Galloway faces new cash probe over donation

05 December 2007

Galloway: 'smelt a rat' and called in Electoral Commission

Exclusive by Ted Jeory

ted.jeory@archant.co.uk

A NEW crisis has engulfed MP George Galloway's troubled Respect party after it emerged this week that the Electoral Commission has been called in over a suspected unlawful foreign donation.

The election watchdog is probing a $10,000 cheque from a Dubai construction company that ended up in the bank account of an organisation set up by Respect, the East London Advertiser can reveal.

Even more troubling for Left Wing Respect is the donor company is owned by one of Britain's biggest private finance initiative contractors, which itself is headed by a former policy chief to John Major's Tory government.

The Electoral Commission was told about the donation by Galloway himself when he "smelt a rat."

He strongly denies any wrongdoing and has asked the commission to look into the money trail surrounding the cheque.

Khansaheb Civil Engineering, a Dubai-based subsidiary of Interserve plc private finance experts, sent the cheque on January 7, according to the commission.

The Advertiser understands the cheque was sent with a covering letter from a Khansaheb executive saying he was a fan of the Bethnal Green & Bow MP and wanted to contribute to his political causes.

But Galloway, who was being investigated by the Parliamentary commissioner for standards for improper donations to the Mariam Appeal, feared the letter was a 'sting' by an undercover reporter.

The proposed foreign donation, he felt, would be unlawful. He told his staff to return it and suggested if the donor wanted to make a financial contribution, he should make a new cheque payable to the Stop the War Coalition.

Respect's National Secretary, John Rees, has confirmed he returned the cheque on January 23. But in his letter, he suggested the funds could be resent to another Respect-backed project, OFFU, the Organising for Fighting Unions campaign, which had been set up to lobby for the Trade Union Freedom Bill. According to the campaign material, its headquarters was Respect's national office in Club Row, Bethnal Green.

A large OFFU conference in Shoreditch last year ended up with a £5,000 deficit. When Khansaheb sent a new $10,000 cheque made out to the campaign in February, it was used to cover some of the conference debts.

Mr Galloway discovered this in August and says he then pushed for the Electoral Commission to be called in.

This contributed to the current split in Respect, he told the Advertiser.

"I wanted it referred to the commission earlier and that contributed to the split," he said.

The Electoral Commission is not yet at the 'investigation' stage, but said it was "making preliminary enquiries."

Mr Rees, who admits the donation was partially used to cover the conference deficit, insists he did nothing wrong.

"Galloway knew all along we had suggested an alternative destination for the cheque," he said. "He said Stop the War Coalition, we said OFFU.

"Galloway is now raising this to discredit his opponents.

"The cheque may well have been drawn on a company account, but it was clear to me it was an individual donation by someone who clearly supported our political goals."

Interserve currently manages a number of PFI-backed schools and hospitals in the UK. The boss is 55-year-old Lord Blackwell, head of Major's policy unit from 1995 to 1997, who was made a life peer when the Tories lost office.

Khansaheb Civil Engineering, which helped build Dubai's luxury Jumeiran beach resort, could not be contacted for comment.