Ashcroft in mystery of school funds

CHARITY COMMISSIONERS have launched a formal inquiry into an organisation backed by the Conservative Party treasurer Michael Ashcroft amid mystery over payments of almost pounds 300,000 a year to staff at a state school.

The Adlearn Foundation is a charity that supports the ADT College in Wandsworth, south- west London. Accounts being examined by the commissioners show that in 1997 the fund spent pounds 373,948 on the college.

But the accounts for the college, of which Mr Ashcroft is a director, showed a far smaller amount, just pounds 80,851, in donations and gifts in kind during the year to August 1997.

Accounts for 1996-97 for the foundation reveal it paid college staff costs of pounds 291,134 and "other costs" of pounds 62,109. The charity's total income that year was only pounds 152,038. One of four staff employed by the charity in connection with the college was paid between pounds 140,000 and pounds 150,000. No one at the charity would return calls when The Independent sought clarification of the accounts.

Richard Painter, Mr Ashcroft's right-hand man at Conservative Central Office, has also been involved in the running of the charity. Mr Ashcroft's wife, Susie, was a trustee until recently, and one of its main assets was several million pounds in shares in Mr Ashcroft's company, the Belize-based BHI Corporation.

Since it was set up in 1989 the foundation has made donations to several of Mr Ashcroft's favourite causes including the Crimestoppers charity, which he set up. Since 1996, though, its main activity has been running the ADT College fund.

The technology college was set up with the backing of Mr Ashcroft's ADT security company. In 1995-96 the charity received a donation of pounds 2.9 million from ADT "to be used in the furtherance of ADT college", taking its total funds to pounds 3.8 million.

The charity's 1997 accounts disclosed that it had applied for tax exemption for an investment, and that if it was unsuccessful it might have to pay tax of pounds 600,000. It also disclosed it had lent pounds 2m to an undisclosed recipient.

A spokesman for the Charity Commissioners said the charity had been under formal investigation since August 1998. Its trustees had been co-operative, he said.

David Durban, headteacher and managing director of the school, refused to discuss the accounts, or to answer questions about payments to college staff. In a written statement he said: "No donor funds any member of staff, but donors are free to request that their donation is a contribution to some aspect of the college and it is recorded accordingly."

A source close to the charity said the inquiry involved a technical matter and was not related to the college's funding.

The college's local Labour MP, Tony Colman, said it was an excellent school that was oversubscribed. "I would hope the Department for Education and Employment would look at this to ensure that everything is above board," he added.