Wednesday, July 26, 2006

EXCLUSIVE: LibDem Donor in Court Tomorrow

LibDem Donor Michael Brown is up before Southwark Crown Court tomorrow in the first stage of a criminal prosecution. Brown gave the LibDems £2.4 million before the last election and was arrested in Majorca in April on suspicion of forgery.

The hearing starts at 9.45am in Court number 1, should you wish to be there. He's charged with 53 (!) counts of forgery. The hearing is held for him to enter a plea and to fix the trial date and various disclosures to be arranged.

Police have reportedly sezied £10 million of his assets police seized £10m of his assets in Majorca including five properties, a £400k yacht, a Porsche and a Bentley. So far they have not knocked on the door of 4 Cowley Street (just my little joke).

Personally, I'd like to know what he disclosed to the LibDems about his UK business operations and what checks they made on his status.

Perhaps a lawyer who is reading this could clear something up for me. Under what circumstances would the LibDems be forced to repay the donation? Most of us might think there was a moral obligation on them to do so if indeed it is proved that his UK companies were not trading at the time of the loan (see HERE). But what is the legal precedent for somone having to hand back a donation to a third party which at the time was in no position to give it. My suspicion is that HSBC are the key here. They are the ones bringing the charges against Brown and they are the ones who may well try to demand the money back from the LibDems.

The trial date is expected to be set for the autumn.

17 comments:

griswold said...

Iain I think a City lawyer or two gave opinions on a possible action to recover the £2,4m from LibDems, on your earlier post on this subject. For what it is worth my view is that LibDems a) did not do due diligence and b) will find it difficult to hold on to the funds if there is clear evidence that they are the proceeds of theft. Call it receiving stolen goods. Expect weasel words from them In the wings are Martin Edwards and Co who are considering action against certain parties who have benefited from Brown's theft. Its serious.

Scary Biscuits said...

I'm not a lawyer but I'm fairly sure it's the same law that applies to all stolen goods. I.e. if you buy a dodgy car radio down the pub and subsequently the police track it down. The same applies even if you bought the property in good faith, e.g. a car that turns out to be stolen. You simply have to hand it back. Any money that you gave to the fence is lost (unless the police get that back for you too). You could also be charged with handling stolen goods. Of course, as with any criminal case, the police can't do anything unless the aggrieved complains to them - apparently HSBC in this case as you say.

Hello I'm Johnny Cash said...

They handled stolen funds, I am no lawyer, however, I think that for them to be liable I they would have to have knowingly received stolen funds, as it was they were just naive, although it could probably be said they were also culpably negligent your honour.

ContraTory said...

No one is in possession of full details of the cases against Mr Brown (except for the lawyers involved - and they aren't going to tell) so nobody can say what is likely to happen.

I suspect that the chain of events which would have led to the Lib Dems £2.4 million donation having to be repaid, is not complete, so they are "off the hook" - even if they were ever "on it" in the first place, which I doubt very much.

It's fun watching them sweat though.

Geoffrey Brooking said...

Iain, Please get rid of that red colour are your frony page.

It clearly does not respect your political allegiance.

Go for Blue instead.

Tim J said...

Since the donation was from a company, which is no longer trading, HSBC could look at using the Insolvency Act - which gives a court the power to order the reversal of gifts/transactions at undervalue. I think most of the 'stolen goods' analogies miss the point - this must be a civil matter for HSBC to claim the money of the Lib Dems, not a criminal one.

jm said...

Are the people who sold Brown his properties, yacht, porsche and bentley obliged to give money to HSBC? I can't see why they would be in any more of a protected position than the Lib Dem party.

Iain, do you think they (especially the people who sold him 5 properties) have a moral obligation to give the money they recieved to HSBC?

Iain Dale said...

jm, that is probably the most desperate argument I have heard on this. Do you not understand the difference between a purchase and a donation? No wonder you're a LibDem! However there is one similarity. The property/purchases can be recovered and sold off in the same way that a donation might be recovered for the benefit of those defrauded. That's why the LibDems are understandably worried.

Guido Fawkes Esq. said...

53 charges of forgery?

Did he write Ben Abbotts' by-election leaflets?

Richard Shackleton said...

So where does this leave the Tories and Asil Nadir (Polly Peck)or Labour and Robert Maxwell (Maxwell Communications etc)??

William Norton said...

Naturally, of course, none of us would want to prejudge anything and we all stand by the presumption of innocence of all involved.

So let's imagine a purely hypothetical case where a businessman, Mr Malcolm Eau-de-nil, steals funds belonging to Eau-de-nil Corp and gives them to a political party called, say, the Diberal Lemoncrats in circumstances where PPERA prevents the party from accepting the donation.

PPERA is quite clear at section 58 and 60 that the Electoral Commission can seek a civil court order for forfeiture of "an amount equal to the value of the donation" if its not a permitted donation, and the cash forfeited goes to the Consolidated Fund i.e. the taxpayer. So Gordon should be getting interested at this point.

The Treasurer of the Diberal Lemoncrats would face criminal proceedings under section 66 if he's knowlingly or recklessly made a false donation report to the Electoral Commission, and the Treasurer and the party face charges under section 56 for failing to return the donation within 30 days of receipt.

That still leaves the shareholders of Eau-de-nil Corp out of pocket - their cash is now in the Exchequer. Applying basic principles, the Diberal Lemoncrats received money which they were prohibted from doing so by law so they must have been holding it on trust for the rightful owner, i.e. the shareholders. PPERA states that they are supposed to return the donation within 30 days.

Because PPERA is such a bloody shambles of an Act it's not clear whether the shareholders can still sue for the recovery of their money.

They could go against Mr Eau-de-nil personally for breach of duty as a director, but he's unlikely to have sufficient assets. A court would probably be reluctant to enforce double forfeiture against the Diberal Lemoncrats, who would presumably defend any action from the shareholders on the basis that they didn't have the cash any more - and launch 3rd party proceedings against the Govmt (who would have the money). The fact that the money is supposed to be returned within 30 days, and if not is exposed to forfeiture by court order, supports the view that there is only a single pot of cash to be returned to shareholders.

So: the answer is probably - the Party pays the money to the Govmt, who then get sued by the shareholders.

Maggie Thatcher fan said...

Geoffrey Brooking said...
Iain, Please get rid of that red colour are your frony page.

It clearly does not respect your political allegiance.

Go for Blue instead.

1:05 PM

Its infinitely prefereable to the pea soup green of the previous banner.
I suggest a new colour to replace the green. How about Orange, then you have all three parties colours and noone can accuse you of not being even handen..bannerwise.!

Andrew Woodman said...

He looks just like my old PE teacher Mr Marsden. He was a shit as well.

Rick said...

Perhaps a lawyer who is reading this could clear something up for me. Under what circumstances would the LibDems be forced to repay the donation?

More importantly will Ming represent them to save money ?

strapworld said...

Iain,

If his money came from forgery (i.e. crime) and part of that money was the loan/donation to the Lib Dems, they would have to pay it back immediately they became aware of its true background. i.e. when found guilty! BUT morally and politically they should pay it back immediately, otherwise they are tainted!

vikki said...

Donated to the wrong party .....lost out on "resserved places"....

Indigo said...

Iain, your "thumbnails" on the right (the book covers) and some on the left are not thumbnails - they are helping to slow down the loading of your page. The picture of Gazza is WAY too big, as is the podcast icon and join my e-mail list image. Using the html code to make them appear the desired size does not make the images themselves smaller.