Page last updated at 10:26 GMT, Sunday, 27 January 2008

Q&A: Labour donations rows

The Labour Party and senior figures face police inquiries into whether donations were lawfully registered:

What are the latest developments?

Work secretary and Welsh secretary Peter Hain resigned on 24 January to "clear his name" after the Electoral Commission referred to police his late disclosure of £103,000 donations to his Labour deputy leadership race.

Is Alan Johnson facing similar claims?

Not exactly. The health secretary is said to have received a donation of £3,334 given by a man under his brother's name. The Electoral Commission had also not published the donation, and three others, on their website months later.

What does Mr Johnson say about it?

Mr Johnson says he was surprised to find that the money was not the donor's. He says his team complied 100% with the law, checking the donor was eligible to vote and was a Labour member. He also insists his team registered the donations with Parliament's register of interests in May last year, the Labour Party and the Electoral Commission.

What happens next?

Mr Johnson suggests there may have been a problem at the Electoral Commission's end and is adamant that his team declared the money as they should have done. The Electoral Commission is expected to look into both the declaration of the donations and find out more about whether the money was the donor's or whether his name was used for "a proxy donation".

Why has the issue of donations been so high profile?

Last year it emerged that property developer David Abrahams had donated more than £660,000 to the Labour Party since 2003 under other people's names.

Whose names did he use?

His employees Raymond Ruddick and Janet Kidd, plus his solicitor John McCarthy and the wife of one of his employees Janet Dunn. (See table at the bottom of this page for full list of donations)

How did that work?

Mr Abrahams gifted the money to them to donate to Labour. It is not clear how involved the four were in the process - at least some of those involved did not appear entirely aware they had been named as Labour donors.

Why not give money under his own name?

Mr Abrahams says that he had long given money to Labour and to charities but did not want the publicity associated with being a big political donor.

What's wrong with what he did?

In the early years of the Blair era Labour tightened the laws on political donations. The idea was to ensure that all donors giving more than £5,000 were identified so there was less chance of anyone suspecting people were, or seeking to, "buy influence".

What does the law say?

The Political Parties, Elections and Referendum Act 2000 forces political parties to declare publicly donations of more than £5,000 and to disclose the name, address and other relevant details of donors. The names of all donors then appear on the Electoral Commission's register. A donor can give money through an "agent", but the party must be given details of the original donor by the agent and is required to report that donor to the Electoral Commission, which would then put that name on its register of donations.

What does the Electoral Commission say?

Guidance from the Electoral Commission issued in July 2007 states: "Transferring a donation to an agent rather than directly to a party must not be used as an attempt to evade the controls on permissibility and transparency."

Who in Labour knew about the donations?

Labour general secretary Peter Watt resigned on Monday saying he had known the money was actually Mr Abrahams' but had not known it broke rules. Gordon Brown's new chief fundraiser Jon Mendelsohn , says he found out about the Abrahams' link about a month ago. He says he did not tell anyone as he wanted to put an end to it privately. Hilary Benn turned down a donation from Janet Kidd during the deputy leadership race after his supporter Baroness Jay told him the money was actually David Abrahams'.

Who says they did not know about it?

Gordon Brown says he only found out about it at the weekend. His team turned down a Janet Kidd donation during his leadership campaign because they did not know her. Harriet Harman , who accepted a £5,000 donation from Janet Kidd two weeks after being elected deputy leader, said she took it in "good faith" and had no idea it was from someone else. Ms Harman's husband Jack Dromey, Labour's treasurer has also implied he did not know about it, saying "complete concealment" when asked by reporters if he had known about it.

How has Gordon Brown reacted the revelations?

The prime minister has said the donations were unlawful and a mistake and were being returned. He has asked a Bishop, a Judge and Lord Whitty to inquire into the situation.

Who else is under the microscope?

Potentially any senior Labour figures are if it turns out they knew about the arrangement. The most obvious target for opponents is Ms Harman, Labour's deputy leader, chairwoman, equalities secretary and Leader of the House of Commons. The Conservatives are yet to be satisfied by her explanation of the circumstances surrounding the donation from Janet Kidd and will be pressing on that issue when Ms Harman faces MPs for her weekly grilling on Thursday.

Who will the money be returned to?

Gordon Brown has said the money will be repaid, but it is not yet clear where it will be returned to. UKIP leader Nigel Farage has said it should go "back to the jobbing builder, the secretary and the solicitor".

What do the Conservatives say?

David Cameron said: "There is a time in the life of every government when it slips over from complacency into arrogance, and from arrogance into even indifference for the law. I say we've reached that point and it is time for real change in our country."

What do the Liberal Democrats say?

Acting leader Vince Cable said a "can of worms" had been opened up: "It's a whole sleazy area; it needs cleaning up because of lack of public confidence... the government should have got on with the job of bringing in new rules and regulations."

Is there any other fall-out?

Yes. Ministers have promised to look into the details of a planning application made by Labour donor David Abrahams. Communities Secretary Hazel Blears said she would liaise with other departments over the details of Mr Abrahams' plans for a business park in County Durham, and its approval.

Has this got anything to do with cash-for-honours?

Not directly. That was prompted by the revelation of secret loans given to Labour. A lengthy police inquiry ended without any charges being brought over allegations of honours being given in return for cash. But in both cases the row has been prompted by money being given to a political party without being properly declared.

What happens next?

The Electoral Commission has referred the donations to the Metropolitan Police, who say they will consider a report from the commission on the donations before deciding whether to take any further action.

How serious is the row to Gordon Brown?

No prime minister wants to be the focus of a police inquiry. Tony Blair had the cash-for-honours probe hanging over him for his last year in the job. Mr Brown sought to make a clean break with that past when he took over in the summer - stressing his "moral compass". The current row comes in the wake of the run on Northern Rock and the loss of 25m people's personal details by the tax authorities. The danger of the donor row is that his government will become tarred in voters' minds with "sleaze" and/or incompetence.

List in full of the donations


Janet Dunn 31 January 2003 £25,000
Janet Kidd 06 May 2003 £25,000
Ray Ruddick 18 August 2003 £25,000
John McCarthy 12 January 2004 £15,000
Janet Kidd 01 April 2004 £10,000
Janet Kidd 27 October 2004 £2,000
John McCarthy 05 February 2005 £25,000
John McCarthy 01 June 2005 £25,000
John McCarthy 22 December 2005 £52,125
Janet Kidd 23 December 2005 £30,000
Ray Ruddick 23 December 2005 £17,850
John McCarthy 21 April 2006 £50,000
Ray Ruddick 24 May 2006 £50,000
John McCarthy 28 June 2007 £35,000
Janet Kidd 29 June 2007 £38,000
Ray Ruddick 29 June 2007 £24,000
Janet Kidd 10 July 2007 £80,000
Ray Ruddick 10 July 2007 £80,000
John McCarthy 10 July 2007 £55,000
Total £663,975

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