Donorgate
Encyclopedia
The Labour party proxy and undeclared donations was a 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. The careers of Labour Party treasurer Peter Watt
and the leader of the Scottish Labour Party
, Wendy Alexander
, were curtailed as a consequence. In May 2009 the Crown Prosecution Service
decided there was insufficient evidence for any prosecution relating to these events.
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). (Mr Khayami's donations subsequently came under some scrutiny in the press, though there was no indication that they were in any way illegal.) Abrahams has donated at least £548,850 since 2003, via two work colleagues, his solicitor and the wife of an employee.
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. Mrs Kidd has "donated" £185,000 since 2003, 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
. It also emerged that £167,000 had been given previously through another intermediary, solicitor John McCarthy.
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.
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". 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.
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".
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.
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.
, Peter Watt
, resigned on 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.
imbroglio which had beset Blair. There was 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. Two significant Labour Party heads, those of Wendy Alexander and Peter Watt, rolled as a consequence of the affair.
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
in November and December 2007, when it was discovered that, contrary to legislation passed during the Blair
Tony Blair
Anthony Charles Lynton Blair is a former British Labour Party politician who served as the Prime Minister of the United Kingdom from 2 May 1997 to 27 June 2007. He was the Member of Parliament for Sedgefield from 1983 to 2007 and Leader of the Labour Party from 1994 to 2007...
Government, the Party had been receiving significant financial donations made anonymously via third parties. The careers of Labour Party treasurer Peter Watt
Peter Watt
Peter Martin Watt was the General Secretary of the Labour Party in the United Kingdom from January 2006 until he resigned in November 2007 as a result of the Donorgate affair.-Early and family life:...
and the leader of the Scottish Labour Party
Scottish Labour Party
The Scottish Labour Party is the section of the British Labour Party which operates in Scotland....
, Wendy Alexander
Wendy Alexander
Wendy Alexander is a Scottish politician and the former Member of the Scottish Parliament for Paisley North. She held various Scottish Government cabinet posts and was the leader of the Labour Party group in the Scottish Parliament from 2007-2008...
, were curtailed as a consequence. In May 2009 the Crown Prosecution Service
Crown Prosecution Service
The Crown Prosecution Service, or CPS, is a non-ministerial department of the Government of the United Kingdom responsible for public prosecutions of people charged with criminal offences in England and Wales. Its role is similar to that of the longer-established Crown Office in Scotland, and the...
decided there was insufficient evidence for any prosecution relating to these events.
Abrahams donations
On 25 November 2007, The Mail on SundayThe Mail on Sunday
The Mail on Sunday is a British conservative newspaper, currently published in a tabloid format. First published in 1982 by Lord Rothermere, it became Britain's biggest-selling Sunday newspaper following the closing of The News of the World in July 2011...
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
Sedgefield
Sedgefield is a small town and civil parish in County Durham, England. It has a population of 4,534.Sedgefield has attracted particular attention as the Member of Parliament for the wider Sedgefield constituency was the former Prime Minister Tony Blair; he was the area's MP from 1983 to 2008,...
at Tony Blair
Tony Blair
Anthony Charles Lynton Blair is a former British Labour Party politician who served as the Prime Minister of the United Kingdom from 2 May 1997 to 27 June 2007. He was the Member of Parliament for Sedgefield from 1983 to 2007 and Leader of the Labour Party from 1994 to 2007...
's announcement that he was leaving office, in November 2007 it emerged that, in the time since Prime Minister
Prime minister
A prime minister is the most senior minister of cabinet in the executive branch of government in a parliamentary system. In many systems, the prime minister selects and may dismiss other members of the cabinet, and allocates posts to members within the government. In most systems, the prime...
Gordon Brown
Gordon Brown
James Gordon Brown is a British Labour Party politician who was the Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 until 2010. He previously served as Chancellor of the Exchequer in the Labour Government from 1997 to 2007...
had come to power, Abrahams was now Labour's third largest donor behind Lord Sainsbury of Turville
David Sainsbury, Baron Sainsbury of Turville
David John Sainsbury, Baron Sainsbury of Turville, FRS , is a British businessman and politician. From 1992 to 1997, he served as the Chairman of Sainsbury's . He was made a life peer in 1997, and currently sits in the House of Lords as a member of the Labour Party...
(£2 million) and Iranian businessman Mahmoud Khayami
Mahmoud Khayami
Mahmoud Khayami, CBE, KSS, GCFO is an Iranian industrialist and philanthropist, of French nationality.-Life:Khayami had an active role in the company Iran National or IKCO) , automobile manufacturing and the introduction of the Paykan car to Iran in a...
(£320,000 in September 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.) Abrahams has donated at least £548,850 since 2003, via two work colleagues, his solicitor and the wife of an employee.
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. Mrs Kidd has "donated" £185,000 since 2003, and is also listed as a £5,000 donor to Harriet Harman
Harriet Harman
Harriet Ruth Harman QC is a British Labour Party politician, who is the Member of Parliament for Camberwell and Peckham, and was MP for the predecessorPeckham constituency from 1982 to 1997...
's successful Labour deputy leadership bid in 2007;
The Mail on Sunday
The Mail on Sunday
The Mail on Sunday is a British conservative newspaper, currently published in a tabloid format. First published in 1982 by Lord Rothermere, it became Britain's biggest-selling Sunday newspaper following the closing of The News of the World in July 2011...
, 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
Ford Transit
The Ford Transit is a range of panel vans, minibuses, and pickup trucks, produced by the Ford Motor Company in Europe.The Transit has been the best-selling light commercial vehicle in Europe for 40 years, and in some countries the term "Transit" has passed into common usage as a generic term...
; while Mrs Kidd was a secretary living in Whickham
Whickham
Whickham is a town in North East England, four miles south west of Newcastle upon Tyne and four and a half miles west of Gateshead. Whickham is part of the Metropolitan Borough of Gateshead. Its postal address is Whickham, Newcastle upon Tyne. Whickham is situated on high ground overlooking the...
near Gateshead
Gateshead
Gateshead is a town in Tyne and Wear, England and is the main settlement in the Metropolitan Borough of Gateshead. Historically a part of County Durham, it lies on the southern bank of the River Tyne opposite Newcastle upon Tyne and together they form the urban core of Tyneside...
. It also emerged that £167,000 had been given previously through another intermediary, solicitor John McCarthy.
Another go-between used by Abrahams, Janet Dunn, who is a life-long Conservative Party
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
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.
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". Baroness Jay of Paddington
Margaret Jay, Baroness Jay of Paddington
Margaret Ann Jay, Baroness Jay of Paddington, PC is a British politician for the Labour Party.-Background:Her father was former Labour Prime Minister James Callaghan, and she was educated at Blackheath High School, Blackheath and Somerville College, Oxford.Between 1965 and 1977 she held production...
, who was working on the deputy leadership team of Hilary Benn
Hilary Benn
Hilary James Wedgwood Benn is a British Labour Party politician who has been the Member of Parliament for Leeds Central since 1999. He served in the Cabinet as Secretary of State for International Development from 2003 to 2007 and as the Secretary of State for Environment, Food and Rural Affairs...
, 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.
On 3 December 2007 Peter Hain
Peter Hain
Peter Gerald Hain is a British Labour Party politician, who has been the Member of Parliament for the Welsh constituency of Neath since 1991, and has served in the Cabinets of both Tony Blair and Gordon Brown, firstly as Leader of the House of Commons under Blair and both Secretary of State for...
, on BBC Radio, admitted that some donations to his own Labour deputy leadership campaign "were not registered as they should have been".
At the time of Abrahams's attempted offer of £5,000 towards Hilary Benn
Hilary Benn
Hilary James Wedgwood Benn is a British Labour Party politician who has been the Member of Parliament for Leeds Central since 1999. He served in the Cabinet as Secretary of State for International Development from 2003 to 2007 and as the Secretary of State for Environment, Food and Rural Affairs...
's campaign for the office of Deputy Prime Minister, and his successful donation of £5,000 to Harriet Harman
Harriet Harman
Harriet Ruth Harman QC is a British Labour Party politician, who is the Member of Parliament for Camberwell and Peckham, and was MP for the predecessorPeckham constituency from 1982 to 1997...
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
Highways Agency
The Highways Agency is an executive agency, part of the Department for Transport in England. It has responsibility for managing the core road network in England...
, 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.
Jon Mendelsohn
Jonathan Mendelsohn
Jonathan Mendelsohn is the director of general election resources for the British Labour Party. He had previously been a spokesman and lobbyist for the gambling company PartyGaming...
, 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.
Resignation of Peter Watt
The General Secretary of the Labour PartyGeneral Secretary of the Labour Party
The General Secretary is the most senior employee of the British Labour Party, and acts as the non-voting secretary to the National Executive Committee...
, Peter Watt
Peter Watt
Peter Martin Watt was the General Secretary of the Labour Party in the United Kingdom from January 2006 until he resigned in November 2007 as a result of the Donorgate affair.-Early and family life:...
, resigned on 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
Electoral Commission (United Kingdom)
The Electoral Commission is an independent body set up by the UK Parliament. It regulates party and election finance and sets standards for well-run elections...
is seeking to investigate under the Political Parties, Elections and Referendums Act 2000
Political Parties, Elections and Referendums Act 2000
The Political Parties, Elections and Referendums Act 2000 is an Act of the Parliament of the United Kingdom that sets out how political parties, elections and referendums are to be regulated in the United Kingdom...
why they were given wrong names and what checks Labour made into its “donors”, and has since called in the Crown Prosecution Service
Crown Prosecution Service
The Crown Prosecution Service, or CPS, is a non-ministerial department of the Government of the United Kingdom responsible for public prosecutions of people charged with criminal offences in England and Wales. Its role is similar to that of the longer-established Crown Office in Scotland, and the...
for briefings and advice.
In December 2007, the Metropolitan Police
Metropolitan Police Service
The Metropolitan Police Service is the territorial police force responsible for Greater London, excluding the "square mile" of the City of London which is the responsibility of the City of London 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.
Resignation of Wendy Alexander
On 28 June 2008, Wendy Alexander announced her resignation as Leader of the Scottish Labour Party, due to pressure on her following the donation scandal. She said it was with "deep regret" that she was resigning following the decision of the Scottish Parliament's standards committee. She had come under pressure after breaking donation rules and faces a one-day ban from parliament. In her resignation statement, she claimed the breach of the rules was made in "good faith" and the decision of the committee was "partisan" but she respected parliamentary process.Political repercussions
Donorgate meant that Gordon Brown's administration was involved in an early scandal, and only a few months after the Cash for PeeragesCash for Peerages
Cash for Honours is the name given by some in the media to a political scandal in the United Kingdom in 2006 and 2007 concerning the connection between political donations and the award of life peerages...
imbroglio which had beset Blair. There was heavy criticism from opposition parties, which includes calls for Harman's resignation. Conservative leader David Cameron
David Cameron
David William Donald Cameron is the current Prime Minister of the United Kingdom, First Lord of the Treasury, Minister for the Civil Service and Leader of the Conservative Party. Cameron represents Witney as its Member of Parliament ....
questioned Brown's integrity during Prime Minister's Question Time and Liberal Democrat
Liberal Democrats
The Liberal Democrats are a social liberal political party in the United Kingdom which supports constitutional and electoral reform, progressive taxation, wealth taxation, human rights laws, cultural liberalism, banking reform and civil liberties .The party was formed in 1988 by a merger of the...
leadership contender Chris Huhne
Chris Huhne
Christopher Murray Paul-Huhne, generally known as Chris Huhne is a British politician and cabinet minister, who is the current Liberal Democrat Member of Parliament for the Eastleigh constituency in Hampshire...
asked police to get involved, in particular as regards the planning permissions granted to Mr Abrahams. Two significant Labour Party heads, those of Wendy Alexander and Peter Watt, rolled as a consequence of the affair.