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Last Updated: Thursday, 29 November 2007, 15:51 GMT
Northern view on donation scandal
By Brian Wheeler
BBC News political reporter

It seems alarm bells were ringing about David Abrahams - the man at the centre of the hidden Labour donations row - as far back as the early 1980s.

David Abrahams
David Abrahams donated more than 660,000 in other people's names
His father, Bennie - a self-made property tycoon described by one former colleague as "a bit of a rough diamond" - was lord mayor of Newcastle between 1981 and 1982.

But the leader of the city council at the time, Sir Jeremy Beecham, was concerned that young David was becoming too closely involved in his father's activities as mayor.

Sir Jeremy confirmed that he raised concerns about David's behaviour, although he says he cannot recall whether he put out a memo on the subject, as some have claimed.

The Labour councillor is reluctant to talk about the incident.

Like many members of the North East political establishment, he seems somewhat bemused by David Abrahams' emergence as a major donor to the Labour Party.

Supporters angered

Mr Abrahams - who took over his father's property empire - was certainly a well-known figure in North East political circles, but the idea that he wielded any great influence is treated with scorn.

John Burton, Tony Blair's former election agent, says he had no idea Mr Abrahams was a wealthy man, let alone a Labour donor.

Greg Stone
Labour has an "extended family" in the North East, Greg Stone says

He used to turn up at party events - famously sitting in the front row at Mr Blair's farewell speech to the Sedgefield constituency - and occasionally write papers on Middle Eastern issues, says Mr Burton.

But Labour supporters are angered by the suggestion that the story contains echoes of an earlier political scandal in the North East.

In 1974, T Dan Smith, the leader of Newcastle City Council, and Durham County Council chief Andy Cunningham - father of former Labour minister Jack, now Lord, Cunningham - were jailed.

This was for their part in a web of bribery and corruption, related to the awarding of building contracts.

The case was the inspiration for the 1996 BBC drama Our Friends in the North.

Durham North MP Kevan Jones describes comparisons between the current funding scandal and the late 1960s as "total crap".

'Lazy... journalists'

Mr Jones - a former member of Newcastle City Council - says it is "rubbish" to suggest Mr Abrahams was a "big figure" in the party.

"Most people involved in North East politics know him. Would they take money off him? No they would not."

And he angrily rejects the suggestion that North East can be a breeding ground for political scandal because one party - Labour - has dominated the region for so long.

Apart from anything else, he points out, Newcastle has had a Liberal Democrat-controlled council for the past four years.

Christopher Eccleston, Gina McKee, Mark Strong and Daniel Craig in Our Friends in the North
I think it is damaging. I think it is exaggerated but I think there are some pockets of this still out there, basically
Lib Dem councillor Greg Stone on the portrayal of corruption in the BBC's Our Friends in the North

"It is crass. It is lazy Metropolitan journalists not doing their homework," adds Mr Jones.

But Greg Stone, a Lib Dem member of Newcastle City Council for the past nine years, thinks there is still some truth in the analogy - if not in direct relation to David Abrahams, then certainly in relation to the wider political culture of the region.

"There has always been that spectre of T Dan Smith over the city," he says. "You can still see his legacy in some of the concrete buildings but also in that history of corrupt dealings.

"I think things have changed from the bad old days of the sixties - Our Friends in the North is a very clear illustration of what went on at that time, which I think was pretty close to the truth, to be honest."

Mr Stone has twice taken on the Labour establishment in the North East and lost.

He failed to dislodge Newcastle Central MP Jim Cousins at the 2005 general election, slashing the Labour MP's majority from 11,605 to under 4,000.

More recently, he came second to Labour's Phil Wilson in the battle to replace Tony Blair in Sedgefield.

Opposition disappears

He believes Mr Abrahams' contributions may have helped fund Mr Wilson's campaign.

He points to donations totalling 62,000 made to the Labour Party by two of Mr Abrahams' intermediaries on the day the by-election was announced.

The political culture in Newcastle has become more open and accountable since he was first elected to the city council, Mr Stone says.

Kevan Jones
Kevan Jones denies Mr Abrahams was a "big figure" within Labour

Back then there were "suspicions that there were dark corners of the council that you had best not look too closely into, a few skeletons in closets".

But, adds the Lib Dem councillor, the same is not true of other parts of the North East, which remain dominated by a single party with little in the way of scrutiny by an effective opposition.

Of the North-East's 30 MPs, 28 belong to the Labour Party and many current and former Cabinet ministers - including Tony Blair, David Miliband, Alan Milburn, Stephen Byers and Hilary Armstrong - represent seats in the North East.

In a few former mining areas political opposition has disappeared to the extent that Labour councillors are elected unopposed.

Much of the employment in the region is also in the public sector - or dependent on public subsidies - leading, according to Greg Stone, to "quite a lot of leakage between local authorities and the private sector".

"There is certainly a political oligarchy in the North-East.

"I wouldn't say it is necessarily the same as it was 25 years ago, when it was very much a product of Labour Party domination of the town halls and Parliamentary seats, and the domination of the trade unions.

"There are still remnants of that, but their power is not as great as it used to be. But there is certainly a Labour extended family."

He adds: "I wouldn't quite say it's like the Ba'ath Party in Iraq, or the Communist Party in Russia, but there is that sort of prevalence."

Pub talk

Mr Stone is concerned that the current donations scandal will damage the North East's reputation, which he says to many outsiders consists of "flat caps, whippets and political corruption".

Headlines about Our Friends in the North are not particularly helpful, he adds.

"I think it is damaging. I think it is exaggerated but I think there are some pockets of this still out there, basically."

Janet and Anthony Dunn
Janet Dunn (left) was one of those used as a conduit by Mr Abrahams
There is certainly a colourful cast of characters attached the donations row.

Ray Ruddick, in particular, has entertained journalists with his one-liners, comparing the case to "two schoolboys" being "caught farting" in class - and saying he was off to the bingo to try and win the money he is meant to have donated on behalf of Mr Abrahams.

There has also been much misty-eyed nostalgia for the early 1970s, and not just among journalists looking for an angle.

Drinkers in the Royal County Hotel, near to Mr Abrahams's Gosforth home, have been swapping stories about Mr Abrahams' father, whom it seems was a flamboyant but well-liked figure from that era.

But tempting as it is to compare the current scandal to the days of T Dan Smith, there is absolutely no evidence that Mr Abrahams gained personally from his donations to the Labour Party.

Some have suggested that Mr Abrahams simply enjoyed the idea of wielding influence behind the scenes, after his own political ambitions were derailed amid controversy in the early 1990s.

He says he is a private person, who does not want to be in the public eye.

He told the Newcastle Evening Chronicle: "This is exactly the kind of media attention I was trying to avoid. I didn't have a clue that what I was doing was against the rules."

We tried to contact him for a comment for this article but he was not available.

Business park

The spotlight has inevitably fallen on Mr Abrahams' business interests and, in particular, his involvement in a huge scheme for a business park on 540 acres of land next to the A1(M), a few miles south of Newcastle.

Permission for the Durham Green development - which eventually aims to create 10,000 jobs - was initially turned down on traffic congestion grounds.

Get on and run the country Mr Gordon Brown or we require someone else
Heather, Bexhill

A revised scheme, with better access roads and a new roundabout, was given the go-ahead earlier this year.

The two people listed as directors of Durham Green Developments, Mr Ruddick and Janet Kidd, were also acting as intermediaries for Mr Abrahams' donations to the Labour Party.

The Department of Transport, in London, and Durham City Council firmly reject the suggestion that the decision to approve the development was linked in any way to political donations, although ministers now say there will be an investigation.

Durham City Council says it was obvious from an early stage that Mr Abrahams was the main figure behind the development, even though he was using the name David Martin.

We could only find a single mention of that name in the files on the proposed development at the council's planning offices in Durham - and no mention of David Abrahams.

In the letter, to Northumbrian Water, "David Martin" offers to pay for a study into the likely impact of the development on a local sewerage works, amid concern it would lead to a big increase in foul odours.

That may have helped to do the trick but it looks as if the political cloud prompted by his surreptitious donations - however innocently intended - may be a lot harder to shift.

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