Britain’s Labour Party is facing a storm of criticism after it admitted receiving some 20 million euros in loans which helped fund the party’s re-election last year. Even the Labour treasurer, Jack Dromey, had not been told about the loans, something Prime Minister Tony Blair admitted was wrong. The scandal centers on allegations that those lending the money were being rewarded with peerages in the upper House – claims vehemently denied by the government.
“This idea that somehow there was some sort of secret account and the money that’s gone has been spent on something completely different, as far as I’m aware, is complete rubbish,” said Tony Blair. “I mean it would have gone to fight the general election.” Blair won a third straight term last May. He has said he will not seek a fourth mandate.
While the loans do comply with British law, which only requires donations to be disclosed, critics say the rules create a legal loophole that is open to abuse. In an attempt to limit the damage, Blair has appointed a top civil servant to review party funding rules in Britain.