Greasy Pole: Money, Money, Money…

It was a bit like an archaeological dig as enthusiastic excavators exposed, one layer after another, not the remains of some prehistoric wanderers but the identities of Labour leaders who had been offered and in some cases accepted, donations to help their campaigns in contravention of the rules of their party and, even more to the point, against the law which their own government had introduced. Day after day the incriminated names emerged from the soil of Westminster: Gordon Brown and Hilary Benn (who both refused): Harriet Harman and Peter Hain (who both accepted). Then there were the people outside the Commons but who, as party officials, must have known what was going on and how troublesome it could be but who apparently did nothing to stop it ; people like Labour’s funds organiser John Mendelsohn (who put up a defence so feeble as to be incredible) and Party Secretary  Peter Watt (who could find nobody to say how blameless he was and why he should not under any circumstances be required to leave his job over so insignificant a peccadillo so had to carry the can and resign). After the Honours for Loans affair, which so bitterly flavoured the final months of the Blair government, another such scandal was the last thing on Gordon Brown’s wish list.

The law in this matter is clear; in the case of any donation over £200 the party must record the full name and address of the donor, who must be a registered voter in this country. If the amount is over £5000 these must be reported to the Electoral Commission. In view of this it is not advisable for a donation to be accepted unless the source of it is known to the party. What is not acceptable under the law is that the donor’s identity should be obscured by the money passing through the medium of another person. This was what happened with those generous gifts from David Abrahams, a man who has been variously described as one of the party’s strongest supporters and their third largest financial backer.  While there is no question about his support for Labour and the fortune he has given to the party, there are other aspects about Abrahams which are rather less clear.

To begin with there is his name; to the tenants of some properties he manages in Newcastle he is known as David Martin. Then there is his age, variously given as 53 and 63. When he was resisting being deselected as the Labour candidate in William Hague’s seat in Richmond Yorkshire he presented himself as a married man with a young son. Perhaps he did this under the impression that an image of domestic stability would help his case but there were serious doubt about this, aggravated by clashes between him and a divorced woman who asserted that he had more or less hired her and her 11 year old son to pose as his family. Not surprisingly, when he was re-adopted (by one vote) by the Labour Party in Richmond a group of party officials resigned in protest. Abrahams has explained the confusion over his identity by saying that he is a very private person, although a party activist thought him “the pushiest person I ever came across” and to an MP he was “The kind of person you sometimes see at conferences and such – hanging about and wanting to shake hands with everyone”.

The Builder
For all his cunning and survival skills Abrahams was less than totally discreet in his choice of people to conceal his identity by acting as channels for his gifts. One woman, who professed herself puzzled by the matter, said she was a lifelong Tory; another was his secretary. But the most exciting material for the scandal-excavating media was Ray Ruddick, said to be a director of Abrahams’ property company but who works as a builder, and leaves his ex-council house each day in a battered old Ford Transit.  Ruddick is reputed to have given £140,000 to the Labour Party during the five months since Gordon Brown became Prime Minister but what he said about it was: “I can’t stand Labour. I can’t stand any politicians…I’m off to the bingo to see if I can win that sort of money”. This penetrative comment dragged the matter down to the appropriate level of a farce – but one which seemed to have brought Labour’s spin machine almost to a standstill, unable to respond in the customary manner of diverting attention onto their opponents.

All political parties must be preoccupied with money and the bigger the party the more immediate and desperate their preoccupation. A lot of design, effort and organisation must be devoted to the task of, essentially, persuading millions of people that all the evidence available to prove the impotence of those parties must be disregarded so that they are willing to trust again policies which have been massively discredited. To convince voters of the usefulness of choosing between one hopeless way and another  requires a big effort and a lot of money and the parties, steeped as they are in capitalism’s obligingly acquisitive morality, do not need to be too choosy about how they come by it. For them, custom, rules and laws are there to be broken if by that they can win advantage over their rivals for power. What this means is that Labour are not alone in financial manipulation; the Tories and the Liberals have similarly disreputable histories.

Dodgy Tory Finances
The source of the funding of the Tory party is as prudently obscure as it needs to be –and it goes back a long way. Most infamously, in 1993 the businessman Asil Nadir fled to Northern Cyprus, out of the clutches of any extradition treaty, to escape prosecution arising from him defrauding  the Polly Peck company of some thirty four million pounds. Since then he has often told of his desire to return to England to face the music.  If he does so he may well be greeted by some old Tory friends, anxious that the years in exile have not stunted his generosity which, just before his hurried departure, ensured that he gave them £440,000. More recently a Berkshire company going under the name of Bearwood Corporate Services has been a generous, if selective, donor; it is owned by Bearwood Holdings which is itself 99 percent owned by an investment company entirely owned by Lord Ashcroft, previously Conservative Party treasurer and now Deputy Chairman of the party. The Bearwood contribution did not go to Conservative central office but to individual parties in marginal constituencies. But the effects were uneven; in the 2005 election of a sample of 15 seats six were held by Labour, six were won (2 of them gains) by the Tories and three  (one gained) by the LibDems. There are questions about Ashcroft’s legal status as a donor, connected to his complex financial affairs and whether he is disqualified from donating by really being domiciled in a tax haven.

Another large corporate donor was IIR Limited, a company dealing in conference and training facilities. This firm’s donations were registered with the Electoral Commission but they said that they were made personally by their chairman Lord Laidlaw. In fact Laidlaw is a tax exile, Scotland’s second richest person; he sold IIR Ltd, for £7 million, in 2005 and is one the four biggest donors to the Tory party. 

And so it goes on; what is abundantly clear is that the finances of the big players in the political game are anything but clear and open and accessible. The wealth of people like Abrahams and Ashcroft originates in the exploitation – the wage-slavery – of the working class, who are deceived by the political parties so generously financed into supporting the social system which keeps them in their inferior position. That is the motivation for the millions of pounds which, through a variety of labyrinthine accounting methods, finds its way into the coffers of the Labour and Tory parties and others like them. Through their exploitation and their votes  for these parties at the polls  workers are paying to keep themselves subjugated.  

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