"Sleaze is an oil slick"

Sleaze is making the headlines again (if not the News at 10!). Tony Blair recommended Dr Chai Patel for a peerage after he had made a £1.5 million loan to the Labour party last year. There is a loophole that loans to political parties don't have to be made public.

Peter Preston comments about this sleaze in today's Guardian:

"Sleaze is an oil slick on the beach of politics. It sticks, stinks - and kills reputations. It stayed with John Profumo through 43 desolate years as he toiled for redemption. It still swills around the Conservative party that David Cameron strives to revive. And now it is a threat this government can't ignore any longer: a foul Blair "legacy" that may finish off Brown as well.

Too apocalyptic? Why should a few soft loans to Labour matter? Who cares if rich men, waving chequebooks, can collect their peerages in that dark alley round the back? We've wallowed in so much gunk since 1997 - dodgy millionaires, dodgy mortgages, dodgy dossiers - that ermine for sale should barely rise eyebrows. But it does."

We recently asked what had been Labour's sleaziest moment, and there was no shortage of suggestions. But what can be done about party funding? Preston continues:

"The funding of political parties is a grey hole for democracy everywhere from Washington to Paris. Desperate bank managers beget desperate fundraisers. And probably neither the Committee on Standards, nor its next organisation for examination, the Electoral Commission, has easy answers."

ToryDiary recently advocated a cap of £100,000 - but people shouldn't be able to get around the cap by making loans that then saddle political parties with unstable levels of debt and/or hold their policies hostage.

Deputy Editor

Comments

[Chad]

Before we cast stones, the Tory party is practicing exactly the same trick of allowing big donors to make loans.

It is a complete side-step of the intention of the rules, and the only honest action for both Labour and the Tories would be to list the source of loans.

Sure, technically it is not a donation, but hiding a source of income in this way should be illegal, and for private companies to do so, would lend charges of money laundering.

[Editor]

I don't think we are pretending that this is only a Labour problem, Chad. The £100,000 cap and disclosure of loans should apply to all parties. Insofar as the Tory Party has accepted lots of loans it puts it in a precarious position - its financial security depends upon not annoying a big money donor who has lent the party a serious sum of money.

[Chad]

I know you're not Tim, just pre-empting a Labour sleaze thread when both parties are acting as badly as each other! ;-)

All party funding should be open to public scrutiny, no matter what method their financial engineers devise.

Perhaps the Tories could take the lead and declare the source of all past and present loans to show there is nothing to hide, and thus put Labour on the spot.

[malcolm]

Your idea seems a good one Chad.Perhaps I'm being a bit naive here but can't we expect our political leaders to simply behave with a bit of decency under existing rules?
I was not aware of Callaghan,Mrs Thatcher or Major being accused of selling honours to party donors etc.Were they just never caught?

[Christina]

I think you are missing the point, Chad. The sleaze is the selling of peerages to donors or loaners, not the actual loans themselves.

Blair wanted to remove people from the Lords who were there "due to an accident of birth."

He has replaced them with donors and loaners to the Labour Party.

[Sam Coates]

Jack Straw has just come out in support of the Electoral Commission's calls for loans to be declared.

[Chad]

"I'm being a bit naive here but can't we expect our political leaders to simply behave with a bit of decency under existing rules?"

Hi Malcolm,

As someone who started life working in derivatives, I would never discourage innovative methods of funding, but without transparency it is simply corruption, imho.

The Tories could really put Labour on the spot here by listing the source of all past and present loans but failure to do so, will gradually increase calls for such funding methods to be made illegal and leave both big parties looking dishonest.

We simply must know who is funding our political parties, no matter how that funding is structured. I cannot believe that, now, in the 21st century, we need to be demanding changes to find out just who is bankrolling our political parties.

It stinks, and the Tories should take the lead in cleaning it up.

[Sam Coates]

We simply must know who is funding our political parties
The other advantage with more transparency, as discussed in the Editorial about the donation cap, is that some donors will be more inclined to look at supporting the fledgling conservative movement, not just the Conservative party.

[Chad]

Hi Christina,

No I would suggest you are missing the point. These loan-donors have completely changed the face of British politics.

Whereas in the past, a wealthy person made a donation, and if he did not like policy, gave no more, but now, the parties are spending borrowed money from sources they care not to tell us. The parties are leveraging themselves into a position where if they deviate from a loan-donors wishes, could face bankruptcy with loans being called in that we promised "in perpetuity".

How the parties reward these people does add to the sleaze-feel I know, but for me, the biggest scandal is that we simply do not know who is bankrolling the parties, so cannot judge in anyway if they have an unfair influence on policy.

[Frank Young]

The party's accounts are avaliable free on the website - conservatives.com. I can't say i've looked at them though!

[Jonathan Sheppard]

Absolutely Sam - so all the moneymay not flow into CCO- but into other organisations that can be just if not more effective within a C/conseravtive umbrella.

[Ed R]

"[Sleaze] still swills around the Conservative party that David Cameron strives to revive."

How often do you see 'sleaze' and 'Tory' together these days? Even in the context of the 90s, it hardly ever seems to come up. Archer is quiet. The Hamiltons are some media celebs or other. The party has been pretty adept at steering away from major scandals lately -- its 'demons' are perceived to be ideological rather than personal -- as in the big "move to the right or move to the centre" debate. I can't help but feel that the only time sleaze and the Tories are especially linked these days are when partisan journalists want to throw mud without having any mud to hand...

[Frank]

Unfortunately the Party keeps on selecting the rich as candidates-people who are rich now and "can't survive" on a near £60k parliamentary salary. So they take on directorships and their partners do dodgy deals to add to the family income. There is no difference between Labour and ourselves on this. Only when the the candidates list and MP's are representative of the 90% of people who pay the standard rate of tax will anything change.

[Jonathan Sheppard]

Frank, Im not so sure paying a higher rate of tax makes you rich these days! Though I agree with your point about having "regular" people on the list - perhaps with public sector experience etc...

[Donal Blaney]

I've said it before, I will say it again and I will it until I am blue in the face.

A wealthy benefactor giving money to CCO is pouring money down a black hole. The place is over-staffed with often inadequately trained (and barely conservative) graduates and its sickness rates and low productivity would cause the organisation to go bust if it were a private company.

Wealthy benefactors and Mrs Migginses should give their pounds, shillings and pence to the conservative movement. This blog, the Taxpayers' Alliance, the Young Britons' Foundation et al could all do a hell of a lot more with £20,000 or £200,000 than the Party can.

The next election cannot be won by the Party alone: a vibrant conservative movement has a critical role to play...

[Chad]

How often do you see 'sleaze' and 'Tory' together these days?"

Hi Ed, do you not think that is more to do with the fact that the focus will always be on the party in power as that will generate more interest and thus newspaper sales etc?

It would be nice to see the Tories take the initiative though and instead of waiting for the electoral commission to change the rules, to promise that the source of all funding will be declared.

I'm not sure LAbour would be prepared to do the same, and it could be a moral victory.

[TC]

Even the BBC are commenting on nuLab sleaze:

http://blogs.bbc.co.uk/nickrobinson/2006/03/the_whiff_that_.html

Up to now, one of the main principles was that ministers should not be aware of donations to their political party and therefore not influenced. If the donations were published, ministers could easily look at these figures.

Personally, I am not disputing with the idea of publishing details of donations - we just need to work out how to deal with this issue.

[Mark Fulford]

Up to now, one of the main principles was that ministers should not be aware of donations to their political party and therefore not influenced.

And pigs might fly!

[Andrew]

Is there any government in the past 150 years that hasn't sold honours? That's how the system works - institutional corruption at its finest.

[Mark Fulford]

Yes, but historical wrong is no reason not to do right now. And New Labour came to power partly on a no-sleaze ticket.

[Ted]

Sleaze, NHS, Iraq etc could hit Labour hard - defections to the LDs, by election losses etc. Mike Smithson suggested yesterday that the LDs couldn't replace us but could replace Labour.

It's possible to imagine that in the election after next the Liberal share of the vote overtakes Labour's - that Tony Blair's NuLab experiment, which delivered victories but precious little substance, has left his party without a mission or purpose - no Blair no NuLab. The Project could deliver the re-alignment of the left but to the benefit of the LDs not Labour.

Its not just sleaze that will do it - its what peerages for cash, offshore money, rich friends, etc tell us about the vacuum where there should be political purpose. It's the Blairite ministers with their scripted comments without passion. It's ill thought out media initiatives - Blair's cashpoints, Brown's Britishness & £25 behaviour bonuses. Alll point to a government bereft of purpose other than winning.

and to expect one of the two architects of this mess to re-vitaise the Government....

[Statto]

Check out KTAB News report Peer Review, taking a satirical look a the "cash for peerage" scandal.