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Brown denies war over donations Brown denies war over donations
(about 2 hours later)
Downing Street has played down reported tensions between Gordon Brown and Labour deputy leader Harriet Harman over proxy donations to the party. Downing Street has played down a reported rift between Gordon Brown and Harriet Harman over proxy donations.
The prime minister's spokesman said he was "fully supportive" of Ms Harman and "focused" on running the country. It follows revelations about the way Ms Harman's successful campaign for Labour's deputy leadership was funded.
Ms Harman earlier denied harming Mr Brown's reputation after it emerged her aides accepted £5,000 from Janet Kidd, an associate of David Abrahams. Her team accepted £5,000 from a donor linked to businessman David Abrahams on the recommendation of Mr Brown's aides.
Police have launched an investigation into Mr Abrahams' donations. Police have launched an investigation into all of Mr Abrahams' covert donations to Labour dating back four years and totalling more than £650,000.
The Electoral Commission has said it formally handed over its report on Labour donations earlier in a meeting with the Metropolitan Police and Crown Prosecution Service. But - in a separate development - the Electoral Commission has asked Ms Harman to explain how she paid for her campaign after BBC Newsnight revealed substantial loans were taken out.
'Unacceptable'
The man at the centre of the row, North East property developer David Abrahams, gave more than £650,000 to the party, via four associates, over four years.
See how David Abrahams made donations to the Labour PartyIn graphicsSee how David Abrahams made donations to the Labour PartyIn graphics
Mr Brown has said all the money will be returned, as the donations were unlawful and "completely unacceptable". Any such loan should be reported to the Electoral Commission within 30 days. Only one loan, an overdraft facility for £10,000 taken out in October last year has so far been reported.
Downing Street has insisted Mr Brown knew nothing about the arrangement with Mr Abrahams. Even though the contest ended in June, the Harman campaign is still trying to raise money to repay the loans, BBC Newsnight's David Grossman reports.
But Ms Harman appeared to implicate Mr Brown in the affair by revealing his former leadership campaign manager, Chris Leslie, had suggested Janet Kidd as a possible donor. Downing Street has insisted Mr Brown knew nothing about the funding arrangement with Mr Abrahams, which saw the businessman give cash to the party through four proxies.
Mr Brown has said all the money paid out by Mr Abrahams will be returned, as the donations were unlawful and "completely unacceptable".
Ms Harman earlier appeared to implicate Mr Brown in the affair by revealing his former leadership campaign manager, Chris Leslie, had suggested one of Mr Abrahams' intermediaries, Janet Kidd, as a possible donor.
Asked earlier if she had "dropped Gordon Brown in it," she replied: "No, absolutely not.Asked earlier if she had "dropped Gordon Brown in it," she replied: "No, absolutely not.
"I strongly maintain I have complied with the letter and spirit of the law and I think Gordon Brown has done the same.""I strongly maintain I have complied with the letter and spirit of the law and I think Gordon Brown has done the same."
And No 10 has sought to play down reports of a Cabinet rift over the donations. Downing Street has also sought to play down reports of a Cabinet rift over the donations.
'Mind-blowing''Mind-blowing'
The prime minister's official spokeswoman said: "The prime minister is fully focused on the business of government and has made clear he is keen that all the issues regarding party political donations are investigated thoroughly." Mr Brown's official spokeswoman said: "The prime minister is fully focused on the business of government and has made clear he is keen that all the issues regarding party political donations are investigated thoroughly."
f Gordon Brown had had even a sniff that this was going on, he would have stopped it immediately, as would have I Jack Straw, Justice Secretary Q&A: Legal implications Timeline: Donations rowf Gordon Brown had had even a sniff that this was going on, he would have stopped it immediately, as would have I Jack Straw, Justice Secretary Q&A: Legal implications Timeline: Donations row
Justice Secretary Jack Straw also denied there was a Cabinet rift. Justice Secretary Jack Straw said: "Far from there being any chasm, there is not an inch between them."
"Far from there being any chasm, there is not an inch between them," he said. Mr Straw, who ran Mr Brown's leadership campaign, insisted it had cost less than expected because he was unopposed.
He insisted that Mr Brown's leadership campaign had cost less than expected because he was unopposed, and Chris Leslie had been unaware that Mrs Kidd was not the source of the money when he put her name forward as a potential donor for Ms Harman. And he said Chris Leslie had been unaware that Mrs Kidd was not the source of the money when he put her name forward as a potential donor for Ms Harman.
Mr Straw voiced his frustration that another controversy had emerged so soon after the cash-for-honours affair.Mr Straw voiced his frustration that another controversy had emerged so soon after the cash-for-honours affair.
And he accepted that there were questions to be asked of Tony Blair, because many of the donations were made when he was prime minister.And he accepted that there were questions to be asked of Tony Blair, because many of the donations were made when he was prime minister.
"It's absolutely true that this seems to go back for about four years," said Mr Straw."It's absolutely true that this seems to go back for about four years," said Mr Straw.
"And frankly one of the reasons why all of us are irritated to distraction by what's happened is that we assumed that these historic problems had been sorted out with all the additional controls that were put in place following the so-called cash-for-honours issue.""And frankly one of the reasons why all of us are irritated to distraction by what's happened is that we assumed that these historic problems had been sorted out with all the additional controls that were put in place following the so-called cash-for-honours issue."
Mr Straw said the latest scandal was "distracting beyond belief" for Mr Brown, who was a man of "astonishing rectitude".Mr Straw said the latest scandal was "distracting beyond belief" for Mr Brown, who was a man of "astonishing rectitude".
Earlier, Mr Straw insisted "99.9%" of people in the Labour Party - including both Mr Brown and himself - knew nothing about the secret donations.Earlier, Mr Straw insisted "99.9%" of people in the Labour Party - including both Mr Brown and himself - knew nothing about the secret donations.
He told BBC Radio 4's Today programme the situation was "mind-blowing".He told BBC Radio 4's Today programme the situation was "mind-blowing".
'Unprompted' cheque
Ms Harman's campaign team accepted £5,000 from Mrs Kidd in July - the month after she won the deputy leadership contest.
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The BBC has learned this money was used to pay off debts accrued during campaigning.
Mr Leslie said Mrs Kidd had been suggested as a possible donor by Mr Abrahams.
But when she sent an "unprompted" cheque for £5,000 Mr Leslie destroyed it because the campaign team did not know who she was.
He did, however, suggest Mrs Kidd as a possible donor when Ms Harman's campaign team asked him for help.
"I passed them the details of Mrs Kidd as someone whose offer of a donation we had not taken up," Mr Leslie said.
Cheque destroyed
In law, details of any donor making gifts through a third party must be registered and reported to the Electoral Commission. The commission has asked the Metropolitan Police to investigate.
The Electoral Commission has now decided to refer matters to the Metropolitan Police for further investigation. The next step is for us to receive and review their reference report Metropolitan Police Commissioner Sir Ian Blair In full: Met Police response Chris Leslie: Full statementThe Electoral Commission has now decided to refer matters to the Metropolitan Police for further investigation. The next step is for us to receive and review their reference report Metropolitan Police Commissioner Sir Ian Blair In full: Met Police response Chris Leslie: Full statement
One of Ms Harman's rival contenders, Hilary Benn, turned down £5,000 from Mrs Kidd, because he had been told it was actually from Mr Abrahams. He later accepted it under Mr Abrahams' name.
Mr Abrahams has said he did not know he was breaking any rules when he made the donations by proxy, claiming that he kept them secret to avoid publicity.Mr Abrahams has said he did not know he was breaking any rules when he made the donations by proxy, claiming that he kept them secret to avoid publicity.
Labour's general secretary Peter Watt has already resigned, saying he knew about Mr Abrahams' funding arrangement, but did not think they had broken the rules.Labour's general secretary Peter Watt has already resigned, saying he knew about Mr Abrahams' funding arrangement, but did not think they had broken the rules.
Labour's chief fundraiser, Jon Mendelsohn, has said Mr Watt told him about the situation last month but had been unhappy about it and had contacted Mr Abrahams with the intention of putting his donations on a proper footing.Labour's chief fundraiser, Jon Mendelsohn, has said Mr Watt told him about the situation last month but had been unhappy about it and had contacted Mr Abrahams with the intention of putting his donations on a proper footing.
The Metropolitan Police recently completed its 19-month, £1.4m "cash-for-honours" investigation into party funding.
That inquiry, which cast a shadow over Tony Blair's final months as prime minister, ended with no charges being brought.