Diplomat calls for Ashcroft investigation

Tory treasurer row: Senior Conservatives deny ordering British diplomat to lobby Belize to help businessman

THE FORMER British Commissioner for Belize, David Mackilligin, last night called on the Conservative leader, William Hague, to order an ethics committee of inquiry into the conduct of his party Treasurer, Michael Ashcroft.

Mr Mackilligan's remarks are a devatastating blow to the Tory leadership's attempts to sweep away allegations that Mr Ashcroft used his influence on the party to avoid tax on his overseas businesses.

Mr Ashcroft, a major donor to the Conservatives over many years, is accused of pressuring the Tory government in 1994 to protect his tax exemptions in Belize where he has substan-tial business interests. Tax changes planned after a report from a British consultant were dropped after Mr Ashcroft said they could cost him millions. The incident, five years ago, was confirmed by the Foreign Office this week after revelations in The Independent.

Mr Mackilligin said: "There does seem to me on the available evidence to be several questions concerning Mr Ashcroft's past record and his present relationship with Belize which ought to be addressed by William Hague either through his ethics and integrity committee or by some other means."

William Hague and his party chairman, Michael Ancram, have been forced to defend Mr Ashcroft, and last night a Labour MP, Peter Bradley, questioned two senior Conservative MPs over whether they ordered Britain's High Commissioner to Belize to lobby on his behalf. If civil servants did not inform either one of them of the details, he suggested, then the officials may have failed in their duty.

David Heathcoat-Amory, now shadow Chief Secretary to the Treasury, denied that officials told them about representations from Mr Ashcroft in 1994 about proposed changes to Belize's tax laws. David Davis, now chairman of the Public Accounts Committee, said he would respond when he had seen Mr Bradley's letter.

Mr Davis replaced Mr Heathcoat-Amory as Foreign Office minister on 20 July 1994, two weeks before the Belize High Commissioner, David Mackilligin, wrote to the then prime minister, Manuel Esquivel, "on instruction" from the Foreign Office.

Mr Mackilligin's letter pointed out that a UK-Belize treaty protected inward investors, but added: "The issues raised by Mr Ashcroft are clearly a matter for him and your government."

In letters to the two former ministers last night, Mr Bradley wrote: "May I ask whether... it was normal practice at the time to allow decisions of this kind to be taken by civil servants and diplomats without reference to or sanction from their Minister?"

Mr Heathcoat-Amory and Mr Davis said they had taken no part in the affair. Colleagues of Mr Davis added that in fact he had a "frosty" relationship with Mr Ashcroft and had only met him on one later occasion.

Another Tory MP, Bowen Wells, who is a former consultant to Mr Ashcroft and director of one of his companies, confirmed he had made representations to the Foreign Office on Mr Ashcroft's behalf.

Meanwhile, William Hague defended Mr Ashcroft and dismissed the allegations against him, including suggestions the American government was worried about drug money laundering in Belize, as "smear and innuendo".

Mr Hague rejected suggestions that the Conservatives' new ethics and integrity committee should investigate Mr Ashcroft. "We proceed on the basis of facts. It's not for panic reaction to smears. On the basis of what I have seen there is not a case for doing that," Mr Hague told the BBC.

Mr Ancram described the attacks on Mr Ashcroft as a "smear campaign". The most substantial allegation was that Mr Ashcroft asked the British government to help him dissuade Belize from introducing tax legislation which would have damaged his business, Mr Ancram said. "It would have been surprising if he had not done so, and it would have been strange if the Government had not responded positively to his request," he added.