We have strict laws regarding businesses trading when they are insolvent. But they don't apply to a political party which is forming the country's government?????
Fred Perkins, London, UK
This will further fuel calls for State Funding of Political Parties and why? Because they cannot be trusted to follow the (very clear and, in this case, their own) law regarding donations. If they cannot follow the law why should they even be in power let alone be given more money from us to keep them there? State Funding will also lead to money being given to extremist parties of all kinds unless we employ the 'Thought Police' to decide who gets the money. Now who would you trust to decide that?
Simon, Harrow,
£650k bung, 25 million lost names ,5 or 10,000 ilegal security guards, 500 or 600,000 illegal immgrants ,£43biilion for failed bank
What next ?
Time to go I think !
DPC, London,
and to think that - after yesterday's other announcement, of the Planning Reform Bill - this bunch of incompetents might be deciding who gets planning permission for major infrastructure projects e.g Third Runway at Heathrow !!
B BERRY, Shepperton,
Servants of the people, Garibaldi? Chance would be a fine thing - you need to know that here, the Labour Party consider the people to be THEIR servants. Their leader, the loathsome Brown wants to change party funding so that the Labour Party will still be able to get HUGE financial backing from the unions, but other parties will be unable to accept large donations.
The aim here is a one party state. Be quite clear about that, and be quite clear that the law will not be allowed to get in the way of that, even laws (and heaven knows, they've created enough new ones - one new criminal offence per day that parliament has set since Bliar got in) that they made.
Jeremy Poynton, Fromeville, 51st State
The big lie exposed. The pompous, pious, po-faced rulers are not in fact omnipotent and omniscient. They are just Wizard of Oz buffoons pulling away incompetently at the levers and franatically hoping the public never wakes up to it.
Ubi, Edinburgh, UK
This would be a joke were it not for the fact that ordinary members of the public cannot make a bank transfer of a few thousand pounds without being subjected to the third degree about the source of the funds and the reason for the payment - mandated by this government in the name of money-laundering but as everyone knows really in order to tighten the tax net on us.
Andrew, Hong Kong,
Whatever ones political leanings; for or against Gordon Brown and Labour, it is clear that this administration is in a mess.
They have become accident prone; rather like the fag days of Wilson, Callaghan and Major, and once that pereception sticks in the minds of the press and the public it is only a matter of time.
In sport they say "a good team creates it's own luck", meaning that success is built on confidence and ability.
Napolean used to ask of a general "is he lucky" for similar reasons.
So even when the public can see that one particular incident may be indeed be bad luck they tend to remember that bad luck happens to bad teams.
Tom sykes, Huddersfield, England
A more practical rule : all business backed directly or indirectly from government members, their families or friends, acquaintances or otherwise should by law be stated on advertising billboards across the land.
As servants of the people I see no issue for government members.
Garibaldi, Amsterdam, Netherlands
Brown will do anything to hang on to power, this shambolic Government is reaching the level of farce.
edwina rigby, Blackburn, England
"£14 million in outstanding loans"
Simple new law. No party may compete for management of the country unless it is solvent.
Phil Payne, Sheffield,