Sunday, November 25, 2007

Political Donations Again Brought Into Disrepute by Labour

When political parties receive donations - especially large donations - it is incumbent on them to check their provenance. The Mail on Sunday's story today demonstrates culpable failure on the part of the Labour Party to do that. A North East businessman, David Abrahams, has given £382,000 over the last five years, but you won't find his name on the Electoral Commission website as he channelled the donations through two of his staff. He gave them the money, then they wrote the cheques. All three are now in big trouble. But surely these were impermissable donations and should have been checked by the Labour Party themselves? But Mr Abrahams and his colleagues are certainly in big trouble. The law is quite clear...

S54 PPERA 2000
(6) Where—
(a) any person (“the agent”) causes an amount to be received by a registered party by way of a donation on behalf of another person (“the donor”), and
(b) the amount of that donation is more than £200,
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 donor as are required by virtue of paragraph 2 of Schedule 6 to be given in respect of the donor of a recordable donation.
(7) A person commits an offence if, without reasonable excuse, he fails to comply with subsection (5) or (6).

S61 PPERA 2000
(2) A person commits an offence if—
(a) he knowingly gives the treasurer of a registered party any information relating to—
(i) the amount of any donation made to the party, or
(ii) the person or body making such a donation,
which is false in a material particular; or
(b) with intent to deceive, he withholds from the treasurer of a registered party any material information relating to a matter within paragraph (a)(i) or (ii).

What I am less clear about it the responsibility of the Party which receives these donations without apparently questioning their provenance. Presumably the Electoral Commission will be looking to Labour to return the money and fine them for accepting it in the first place. Or not, as the case may be.


Anonymous said...

Is there a tax implication for giving gifts of this level to employees?

adrian said...

When political parties receive donations - especially large donations - it is incumbent on them to check their provenance.

I agree. So what does it tell you about the Tories that they accepted money from John Latsis, well know collaborator with the Nazi occupation of Greece?

Rush-is-Right said...

This is just like what the Hilary/Dems are doing in New York. Big value illegal donations being laundered through China-town dishwashers and waiters etc.

Easier to get away with when you are Hilary though? Maybe. We'll see.

Adam Gray said...

It's a genuinely interesting theoretical question, Iain.

Presumably there's no question that the "proxy" donors were eligible contributors; and if that's the case then provided the Party took reasonable steps to check out they were permissable then there can be little question of the Party failing in its duty (therefore a fine would be difficult to justify).

This is another example of something that looks worse than it is - and which exposes a flaw in the drafting of the law rather than something corrupt within our political parties.

The big problem we have in this country, evidently (and it may well be the British reserve) is that wealthy people are clearly uncomfortable letting the world know how much they contribute.

In the US, it is almost a virility symbol to give the maximum amounts to candidates and raise many times those sums; but America is a much brasher, unreserved country which has regulated donations to candidates far longer than we in the UK have.

It's a genuine problem, because if we oppose a significant level of state funding but have rules on private contributions which are off-putting to potential donors, we are going to continue getting instances like this where they try other means to donate.

From what I've seen, I don't think there's anything more sinister than a wish for discretion and privacy here (which has backfired spectacularly) and where malice is not present I would question the purpose of pursuing criminal action against the donors - proxies or otherwise; but the law needs to be re-examined and this loophole closed.

Tapestry said...

So naive you are iain. The law being enforced in Britain? Don't make me laugh. No one's done that since 1997, when the Constitution changed. Since then there has only been one law.

Anything which helps Labour get elected is legal. This law overrides all previous and subsequent laws.

Get real.

Anonymous said...

Adam resurfaces to talk out of his gray bottom once more.
When doorstepped one of the 'donors' knew nothing about the donation whatsoever, the donation had been made without his consent or knowledge.

This is a disgraceful episode, the fact that you, a Labour party activist and labour councillor try to bat it away as some kind of administrative technicality shows more about the mentality and contempt for the law that has infected this government

Anonymous said...

Tapestry - Bullseye!

Adam Gray - What a stream of garbage. "The big problem we have in this country, evidently (and it may well be the British reserve) is that wealthy people are clearly uncomfortable letting the world know how much they contribute."

British reserve my ass. Rich people don't want people to know how much they've contributed because they don't want people to know they're buyers, not "contributors".

They don't give for love of the Labour Party. They give to get.

"In the US, it is almost a virility symbol to give the maximum amounts to candidates and raise many times those sums; but America is a much brasher, unreserved country which has regulated donations to candidates far longer than we in the UK have."

America is not a "much brasher, unreserved country" than Britain. They are much more conservative than the British. They are much more courteous. They are more understated.

How sad to see someone buying into this ancient myth. Americans are not, by and large, PT Barnum. They are more George Bush Sr, or Bill Gates. These people do not splash funds around in public, except for their own foundations.

British yobs like Tony Blair and Jack Straw are far, far more vulgar than any American on a similar level. Compare, for example, Condoleezza Rice and Jack Straw. Compare Bill Gates or Warren Buffet and Richard Branson. Compare Hillary Clinton and Cherie Blair.

Who has the reserve and the dignity and who has the vulgarity?

Anonymous said...

Isn't this a case of money laundering.Perhaps HMRC could look into it after they have gone through their CD collection.

Anonymous said...

nobody will be charged. these bastards actually ARE above the law.

Anonymous said...

it's worse than that for the proxy contributors, they were given 'unearned' income and then decided to give it away - political parties are not tax eligible. So the poor proxies are due to pay 40% tax and NI and their employer should be done by HMRC for evading employer NI contributions

Anonymous said...

Why? Why? Why?


Developer, N.East...

Just saying is all...

Anonymous said...

slightly OT, but I hear the missing disks have been sent to one 'F.Christmas' c/o North Pole.

Apparently he wants to computerize his UK franchise, so names, dates of birth and addresses of children are very handy.

Parent's bank details are just a bonus!

Anonymous said...

surely the builder should pay income tax on gift.


Anonymous said...

I heard the real donor of the cash on Today this morning, pleading that he just wanted to protect his privacy. Naturally, he wasn't asked anything too stringent about exactly WHY he wanted to give large sums of money to a political party but didn't want anyone to know about it - allegedly, not even the party.

We all know that generous people do give dollops of cash to proper charities (eg Help the Hospices, Salvation Army, RNLI etc) and often don't want their names publicised, but the charities know who they are. Equally, there's no obvious personal advantage to doing so - other than gaining a reward in heaven, perhaps!

However - call me cynical, but what was the donor hoping to gain from giving big bucks to the Labour Party and concealing his name...........he's a local business man, isn't he - not that I would suggest his motives were less than pure, of course, but one wonders.............

Anonymous said...

It does seem, Iain, that Labour's responsibility here was to check that those giving the money were eligible to donate, not whether the money was being donated on behalf of someone else.

The quotes you give indicate that it is incumbent upon the agent - the two employees - to declare to the Labour Party that they are donating on behalf of someone else, and who it is.

This is an offence committed by two gullible people who have been used by a Labour Party donor to mask his identity.

Would certainly be interesting to see whether this is widespread practice for Labour donors though!

Anonymous said...

Since we seem to be avoiding the subject can I just say that Julian Lewis has shown leadership and done the right thing over the Oxford Union.
PS-didn't Dave go to Oxford?

Adam Gray said...

Err, nice try "anonymous" (and how brave of you to post under your real name like that) but I am not a councillor or a member of the Labour Party. Nor, incidentally, am I "a member of the government" though thanks for the promotion.

So, three personal attacks, thrice wide of the mark. And nothing of any substance about the actual issue.

In response to Verity, sure, plenty of donors give because they want influence (in all parties); but it still doesn't explain the difference in attitudes to contributing between US and UK donors, does it?

Why are you interpreting my comparison as an attack on the US? I'm not disputing the US is broadly more conservative (point of that statement of the obvious please?): but contributions to the Democrats this cycle and last have blown the GOP out of the water; and the fact remains that in the US, donating to political parties is far more widespread and "accepted" than it is here.

That's what (I at least) find theoretically interesting. If you'd rather debate at the level of most of this thread then good luck to you.

Anonymous said...

Ok Mr Gray, lets not sneak away to quickly, you where a Labour Councillor for Crabtree ward on Hammersmith and Fullham Council, holding a senior portfolio. A regular internet poster, well known for pedantry and extreme partisanship, you seem to have faded away.

I wonder why you left the party?

Anonymous said...


Now that the GenSec has apparently said he did know that the donations were from Abraham, that pretty much puts the 'agents' in the clear (failing technicalities for which I doubt they would be prosecuted).

However, under Section 61 (and maybe others) the Gen Sec is almost certainly guilty of an offence, and if I were Jack Dromey, I would be worried as well. Almost all inaccurate reporting offences apply specifically to the Treasurer, which I was astonished to learn was still Mr Dromey (married to Dep Lab Leader Harriet Harman). Both Mr Dromey and Mr Watts can expect to have their collars felt by Yates of the Yard (if he still has the appetite).

What chance Huhne makes an outrageous accusation and says 'sue me' again? It would certainly get him in the news.