Hain reveals £103k not declared

[Steve Gardner]

As Lord Acton famously said: "power tends to corrupt; absolute power corrupts absolutely."

Source: BBC

Work and Pensions Secretary Peter Hain failed to declare £103,000 in donations to his Labour deputy leadership bid, his spokesman has confirmed.

Mr Hain, who is also Welsh Secretary, came fifth out of six in the race to succeed John Prescott last summer.

He said he should have given "higher personal priority" to the campaign, but he had put his government job first.

His Tory shadow Chris Grayling said the "extraordinary" revelations suggested a "complete disregard for the rules".

All "regulated donees" are expected to report any donation over £1,000 to the Electoral Commission, within 30 days of accepting it.

'Second priority'

Mr Hain expressed regret that donations were not reported on time, but said they were all from people legally entitled to donate.

Earlier he passed full details of the £103,156.75 in donations to the Electoral Commission, which is due to report back next week.

In a statement, he said: "I understand that people will ask how I could have allowed this number of donations to go undeclared at the time.

"The fact is that during this period, I gave my campaign for office within the Labour Party second priority to my government responsibilities.

"I reasonably believed that the arrangements in place for my deputy leader campaign would be sufficient to ensure compliance with reporting requirements, but as it transpired, due to administrative failings this was not the case after early May."

'Immediate' steps

He went on to say that fundraising had to continue after the deputy leadership campaign ended - owing to "unpaid invoices coming to light during the summer and autumn".

He said he had only become aware there was a problem on 29 November 2007 and had "immediately" taken steps to inform the Electoral Commission.

The BBC's political editor Nick Robinson said it was clear Mr Hain's team had spent so much money that even after the contest ended they had to raise £70,000 for a campaign he had already lost.

But although it was a breach of electoral law, the Electoral Commission had no powers to penalise him - although he may be found to have breached House of Commons rules, he added.

Earlier, the new Parliamentary Standards watchdog Sir Christopher Kelly told MPs his committee "would be concerned that even now not everyone appears to have understood the importance of being absolutely transparent about political donations".

And for the Tories, Chris Grayling said: "Failing to declare £100,000 of donations, which is the equivalent of the maximum spending limit on a Conservative leadership campaign, demonstrates breathtaking incompetence.

"Mr Hain is running two government departments. How on earth did he manage to get this so dramatically wrong?"

'Simple oversight'

Lib Dem frontbencher Norman Baker said: "This is a lot of money not to notice and not to report on time, even if you are busy working as a Cabinet minister.

"It looks simply like an oversight, but obviously the Electoral Commission will have to satisfy itself on that."

Questions about Peter Hain's deputy leadership donations first emerged in November - amid a separate donations row engulfing the Labour Party.

The police began to investigate more than £650,000 of proxy donations made to the party by a property developer under other people's names.

Other problems then emerged with donations to Harriet Harman's deputy leadership bid and Wendy Alexander's Scottish Labour leader campaign.

On 29 November Mr Hain admitted failing to register a £5,000 donation to the Electoral Commission - something he blamed on an "administrative error" which he wanted to declare "in light of recent events".

Days later he said there were other donations that had not been properly declared.

After weeks of work going back through the paperwork, Mr Hain submitted a full list of donations to the Electoral Commission on Thursday.

Meanwhile the two men who ran his deputy leadership campaign have been arguing over who was to blame.

On Wednesday, former Hain aide Phil Taylor, who ran the campaign in its earlier stages, said all donations had been declared when he was in charge.

His successor, Steve Morgan, has said he was brought into the Neath MP's campaign "to bring order to the chaos" left by Mr Taylor.

[Steve Gardner]

Source: BBC

Work and Pensions Secretary Peter Hain is under fresh pressure over a think tank used to channel money to his bid to become Labour's deputy leader.

The BBC understands two donors who gave money to the Progressive Policy Forum (PPF) were not told it would go towards supporting the unsuccessful campaign.

But Mr Hain says all PPF donors were asked if funds could be transferred.

Energy Minister Malcolm Wicks said Mr Hain had "got himself into a very difficult position".

He told BBC Radio 4 that Mr Hain, who is also Welsh secretary, was a man of "great integrity".

Mr Wicks said leadership candidates should not have to raise "tens and tens of thousands of pounds to run a campaign", but should be funded by the party instead.

'Nothing illegal'

Liberal Democrat leader Nick Clegg said it was "intensely embarrassing" for Mr Hain but warned against a rush to judgement while investigations were under way.

He told the BBC: "From what I've heard I can't really distinguish between what appears to be either utter incompetence in the way his campaign was run, or deliberate obfuscation.

"But equally we have the Electoral Commission now looking into it, and the Parliamentary authorities. I hope they will do their job quickly because I think we need answers quickly."

Mr Hain admitted on Thursday he had failed to declare 17 donations to his campaign totalling £103,000.

Their focus is likely to be on the PPF and how donations to it totalling more than £50,000 came to be channelled to Mr Hain.

A source has told the BBC that one of the donors, diamond dealer Willie Nagel, was unaware of the transfer, but "was not surprised" and "not unhappy" when he learned of it.

'Not tenable'

Labour MP Dan Norris, who was parliamentary private secretary to Mr Hain during his deputy leadership bid, said the minister had "not done anything illegal".

"And if it was a crime to report things late, beyond deadlines, then millions of taxpayers every year would probably be in trouble too," he said.

Six of the donations to Mr Hain were made by individuals through the PPF, a virtually unknown think tank which has a registered address at a London solicitor's offices.

It was set up three months after the launch of Mr Hain's campaign, and counts John Underwood, who was closely involved in financing the Hain campaign, as a trustee.

In a statement, Mr Hain said there was nothing illegal about using a third party to donate money, provided the original source of the donation was registered.

But Elfyn Llwyd, Plaid Cymru's leader in Parliament, told BBC Wales Mr Hain's position was no longer tenable.

"The buck stops with him according to the law. He can't just blame his assistants," Mr Llwyd said.

Gordon Brown, meanwhile, is standing by Mr Hain and the Conservatives say they are holding off from calling for his resignation until the standards commissioner produces his report.