Brown & Blair: The Grinding of Axes?

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2nd December, 2007

THE SUNDAYS

Plenty of reports today on the ongoing tale of the Labour party donor. But before I provide those links, I thought you might wish to look at Andrew Rawnsley’s article in the Observer, to which I have added my own comment.

Did Brown & cohorts set Blair up over the Honours debacle? If so, and according to Rawnsley, Blair believes he WAS set up, is the former prime minister (& friends) playing the same game?

Well, time and another police investigation, will tell.

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Rawnsley article pasted below:

Brown’s agony gives Blair something to smile about

Friends of the former Prime Minister believe that the latest funding scandal is a case of poetic justice for his successor
Andrew Rawnsley
Sunday December 2, 2007
The Observer

Clutching their heads in despair, Labour MPs are groaning: where will it all end? The trouble for the commentator is deciding where to begin. One good place to start is with the scandal before last, with the allegations that lordships were exchanged for loans. Towards the end of Tony Blair’s time at Number 10, at a point when his relationship with Gordon Brown had become utterly poisoned, the two men were locked in a ferocious row in the Prime Minister’s study. It was a combustion ugly even by their standards. The confrontation climaxed with Mr Brown storming out as he shouted: ‘You haven’t heard the last of cash for peerages.’

According to a slightly different version of this unpleasant scene that I’ve heard, Mr Brown was even more brutally menacing. To the Prime Minister he was agitating to supplant, he directly threatened: ‘I’ll get you over the peerages.’ Mr Blair subsequently told friends that he was so alarmed by Mr Brown’s behaviour that he reported the conversation to the Cabinet Secretary, then as now, Sir Gus O’Donnell.

Did Gordon Brown set up Tony Blair for a fall over cash for coronets? Brown has always denied it; Blair has always believed it. Soon after that confrontation, they did come to get him. Jack Dromey, the Labour party’s treasurer and husband of Harriet Harman, ally of the then Chancellor, lit the blue touch paper under Mr Blair by going on Channel 4 News and Newsnight to denounce him for raising campaign funds using concealed loans. Soon after that, the police began their 16-month inquiry, the toxic cloud over the twilight days of Tony Blair which helped to push him out of Number 10 earlier than he wanted to leave. This earned him the unenviable distinction of being the first sitting Prime Minister to be interviewed in the course of a criminal corruption inquiry.

Now, just a few weeks after the police reluctantly dropped that investigation, Mr Brown is contemplating being the second Prime Minister to face an interview by detectives. Yates of the Yard and his colleagues from the Old Bill are returning to the scene and come fired with the frustration of failing to get anyone into court the first time around.

Most Labour MPs are in a state of horror, bafflement and fury to find that their government is engulfed by yet another funding scandal. For some, though, there is an additional emotion for which the Germans have supplied us with a lovely word: schadenfreude. Tony Blair and his friends cannot help but think this is poetic justice being meted out to Gordon Brown. They take bitter satisfaction from the spectacle of Mr Brown, the self-styled possessor of a moral compass who advertised himself as so ethically superior to his predecessor, floundering in the mire.

For the friends of the old king, this has added piquancy because Ms Harman was the recipient – unknowing and innocent recipient, she says – of one of the dodgy donations from David Abrahams, man of many disguises. And for the second scandal in a row, her husband is a party treasurer who does not know where the money is coming from, even when it is being banked by the campaign team of his wife. The Prime Minister’s camp are, in turn, casting the blame back on his predecessor. They point out that the illegal practice of taking donations from proxies grew up in the shady culture which incubated under the old regime.

So 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. The Brownites are also turning on each other. After the Prime Minister gave less than effusive support for his deputy, Ms Harman told friends she was not going to go down without a fight. Her camp then revealed that the idea of getting a donation from this dodgy source had come from Mr Brown’s campaign team.

The Conservatives simply cannot believe their luck. ‘I keep pinching myself to make sure I am not dreaming,’ chuckles one frontbencher. In just eight weeks, a Tory poll deficit to Labour of more than 10 points has flipped into a poll advantage to the Conservatives of more than 10 points. That sensational reversal in fortunes is spiced for Tories who think this is a well-deserved payback for the way Labour exploited sleaze to destroy the reputation of John Major’s government. The only regret the Conservatives have about the battalions of troubles afflicting Mr Brown is that they have come in such a concentrated lump. This has knocked Northern Wreck and the scandal of the lost discs off the front pages. ‘It’s a pity we couldn’t have spread them out a bit,’ says one member of the shadow cabinet.

Looked at from one perspective, this sleaze quake only registers modestly on the Richter Scale of scandal. Mr Abrahams says he liked to give money anonymously by channelling donations through proxies because he wanted to stay out of the limelight, an ambition in which he has now spectacularly failed. No one has produced any evidence yet that these donations actually bought anything other than some proximity to the powerful. Yet another sleaze eruption does not really tell the voters anything that they did not think already about all of them.

The Conservatives are not in a position to take tenancy of the high moral ground when their secret bankrollers once included fugitives from justice and the tax status of their deputy chairman, Lord Ashcroft, remains a mystery. The Liberal Democrats don’t have a polished halo after trousering more than £2m from a crook. The public concluded a long time ago that party funding is a grubby business and all the parties are dirty to some degree.

None of which means this is not a further awful blow to Gordon Brown, not least because he put such emphasis on representing a change and a break with his predecessor. All those pieties he uttered about restoring trust in politics have turned to ashes in his mouth. ‘It’s a nightmare,’ says one of his ministerial allies. The Prime Minister must be feeling – this is certainly how he is looking – like a man to whom the gods have taken a terminal and malevolent dislike.

Peter Watt has already resigned as the party’s general secretary. While he was inherited from Mr Blair, that cannot be said about Jon Mendelsohn, the Prime Minister’s chief fundraiser, who also knew about the arrangement. As if this was not bad enough, Wendy Alexander, Labour’s leader in Scotland, is embattled by a separate uproar over an illegal donation from a Jersey businessman. The government’s explanations of what happened and who knew have unravelled within hours of being offered. In the words of one minister: ‘People are very edgy because they don’t know what else is going to come out.’

And in one crucial respect this looks to be worse than cash for coronets. We can all note the staggering correlation between giving money to a political party and being elevated to the ermine. But unless somebody is idiotic enough to make it a written transaction, it has always been difficult to make a legal case that a coronet has been exchanged for cash, which is why there has only ever been one successful prosecution many decades ago.

In this case, the law is unambiguous and it is a law that Labour itself wrote. The Political Parties, Elections and Referendums Act – passed in Labour’s first term – is explicit. Donors cannot disguise their identity behind proxies. Rightly so. One of the safeguards we have against corruption is knowing who may be trying to buy access to power.

Gordon Brown was right to argue yesterday that more reform is needed, but his first imperative should be to get his party to obey the laws we already have.

It is hard to see how prosecutions cannot follow. The Prime Minister himself pointed the way to the dock when he called the arrangement with Mr Abrahams ‘unlawful’.

What really staggers Labour MPs, just as it does the rest of us, is how anyone could be so stupid as to take money from a donor who appears to be a cross between Walter Mitty and Zelig. Mr Abrahams’s fantastic exploits include being ditched as a Labour candidate when it was discovered that he had invented a wife and child for the selection meeting. To take money from such a source is, to use Jack Straw’s phrase, ‘mind-blowing’. How could anyone do this when the government had been through the searing trauma of the cash-for-coronets affair? ‘I’m afraid the truth is probably very simple,’ says a former cabinet minister. ‘They were desperate for the money.’

Every time there is one of these reputation-shredding scandals, even fewer people are prepared to donate to political parties. The fewer the donors, the less the inclination to ask questions of those who are still prepared to write cheques. Politics has become trapped in a downward spiral in which each funding scandal leads on to another.

Mr Brown’s friends sigh that it is all so unfair. His team tore up a cheque from Mr Abrahams. Alas for him, protesting his own purity won’t be enough. No one ever accused John Major of being personally corrupt. Many of the scandals that afflicted his benighted administration originated during the rule of his predecessor. Mr Major did not have his toes sucked by actresses or take money in dirty brown envelopes. But he nevertheless paid the price for them.

One severe penalty already being paid by Gordon Brown is to be made to look ridiculous. Tony Blair used to joke that he went from being Bambi to Stalin. Mr Brown has been ‘transformed from Stalin into Mr Bean’ in the deadly jibe of Vince Cable. He is the temporary leader of a third party which is about to elect its third leader in a single parliament. It has come to something when Gordon Brown can be tormented by the mockery of a Lib Dem.

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ABRAHAMS STILL AFTER LABOUR BLOOD – WHY EXACTLY? If you have no axe to grind in this donor story you might wonder just WHY the Labour donor David Abrahams is so vehement in his determination to prove that he is in the right and the present government wrong over the whole issue. I must admit, I”m still trying to work it out.Somewhere amongst the hints that the donor HAD actually been after a quid pro quo for his donations and the donor’s insistence that loads of people knew about his method of donating, will lie the truth. Whatever, he has given the Sundays something to tap away about.And Labour something seriously to think about.

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1 The Observer maintains that Brown’s hopes of calm returning to the Labour party scene have been dashed.

Donor row: more key ministers accused

I have letters, warns Abrahams
by Nicholas Watt and Jamie Doward
Sunday December 2, 2007
The Observer – Excerpt

Gordon Brown’s hopes of moving on from the explosive issue of Labour funding were dashed this weekend as more cabinet ministers were drawn into the row and one of the Prime Minister’s closest allies fought for her political life.As Brown launched a desperate fightback after the worst week of his premiership by making a historic pledge to curtail trade union donations, he faced fresh pressure when the donor at the heart of the controversy warned that more senior party figures knew of the system of anonymous donations.

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2 The Sunday Times claims that Mr Abrahams says that ten party officials were aware of his method of donation.Excerpt – Sunday Times – Donorgate: 10 Labour bosses knew
by Jonathan Calvert, Michael Gillard and Marie WoolfThe property developer at the centre of Labour’s donor scandal has claimed that there are 10 party officials who were aware of his “illegal” arrangement to fund it secretly.The details will be passed to the Metropolitan police, who are now investigating how more than £600,000 was paid by the developer to Labour through intermediaries.The list includes two senior members of Gordon Brown’s party and government: David Triesman, the minister for intellectual property, and Jon Mendelsohn, Labour’s chief fundraiser.Yesterday David Abrahams, the secret donor, issued a statement detailing precisely his claims that Mendelsohn knew about the arrangement eight months ago. It challenges Mendelsohn’s statement that he did not find out until September.

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3 In The Independent, Mr Abrahams claims that Mr Mendelsohn knew in April of Abrahams’ intemediary payment setup.

I accuse: Abrahams and PM’s aide locked in bitter row over donations

Businessman reveals details to IoS of key meeting with Mendelsohn; Labour’s fundraising chief rebuts claim as ‘fictional and completely.

By Brian Brady and James Hanning, published: 02 December 2007

Undercover Labour donor David Abrahams last night accused Gordon Brown’s chief fundraiser of knowing about his network of illegal proxy donations seven months ago – and deciding that they were “a good idea”.

In an exclusive article for The Independent on Sunday on page 38, the controversial Labour supporter insisted that Jon Mendelsohn discussed Mr Abrahams’s system of donating through intermediaries with him at a dinner in London, five months before Mr Mendelsohn became the Labour Party’s head of election resources.

Mr Abrahams claims Mr Mendelsohn, a close ally of the Prime Minister, told him that the unconventional arrangement, which breaches electoral law, “sounds like a good idea”.
Mr Mendelsohn last night dismissed Mr Abrahams’s claims. He said: “This latest statement is fictional and completely untrue. I will be co-operating fully with the police in their investigation.”

Labour’s chief fundraiser has previously maintained that he had no knowledge of the proxy donations, totalling over £600,000, until he took over his new role in September, and queried a number of third-party donations with the former general secretary Peter Watt, who resigned over the affair last week.

But, in his first full account of his “social” encounter with the fundraiser during a British Board of Deputies dinner at which Gordon Brown was guest speaker, Mr Abrahams claimed financial support for Labour had been a central topic of conversation.

“I was placed next to Jon Mendelsohn which, at the time, I felt was just a little more than coincidence,” he recalled, in a personal account which revealed his frustration at his treatment at the hands of rivals within and outside the Labour Party. “I then realised he was hoping to become Gordon Brown’s fundraiser and he knew I was a strong supporter.

“He did not solicit funds from me at the dinner, however. I told him that I regularly donated to the party, and I described how it was done through intermediaries for the purposes of anonymity, to which he replied, ‘That sounds like a good idea’.”

The new attack on one of Mr Brown’s closest confidants came as the third-party donors affair threatened to destabilise the Labour Party still further, with deputy leader Harriet Harman clinging on to her job amid revelations about how her campaign for the position had been financed.

Last Wednesday night Mr Abrahams said he had received a letter from Mr Mendelsohn, dated 24 November, asking to meet him next time he was in London. Mr Mendelsohn said he wrote to Mr Abrahams to arrange a meeting so he could inform him he was “unhappy” with the way he had disguised donations to the party. He said he was told by Mr Watt that these were disguised donations by Mr Abrahams, but were within the law. Mr Mendelsohn said he believed the donations “did not meet the strict transparency test that I wished to see in place” and wanted to meet Mr Abrahams to tell him the arrangement should end.

Mr Abrahams last night stressed that he had not believed he was breaking the law by failing to put his name to all 19 donations. But he pointed the finger at further, unnamed, senior Labour figures, who he claimed had been fully aware of the back channels through which he had been directing his contributions since they began in 2003.

Mr Abrahams said: “Party officials knew of my wish to retain my privacy and were only too happy to accept my money via intermediaries. Only a very few officials and party figures in the higher echelons of the national party structure were aware. Perhaps as a result I was received warmly at functions and was occasionally contacted to make further donations.”

Mr Abrahams stepped up the pressure on Mr Mendelsohn by urging the fundraiser, who he said was one of “only a very few” people who knew about the proxy donations, to “stop damaging himself and the party’s credibility”.

In a separate statement, Mr Abrahams said: “He was one of only a very few people who were aware of this method of making donations to the party.

“He would be well advised now to stop damaging himself and the party’s credibility. I will not stand by and allow my name to be put in the frame by spin doctors. The police must be allowed to conduct this inquiry free from the interference of politicians.”

Details of Mr Abrahams’s network of donations have plunged the party into renewed crisis only months after Labour was humiliated by the “cash-for-peerages” inquiry. The Electoral Commission passed a file on the affair to the Metropolitan Police on Friday, after it was confirmed that Scotland Yard had launched “Operation Minera”, into “potential breaches” of the Political Parties, Elections and Referendums Act 2000.

Mr Brown has also asked former Labour general secretary Lord Whitty to carry out an internal investigation into the party’s handling of the donations, which are to be handed back. The decision to return the “tainted” cash will now force the Labour leadership to take the begging bowl around union supporters in a bid to prevent a financial crisis.

Mr Abrahams’s latest disclosures came as Mr Brown tried to fight back against the torrent of criticism that has dogged him since the affair came to light. The PM pledged yesterday to use the lessons of the embarrassing episode to push forward reform of the entire political party funding system. As he attempted to regain the initiative after a two-week battering, he called for a fresh consensus but warned he would not allow “one-party deadlock”.

He told a meeting of Labour’s National Policy Forum in west London: “The latest problems in party funding show why it is right not to delay but it is time to act. We have learned just how easily trust in our politics can be eroded. We must now complete the work of change, address the problems that still remain to be resolved, not hesitate to make the changes necessary and seek to build greater confidence in the integrity of our political system.”

Mr Brown said reform proposals put forward by Sir Hayden Phillips, which include a £50,000 cap on individual donations, provided a “comprehensive framework for reform”.

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4 The Mail on Sunday says that the second biggest Labour donor is an Iranian born French citizen.

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Much as I have huge differences with Matthew Parris on his analysis of Tony Blair – except once when he wrote about “Why he loved Blair’s Britain” (an article sadly disappeared into the internet ether) – he IS nonetheless, imho, a good writer.This article has some Parrisian gems.Matthew Parris – “They can’t even cook their own books”

Tags: brown, donors, harman, i have proof, labour scandal, mendelsohn, mendelson, trades union funding