Party funding: pick the true statement

Amid all the hysteria in the Westminster village over Mr Abrahams's donations to the Labour Party, some of them channelled through intermediaries ('proxies'), a number of questionable assumptions seem to have crept into the voluminous commentaries in the media.  Here are ten statements, all of them reflected or implied in current newspaper and television stories and comments;  the task is to pick out the one (and there seems to me to be only one) which is true, so far as we can tell from facts already made known:

1.   It is an offence under the Political Parties, Elections and Referendums Act 2000 to give money to a political party through an intermediary.

2.   A political party is committing an offence under the Act by knowingly accepting money given through an intermediary.

3.   A political party is committing an offence under the Act by accepting money given through an intermediary even if the recipient doesn't know at the time that the donor was acting as an intermediary for someone else.

3.   Anyone who knows about a donation made through an intermediary and fails to report it is committing an offence. 

4.   An intermediary who allows himself or herself to be used as a channel for a donation to a political party of money which in fact comes from someone else is committing an offence.

5.  The General Secretary of the Labour Party has admitted that he failed to report to the Electoral Commission certain donations, i.e. those received through intermediaries.

6.  If the Labour Party's chief fund-raiser knew the true identity of the original donor of money given through intermediaries but did not report it to the Electoral Commission his omission amounts prima facie to an offence.

7.  If the then General Secretary of the Labour Party knew the true identity of the original donor of money given through intermediaries but did not report it to the Electoral Commission his omission amounts prima facie to an offence. 

8.  If it were to emerge that Gordon Brown or Tony Blair knew at the time that some donations from Mr Abrahams (or anyone else) were being given to the party through intermediaries, and did nothing about it, that would be prima facie evidence of an offence under the Act.

9.  Acceptance of money given direct by Mr Abrahams to any official of the Labour Party who knew that Abrahams was also making other donations through intermediaries would be an offence under the Act.

10. The facts already publicly revealed are enough to justify prosecuting Mr Abrahams under the Act.

I'm no lawyer (as others have drily pointed out in other contexts), and if I'm wrong in my belief that only one of these ten propositions is correct, I'll be glad to be corrected.  On the other hand, if I'm right, the gravity of what has happened is being absurdly exaggerated — not least by Gordon Brown, with his initial expression of shock and horror, reactions then taken up with understandable glee by everyone else from David Cameron to the political commentariat and so on down to less exalted Labour ministers, vying with each other to express the profundity of their anguish or the extremity of their anger. 

Anyone arriving today from Mars and reading the Sunday newspapers could be excused for assuming that the entire Labour cabinet except Gordon Brown had been convicted of conspiracy to commit murder, and that the hapless general secretary of the party had been arrested at Heathrow attempting to flee to Paraguay with a suitcase containing the entire war-chest of the Labour Party in cash.  The facts so far revealed, if I understand them and the law correctly, actually reveal no more than a fairly minor omission in reporting by a single party official whose name hardly anyone knew until this whole thing blew up.  Yet Mr Rawnsley of the Observer describes the situation as a swamp ("to all the other problems besetting the government we can add vicious division and recrimination about who is to blame for stranding them in this swamp") and "another sleaze eruption".  He even goes so far as to add that "in one crucial respect this looks to be worse than cash for coronets": and the one crucial respect turns out to be nothing worse than that it will be easier to prove in this matter that an offence has been committed, and who committed it, than it was to prove that New Labour under Blair was dishing out peerages and knighthoods in exchange for massive donations to party funds.  Our  political morality yardsticks must have got badly bent if we are now to regard one offence as "worse" than another simply because it is more easily proved.

David AbrahamsLet's try to remember that even if Mr Abrahams is a strange and probably rather unsavoury figure, all our political parties would be in deep trouble if they refused to accept money from the strange or the unsavoury;  that Abrahams's uninhibited public revelations to both the Labour Party and to the media about his use of named individuals as intermediaries for some of his donations to the party can hardly be described as a failure of transparency;  that there has been no suggestion that he has sought or been offered any kind of honour in exchange for his donations;  that the party official who had been responsible for reporting the identity of the ultimate donor to the Electoral Commission resigned as soon as he realised that he had been required but had failed to do so — and issued a statement admitting his failure in detail;  and that despite David Cameron's insinuation, under cover of parliamentary privilege, that Gordon Brown's personal integrity was now in question, not a splinter of evidence to support that accusation has so far been produced.  Meanwhile, let's regard with appropriate derision all references to 'anonymous' or 'secret' donations, to 'sleaze' and to 'corruption'.  A bad mistake was made by someone who ought to have known better, but that's hardly an indictment of an entire party or of an entire system. Calm down, dears, it's only a peccadillo!

I hope and believe that in six months' time Labour's lead in the opinion polls will have been restored and that when we try to remember what really happened about Mr Abrahams and his proxies, we shall wonder what all the fuss was about.  But by then a serious economic downturn, verging on a recession, may well have transformed our political landscape out of all recognition.  As a wise friend of mine remarked in a recent e-mail, vamos a ver.   It's not over till it's over, or until the fat lady sings.

Oh, and won't you tell us the number of the sole proposition out of the ten above that's unquestionably true? 


9 Responses

  1. Oliver Miles says:

    How about a couple more propositions:

    Faced with the need to be seen to do something to tighten up the rules the party decided to support a few changes of detail in the law – but not to make sure that minor folk like fundraisers, treasurers, compliance officers and suchlike actually understood the new rules, that would be going over the top.

    A fundraiser who receives a cheque for many thousands of pounds out of the blue can't be expected to take an interest in who the donor is, what the motive might be or whether any follow-up is called for – life's too short.

    Brian writes:  Touché!  But in fact, as I understand it, the chief fund-raiser didn't need to make enquiries about the identity of Mr A., whom he had known for a long time (and had quarrelled with!).  But anyway what was there about Mr A that should have prevented the fund-raiser or anyone else accepting money from him?  As to the intermediaries, apparently the fund-raiser and the party general secretary, and perhaps others, knew that they were channelling the money from Mr A., so there was hardly any need for enquiries about them.   They also knew what few of the media commentators seem to know even now, namely that channelling money through an intermediary is permitted under the law.  (Do you care to identify the true statement out of the ten?)

  2. Jeremy Varcoe says:

    As a lawyer it may seem absurd for me to suggest that by seeking to rely on the law, you are missing the essential element in this sorry debacle. Irrespective of what offences may, or may not, have been committed under sections 54, 61 ,62 etc of the 2000 Act – and these can only emerge from the results of the Police enquiry and subsequent review by the CPS – what really matters is that the Labour Party, after being in power for ten years appears in the eyes of the electorate to be incapable of abiding by the high standards of public probity that they have espoused but serially failed to abide by. Even allowing for the media hype to which you allude, the conflicting accounts by ministers and protestations of shock and horror in the face of each new allegation only reinforces Mathew Parris's accusation of Labour inefficiency and sleaze.

    Your political loyalties appear to allow you to take a Panglossian view of every Labour failure and disaster. We all want to be well and honourably governed. You may. of course, be right that in six months this affair will be forgotten and Labour will again be riding high in the polls. Personally I doubt that the majority of people will be as generous as you in their view of a government that seeks to control almost all aspects of our lives, that fails our armed forces and over- extends them for their own political ends and which fails to deliver significant improvements in our public services despite taking an ever increasing share of national income.

    I do not, of course expect you to agree with much, if any, of this However, I would gently remind you of the need to judge a party or government by results rather than by its promises and aspirations.

    Brian writes:  Well, I don't claim to be impartial.  But I don't have a record of being uncritical, either.  The essence of the assault on the government and the Labour Party (not the same thing, by the way) over these donations is their alleged illegality.  The Observer today devotes four whole pages of so-called analysis to the affair, almost entirely based on the assumption that making the donations was illegal and that accepting them was illegal.  Neither accusation has the smallest substance.  Of all the welter of accusations and innuendos that have so excited the media and the opposition parties, the only breach of the law so far revealed is the general secretary's failure, in registering the donations made through intermediaries with the Electoral Commission, to identify their original donor.  Neither that donor, nor the intermediaries, nor whoever accepted the donations on behalf of the Labour Party, appear to have done anything even questionable, let alone illegal.  The Observer's editorial comment, apparently ignoring all the stuff in its own pages about the illegality of making and accepting the donations, itself admits:

    As long as there is no evidence that donors received favours for their money, failure to register the gifts properly is a paltry piece of corruption: inept and shabby, but not a malicious subversion of the political system

    — but, perhaps recognising that with this admission the whole overblown case against the Labour party fizzles out, continues inconsistently:

    But it leaves a pall of dishonesty and shiftiness over the government. It reinforces the impression in the public eye that giving money to parties is by definition sleazy, when it could be seen as a civic virtue. That does diminish democracy, albeit over time. It diminishes trust in Labour and Gordon Brown much faster.

    Corruption?  A pall of dishonesty and shiftiness?  Over the government?   Diminishes democracy?  "Failure to register the gifts properly"?  The gifts were registered — no failure there; but without the required identification of the original donor, even though the donor and the intermediaries had made no secret of where the money had come from and had indeed told the party all about it!  Can you really maintain with a straight face that this 'paltry' act of omission, unaccompanied by even the most tentative attempt to cover it up, justifies your assertion that the Labour party is "incapable of abiding by the high standards of public probity that they have espoused"?  To call the whole episode  an example of the party's  "inefficiency and sleaze"  is made no more credible by being attributed to Matthew Parris, witty and likeable commentator — and former Tory MP.   Isn't it just possible that even you, famously judicious and even-handed, are getting the whole business a tiny bit out of proportion?

  3. John Miles says:

    "I'm no lawyer," you say.

    Who are you trying to kid?

    I've yet to read a more persuasive bit of salesmanship for Mr Brown and Co.

    Weren't these the people who actually introduced the laws they seem to have broken?

    Their defence for their "mistakes" seems to be that they acted "in good faith" and "knew nothing about was going on."

    Shouldn't they have known?

    To some of us – perhaps most of us – the whole thing stinks to high heaven.

    These people seem to think our laws don't apply to them; the police, the CPS and the jury should remind them that they do.

    Brian writes:  Isn't this a bit over the top?  So far as any of us knows, the only law that has been broken by anyone is the requirement, when reporting (perfectly lawful) donations made through third parties, to identify the original source of the money.  The only person to have broken this law was the general secretary of the party, who resigned as soon as he realised that he had failed to provide the full information required and issued a full statement admitting this failure.  No-one else concerned seems to have done anything either illegal or even improper.  If you really think that this single really rather minor breach of the rules "stinks to high heaven", and demands the attention of the police, the Crown Prosecution Service and a jury, I can't help wondering what language you have kept in reserve for a genuine scandal — one involving fraud and deceit, concealment, deliberate evasion of a legal requirement, improper benefit to the perpetrator, conspiracy to deceive, cover-up, or any combination of these.  Not one of those elements appears to have been a factor in what happened in this case.  Or do you know something that the rest of us don't?

    Unless the media have evidence of something much more serious that hasn't so far been revealed publicly, their treatment of this story is the real scandal.  Today's news is that in some poll 57 per cent of those questioned think that Gordon Brown is in some way "tainted by sleaze".  David Cameron's slanderous reference to Brown's integrity being in question has helped to fuel this monstrous smear.  Perhaps someone peddling this stuff would care to produce even a hint of a rumour, or better still an established fact, that links Gordon Brown to any wrong-doing of any kind.  Why do our political journalists and editors seem to be so intent on discrediting our whole democratic system, starting with the prime minister?  I suppose it sells newspapers and television advertising space.  Yuk.

  4. Brian,

     This Geordie ex lawyer, living within spitting distance from Mr Abrahams' home, can't resist your challenge.

    It's easy to knock out most of your list. I've ended up with the reporting offences under the 2001 Act. That leaves only 5, 6 and 7.
    Six is the next one to go. There is no obligation on the fund-raiser, to report anything to the E.C.
    Down to 5 and 7

    At this stage there's a temptation just to toss a coin. After all, there's now  an evens chance.
    Never mind.
    The General Secretary/Treasurer, on whose shoulders the reporting obligations rest,  has knowledge of the true identity of the "donor", Abrahams- the proxies are agents, and he ( the Treasurer) has an obligation to report the true donor  to the E.C.
    Surely one of the mischiefs the Act intended  to remedy was the prevention of party donations being hidden via agents.

    Even if I'm way off beam here there's the prosecutors favourite – conspiracy- to examine.  In this case it could be argued that the donor, his agents and the Treasurer all conspired to commit an unlawful act. That was to deceive the E.C. by making  false declarations.  It certainly does not help the donor and his agents that they told the party the truth. And it's certainly not going to help the treasurer to claim he did not know the law.
    Fire away!

    Brian writes:  I did specify that the answer must be based on the facts as we know them now.  So far as I know, there's no evidence or even suggestion that the party treasurer, the chief fund-raiser or any of the donors (principal or intermediary) knew that the party general secretary would not, or did not, identify the principal donor when reporting these donations to the Electoral Commission; still less that any two or more of them conspired together to arrange that he would not do so.  Since the responsibility for making the reports rested with the general secretary and, AFAIK, no-one else, the answer to my puzzle must be no. 7.  So you successfully narrowed it down to two, including the correct answer.  Bravo!  But I might have known that a lawyer would (almost) solve it…. 

  5. Oliver Miles says:

    I hate turning down a challenge (to spot the odd one out), but one would have to be mad or a lawyer to accept this one.  If you don't believe me, have a look at the text of the law at  Here is a typical extract:

    "In relation to each such separate donation, the principal donor must ensure that, at the time when the principal donation is received by the party, the party is given—
    (a) (except in the case of a donation which the principal donor is treated as making) all such details in respect of the person treated as making the donation as are required by virtue of paragraph 2 of Schedule 6 to be given in respect of the donor of a recordable donation; and
    (b) (in any case) all such details in respect of the donation as are required by virtue of paragraph 4 of Schedule 6 to be given in respect of a recordable donation."

    Everybody happy so far?

    Brian writes:  Your quotation illustrates extremely lucidly how easy it must be for anyone responsible for reporting these donations, even the general secretary of on of our major political parties, inadvertently to fall foul of this law.  As to my challenge, please see Tony Hatfield's comment above and my reply to him.   I just hope that this exercise has drawn attention to the incredibly widespread misunderstandings of what is and what isn't permitted under this law.  Article after article and commentary after commentary continue to refer to "illegal" and "secret" or "anonymous" donations, clearly in the unfounded belief that the law forbids donations made through intermediaries:  in fact, the law explicitly provides for donations to be made through third parties, in S. 54 (4), (5) and (6), part of which you quote.  These donations weren't even secret, since they were reported to the Electoral Commission, nor anonymous, since the immediate donor was identified in each case — and the party receiving the donations knew the identity of the original donor.  But the howls of outrage and denunciation of 'sleaze' and 'corruption' have drowned out such simple truths, and this hysterical myth-making will never be exposed now.  Like the myths and outright lies surrounding NATO's aggression against Yugoslavia over Kosovo in 1999, it is now part of the conventional wisdom and therefore has become History.

  6. John Miles says:

    OK, you win.

    Delete "stinks to high heaven."

    Insert "gives off a bit of a pong."

    If you're really looking for something that "links Gordon Brown to any wrong-doing of any kind," how about the part he played over the invasion of Iraq? Though it's not immediately obvious what bearing – if any – this has on the comparative peccadillos currently under the spotlight.

    When you're playing about with other people's money it's not a bad idea to stick pretty strictly to the rules. Perhaps even more so if you've introduced these rules yourselves.

    If you or I were found to have done something wrong, and thought we'd acted in good faith, we probably couldn't put that claim forward as a mitigating factor until when actually we appeared before a court.

    When a Minister is found to have broken the rules, and claims he's acted in good faith, it seems to be accepted automatically as a complete defence.


    I'm afraid I'm not – or anyway not yet – capable of showing these people as much charity as you do.

    Remember Theresa Gormon's motherly, tolerant insistence we should make allowances for her poor, persecuted colleagues who'd innocently got themselves involved in Cash for Questions?

    Those were the days!

    Do you honstly believe the guy who's resigned was the only person who knew, or shold have known, what was going on?

    Anyway, I don't find it easy to think Gordon, Harriet, Peter and Wendy are all whiter than white.

    So let's hope I've got it all wrong.

    Once again!

    Brian writes:  We know that others besides Peter Watt knew about the donations made via intermediaries, but that merely undermines the case for calling them 'secret'.  They were not illegal or improper and the more people knew about them, the healthier the situation.  But Watt was the only person responsible for making the formal reports on the donations to the Electoral Commission, his reports proved to be incomplete, and he resigned when this came to light. 

  7. Labour MPs could vote for a mass culling of grandmothers and compulsory kitten baiting for all, and you'd still make apologies for them. 

    Still, this seems to have knocked the HMRC data loss and Northern Rock off the front pages for a while.  We're governed by criminals Brian, haven't you noticed?  They have no respect for the rule of law.  They consider themselves above the law while the little people must be harangued into compliance and branded as cattle.  There is no Labour Party worthy of the name anymore.  Corporate whores and grasping narcissists the lot of them. 

    Brian writes:  After some of the things I have written about New Labour during and after the Blair years, and continue to write about some of the ministers of the Brown government and some of their policies, it's quite refreshing to find myself accused of being an undiscriminating apologist for them!  The fact that this government continues to pursue indefensible policies in so many areas and is guilty of multiple misjudgements in others doesn't mean that we're obliged to believe every allegation made against any of them on every subject, regardless of its accuracy and validity (or lack of them).  Errors have certainly been made in managing and (especially) reporting these controversial donations, but they are mostly quite different in both significance and substance from what most of the accusers have been asserting.  This seems to me worth pointing out.

  8. Malcolm McBain says:

    I am actually a bit right wing, and hence not much inclined to support Labour now that the idiots have ousted TB, but it seems to me that the sums of money involved in the donations farrago are trivial, and scarcely worthy of more than passing notice. The collapse of Northern Rock is much more serious but in that case it does not seem to me that either of the other two political parties or any of the politically motivated commentators had much to offer in the way of advice to the wretched Treasury. What was the other thing? Oh yes, Iraq. The fact is that even trying to run a middle ranking European country cannot be much fun these days. It would be nice if we could just get the Foreign Office to concentrate on foreign policy in future.    

    Brian writes:  Malcolm, thanks.  Much good sense here, except that on your way out from supporting the Labour Party over the ousting of Mr Blair, you might come across me on my way back in — for the same reason!  But I regard GB as very much on probation so far as my continuing support is concerned, and first signs are far from encouraging….                                                                                                                                                                                                                          

  1. 2 December, 2007

    […] Finally on UK political funding – Brian Barder on Ephems cuts through the muck to try to < a href = “”>pin down some hard facts. He finds one. […]

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