Trusts and Convictions

To secure a conviction the detectives will need to find hard evidence that honours were an inducement for donations to the city academies or to the making of loans to the Labour party. Not an incredibly difficult thing to do since we have the evidence of Des Smith, a former council member of the Specialist Schools and Academies Trust (SSA Trust), which helps the government to recruit sponsors for Blair’s academies. He told an undercover Sunday Times reporter that big financial donations to help set up the schools would guarantee a gong. He put it plainly “the prime minister’s office would recommend someone like [the donor] for an OBE, a CBE or a knighthood”.
Asked if this would be just for getting involved in the academies, he responded: “Yes … they call them services to education. I would say to [the SSA Trust] office that we’ve got to start writing to the prime minister’s office… you could go to the House of Lords”. It is a fact that donors to the Labour party who also supported Blair’s flagship policy, through the SSA Trust, got honours. Blair got a double whammy, he got cash for the party as well as financial support for a controversial policy. By disguising the donation to the party as a loan the honour could be respectably awarded for “services to education” without anyone knowing about the bung to the party made through Downing Street. The SSA Trust provided camouflage. When exposed by the Sunday Times Des Smith recanted everything, “confessed” his naive errors, then disappeared back to teaching.

Honours (Prevention of Abuses) Act 1925. Section 1 (1)
If any person accepts, obtains or agrees to accept or obtain from any person, for himself or for any other person, or for any purpose, any gift, money or valuable consideration as an inducement or reward for procuring or assisting or endeavouring to procure the grant of a dignity or title of honour to any person or otherwise in connection with such a grant, he shall be guilty of a misdemeanour.

Des Smith’s admission is prima facie evidence of what we all know. If you wanted a peerage, a seven-figure loan to the Labour party and the same again donated to a city academy obtained it. Levy induced it. He covertly procured the money for the Labour party. The public donations were the cover story. Take the case of Sir David Garrard, a city academy backer whose £2 million loan to the party was followed by the Prime Minister nominating him as a working peer. Was it really a coincidence? If it was nothing to be ashamed of, why did they tell donors not to openly donate the cash as they intended, but to lend it secretly? If it was honest, why did they mislead the Lord’s Appointment Commission about the true nature of the financial relationship between Blair’s nominees and the Labour Party?

Levy loves trusts, he did a lot of his music business through tax efficient offshore trusts. In 1995 he set up the Labour Leader’s Office Fund “blind” trust to finance Blair’s private office. Theoretically it was a blind trust, but we now know that it was not so blind that donors did not get peerages. Such unaccountable and unblind trusts were rightly banned in 2000 under the Political Parties, Elections and Referendums Act. David Osler in Labour Party Plc: New Labour as a Party of Business estimates that before the law tightened things up £2.5 million was raised for Blair’s office through the trust – outside the Labour party’s structures. We know that at least two donors to the “blind” trust subsequently got peerages – Bob Gavron and Alex Bernstein. Other peers are suspected of having made donations to Blair’s blind trust. A pattern for the future was set, Levy lands the donors to a trust, Blair makes coincidental recommendations, peerages arrive in the post.

A pattern of behaviour is not proof, nor will circumstantial evidence be enough. What the police investigators will need is documentary evidence, they will need, forinstance, to look at the papers provided to the Lord’s Appointments Commission, do they contain falsehoods? Who assisted in that and in doing so attempted to procure the grant of an honour. Did those people have any dealings with donors? Downing Street advisers’ appointments diaries should make interesting reading. Who did Des Smith mean when he referred to the “the prime minister’s office”?

Guido understands that the Specialist Crime Directorate’s* Assistant Commissioner Tarique Ghaffur is treading very carefully with the investigation. Officers led by Deputy Assistant Commissioner John Yates need to seize the diaries of key people quickly before they get “mislaid”. If the diaries show that a donor met anyone involved in the process of procuring honours, than clearly both the donor and the procuror will have to be questioned. Merely writing letters to those concerned requesting to talk to them next month is not good enoughthe police need to go in to Downing Street and get the evidence now.

*Formerly known as the “Fraud Squad”.




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