Labour to hold donations inquiry

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The Labour Party is to investigate some of its biggest donors after a businessman admitted he had made donations through "friends".

Property developer David Abrahams gave more than £400,000 to Labour through Janet Kidd and Ray Ruddick as, he said, he did not want to "seek publicity".

Justice Secretary Jack Straw has said he is concerned about the arrangement, which was "plainly not transparent".

The Electoral Commission has also asked Labour to explain the donations.

The party confirmed general secretary Peter Watt will examine its donations.

"It is important that the Labour Party is beyond reproach in this matter," said a spokesman.

"The general secretary has therefore been asked to investigate this issue and report his findings to the party's treasurer."

'Worthwhile causes'

The Electoral Commission has asked Labour to explain the donations, which may breach electoral law.

Mr Straw said: "Whether these arrangements are within the letter of the law they are plainly not transparent. I am concerned about them.

"I shall ask both the Electoral Commission and my officials for immediate advice on what action should be taken."

I can't stand Labour - I can't stand any politicians Ray RuddickLabour donor

Under electoral law, people making donations on behalf of others must give full details of the person providing the money.

David Abrahams, a property developer in the North East of England, has told the BBC he will declare his donation if he is required to.

According to Electoral Commission records, Mr Ruddick, a builder, who drives a Ford Transit van and lives in a former council house in Newcastle, is Labour's third biggest donor.

When he was contacted by the Mail on Sunday newspaper he initially told it he knew nothing about the donations - apart from a payment of £80,000 made in July.

He told the paper's reporter: "I can't stand Labour. I can't stand any politicians."

'Private person'

Mr Abrahams told BBC News it was he who had funded the donations by his secretary Mrs Kidd and his "friend and colleague" Mr Ruddick.

Gordon Brown needs to come clean quickly and explain what has been going on Chris Grayling, shadow work and pensions secretary

Mr Abrahams said: "I'm a member of the Labour Party and have been for nearly 40 years, since I was 15.

"I have always been fortunate enough to be able to make donations to worthwhile causes including the Labour Party."

He said he had "gifted funds to my friends and colleagues" so they could make donations on his behalf.

He said he had not donated the money under his own name because he was "a very private person".

According to the Electoral Commission, Mr Ruddick has donated £196,850 to Labour and Mrs Kidd £185,000 since 2003.

They are listed as having given the party £222,000 between them since Gordon Brown became leader, making them Mr Brown's third biggest donors after Lord Sainsbury and businessman Mahmoud Khayami.

Janet Kidd is also listed as making a donation to Harriet Harman's successful campaign to be Labour deputy leader, while Mr Abrahams is listed, under his own name, as a donor to Ms Harman's defeated rival Hilary Benn.

Michael Kidd, Mrs Kidd's husband, told BBC Radio Five Live his wife had been given the money by Mr Abrahams "with the clear instruction to donate it to the Labour Party".

"It was never a gift. She did it because she works for him part time and she saw it as part of her job. She was given no money to do this," Mr Kidd said.

'Mysterious'

Commenting on the donations, Conservative frontbencher Chris Grayling said: "This is all extremely mysterious.

"Gordon Brown needs to come clean quickly and explain what has been going on."

And Lib Dem leadership contender Nick Clegg said: "I think it is precisely that lack of transparency that does so much damage not only to Labour - which it should - but to all politicians and all political parties."