Saturday, October 28, 2006

Strong hint on repayment of donation

At least according to today's Guardian here. The Electoral Commission has indicated that the Liberal Democrats could be forced to pay back their biggest ever donation of £2.4m which came from Michael Brown's company, 5th Avenue Partners Ltd.

The BBC also has the same story here.

Meanwhile The Times runs with the same story with the slant that all 70,000 members of the Liberal Democrats will be personally responsible for repayment of the £2.4m. The piece states that "The Lib Dems have admitted that they have not made any provision for paying back the money. If forced to do so, each party member would share the debt. "

Norfolk Blogger takes issue with the slant in the Times here. He says "it is The Times obsession with claiming the Lib Dem party members are liable for the debt that devalues their article. They keep repeating the phrase "party members will be liable" or "each party member would share the debt". The problem for the journalists, and something they cannot explain is why this is the case? Surely, just like the Tory Party or Labour Party (who both have massive debts which are not paid by their members) the Lib Dems could arrange temporary loans from individuals or financial institutions ? Just because the Lib Dems have made no provision at present, it does not mean they can't !"

I agree entirely with the above statement but just because we have made no provision does not mean that we will be able to raise all of the £2.4m which is required.

What happens then?

Could individual members be forced to stump up their share of the shortfall?

I don't know the answer to that question but I am not surprised that the media are running with it given the following quote from the same Guardian article which I quoted above. "The statement prompted senior Liberal Democrats figures to call for the party to repay Mr Brown's donation, which was spent on last year's general election campaign. Lady Miller, a Lib Dem peer, yesterday told the Guardian: "Raising £2.4m from 70,000 members is a mountain. But one thing the Lib Dems are known for is integrity. The party did its best at the time to check everything was fine. But he gave the party money which wasn't his. At the moment [the decision] is in the balance, but in my view it's balanced on the side of paying it back."

Admittedly this talks about raising the money rather than members being forced to pay the money but this still leaves unansweredered question of what happens if loans and money raised from members do not cover the amount required. The answer to this question could be very significant for membership of all political parties in the UK.

1 comment:

Jock Coats said...

When I last posted about this a couple of weeks back when the trial finished someone suggested that the reason "members would be liable" could be because of the corporate form the party has taken. I have a feeling that with a company limited by guarantee in some circumstances members of the company can be liable for a debt. Incidentally the Telegraph repeated that claim today as well.

However, Sue Miller is conflating two issues so far as I can see. Whether the money was Brown's to give or not is not, or should not, be the question for the Electoral Commission. That one, if it comes to it, will require legal action by the other partners in 5th Avenue. The Electoral Commission should, in my view anyway, restrict itself to whether the donation was permissible within its rules - ie was 5th Avenue actually trading.

On that question, the judge's remarks (was he a Lib Dem?) at the recent trial, should give them pause for thought - since he made it clear that Brown had been quite cunning in trying to ensure it looked like 5th Avenue was trading.

Personally, I think the EC should leave it alone, but that the party should still pay it back, or at least be prepared to do so, because it was not his to give. Though it sticks in the craw to worry too much about whether the four multi-millionaires involved got conned by Brown or not!

Since I was originally not in favour of the gift anyway, and wish we had never accepted it, because we've always gone on about how we are not in hock to rich individuals, unions or businesses, I do hope we end this one way or another soon.