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Revealed Blair's secret role in loans scandal

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posted on Mar, 20 2006 @ 04:36 AM
Businessman admits he was one of the 'secret lenders'

Evidence linking Tony Blair personally to the £14 million "loans for peerages" scandal engulfing Labour can be revealed today.

A certificate putting forward a nominee for a peerage - and misleadingly stating they did not have a financial relationship with the party - was filled in inside No 10, Labour sources have told the Sunday Telegraph.

Ruth Turner, the Prime Minister's head of government relations, played a key part in arranging the application, as well as at least one other. They were then taken to the hospital bedside of Ian McCartney, the Labour Party chairman, who signed them.

The certificates were then sent to the House of Lords Appointments Commission, whose members are understood to be "concerned" that they might have been misled about the financial relationship between nominees for peerages and political parties.

The new revelations about Downing Street's direct involvement put responsibility for the potentially misleading certificates squarely at Mr Blair's door.

In a further twist last night, it emerged that Ms Turner had visited Mr McCartney in hospital around the time he signed the certificates.

Downing Street attempted to play down her role in the affair last night. However a source at No 10 later admitted: "We are not saying she didn't go to the hospital. She visited him as a social call. It was purely a social visit."

Lord Levy, Mr Blair's personal fund-raiser, is understood to be attempting to take steps to avoid blame for the loans row. He has told colleagues he had serious reservations about the decision to start accepting loans which, unlike straight donations, do not have to be publicly declared, and that the driving force behind the decision to do so came from No 10.

Senior figures, including Gordon Brown and John Prescott, were kept in the dark about the loans.

An ICM poll for today's Sunday Telegraph shows 73 per cent of voters, in the light of the scandal, now believe Mr Blair's Government is as "sleazy" - or more so - than John Major's scandal-hit Conservative administration.

Mr Blair accepted responsibility for the row last week, declaring: "As leader of the Labour Party, I take responsibility for all that is done in its name.'' His comments were made, however, before it was known that the peerage nomination certificates were drawn up inside No 10 and that a key role was played by Ms Turner, one of his inner circle of trusted advisers.

The certification documents, which are filled in by all parties who wish to nominate supporters for a peerage, go to the Appointments Commission where they are scrutinised by a six-person committee including Lord Hurd, the former Conservative foreign secretary.

Among Labour's list of nominees were three people who had provided loans totalling about £4 million - Chai Patel, the head of the Priory clinic, Sir David Garrard, a property developer and Barry Townsley, a stockbroker. All were turned down for peerages by the commission.

A fourth name is understood to be Gulam Noon, the entrepreneur, who said he lent Labour £250,000. His nomination is not thought to have been turned down - although no final announcement of the new working peers has yet been made. Jack Dromey, the Labour treasurer, ignited the row last week by going public to declare that he had known nothing about the loans.

Unlike donors to political parties, who must be identified by law if they give more than £5,000, those who provide loans can have their names kept secret. In the furore sparked by Mr Dromey's comments, Labour admitted that the total amount of loans it had secured last year was £14 million and that there were other names on the list besides the four who have become known.

Mr McCartney has told colleagues that he gave permission to Matt Carter, the former general secretary, and Lord Levy to secure loans for Labour for the first time. However, importantly, he is said to have not been told the identities of those who loaned the money.

In the autumn of 2005, Mr McCartney had two heart operations. It was after the first that the certificates arrived at his bedside for him to sign. Labour sources said that one of those nominated for a peerage was said on a certificate not to be a Labour donor - which was true. Another was said not to have any financial involvement with Labour, which was wrong because they had loaned the party money.

Mr McCartney did not know the names on the certificates included people who had made loans. He is understood to have been keen to get his version of events into the public domain because he feared becoming the "fall guy".

A spokesman for Mr McCartney said last night: "Had he known any of the people had lent money, even though that is technically allowed, he would have ensured that the information be included in the certificates."

A Downing Street spokesman said: "We have always said we would not want to comment on the process of how people are nominated."

The Sunday Telegraph has obtained blank "model certificates". They include three alternative declarations, labelled a b and c, and have to be filled in according to the nature of the financial relationship between the person being recommended for a peerage and the party. Loans are not specifically mentioned.

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