Party Funds at Heart of Tory Scandal

The exchanges in the House of Commons over political party financing were unusually bitter this week:

“An atmosphere of sleaze and an odor of corruption,” declared Labor Party deputy leader Margaret Beckett, speaking of the governing Conservative Party.

“The only atmosphere of sleaze lies on the benches opposite,” responded the government’s spokesman, David Hunt, who was backed up by the declaration of the Conservatives’ House leader, Tony Newton: “The one party in this country with whom you can buy votes and influence is the Labor Party.”

British political parties seemed--from the rhetoric--on the verge of being tainted with the widespread political corruption that has affected continental nations in recent months. The argument has forced political parties to re-examine the nature and source of political fund raising: The Conservatives traditionally get money from fat-cat business executives seeking favors or honors; the Labor Party directly from trade unions seeking power.

The current uproar centers on Asil Nadir, a suave Turkish-born entrepreneur whose company, Polly Peck--a conglomerate that ranges from women’s clothing to Cyprus fruit packing--skyrocketed in the 1980s. It then went broke at the decade’s end.

Nadir, who enjoyed high living and a string of mistresses, was charged with several counts of fraud in London. Last month, he jumped bail and secretly fled from Britain to Turkish-controlled Northern Cyprus. There he has lived in comfort, free from worry since there is no extradition treaty with Britain; as a major employer in Cyprus, he is regarded by Turkish Cypriots as a local hero.

In Britain, several members of Parliament allegedly interceded on Nadir’s behalf; Conservative legislator Michael Mates, a government minister for Northern Ireland, gave Nadir a watch inscribed: “Don’t let the buggers get you down.”

Labor members of Parliament and some Tories called for Mates to resign his ministerial post. Political observers theorized that it would only be a matter of time before he would do so--or be fired. And, in fact, he quit on Thursday.

Conservative Party officials admitted that Nadir contributed $700,000 to their treasury over five years and was included in high-level Tory lunches and dinners. He also sought, it was claimed, government support for his business--and a knighthood or peerage for his contributions.

While embarrassed by the revelations, Conservative Party leaders defended their accepting funds from such a source. They maintained that it is the right of contributors to make large donations in secret.

Prime Minister John Major and party Chairman Sir Norman Fowler believe contributors have a right to make unrevealed donations to political parties, and Tory sources privately say public disclosure would seriously reduce fund raising.

The Labor Party, in contrast, announced that it would make public the names of large campaign donors; gifts from the trade unions are already a matter of record.

While Labor Party leader John Smith called for politics to be conducted “on the moral high ground,” Fowler replied that Labor’s “behavior has been to wade through the sewer about as far from the high ground as it is possible to get.”

Buying privilege and honors is nothing new in British society: King James I invented baronetcies--hereditary knighthoods--in the 17th Century solely to sell them.

Many commentators this week, like historian Paul Johnson, called for open disclosure of major party contributors and transferring the honors selection system to an independent body. “Political corruption and open flouting of the law overshadows the whole future of the European Community,” argued Johnson, “and one of Britain’s prime objects, in moving closer to Europe, must be to improve the moral standards of its public life. We cannot do this if our own methods of raising party finances are tarnished.”