Leading Article: Mr Ashcroft and the problems of political funding

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THE ALLEGATIONS about Michael Ashcroft have now burst out in a spectacular fashion in the House of Commons, and true or false can no longer be contained. William Hague cannot continue to distance himself from these stories about his party treasurer, which put his own judgment severely into question. However hard-up the Tories may have been, it was simply not wise to accept large cheques from a Belize resident with an indeterminate multitude of business interests, about which the Conservatives knew little. It was even more foolhardy to make such a man the party treasurer - a position which should represent impeccable financial probity. In the aftermath of the tide of sleaze allegations against the Conservative Party in the run up to the cataclysmic defeat at the last general election, Mr Hague's sense of danger should have been sharpened. He should have been all too aware that just one bad business interest in Mr Ashcroft's pile would set any Tory party revival back.

But the accusations about Michael Ashcroft that have emerged are far worse than just one bad business interest. It is a story which, if proven, casts serious aspersions on Mr Ashcroft's character, the source of his fortune, and his associates. A man can be judged by his friends, and leading members of the Conservative Party have put themselves into Mr Ashcroft's circle. Meanwhile, some of Mr Ashcroft's fortune now sits in the Tory party coffers, nestling next to party members' subscriptions and the hard- earned receipts of their local fund-raising activities. Mr Ashcroft has been neither convicted nor accused of criminal conduct, and may never be. But the Tories' involvement with this man's complicated and mysterious business affairs is an extremely grave error.

This is by no means the first time that a political party has succumbed to the temptation of hollow gold. Lloyd George openly sold off peerages and knighthoods - a practice that continues today, although in a more covert fashion. Robert Maxwell, bankroller of the Labour Party in the 1970s, appears to have been one of the biggest fraudsters this century (and senior party members now in government were close to Mr Maxwell). Marcia Falkender's Lavender List revealed the extent to which Harold Wilson's government had indebted itself to a number of businessmen who fall into that murky category of "international financiers".

Margaret Thatcher's Conservative Party accepted funds from mysterious foreign sources based in Hong Kong. Asil Nadir gave money to the Conservatives, before fleeing to Cyprus to escape criminal charges. At least, this time, the party filling its pockets wasn't in government and able to change policies in favour of its donor - although it appears that the last Conservative government did intervene on Mr Ashcroft's behalf. But the fact that it seems to be a long-established tradition for political parties to accept money with their eyes tight shut does not exonerate William Hague.

However it ends, this debacle over who pays for our political parties splatters mud right across the political arena. New Labour may now be laughing with glee, if not relief, after their poor performance in the European elections. But their hands are far from clean. The Labour Party accepted pounds 1m from Bernie Ecclestone before exempting Formula One from the ban on tobacco advertising. Brian Davies, now of the Political Animal Lobby, has channelled over pounds 1m to Labour, who intend to ban hunting. The question of how political parties are funded can no longer be sidestepped and must be tackled head-on. The source and extent of each and every political donation, above the smallest of sums, needs to be made public as soon as it is given. It is only through transparency that political funding will find integrity.

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