Donorgate

Donorgate is the colloquial name for the political scandal involving the British Labour Party in November and December 2007, when it was discovered that, contrary to legislation passed during the Blair Government, the Party had been receiving significant financial donations made anonymously via third parties.

Background

On November 25, 2007, "The Mail on Sunday" carried a front page headline: 'How big Labour backer is a jobbing builder who knows NOTHING about his £200,000 donation'. It was revealed that Tyneside lawyer David Abrahams had donated at least £548,850 to the Labour Party since 2003 via two work colleagues, his solicitor and the wife of an employee, which broke electoral law forbidding the use of proxy donors. Abrahams had had a colourful political involvement with the Labour party over many years.

After being honoured with a front row seat in Sedgefield at Tony Blair's announcement that he was leaving office, in November 2007 it emerged that, in the time since Prime Minister Gordon Brown had come to power, Abrahams was now Labour's third largest donor behind Lord Sainsbury of Turville (£2 million) and Iranian businessman Mahmoud Khayami (£320,000 in September 2007). [http://www.mailonsunday.co.uk/pages/live/articles/news/news.html?in_article_id=496244&in_page_id=1770 How big Labour backer is a jobbing builder who knows NOTHING about his £200,000 donation] "Mail on Sunday" - 25 November 2007] (Mr Khayami's donations subsequently came under some scrutiny in the press, though there was no indication that they were in any way illegal) ["Independent on Sunday", 2 December 2007] Abrahams has donated at least £548,850 since 2003, via two work colleagues, his solicitor and the wife of an employee. [ [http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=496689&in_page_id=1770 Four top ministers embroiled in Labour sleaze crisis as prosecutions loom] "Daily Mail" - 27 November, 2007]

Abrahams's secretary Janet Kidd 'gave' £80,000, while builder Ray Ruddick - who has 'given' a total of £196,000 according to a political donors list - had contributed £104,000 of the £222,000 donated by Abrahams in the five months since Mr Brown became PM. [http://www.thesun.co.uk/sol/homepage/news/article507818.ece £400k Labour donor probe] "The Sun" - 26 November, 2007] Mrs Kidd has 'donated' £185,000 since 2003, [http://www.metro.co.uk/news/article.html?in_article_id=76964&in_page_id=34&in_a_source= Property developer was Labour donor] Metro.co.uk - November 25, 2007] and is also listed as a £5,000 donor to Harriet Harman's successful Labour deputy leadership bid in 2007;

"The Mail on Sunday", which broke the story, investigated the donations after it emerged that builder Ray Ruddick lived in a former council house he had bought for £12,000, and drove a second-hand blue Ford Transit; while Mrs Kidd was a secretary living in Whickham near Gateshead. [ [http://www.express.co.uk/posts/view/26321/Property-developer-was-Labour-donor Property developer was Labour Donor] "The Sunday Express" - 25 November, 2007] It also emerged that £167,000 had been given previously through another intermediary, solicitor John McCarthy; [http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=496621&in_page_id=1770&ct=5 Revealed: How Labour tycoon got green light for business park AFTER £200,000 donation] "Daily Mail" - 27 November, 2007] .

Another go-between used by Abrahams, Janet Dunn, who is a life-long Conservative Party supporter and a lollipop lady by profession, has subsequently claimed that she never knowingly paid any money to the Labour Party; she had only on one occasion signed a blank cheque for Mr Abrahams for £25,000 after he had paid a similar amount into her own bank account. "I thought it was just a bit of business", her husband has said. However a donation of £25,000 in her name was received by the Labour Party in 2003, although Mrs Dunn says the first she knew of this was on 26 November 2007. ["Daily Telegraph" 28 November 2007, p. 1] [ [http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/11/28/nbrown128.xml&page=2 Gordon Brown says Labour donations 'illegal'] "The Daily Telegraph" 28 November 2007]

After the news broke of Mrs Kidd's 'donation' to her campaign, Harriet Harman made a statement saying she accepted a donation to her campaign for the Labour Party deputy leadership (which she eventually won) on 4 July "in good faith," had registered the monies with the Electoral Commission and the Register of Members Interests, and she "was not aware of any funding arrangements ... between David Abrahams and Janet Kidd". [http://news.bbc.co.uk/1/hi/uk_politics/7115016.stm Harman took cash 'in good faith'] BBC News - 27 November, 2007] Baroness Jay of Paddington, who was working on the deputy leadership team of Hilary Benn, questioned and turned down a donation of £5,000 offered by Mrs Kidd; but it was subsequently accepted by Benn's team when made under the name of Mr Abrahams. Kidd offered a similar 'donation' to the leadership campaign of Gordon Brown, but was turned down as she was not a known donor. [http://news.bbc.co.uk/1/hi/uk_politics/7114327.stm Labour donations to be returned] BBC News - 27 November, 2007]

On 3 December 2007 Peter Hain, on BBC Radio, admitted that some donations to his own Labour deputy leadership campaign "were not registered as they should have been". [ [http://news.bbc.co.uk/1/hi/uk_politics/7125770.stm BBC NEWS | Politics | Hain admits more donations errors ] ]

At the time of Abrahams's attempted offer of £5,000 towards Hilary Benn's campaign for the office of Deputy Prime Minister, and his successful donation of £5,000 to Harriet Harman who was campaigning for the same position, Abrahams was in the midst of protracted negotiations concerning a development he was proposing close to the A1. After initial proposals had been rejected by the Highways Agency, Abrahams made his donations, and resubmitted plans which were duly accepted the second time round. The Highways Agency was overseen by the Department for Transport which at that time was headed by the Office of the Deputy Prime Minister.

Israel lobby

According to the BBC, Mr Abrahams said he donated cash secretly to avoid accusations of being part of a "Jewish conspiracy". [ [http://news.bbc.co.uk/1/hi/uk_politics/7131540.stm BBC NEWS | Politics | Abrahams warning for government ] ]

Mr Abrahams, a practising Jew, has strong links with Israel: he is provincial vice-chairman of the Jewish Labour Movement [http://www.jlm.org.uk/cgi-bin/sitetools.cgi?task=servepage&id=1] , serves on the executive of Trade Union Friends of Israel [http://www.tufi.org.uk/] , and supports organisations including the Community Security Trust (a British charity set up to protect Jews living in the UK), Labour Friends of Israel, and Academic Friends of Israel.

In 2007 he provided £250,000 to found a chair in International Politics of the Middle East at Warwick University. For many years, he has made regular trips to Israel with Trade Union Friends of Israel and in 2007, in Britain, he met Ehud Olmert, the Israeli prime minister, whom he has also seen in Israel.

His neighbours in Newcastle recall years ago that their road had to be closed for "security reasons" when the Israeli ambassador visited Mr Abrahams at his home.

Mr Abrahams, however, insists that his charitable and political donations are from his own pocket - and that he is not the conduit of another mystery benefactor. [ [http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/12/02/ndonor202.xml&page=2 David Abrahams' glory days as Blair ally - Telegraph ] ]

Coincidentally, at the same time Wendy Alexander, Labour leader in the Scottish Parliament and sister of British cabinet minister Douglas Alexander, also became involved in a funding scandal after it emerged that she had accepted an illegal donation from Paul Green, a property magnate, [ [http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2007/12/01/do0107.xml Wendy Alexander should resign at once] , by Alan Cochrane, Daily Telegraph, 1 December 2007] a matter which is being investigated by the Electoral Commission and Strathclyde Police. [ [http://news.bbc.co.uk/2/hi/uk_news/scotland/7120096.stm Alexander wrote to illegal donor] - BBC News] Further newspaper reports on 30 November indicated Alexander was aware of the identity of the donor, after having sent a personal letter of gratitude to Mr Green (at his home in the tax haven island of Jersey) concerning the donation. [ The Scotsman - 'Pressure grows on Alexander as letter hints at closer links', 1st December 2007, pp.4-5] Accepting a donation from someone who is not registered on the UK electoral roll is illegal under electoral law, and is subject to criminal prosecution. As Mr Green was not registered as an elector on any electoral register in the United Kingdom this barred him from donating to a UK-based party.

Mr Green has stated that he in fact gave two donations to Labour, both at the suggestion of Charlie Gordon, MSP. He said: "This has to be gross mismanagement ... I am angry that I have been innocently embroiled in a national controversy, that's what's really upsetting me. When you have done nothing wrong, to find yourself banner headlines is not very pleasant." ['Donor hits back over illegal gift' [http://news.bbc.co.uk/1/hi/scotland/7126034.stm] ]

Resignation of Peter Watt

The General Secretary of the Labour Party, Peter Watt, resigned on the 26 November, after saying he took full responsibility. In his monthly press conference on 27 November, Prime Minister Gordon Brown said donations to the Labour Party by Abrahams through intermediaries were "completely unacceptable" and would be repaid. The Electoral Commission is seeking to investigate under the Political Parties, Elections and Referendums Act 2000 why they were given wrong names and what checks Labour made into its “donors”, and has since called in the Crown Prosecution Service for briefings and advice.

In December 2007, the Metropolitan Police wrote to the Labour Party saying that "the donated money was no longer an issue for the police". Mr Abrahams and his middlemen were also cleared of any wrongdoing. It was also discovered that the £630,000 donated had not been returned to Mr Abrahams, although Harriet Harman had returned the £5,000 donated to her. [citeweb|url=http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=565432&in_page_id=1770|title=£600,000 'donorgate' cash still in Labour account .. six months after vow to repay it|authoer=Rice, Dennis|publisher=Mail on Sunday|date=2008-05-11|accessdate=2008-05-11]

Chief fund-raiser involvement

Jon Mendelsohn, Brown's chief fund-raiser, admitted that he had known since September about the arrangement, but claimed that he disapproved. Abrahams contends that Mendelsohn had known since April, and had encouraged the process. Mendelsohn denies this. [ [http://news.bbc.co.uk/1/hi/uk_politics/7123236.stm BBC NEWS | Politics | Abrahams makes proxy donor claim ] ] Abrahams and Mendelsohn have known each other for many years, having both been involved in the Labour Friends of Israel movement.

Political repercussions

Donorgate meant that Gordon Brown's administration was involved in an early scandal, and only a few months after the Cash for Peerages imbroglio which had beset Blair. There has been heavy criticism from opposition parties, which includes calls for Harman's resignation. Conservative leader David Cameron questioned Brown's integrity during Prime Minister's Question Time and Liberal Democrat leadership contender Chris Huhne asked police to get involved, in particular as regards the planning permissions granted to Mr Abrahams.

ee also

* Israel lobby in the United Kingdom

References