The wording of the resignation statement of Mr. Watt, General Secretary of the Labour Party, bears careful scrutiny for its carefully chosen phraseology as it raises the issue of whether Mr. Abrahams was a “permissible donor” within the terms of the Political Parties, Elections and Referendums Act 2000 and, if not, whether Labour knew this fact.

This issue is important because a registered political party may only accept donations, under Section 54 of the Act from a “permissible donor” which in this context would mean, under subsection 2(a), “an individual registered in an electoral register”. So it will be germane for enquiry to be made if Mr. Abrahams (or Mr. Martin as this individual seems to trade under another name altogether, for reasons that as yet remain murky), the actual donor in this instance, was, at each of the relevant dates when donations were made, registered in an electoral register.

That fact is crucial because, if he was not a “permissible donor” and the Labour Party knew this at the time, it was, under an obligation not to accept the donation:

54 Permissible donors

(1) A donation received by a registered party must not be accepted by the party if—

(a) the person by whom the donation would be made is not, at the time of its receipt by the party, a permissible donor; or

(b) the party is (whether because the donation is given anonymously or by reason of any deception or concealment or otherwise) unable to ascertain the identity of that person.

This raises the possibility of further criminal offences having been committed under Section 61 (1) of the Act:

61 Offences concerned with evasion of restrictions on donations

(1) A person commits an offence if he—

(a) knowingly enters into, or

(b) knowingly does any act in furtherance of,

any arrangement which facilitates or is likely to facilitate, whether by means of any concealment or disguise or otherwise, the making of donations to a registered party by any person or body other than a permissible donor.

This offence carries penalties on summary conviction of a fine up to the statutory maximum or 6 months imprisonment and upon indictment a fine or 1 year in prison.

So, what precisely did Mr. Watt say?:

“I was aware of arrangements whereby David Abrahams gave gifts to business associates and a solicitor who were permissible donors and who in turn passed them on to the Labour Party and I believed at the time my reporting obligations had been appropriately complied with.”

This is, as I suggested earlier, very interesting and carefully chosen phraseology in the context of the Act and very clearly raises the issue of whether Mr. Abrahams/Martin (or whatever he is calling himself this morning) was in fact at the relevant dates a “permissible donor”.

This in turn has implications for the Labour party’s duties under Section 56 of the Act. In the first instance under subsection (1) the party should have taken “all reasonable steps”:

to verify (or, so far as any of the following is not apparent, ascertain) the identity of the donor, whether he is a permissible donor, and (if that appears to be the case) all such details in respect of him as are required by virtue of paragraph 2 of Schedule 6 to be given in respect of the donor of a recordable donation.

If Mr. Abrahams/Martin was not a “permissible donor” and they knew who he was, then they were under a duty under Section 56 (2) of the Act to refuse the donation and return it to him.

Then there is raised a much more serious matter, to wit the fact that in July 2005 Mr. Abrahams/Martin and Mr. Ruddick were involved in a company which made a substantial planning application in respect of a business park near the A1. This was blocked in October 2005 by the planning authorities and the plan withdrawn in March 2006. The plans were resubmitted in August 2006 and planning objections withdrawn in September 2006 with planning permission being granted in October 2006.

Between the date of the first submission and the final grant of permission Mr. Abrahams/Martin gave £199975 to the Labour Party through his proxies in five chunks.

At the time of these payments Douglas Alexander, Gordon Brown’s close confidant and member of the inner circle of so-called “Young Turks”, youthful acolytes of Mr. Brown, was Transport Secretary. It was the Highways Agency, under the aegis of Mr. Alexander, that had been blocking the planning application and which finally withdrew its objections in September 2006 which led to the granting of planning permission.

It is right to point out that all parties deny strenuously that there was any sort of linkage between the donations and the planning application. Indeed Mr. Abrahams/Martin has threatened to sue anyone who makes such a connection.

Nevertheless the fact of this planning application and the contemporaneous donations is at best an unfortunate coincidence in these circumstances. If, however, one adds the facts that Mr. Abrahams/Martin was so keen to conceal his identity and his use of a business partner also involved in the application to channel funds to Labour, the matter might be thought to raise a proper case, in the public interest, for this affair to be thoroughly ventilated so that any question of corruption can be eliminated.

Matters do not end there, of course. The notion that Mr. Watt kept all this to himself is, frankly, lacking in credibility. Nor does the idea that Mr. Watt was somehow ignorant of the rules, which, given the ‘cash for peerages’ scandal might be thought to be required reading for any person charged formally with the duty of making returns to the Electoral Commission, if only out of an excess of caution in the light of other scandals.

In addition we shall want to have the very fullest of explanations from Mr. Hilary Benn and Miss Harriet Harman about what they knew and when they knew it concerning the donations made to them.

There is the rank whiff of very mature Camembert about this whole affair which will only be dissipated by a most vigourous enquiry by the Electoral Commission and, in view of the prima facie commission of indictable offences under the Act, the Metropolitan Police.

AbrahamsGate Timeline

31 Jan 2003: Janet Dunn makes donation of £25,000 to Labour

06 May 2003: Janet Kidd, a secretary working for Mr Abrahams, donates £25,000 to Labour.

18 Aug 2003: Ray Ruddick, a jobbing builder, makes £25,000 donation.

01 Apr 2004: Mrs. Kidd donates £10,000.

27 Oct 2004: Mrs. Kidd donates £2,000.

05 Feb 2005: Mr. McCarthy donates 25,000

29 Jul 2005: Durham Green Developments submits plans for Durham Green Business Park

05 Oct 2005: Highways Agency blocks plans for Durham Green Business Park.

22 Dec 2005: Mr. McCarthy donates £52,125

23 Dec 2005: Mr Ruddick donates £17,850, Mrs Kidd £30,000.

31 Mar 2006: Plans for business park withdrawn.

21 Apr 2006: Mr. McCarthy donates £50,000

24 May 2006: Mr Ruddick donates £50,000.

02 Aug 2006: Business park plans resubmitted.

18 Sep 2006: Highways Agency withdraws objections.

19 Oct 2006: Durham County Council grants planning permission.

22 Jun 2007: Hilary Benn, the Environment Secretary, registers £5,000 donation from Mr Abrahams to his campaign for Labour’s deputy leadership.

27 Jun 2007: Gordon Brown becomes Prime Minister.

29 Jun 2007: Mr Ruddick donates £24,000, Mrs Kidd £38,000.

07 Jul 2007: Mr Ruddick and Mrs Kidd make £80,000 donations.

17 Jul 2007: Harriet Harman registers £5,000 donation from Mrs Kidd to her victorious campaign for the Labour’s deputy leadership.

20 Nov 2007: Official figures show that since Mr Brown became Prime Minister, Mr Ruddick and Mrs Kidd were Labour’s third biggest donors.

25 Nov 2007: Mr Abrahams admits it was his money that had gone to Labour via Mrs Kidd and Mr Ruddick.

26 Nov 2007: Peter Watt admits he knew of donations and resigns as Labour general secretary.

My attention to the “permissible donor” wording of the Watt statement was drawn by Iain Dale who spotted the particularity of it and I therefore tip my hat to him.