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Britain In Furor Over Alledged Bosnian Serb Contributions to Conservatives
By Paul Majendie
LONDON, May 19 (Reuters) — Britain's ruling Conservatives were plunged into a party funding row on Sunday, accused of receiving more than 100,000 pounds ($150,000) in donations from businessmen linked to Bosnian Serb leader Radovan Karadzic. Opposition parties urged Prime Minister John Major to investigate the allegations, while the businessman in question denied he was linked to Karadzic.
The allegation cast a spotlight on the issue of party funding for the embattled Conservatives, currently 2.2 million pounds ($3.3 million) in debt and deeply unpopular after a string of scandals and sleaze accusations. A general election is due within 12 months.
The Sunday Times said donations were made between 1992 and 1994 when the war in former Yugoslavia was at its height and British troops were deployed with U.N. peacekeeping forces. A Conservative member of parliament, who spoke to the newspaper on condition he was not identified, said the first donation was from a British-based Yugoslav entrepreneur.
It was reported to the cabinet office which reviews sensitive intelligence and Major was alleged to have discussed the donation with senior officials. The cash may have been returned after an internal party inquiry, some sources told the newspaper.
A second donation was reportedly arranged in December 1994 after John Kennedy, who the newspaper said has links to Karadzic and is a prospective Conservative parliamentary candidate, contacted the then party chairman Jeremy Hanley.
The donation was allegedly discussed over lunch by Hanley and a Serbian businessman who the newspaper said cannot be named for legal reasons.
Lawyers representing the businessman issued a statement saying he was a British citizen of Yugoslav birth and had been resident in Britain for more than 10 years. "Our client is outraged by any suggestion that he is linked
in any way to Radovan Karadzic or the Bosnian Serbs," the statement said. Law firm Peter Carter-Ruck and partners said the businessman would take legal action if his name was mentioned in connection with any suggestion that he was linked to the Bosnian Serbs.
Robin Cook, foreign affairs spokesman for the Labour Party that is heavily funded by the trade union movement, said of the Sunday Times story: "This is a very serious allegation indeed. If true, it will be the worst scandal we have seen in this parliament."
Kennedy issued a statement through his local Conservative association to say the story was "fantastic nonsense." Conservative Central Office promised to investigate if the newspaper provided more information. "We have always made it clear that we do not accept money, where conditions are attached, from Royal families, from anonymous sources or from known criminals. We do not comment on individual sources of funding, though we do return money if ever the rules are found to have been transgressed."
Conservative funding hopes were delivered a blow by British Airways chairman Sir Colin Marshall who takes over this week as president of the Confederation of British Industry. He told Sky Television that some companies gave cash to
political parties but said: "I personally believe it is not appropriate to do that. I think that if one wants to make a contribution, one should make it on a personal basis."
Britain's election spending limits on candidates are among the strictest in the world — around 8,000 pounds ($12,000) each. But spending by parties is unlimited. Reformers say the combination of this and parties not having to reveal the source of funds leaves the system open to corruption. The Conservatives have been hurt by disclosures that businessman Asil Nadir gave them 400,000 pounds ($600,000) in the 1980s after he was courted for cash.
The former chief of the collapsed Polly Peck conglomerate is now a fugitive from British justice in the Turkish-controlled part of Cyprus. The last election, when the ruling party spent 11 million pounds ($16.5 million) to Labour's 10.4 million pounds ($15.7 million) to ensure a narrow victory was the first time the Conservatives borrowed money from the banks.
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