March 21, 2006

Police probing Blair’s Labor over Lordships

By Gideon Long

LONDON (Reuters) - British police said on Tuesday they were
investigating Prime Minister Tony Blair's Labor party to find
out whether it offered Lordships to wealthy businessmen in
exchange for large loans of money.

The move was the most dramatic twist yet in a row over
party funding which has tarnished Blair's image and increased
calls for him to resign.

"The Metropolitan Police Service has received three
complaints about the Labor party under section 1 of the Honors
Act 1925," the police said in a statement. "These allegations
are being investigated by the Specialist Crime Directorate."

The act calls for a possible jail term for anyone who sells
noble titles or accepts them for cash.

Police said one of the complainants was Angus MacNeil, a
member of parliament with the Scottish National Party, but
declined to name the other two.

MacNeil approached the police after it emerged last week
that four businessmen who loaned money to Labor had been
nominated for Lordships, which come with lifetime seats in the
upper chamber of parliament, the House of Lords.

Labor has confirmed the nominations and the loans but says
there is no link between the two. It says the men were
nominated on merit, not because they loaned money to the party.

But revelations that the Labor party treasurer and some
senior ministers did not know about the loans have added to the
air of sleaze hanging over the government.

Right-leaning newspapers have been clamoring for Blair to
resign for days and on Monday the Guardian, long seen as the
institutional voice of the center-left, joined the chorus.


On Tuesday, Home Secretary Charles Clarke defended Blair,
saying the row would not force him to quit.

But he acknowledged the prime minister was weaker than in
the past and might come under further pressure if Labor fare
badly in local elections in May.

"There are whole chunks of the media that have the view
that Tony should go," he told reporters. "That is not the view
of the Labor party ..."

Asked why the loans were kept secret, Clarke said: "I don't
know, but it certainly wasn't about peerages (Lordships). I
don't think there's any basis whatsoever in the allegation that
somebody somehow made a donation to get a peerage."

In a bid to try to defuse the furor, Labor published the
names on Monday of 12 men who had loaned it a total of 14
million pounds ($25 million). The list included the four who
had been nominated for peerages.

As Labor has pointed out, Blair did not break any law by
not declaring the loans. Under current rules, outright
donations to parties have to be made public, but not loans. The
government says it will pass new laws to close the loophole.

But the dispute has pushed sleaze to the top of the
political agenda and prompted all Britain's major political
parties to call for reform of a party funding system that dates
back centuries.

Labor's national executive committee met on Tuesday and
said it welcomed the opportunity to "have a friendly and
excellent discussion on the whole issue of party funding."

The committee "agreed that the entire issue of party
funding needed to be addressed and the system made more
transparent so the public had complete confidence in it," it

It also called on the opposition Conservatives to follow
Labor's example and publish the names of major creditors --
something the Conservatives have refused to do.

(Additional reporting by Katherine Baldwin)