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SECRET FOREIGN CASH FUNDED TORY CAMPAIGN - Saturday April 1, 2006
Party names some lenders but repays £5m to avoid identifying others. The Conservative party admitted last night that it fought the last general election partly with the use of foreign loans which have now been hurriedly repaid to clean up the party's accounts.
Invisible cash support? - No really! Don't ask
The Tories have been forced to repay £5m over the past fortnight to at least 10 supporters in order to preserve their anonymity after the individuals who lent the money insisted they did not want their names to be made public. Some of that money will have returned abroad.
It is not illegal for political parties to take loans from foreigners - provided it is on fully commercial terms. An aide to the party leader, David Cameron, said the detailed terms but not the names of the foreign lenders would be given to the Electoral Commission next week. The money had been solicited by Michael Howard, the former leader, as part of fundraising for the last election.
Francis Maude, the party chairman, defended the payments, telling Radio Four's PM programme: "Some of them [the lenders] may not be resident in Britain but there's nothing wrong with that."
The Labour party chairman, Ian McCartney, called on the Tories to reveal the sources of overseas loans. "This Labour government outlawed foreign donations to prevent those from outside this country interfering with our democracy," he said. "But the Tories have now revealed they deliberately tried to get round this ban by taking foreign loans.
"We now need to know who these people are; where they reside; where they pay tax; how much they lent; and on what terms. By failing to provide these details, the Conservatives and David Cameron are fuelling suspicions that they have even more to hide."
But as the focus was turning to the provenance and nature of Tory finances, Labour's biggest donor admitted he had failed to declare properly a £2m loan he made to the party. Lord Sainsbury, the science minister, apologised for misleading the public about his contributions to party funds, saying the £2m loan had been confused with another donation of a similar size advanced a few weeks earlier.
In a statement, he said he had contacted the Whitehall official about the money and asked if there was a record of the loan. The permanent secretary said there was a record of a contribution of £2m to the Labour party. "It has now become clear to me that the correspondence refers not to the loan I gave but to the donation of the same sum I had made a month earlier," Lord Sainsbury said. "I wish to set the record straight. I apologise for having unintentionally misled the public."
The admission is the latest twist in the three-week row over the finances underpinning the big parties. Scotland Yard detectives are investigating both Labour and the Tories to ascertain whether loans were solicited in exchange for the promise of honours including seats in the House of Lords. The Tories' decision to try to persuade all the people who gave them loans to go public was taken two weeks ago as the row enmeshed Labour. Tory party officials insisted it had taken so long to resolve the question because many of the lenders did not want their names to be made public and asked for their money back.
The Tories made the repayments by persuading other people who had made loans to convert them to donations and by raising further loans. The publication yesterday of both the list of people who had lent the party £16m and the latest quarterly figures showing donations totalling £8m suggest about half the money raised came from donors and the rest from taking out new or extended loans.
The Tories have been under increasing pressure to reveal the names after Labour revealed its lenders. Jonathan Marland, the Conservative party treasurer, said last Monday that he would never reveal the names, but Tory sources said yesterday that he was playing for time to negotiate a deal. Among the 13 people listed as lending the party £16m, the biggest contributors are former party treasurer Lord Ashcroft (£3.6m) and the Scottish philanthropist Lord Laidlaw (£3.5m). The others include Dame Vivien Duffield (£250,000); deputy treasurer Johan Eliasch (£2.6m); and Cringle Corporation Ltd (£450,000).
In a statement last night, the Electoral Commission said it "welcomes the decision by the Conservative party to publish details of its current lenders and to cooperate with us in making available more detailed information, as we did the decision by the Labour party. We have today written to registered treasurers requesting a more detailed explanation of the rationale they used in coming to the view that all loans accepted by the parties were on commercial terms, including any supporting evidence that would be helpful in clarifying our understanding."
Meanwhile, Scotland Yard detectives conducting an investigation into the peerages scandal interviewed senior officials at the House of Lords Appointments Commission yesterday. They have demanded to see all emails and documents concerning the latest nominated peerage list, which has been delayed since last July.
I said don't ask - nearly got away with it though
Party
funding
31.03.2006:
Tories
name some lenders, and pay back others
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