THE property developer at the centre of Labour’s donor scandal has claimed that there are 10 party officials who were aware of his “illegal” arrangement to fund it secretly.

The details will be passed to the Metropolitan police, who are now investigating how more than £600,000 was paid by the developer to Labour through intermediaries.

The list includes two senior members of Gordon Brown’s party and government: David Triesman, the minister for intellectual property, and Jon Mendelsohn, Labour’s chief fundraiser.

Yesterday David Abrahams, the secret donor, issued a statement detailing precisely his claims that Mendelsohn knew about the arrangement eight months ago. It challenges Mendelsohn’s statement that he did not find out until September.

Q&A: secret donor scandal

Our Political Correspondent analyses the origins of the secret donor sleaze row and its potential implications

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BACKGROUND

• A walking paradox who gave £600,000

• Brown is made to play the fool in stage farce

• Jack Dromey declares he is victim of concealment

Related Links

• How Abrahams could afford to give £670,000 to Labour

Abrahams said he was placed next to Mendelsohn at dinner in London on April 25. He said: “I told him that I regularly donated to the party and I described how it was done through intermediaries for the purposes of anonymity, to which he replied, ‘That sounds like a good idea.’ ”

Mendelsohn denied the claim last night, saying: “This latest statement is fictional and completely untrue. I will be co-operating fully with the police in their investigation.”

Sources close to Abrahams also allege that Triesman was one of three former Labour general secretaries who knew about his secret arrangement while they were in the post — a claim categorically denied by Triesman.

The other two are Matt Carter, who came to prominence during the cash for honours scandal, and Peter Watt, who resigned last week after admitting that he had condoned the arrangement.

A friend of Abrahams claimed: “This pattern was established through the reign of three general secretaries. It is wider than Labour is saying.”

As general secretaries, the three men were the “registered treasurers” responsible for correctly filing details of donations to the Electoral Commission, which regulates political funding. Triesman signed off three donations totalling £75,000, Carter five donations totalling £77,000, and Watt 11 donations totalling £511,000.

However, both Triesman and Carter have firmly denied knowing that Abrahams had given the cash through third parties. Triesman told The Sunday Times last night: “The allegation that I knew of or signed off an arrangement is a lie. Had I known about that kind of thing I would have reported it immediately to the Electoral Commission and would probably have phoned the police.”

Abrahams, who has been a Labour member for more than 40 years, attacks elements of the party in an article today: “Party officials knew of my wish to retain my privacy and were only too happy to accept my money via intermediaries.”

Yesterday Brown attempted to regain the initiative after the scandal by announcing that he would speed up reforms of party funding. The prime minister indicated that he is now prepared to agree to Tory plans to cap individual donations to £50,000, a move that would weaken the link between the unions and Labour.

However, the claims by the Abrahams camp that the method of funding was more widely known across the party could increase the damage to Brown and his party. A spokesman for Abrahams confirmed: “Ten people in the Labour party knew of the manner in which Mr Abrahams made the donations.”

Abrahams, who is 63 and built his wealth through a property business in Newcastle, says that he made the donations in good faith but wanted to protect his anonymity because he did not want it to be known that he was a generous benefactor.

A friend of Abrahams said: “He is a genuine philanthropist — albeit with eccentricities in the manner of his giving — who has been indulged by Labour without reference by anyone to the governing legislation.”

The friend said it was Abrahams who originally proposed using intermediaries to hide his identity and Labour figures told him that it was fine to do so: “Right up to last weekend the party didn’t think there was anything wrong with it, and if they didn’t think so, why on earth should he have?”

Abrahams has been reluctant to name names publicly. “I will keep my details for any inquiry,” he said.

Friends say he has been angered by the party’s attempt to make him the scapegoat and that he is particularly upset by Mendelsohn.

Yesterday Abrahams said: “He would be well advised now to stop damaging himself and the party and the party’s credibility. I will not stand by and allow my name to be put in the frame by spin doctors.”

Abrahams has also accused a key member of Brown’s leadership campaign of deliberately underplaying the extent of his contact with him.

Last week, Brown’s camp appeared to have successfully distanced the prime minister from the scandal, saying his campaign team had turned away a donation from one of Abrahams’s intermediaries because he had a policy of refusing to take cash from people he did not know.

However, it emerged that Chris Leslie, who led Brown’s leadership campaign, had recommended the intermediary to

the Harriet Harman campaign, which was out of pocket after her election as deputy party leader. She was given £5,000 by Janet Kidd, the intermediary.

Leslie was forced to issue a statement in which he claimed that he had been approached by “a man calling himself David Abrahams” who said his friend Kidd wished to donate. He added: “I did not know who Mr Abrahams or Mrs Kidd was.”

This weekend, friends of Abrahams say the property developer was outraged by Leslie’s claim. “The most senior people at the top in charge of funding know him and he knows them,” one friend said. “David knows Leslie and likes him.”

However, Leslie still denied knowing Abrahams yesterday.

A friend of Leslie said: “Chris is completely baffled by this. He doesn’t know David Abrahams at all, and as far as he knows, they’ve never even met each other.”

Meanwhile, it has emerged that there may have been a fifth intermediary used by Abrahams to disguise his donations. In 2004 a man called George Crawford gave £36,000 to the party.

Yesterday The Sunday Times contacted a solicitor in Newcastle of the same name. He had been a co-director in a company with John McCarthy, a lawyer who was one of Abrahams’s intermediaries. He said he was not aware of his name being used to make a donation but he said that he did know Abrahams.

The police investigation could run into 2009, raising the nightmare scenario for Brown of an Old Bailey trial at the very time when the prime minister wants to hold a general election.

It is unlikely Labour figures will be prosecuted merely for being aware of the arrangement with Abrahams. They would need to have played an active role in hiding the donations.

Watt is likely to be questioned by police after he admitted that he knew about the arrangement but thought it was permissible to hide the identity of the donor under electoral law.

His explanation is remarkable because he was head of the Labour party’s compliance unit when it produced rules for local party treasurers. Its Treasurers’ Handbook, produced in 2005, explicitly outlaws taking donations from people believed to be “fronts” for another donor.

The Electoral Commission has also been asked by Chris Huhne, the Liberal Democrat MP, to investigate whether Labour filed false accounts in 2005. He will further ask the police to extend their investigations into the source of Abrahams’s funds.

The funding scandal appears to have affected Labour’s opinion poll rating, with the Tories now enjoying an 11-point lead. The ICM opinion poll for the News of the World showed Labour had slumped by five points to 30%, with the Tories up one to 41%.

The Liberal Democrats, who are in the middle of a leadership election campaign, were up one point on 19%, according to ICM polling on Wednesday and Thursday.

Additional reporting: Holly Watt

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