Labour party donations – Have you got any spare change?

In a democracy we the people permit others to govern us on two key conditions; first they must be elected by a democratic process (however imperfect that may be) and secondly that they protect us and rule for our good. Nothing else persuades us to surrender the personal sovereignty that we have in our free will and transfer part of it to a government. 

Democracy works by people forming alliances and asking for votes on the basis of their proposals. Government fulfils an overall function of protecting the governed by two separate processes; by the formulations of policy and by the implementation of it. Virtually every government in the world spends more time implementing policies their predecessors have formulated than they do on implementing and administering their own policies. 

Politicians ask for votes (a couple of hundred years ago they used to buy votes) and in modern times spend not just their energy in getting the votes but also their money in advertising their wares so that they may attract votes. They believe that the more they spend the better chances they have of being elected. 

Wealthy people realise that donations to political parties and politicians they might buy influence, particularly influence that can create or change policy to enable the wealthy donors to become wealthier.  

Everyone who donates money to a political party has a motive; long standing donors of small amounts are usually motivated by a simple belief in the policies that the party espouses are worthwhile and should be implemented but business people seem to get a Damascus conversion when they suddenly miraculously and overwhelmingly get an uncontrollable urge to donate large sums of money to a political party, usually one that has just come to power or is just about to come to power. 

There is an unquenched scandal in the United Kingdom now about donations to the ruling Labour Party. The government today is defending itself from the slings and arrows of outrageous fortune aimed at it from many directions about the Labour Party having accepted donations that they perhaps should not have accepted under the laws they created. Indeed, so many are these attacks that there seems little time left for the proper governance of the country and the development of policy needed to protect the country. 

It seems that a property developer has secretly given over £660,000 (although the figures quoted do vary) secretly through nominees to the Labour Party. This seems to be in breach of the law which require donations to be accurately recorded. It may be criminal to donate it in this way or to accept a donation in this way. Mr Plod may be interested in this.  

The gentleman, who made the donation, David Abrahams, is a genuine Labour Party supporter of many years standing, who says that he wanted to donate the money anonymously. He said that he is a very private person who does not seek publicity. This, of course, does not allow him to break the law nor does it allow the Labour Party so to do.

Labour politicians in the government have said that they will co-operate fully with the police enquiry. I find it strange that they announce this as a point in their favour; everyone has to co-operate with police enquiries. I would not have expected Prime Minsiter Gordon Brown and Deputy Prime Minister Harriet Harman to “lawyer up” or plead the right against self incrimination. The surprising thing is that the members of the government did not call in Mr Plod much earlier.

I fail to understand one point that no one has properly explained. If you are a lawyer, accountant or financial advisor and you take on a new client from whom you will rceieve money (of any amount) you have to undertake due diligence checks against the client. If you do not you are in serious trouble. These obligations are contained in money laundering rules.

 An experienced financial advisor helping a ninety year old woman put £5000 into the building society has a legal duty to ensure that the £5000 is not the proceeds of crime and that there is no back ground of criminal activity.

If lawyers, accountants and professional financial advisors are under a duty to make these due diligence enquiries for small amounts of money I fail to understand the difficulty of political parties making similar due diligence enquiries for amounts where tens and hundreds of thousands of pounds are involved. I presume there is no exception for assisting money laundering if the money ends up in the coffers of a political party, but I could be wrong about this.

The truth is that it is not difficult to make these enquiries, but the politicians are holding out the begging bowl and they do not want any of the spare change to slip out of it. If money was not involved (for example as when they select a prospective parlriamentary candidate) I am sure that they would make all the enquiries necessary.

Some people, inlcusing Gordon Brown, are trying to deflect this story into a debate about whether the laws for funding political parties are right or wrong. Do not let them. If we hear some wretched politician or political advisor coming out with the proposition that there is something wrong with the rules governing funding of political parties when asked to comment on politicians breaking the funding laws we must respond that there is something wrong with the law makers who believe that the rules they make do not apply to them.

Politicians expect us to obey all the laws they enact, good or bad. We expect no less of them.      

2 Responses

  1. I agree with the above.

    The only comment I would make is that inorder for Mr Abrahams to be guilty of money laundering the money needs to be as a result of a crime and classed as criminal property.

    I assume this would apply to those receiving the money as well.We dont know whether the donation is subject of crime however there is a likelihood of such a criminal offence where inland revenue offences are committed but we dont know that yet, do we?

    Additionally offences may have been committed under the money laundering regulations by those people and organisations dealing with the donations.

    Nodoubt there will be another government fudge and lack of CPS desire to see matters dealt with in a transparant way

  2. I did not mean to suggest that anyone was guilty of money laundering; there would have been breaches of money laundering laws if these events happened in a non political party context. The duty is always on the recipients to know where the money comes from and accepting something at face value is not a defence.

    I hope that there won’t be a fudge but I fear that you will be proven right.

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