View Full Version : Blair Under Attack In Britain As Party Admits Big Loans

03-17-2006, 10:50 PM
Blair Under Attack in Britain as Party Admits Big Loans


Published: March 17, 2006

LONDON, March 17 — Britain's ruling Labor Party acknowledged today that it had received more than three times the amount it had previously acknowledged in contentious and undeclared campaign loans.

The disclosure threatened to intensify a debate swirling around the political future of Prime Minister Tony Blair, coinciding with an editorial in The Economist magazine reversing its support for him in last year's election.

It would be "better, surely, for him to quit while he is still ahead," The Economist said, echoing remarks right and left in other publications.

The undisclosed loans have raised a question for many Britons about whether Mr. Blair's party has become embroiled in the same quagmire of sleaze — a popular tabloid term — that proved to be a key factor in the defeat of its predecessor, the Conservatives, in the 1997 elections.

Mr. Blair has been prime minister since then, but has said he will not fight a fourth campaign, indicating that he intends to hand the reins to his heir-apparent, Gordon Brown, the chancellor of the exchequer, at some unspecified date before the final deadline for the next elections in 2010.

In a statement today, the Labor Party said it had taken out loans worth $24.5 million at commercial interest rates from individuals, more than three times the $7 million it had previously made known. It did not say who had extended the loans, which accounted for the bulk of the $31 million Labor said it spent on last May's elections.

Earlier this week, the Labor Party's own treasurer, Jack Dromey, complained publicly that party leaders had accepted the loans without informing Labor's elected officials.

Previously, news reports had identified three other lenders as wealthy businessmen who had been recommended by Mr. Blair for peerages, a prestigious honor which brings membership of the upper House of Lords and the right to use the title of Lord. All three men had made loans worth over $1.75 million each.

At a news conference on Thursday, Mr. Blair denied widespread suggestions that his party had traded honors for the loans which, under current campaign financing laws, do not have to be publicly declared in the same way as donations.

"It shouldn't be one in exchange for the other, and it wasn't," Mr. Blair said, referring to implications of such a Labor-rewards program.

"I am completely satisfied that there has been no breach of the rules in relation to Labor Party nominations" of candidates for peerages, Mr. Blair said. All major political parties in Britain are entitled to make nominations for membership of the House of Lords, but the final choice of recipients is left to an independent commission.

The questions surfaced at a difficult political time for Mr. Blair, whose parliamentary majority was more than halved in last year's elections and who now faces regular challenges by dissidents within his own party.

Last Wednesday, for instance, education reforms that Mr. Blair has championed were opposed by 52 Labor legislators. Embarrassingly for the prime minister, the reforms were approved in the lower House of Commons only with the help of votes from the opposition Conservatives.

All these compounding difficulties a contrast sharply with Mr. Blair's pledge when he took office almost nine years ago that his party would be "purer than pure."

Since then, there has been a procession of questions about the financial dealings of both the Labor Party and prominent personalities ranging from the prime minister and his wife, Cherie Booth, to a former cabinet minister, Peter Mandelson, and donors like Bernie Ecclestone, the man who runs Formula One motor racing..

In an editorial today, the liberal Independent newspaper said that of 23 people who had donated more than $175,000 to Labor, "17 have been granted a peerage or a knighthood."

"This tacky trade would arguably be less damaging to the public good were it not for the fact that a peerage comes with substantial political influence," The Independent said.

In The Guardian, a traditionally left-of-center newspaper, columnist Polly Toynbee observed: "Whatever he does, Blair still has to answer the embarrassing question: did he offer peerages for cash?" And, like The Economist, she suggested an early departure for the prime minister.

Mr. Blair has been "warned by friends as well as foes against overstaying, at the mercy of events beyond his control," Ms. Toynbee wrote. "The gracious handover should be signaled for this summer, with a new beginning in the autumn. But, like all leaders in power too long, he seems shrink-wrapped into his office with a diminishing coterie of people too insulated from the world beyond." At his news conference on Thursday, Mr. Blair offered to reform the selection process for peerages by giving up the right of the prime minister himself to directly nominate candidate for the House of Lords.

"We will look at taking the politics, if you like, out of the honors system," Mr. Blair said.

But the disclosures nonetheless gave his adversaries ammunition for loud broadsides.

Writing in the right-wing Daily Mail today, Max Hastings, a columnist and historian, said: "This is the world not of British politics but of Tammany Hall," adding that Mr. Blair's dealings "convey a stench that would cause an American congressman to hold his nose."