Nick Clegg yesterday made clear that the Liberal Democrats would not volunteer to give up their biggest ever donation of £2.4m after the benefactor turned out to be a crook who stole the money.
Nick Clegg yesterday made clear that the Liberal Democrats would not volunteer to give up their biggest ever donation of £2.4m after the benefactor turned out to be a crook who stole the money.
On Friday, Michael Brown, the bogus bonds dealer from Glasgow, who is currently on the run from Scotland Yard, was convicted in his absence of theft and other charges. The judge said he would pass sentence once the fugitive was found. Reports have suggested the Scot has changed his identity and is somewhere in the Caribbean.
Clients of the 42-year-old crook gave him £36m - £8m of which belonged to Martin Edwards, the former Manchester United chairman - on the promise of massive returns. However, they were conned.
London's Southwark Crown Court heard how Brown, whose last known address was in the London suburb of Hampstead, had "simply used their money as his own", embarking on a breathtaking spending spree.
As well as luxury holidays, cars and an apartment and office in Mayfair, the conman spent his clients' investments on a £2.5m private jet, £400,000 on an ocean-going yacht and £327,000 on an entertainment system for his home in Majorca.
However, it was Brown's largesse towards the Liberal Democrats ahead of the last General Election that brought the pony-tailed high-flier to the public's attention. After meetings with Charles Ken-nedy, the then party leader, the £2.4m donation ended up in the party's 2005 election war chest and was duly spent.
Ever since the revelations about Brown emerged, LibDem HQ has insisted it took the money in good faith, made all the necessary checks but, like everyone else, was simply tricked by the conman.
Asked if the party should now, in light of Brown's conviction, hand the money back, Mr Clegg said: "We now know he is a crook .We did all the checks. He didn't only fool us, he fooled his bankers, his lawyers, the creditors.
"I regret that enormously. It happened some time ago. We spent all the money before the General Election precisely for the purpose for which it was donated. Nothing was asked in return, nothing was given in return."
He said it was now up to the Electoral Commission, the elections and donations watchdog, to decide what to do. However, it was pointed out the party could voluntarily give the money back.
Mr Clegg replied: "We are culpable if our motives were wrong, if our checks were wrong and if we didn't do something in good faith. However, we accepted this money, did all the checks we possibly could have done, in good faith."
The commission has made clear it is now going to look again at the Brown donation. If, in its final judgment, it says the LibDems should have done more thorough checks, the party will have to hand back the money.
Under electoral law the £2.4m would not go back to the defrauded investors but rather to the Consolidated Fund - the UK Government's bank account.
