Ruling party in cash for honours inquiry

The story began with a police investigation into whether money was donated to the ruling Labour Party in exchange for peerages. This would be illegal under laws passed in 1925 banning the sale of honours. The police were also considering whether another law, which made it compulsory for donations over 5,000 pounds to be declared, was broken.

As the investigation developed, the police started asking questions about an alleged conspiracy to pervert the course of justice. Their interest in the case was further heightened when it emerged that large secret loans were made to the Labour Party before the 2005 general election, which the party won.

Some of the lenders were then nominated for peerages. This led many people to suggest that when a government is in power for too long, power goes to its head and it becomes arrogant and dictatorial and rides roughshod over democracy and the rule of law.

In an effort to be fair, the police widened their investigation to cover all the main parties. In November last year, they issued a statement saying that significant material was gathered from interviews with 90 people and that the Crown Prosecution Service would receive a file from them in the new year.

It was later revealed that the ruling Labour Party was lent nearly 14 million pounds ahead of the election. The opposition Conservative Party borrowed 16 million pounds from 13 wealthy backers. It was pointed out, however, that nothing was wrong with political parties borrowing money, so long as the amount was declared and not kept secret.

Those who lent money to Labour and were put up for peerages included stockbroker Barry Townsley, property developer Sir David Garrard and clinic chief Dr Chai Patel. A fourth person, Sir Gulam Noon, who lent the party 250,000 pounds, was blocked from becoming a Lord.

Prime Minister Tony Blair said he and the party’s general secretary knew about the loans.

Last year, Labour lender Sir Christopher Evans was arrested. Ruth Turner, a senior member of the Prime Minister’s staff was also arrested but was released on police bail. Mr Blair’s chief fund raiser, Lord Levy, was arrested twice, the second time on suspicion of conspiracy to pervert the course of justice. He too was released on bail.

Mr Blair was himself interviewed by the police on two occasions, making it the first time a serving Prime Minister was quizzed in a criminal inquiry. But to be fair to him, it must be said that he was not interviewed under caution and was, therefore, being treated as a witness, not a suspect. Within the past week, however, the plot thickened. Lord Levy was accused of trying to bully Miss Turner into changing her story in the case. His meeting with her last summer reportedly left her in tears and triggered a police investigation into a possible cover-up.

The dramatic twist followed 72 hours of legal activity and intensified speculation that charges are imminent. Pressure on the Government mounted as Attorney General Lord Goldsmith suspended an injunction that had stopped the BBC from reporting details of a potentially explosive document concerning a meeting between Lord Levy and Miss Turner.

Newspaper reports said Lord Levy had urged her to “shape” the evidence she gave to Scotland Yard.

Miss Turner, who played a key role in the awarding of political honours, was left shaken and angry.

She wrote a detailed account of the conversation and her concerns about the developing police inquiry, in a memo that stretched to several pages.

The meeting between the two senior aides of the Prime Minister was said to be about Lord Levy’s account of how a list of names to be recommended for peerages was drawn up. The memo expressed her worries about his version of events and her belief that the issue was so serious that Mr Blair should be told about it.

Miss Turner later passed the note to her lawyers and it is now in the hands of the police who went to the High Court last weekend to stop the BBC reporting its contents. Police have expressed dismay at the continued media coverage of its investigation but acknowledged that it was no longer tenable to seek to maintain the injunction.

Scotland Yard detectives expect to carry out their final interviews any day now. Only a handful of potential witnesses remain to be questioned. The quickening pace means that a decision on whether to prosecute any senior figures in the ruling party will be made within weeks.

However it pans out, one thing is certain. Ruling party or no ruling party, if the police think they have enough evidence to make a case, they will send the documents to the Crown Prosecution Service (CPS) without hesitation. And if they are asked by the CPS to arrest and charge, you can bet your shirt that they would do so.