Labour Party proxy and undeclared donations (2007)

Tyneside lawyer David Abrahams had donated at least £548,850 to the Labour Party since 2003 via two colleagues, his solicitor and the wife of an employee, which broke electoral law forbidding the use of proxy donors. Abrahams had been involved with the Labour party over many years.

In the time since Prime Minister Gordon Brown had come to power, Abrahams was now Labour's third largest donor behind Lord Sainsbury of Turville (£2 million) and Iranian businessman Mahmoud Khayami (£320,000 in September 2007).[4] Mr Khayami's donations subsequently came under some scrutiny in the press, though there was no indication that they were in any way illegal.[5] Abrahams has donated at least £548,850 since 2003, via two colleagues, his solicitor and the wife of an employee.

Abrahams's secretary Janet Kidd "gave" £80,000, while builder Ray Ruddick – who has "given" a total of £196,000 according to a political donors list – had contributed £104,000 of the £222,000 donated by Abrahams in the five months since Mr Brown became PM. Mrs Kidd has "donated" £185,000 since 2003,[4] and is also listed as a £5,000 donor to Harriet Harman's successful Labour deputy leadership bid in 2007.

The Mail on Sunday, which broke the story, investigated the donations after it emerged that builder Ray Ruddick lived in a former council house he had bought for £12,000, and drove a second-hand blue Ford Transit;[4] while Mrs Kidd was a secretary living in Whickham near Gateshead.[6] It also emerged that £167,000 had been given previously through another intermediary, solicitor John McCarthy.

Another go-between used by Abrahams, Janet Dunn, who is a lifelong Conservative Party supporter and a lollipop lady by profession, has subsequently claimed that she never knowingly paid any money to the Labour Party; she had only on one occasion signed a blank cheque for Mr Abrahams for £25,000 after he had paid a similar amount into her own bank account. "I thought it was just a bit of business", her husband has said. However a donation of £25,000 in her name was received by the Labour Party in 2003, although Mrs Dunn says the first she knew of this was on 26 November 2007.[7][8]

After the news broke of Mrs Kidd's "donation" to her campaign, Harriet Harman made a statement saying she accepted a donation to her campaign for the Labour Party deputy leadership (which she eventually won) on 4 July "in good faith," had registered the monies with the Electoral Commission and the Register of Members Interests, and she "was not aware of any funding arrangements ... between David Abrahams and Janet Kidd".[9] Baroness Jay of Paddington, who was working on the deputy leadership team of Hilary Benn, questioned and turned down a donation of £5,000 offered by Mrs Kidd; but it was subsequently accepted by Benn's team when made under the name of Mr Abrahams.[9] Kidd offered a similar "donation" to the leadership campaign of Gordon Brown, but was turned down as she was not a known donor.[10]

On 3 December 2007 Peter Hain, on BBC Radio, admitted that some donations to his own Labour deputy leadership campaign "were not registered as they should have been".[11]

At the time of Abrahams's attempted offer of £5,000 towards Hilary Benn's campaign for the office of Deputy Prime Minister, and his successful donation of £5,000 to Harriet Harman who was campaigning for the same position, Abrahams was in the midst of protracted negotiations concerning a development he was proposing close to the A1. After initial proposals had been rejected by the Highways Agency, Abrahams made his donations, and resubmitted plans which were duly accepted the second time round. The Highways Agency was overseen by the Department for Transport which at that time was headed by the Office of the Deputy Prime Minister.

Jon Mendelsohn, Brown's chief fund-raiser, admitted that he had known since September about the arrangement, but claimed that he disapproved. Abrahams contends that Mendelsohn had known since April, and had encouraged the process. Mendelsohn denies this.[12]