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More on Lord Sainsbury and the Blair sleaze scandal (27/4/2006)

1.MPs set up a petition over Blair sleaze scandal
2.Tycoons tell Labour: pay us back now

It looks like the current scandal will leave Blair even more financially dependent on his Party's biggest individual donor, the GM entrepreneur and enthusiast, Lord Sainsbury. Perhaps another of Blair's big donors and ministers, Lord Drayson - the former head of the UK biotech industry's trade association - will also be able to help out!

Don't forget the petition mentioned in the first article - www.cleanupwestminster.com. People outside the UK should also feel free to sign this, as Westminster claims to be the mother of all parliaments and as Blair being captive to big business interests has international ramifications, as can clearly be seen with his pro-GM stance in Europe and globally (eg via the Department for International Development).

EXCERPTS: Member of Parliament Nigel Evans... raised the question of money loaned by Trade Minister Lord Sainsbury.

"Do you not feel it ill-judged to have accepted a GBP2m loan off one of your ministers?"

He added, "Don't you agree that the whole thing stinks and it's about time you gave the GBP2m back to Lord Sainsbury?"

Mr Blair responded, "I think he does a superb job as a minister and I'm proud to have him in the Government." (item 1)

Labour is also expecting to repay a GBP2m loan to Lord Sainsbury, the science minister, in July. However, sources said he was preparing to make a sizable donation to compensate for the loan repayment. (item 2)

On Friday, Lord Heseltine, the Tory former deputy prime minister, described the loans-for-honours scandal as "one of the most corrupt situations" he had seen in his political lifetime. Transparency International, an anti-corruption watchdog, has sent a dossier to Scotland Yard claiming that more than seven separate offences, including bribery and conspiracy to defraud, may have been committed by party officials in the scandal. (item 2)
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1.MPs set up a petition over cash-for-honours scandal
Tomos Livingstone
Western Mail, April 20 2006 [url at end]

The Welsh and Scottish MPs who called in the police over the cash-for-honours scandal have set up an online petition to gather support for their campaign - and gained the backing of anti-sleaze campaigner Martin Bell.

Plaid MP Elfyn Llwyd was one of three people to contact Scotland Yard after it emerged several big donors to the Labour Party had subsequently been nominated for peerages.

Scotland Yard last week arrested a former Government adviser, Des Smith, as part of their inquiry under the 1925 Honours (Prevention of Abuse) Act.

Labour has now published the list of those who donated more than GBP14m in the run-up to the 2005 election - unbeknown to many senior party figures.

The online petition, at www.cleanupwestminster.com calls for no appointments to be made to the House of Lords until the police investigation is

Mr Llwyd said, "The 1925 Act is there to be used. The accusation thrown at us is that this is a gimmick, but that accusation is disappearing. The Met[ropolitan police] are taking this seriously, clearly it's not a gimmick, there has been an arrest, and I believe there will be other arrests, and it may even reach the office of the Prime Minister.

"It is my firm belief that people in Number 10 should be interviewed."

He said the aim of the petition was to gather public support for a clean-up of the political system. "We need to clean the stable," he said. "The only way we will do that is to engage the public."

Mr Bell, the former BBC correspondent who famously defeated the sleaze-mired Tory MP Neil Hamilton in the 1997 election, said that "common sense" dictated there was a link between donations to political parties and elevation to the House of Lords.

He added, "There is no formal organisation that exists to clean-up politics; perhaps there should be. When there is a scandal, there is pressure to clean-up politics. There has been insurrection in the past, and I think we are close to that now."

Earlier Mr Llwyd asked Mr Blair to explain why rich supporters were asked to make loans to Labour rather than donations. He asked Mr Blair at Prime Minister's Questions, "Why was it, when your fundraiser-in-chief and tennis partner [Lord Levy] was offered a GBP1.5m donation to the Labour Party, he refused that in favour of a GBP1.5m loan?"

But Mr Blair gave the question short shrift. "I have no intention of giving a running commentary on this, but I can say that I'm delighted that so many successful people support the Labour Party."

Earlier, Swansea-born Tory MP Nigel Evans, who represents Ribble Valley, raised the question of money loaned by Trade Minister Lord Sainsbury.

"Do you not feel it ill-judged to have accepted a GBP2m loan off one of your ministers?"

He added, "Don't you agree that the whole thing stinks and it's about time you gave the GBP2m back to Lord Sainsbury?"

Mr Blair responded, "I think he does a superb job as a minister and I'm proud to have him in the Government."

url: http://icwales.icnetwork.co.uk/0100news/newspolitics/tm_objectid=16968106&method=full&siteid=50082&headline=mps-set-up-a-petition-over-cash-for-honours-scandal-name_page.html

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2.Tycoons tell Labour: pay us back now
Robert Winnett and Jonathan Calvert
The Sunday Times, April 23, 2006 [shortened]
http://www.timesonline.co.uk/article/0,,2087-2147862,00.html

TWO businessmen have demanded immediate repayment of their secret loans to Labour, threatening financial crisis for the party.

The formal demands, for a sum totalling at least GBP1.5m, will necessitate a fire sale of the party's London headquarters to pay the debts.

The "loans-for-honours" scandal now threatens to derail the party's campaign for next month's local elections.

A further two of the 12 businessmen who lent Labour a total of almost £14m are also expected to demand that their money is repaid later in the year, although the party has yet to be formally notified.

Sir Christopher Evans, the biotech tycoon, said this weekend that he would be demanding the repayment of his GBP1m loan "this summer".

Labour is also expecting to repay a GBP2m loan to Lord Sainsbury, the science minister, in July. However, sources said he was preparing to make a sizable donation to compensate for the loan repayment.

Since the start of the year, the party has struggled to attract donations from wealthy individuals.

The repayment demands have shocked Labour, which initially assumed that most of the money would be written off. One Labour source told The Sunday Times last month: "The clear intention with the loans was that they should not be paid back - at least not until Blair was no longer leader."

However, yesterday a source said: "It is now clear most of them [the lenders] are going to have their money back. They are already calling the loans in." The only lenders said to have indicated to the party that they will extend the terms of their loans are the four men put forward for peerages - Sir David Garrard, Sir Gulam Noon, Barry Townsley and Chai Patel. Their nominations were blocked by the House of Lords Appointments Commission which vets potential peers.

On Friday, Lord Heseltine, the Tory former deputy prime minister, described the loans-for-honours scandal as "one of the most corrupt situations" he had seen in his political lifetime. Transparency International, an anti-corruption watchdog, has sent a dossier to Scotland Yard claiming that more than seven separate offences, including bribery and conspiracy to defraud, may have been committed by party officials in the scandal.

Jack Dromey, the Labour party treasurer, said he believed people around Blair "consciously" sought to exploit loopholes in the law by raising cash for the party through loans rather than donations.

Labour is now preparing to sell its Westminster headquarters, valued at GBP6m, to plug the black hole in its finances. However, the party is understood to have an outstanding mortgage of GBP5.5m from the Co-operative Bank so the sale will raise only GBP500,000. It is thought not to have any other saleable assets.

Party sources are confident they can arrange new finance from banks to pay off the loans. One source insisted: "There is no financial crisis. It will not be a problem." However, senior sources contacted by The Sunday Times declined to explain where the money to repay the lenders would be found. A spokesman for the party declined to comment on Labour's financial arrangements.

Financial experts believe the party would struggle to borrow from a bank as commercial organisations would be wary of making an unsecured loan. The loans offered by the businessmen attracted a low rate of interest.

The source said Labour turned to wealthy benefactors in the run-up to the 2005 general election, after it was refused extra credit by its bank. He added that the party would have risked losing the election had it not accepted the loans. "The party was desperate in 2005, the situation was terrible," he said. "It is very simple . . . we wouldn't have won the election without the loans."

Those who lent the party money are among the country's richest people.

Blair may now be forced to turn back to the trade unions for money, emboldening them to demand stronger influence over policy. The government recently indicated it will surrender to pressure from the unions by dropping plans to cut the generosity of pensions for local government workers.

Labour is drawing up proposals for a reform of political funding. A review is expected to recommend state funding.

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