The Riddle of the Porn Baron's Cheque: Nobody at Labour HQ Knew Anything about Richard Desmond's Donation. or So They Say. but the Party Is So Broke That It Needs Cash -- Any Old Cash. (Cover Story)

By Kampfner, John | New Statesman (1996), May 20, 2002 | Go to article overview

The Riddle of the Porn Baron's Cheque: Nobody at Labour HQ Knew Anything about Richard Desmond's Donation. or So They Say. but the Party Is So Broke That It Needs Cash -- Any Old Cash. (Cover Story)


Kampfner, John, New Statesman (1996)


Millbank Tower is not the happiest of places at the best of times. It is now in a state of disarray. The revelation on 12 May that the Labour Party had taken [pounds sterling]100,000 from Richard Desmond, owner of Express Newspapers, came as a complete shock to the new regime at Labour headquarters.

There is, according to party insiders, not a single piece of paperwork detailing the donation. Somewhere in the files there must be a bank slip, so they are looking. But they have not found it yet.

Nothing illegal has been alleged. But the ethical debate about whether the money should have been taken in the first place from a man with porn titles to his name -- some in Millbank are outraged, others say the objections are hypocritical -- has been compounded by a sense of shock at the way the donation was collected. Senior officials say that, apart from the low-level finance official who must have paid in the money but has long since left the party, the only person who knew was Margaret McDonagh, Labour's former general secretary. According to the sources, it is she who received the money on the party's behalf.

Coincidentally, when she left the party after the June 2001 election, she went on to work for Desmond for several months as managing editor of the Express titles. McDonagh is now in the US studying for an MBA, but is said to have gone on holiday.

The latest furore has further damaged already low morale. When the new team took over at party headquarters last summer under the leadership of the general secretary, David Triesman, and the party chairman, Charles Clarke, the atmosphere was described as "akin to Romania after Ceausescu".

"People were jumpy," says one insider. "The concept of human resources barely existed. There were gaps in the records about all manner of decisions, including financial ones."

The flow of "cash for access" stories about donations to the party is taking its toll. The Desmond money was given on the quiet during the six-week window at the start of 2001, before new rules about transparency came into force. Senior party officials say they think there are no more skeletons in the closet. But, as one put it: "We thought we had been given the whole truth, but we can't be sure any more."

Such has been the secrecy surrounding high-level donations from the mid-1990s until the last election, that information was withheld even from those at the top of the party. The figures were stored away in a computer database. According to former Millbank insiders, only three people had access to the password -- Lord Levy, Amanda Delew and McDonagh herself. Delew was head of the high-value donor unit that pulled in money above [pounds sterling]50,000, until she left after the last election.

The role of Levy -- pop promoter turned Middle East troubleshooter -- was pivotal for fundraising. It was also nebulous. He never had an office in Millbank. It is said that he did not get on very well with people there, so stayed in the shadows. He was always, however -- at the end of his mobile phone, either in London or at his home in Tel Aviv -- responsible for "the big numbers".

Tony Blair and his chief of staff, Jonathan Powell, who had been instrumental in getting donors on board before the election, were informed from time to time. But under McDonagh, the people at the top of the hierarchy in Millbank, such as the director of finance and the director of communications, were not given computer access to the files on donations.

It is claimed now that not even Levy or Delew knew about the Desmond money. Clarke and Triesman have ordered an investigation. The mood in the building fluctuates between rage and gloom, as each day seems to bring worse news. "We created a rod for our own back," says one official, part of a team working on a new PR offensive to convince the public that donations from well-off supporters might not necessarily be corrosive for democracy. …

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The Riddle of the Porn Baron's Cheque: Nobody at Labour HQ Knew Anything about Richard Desmond's Donation. or So They Say. but the Party Is So Broke That It Needs Cash -- Any Old Cash. (Cover Story)
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