THE Labour donations controversy last night spread to Sedgefield as a defeated by-election candidate raised concerns over the timing of thousands of pounds in political handouts.
Liberal Democrat Greg Stone, who came second in the Parliamentary by-election last July, has written to Tony Blair’s successor Phil Wilson demanding to know what part the donations played in his victory.
Mr Stone, a Newcastle councillor, referred to the fact that on the day the by-election was called – June 29 – a donation of £25,000 was made to the party by Ray Ruddick, from Newcastle, on behalf of David Abrahams, also of Newcastle, who attended Mr Blair’s farewell party.
On the same day, a donation of £38,000 was made to the party by Janet Kidd, of Whickham, Gateshead, on behalf of Mr Abrahams. On both occasions Mr Abrahams did not declare that the cash had been handed over on his behalf, and the Electoral Commission is now investigating the donations.
Mr Stone said that if money was used in any way to pay for an election campaign, it should be declared.
He said: “The problem is that this has been done by proxy.
“You can give money to a party – there is nothing wrong with that – but we cannot have a situation where people can act in secret.
“I have, therefore, written to the Labour candidate Phil Wilson and his agent Paul Trippett, asking them to state whether their campaign received funding from Mr Abrahams either directly or indirectly via the national Labour Party organisation.”
In his letter to the Sedgefield MP, Mr Stone says: “In the circumstances, I believe it is a matter of public interest whether your campaign’s expenditure in the Sedgefield by-election was legitimate and transparent in respect of donations from Mr Abrahams and his associates.”
A spokesman for Mr Wilson said the Labour Party had handled funding for the by-election.
The letter comes as one of the go-betweens who had donations passed on in her name admitted she knew what was happening at the time. On Monday, Janet Dunn, of Ponteland, said she was a Tory voter who had no knowledge of the money transferred through her account. However, yesterday she changed her mind and said she had not wanted to mislead anyone.
In a statement issued through her solicitor, she said: “The issue between David Abrahams and the Labour Party that has arisen recently came as a complete surprise to me and to my husband.
“Consequently, my response in questions put to me yesterday may have given inaccurate information. That was not my intention. I do not propose to comment further in public, save to confirm that following a review of my records, a cheque drawn on my account in the sum of £25,000 was given to the Labour Party in January 2003.
“I will, of course, provide such assistance as I can to any person or body appointed to carry out a formal investigation into this matter.”
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Pressure on party fundraiser grows
LABOUR’s chief fundraiser Jon Mendelsohn was under pressure to quit last night for his role in the donations scandal.
Mr Mendelsohn admitted he knew about “unlawful” donations made on behalf of David Abrahams last month and was unhappy about it – but did not tell anyone else as he wanted to sort out the matter with Mr Abrahams personally.
The proxy donations have been described by Prime Minister Gordon Brown as unlawful.
The pressure was on the fundraiser after Mr Abrahams revealed a letter sent to him by Mr Mendelsohn asking to discuss donations. In a statement yesterday Mr Mendelsohn said: “I was unhappy with the arrangement whereby donations were taken through a third party and was determined it would not play a part in our future plans. I was very concerned that these arrangements did not meet the strict transparency test that I wished to see in place.
“I had no intention of asking Mr Abrahams for donations and wanted to give him the courtesy of explaining this personally.”
Shadow secretary for work and pensions Philip Hammond said the party finance boss had questions to answer. “We need proper answers and we need them now.”
He is demanding the Labour Party reveals why Mr Mendelsohn did not immediately inform the Electoral Commission.