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Labour donations handling 'inept' Labour boss quits over donations
(about 3 hours later)
Labour's failure to check donations made by a businessman through two colleagues was "inept" and "daft", a former party treasurer has said. Labour general secretary Peter Watt has resigned following the revelation that a property developer made donations to the party via two colleagues.
Property developer David Abrahams gave more than £400,000 through associates, claiming he wanted to avoid publicity. David Abrahams gave more than £400,000 through associates, claiming he wanted to avoid publicity.
But Lady Prosser said party officials normally ran a "due-diligence test" to ensure people were "bona fide" and money received was "legitimate". Mr Watt told a meeting of officers of Labour's National Executive Committee that he had known about the arrangement but not that it might be illegal.
Labour is investigating the donations, which may have breached electoral law. He added that he had always "prided myself on having complete integrity".
The Electoral Commission has also asked the party to explain. 'Integrity'
'Stumbled'
Lady Prosser told BBC Radio 4's The World at One: "It's completely inept when there's been already questions raised in the minds of the public and others about ways in which monies are handled.
"It seems to me to allow this to happen was completely daft."
Lady Prosser also said: "My understanding is, ordinarily, when significant sums of money are being given, the officials at the party do a sort of due-diligence test to make sure that these people are bona fide; obviously that they're registered as electors; and that they've got the money to pay and that the money is legitimate money."
Justice Secretary Jack Straw has said he was concerned about the arrangement, which was "plainly not transparent".
This is all extremely mysterious Chris GraylingConservatives
Sir Alistair Graham, chairman of the Committee on Standards in Public Life, said: "Gordon Brown put as a central theme of his government restoring trust in politics.
"Well, he's had a fairly disastrous period where trust in government as a whole has dropped dramatically.
"So I think he needs to recognise funding political parties is probably one of those areas where he needs to develop a consensus among political parties to see how that trust can be restored."
Labour confirmed general secretary Peter Watt would examine its donations to ensure the party was "beyond reproach".
Under electoral law, people making donations on behalf of others must give full details of the person providing the money.Under electoral law, people making donations on behalf of others must give full details of the person providing the money.
Mr Abrahams, who gave the money through Janet Kidd and Ray Ruddick, told the BBC he would declare the donation if required to. Mr Watt said that, as general secretary, he was legally responsible for the reporting obligations for the party.
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. He added: "I was aware of arrangements whereby David Abrahams gave gifts to business associates and a solicitor who were permissible donors and who in turn passed them on to the Labour Party and I believed at the time my reporting obligations had been appropriately complied with.
'Can't stand Labour' "As a result of press coverage over the weekend, I sought legal advice on behalf of the Labour Party. I was advised that, unbeknown to me, there were additional reporting requirements.
When he was contacted by the Mail on Sunday newspaper he initially said he knew nothing about the donations - apart from a payment of £80,000 made in July. "Once I discovered this error, I immediately notified the officers of the National Executive Committee.
He told the paper's reporter: "I can't stand Labour. I can't stand any politicians." "I take full responsibility for the Labour Party's reporting obligations. Consistent with my own and the party's commitment to the highest standards in public life, it is with great sadness I have decided to resign my position as general secretary with immediate effect."
'Inept'
Mr Abrahams, who gave the money through colleagues Janet Kidd and Ray Ruddick, told the BBC he would declare the donation if required to.
Labour is investigating the donations and the Electoral Commission has also asked the party to explain.
Former Labour treasurer Lady Prosser told BBC Radio 4's The World at One: "It's completely inept when there's been already questions raised in the minds of the public and others about ways in which monies are handled.
"It seems to me to allow this to happen was completely daft."
Justice Secretary Jack Straw said he was concerned about the arrangement, which was "plainly not transparent".
When he was contacted by the Mail on Sunday newspaper, Mr Ruddick initially said he knew nothing about the donations - apart from a payment of £80,000 made in July.
The builder, who drives a Ford Transit van and lives in a former council house in Newcastle, told the newspaper's reporter: "I can't stand Labour. I can't stand any politicians."
Mr Abrahams told BBC News he had funded the donations by his secretary Mrs Kidd and his "friend and colleague" Mr Ruddick.Mr Abrahams told BBC News he had funded the donations by his secretary Mrs Kidd and his "friend and colleague" Mr Ruddick.
Mr Abrahams said: "I'm a member of the Labour Party and have been for nearly 40 years, since I was 15.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.""I have always been fortunate enough to be able to make donations to worthwhile causes including the Labour Party."
'Friends'
He said he had "gifted funds to my friends and colleagues" so they could make donations on his behalf.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".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 and Mrs Kidd £185,000 since 2003.According to the Electoral Commission, Mr Ruddick has donated £196,850 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.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.
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," he added.
Conservative frontbencher Chris Grayling said: "This is all extremely mysterious. Gordon Brown needs to come clean quickly and explain what has been going on."Conservative frontbencher Chris Grayling said: "This is all extremely mysterious. Gordon Brown needs to come clean quickly and explain what has been going on."
Liberal Democrat home affairs spokesman 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."Liberal Democrat home affairs spokesman 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."