Labour boss resigns in funding row
Updated on 26 November 2007
Labour General Secretary Peter Watt resigns after failing to report donations to his party from businessman David Abrahams that may have been illegal.
Labour's general secretary resigned tonight after admitting he was aware that a businessman, who did not want publicity, had made donations to the party through associates.
Peter Watt said he had been advised by lawyers that he had not reported the donations as he should have done. David Abrahams donated £400,000.
Channel 4 News has discovered that Mr Abrahams and a business partner were once sued for nearly £2m by the Allied Irish Bank over a property deal that went sour.
'I believed at the time my reporting obligations had been appropriately complied with... I take full responsibility for the Labour party's reporting obligations.'Peter Wyatt, Labour party general secretary
The Electoral Commission has asked Labour to explain the donations, which could be illegal.
It was Peter Watt's job as general secretary to ensure the Labour party kept within the law. But by his own admission tonight he may have failed in that first duty.
Mr Watt admitted he knew that a Tyneside businessman had used two friends to give £380,000 to Labour. Election law states clearly that donors cannot hide behind intermediaries. So tonight Mr Watt quit, issuing this statement.
"I was aware of arrangements whereby David Abrahams gave gifts to business associates and a solicitor who were permissible donors and who in turn passed them on to the Labour party, and I believed at the time my reporting obligations had been appropriately complied with.
"As a result of press coverage over the weekend, I sought legal advice... I was advised that, unbeknown to me, there were additional reporting requirements.
"Once I discovered this error, I immediately notified the officers of the national executive committee. I take full responsibility for the Labour party's reporting obligations."
When it came to political donations, David Abrahams wanted to stay out of the spotlight, channeling his gifts through two friends.
David Abrahams, the man who cost him his job, had a ringside seat when Tony Blair bid goodbye to politics.
But when it came to political donations, he wanted to stay out of the spotlight, channeling his gifts through two friends, Janet Kidd and Ray Ruddick.
Labour's opponents cannot believe their luck. Less than six months after escaping charges over cash for honours, the party finds itself embroiled in a new funding controversy.
But who is the man who has landed the party in so much trouble? In fact, he's not really David Abrahams at all. In his business dealings he calls himself David Martin. He is not 53, as reported, but 10 years older.
The Allied Irish Bank sued David Martin and a business partner for £1.73m after a property deal went sour. The case reached the House of Lords, and the bank won. But it is not known if the money was ever repaid.
