Q&A: Hain donation row
Updated on 14 January 2008
What's Peter Hain done? What's his excuse? And is he the only one?
What has Peter Hain done?
Last year Peter Hain ran for the position of deputy leader of the Labour Party - unsuccessfully.
But running a national campaign in the modern age costs tens, even hundreds of thousands of pounds, which candidates have to raise for themselves.
Peter Hain ran a particularly expensive campaign, complete with mailings to party members and adverts in the Daily Mirror.
To reduce the risk of wealthy individuals buying influence by funding campaigns, politicians are obliged to declare every donation they receive (except very small ones). This requirement was introduced by Labour in 2000, after Labour promised to be "whiter than white" after making much political capital from the funding scandals of the Major era.
Peter Hain is the latest senior Labour politician to fall foul of this legislation, by failing to declare more than £103,000 of donations on time - in fact, up to four months late.
What's his excuse?
Peter Hain was a busy cabinet minister during that time, and he has blamed 'administrative failings' for his failure to declare those donations. His campaign was certainly chaotic, but the scale of the undeclared donations makes this excuse seem rather extraordinary. His undeclared sum is larger than most of his rival candidates spent on ther entire campaigns.
There's one detail which seems particularly hard to square with the incompetence defence. Some of the money came through a little-known organisation which Hain has described as a 'think-tank', called the Progressive Policies Forum. Channel 4 News has detailed the peculiarities of this organisation here.
The think-tank doesn't seem to have done any research that anyone can find. And it's not set up like a normal think tank. So it has been alleged that the establishment of the organisation was a plan at some point to conceal the identity of the donors who gave or lent money through it. The donors include three businessmen - Willie Nagel, Isaac Kaye and Christopher Campbell - and the lobbyist Steven Morgan, who took over the running of Hain's campaign shortly before the vote.
Members of Hain's campaign have said that the PPF's activities up to now have been focused on the election of Peter Hain. Hain has declared the donor's identities as the law requires, and denies that the PPF was any attempt at a cover-up. However, he has not yet defended his conduct in any broadcast interview.
Is he the only one?
The spectre of dodgy donors has been hanging over the Brown administration for months. The north-east David Abrahams did attempt to conceal his identity by giving money to the national party in the name of a number of business associates. This is now the subject of a police investigation.
The Conservatives have not been immune. George Osborne is currently taking flak too. He declared some £487,000 allocated to his office in one place (the electoral commission) but not another (the register of member's interests in parliament).
Some voices have been arguing that the declaration regime is now so complex that it's becoming increasingly difficult for every politician to declare every donation in every place.
What happens next?
The pressure mounting on Peter Hain is intense. If a complaint made by Conservative MP David Davies is upheld, he will have to apologise to the House and be suspended from the Commons.
There is widespread speculation that his position as a minister may prove untenable. Even if the story is the result of incompetence, rather than anything more sinister, it raises difficult questions about his ability to run a massive Whitehall ministry like the Department for Work and Pensions, at the same time as being Welsh secretary.
George Osborne will survive this row unscathed. But the investigation into the Abrahams affair will continue to run, and will surely generate more damaging headlines for the Brown government before it is over.
And as long as politicians are dependent on raising their own cash to finance campaigns, there will be scandals about how that money is raised and accounted for, and what those wealthy donors receive in return.
