Loans, donations and expenses.

A new twist in the cash for honours saga: Assistant Commissioner John Yates and his team have taken an interest in the possible conversion of the loans into donations, in order to circumvent election laws. As far as I know, commercial loans can be kept confidential but donations have to be declared. The question which will keep the lawyers rich is: when is a money handed over a loan and when is it a donation? According to the Daily Telegraph,

A source close to the investigation said that the commercial issue was now the critical factor in whether the Crown Prosecution Service would recommend criminal proceedings.

"If these loans were not commercial it is a serious breach of the law," claimed the source. "Loans have to have repayment dates and have genuine interest rates. That is what the police are now studying."

Yates of the Yard is to ask the Electoral Commission to examine the problem. Legal anoraks may want to study the relevant legislation: the 2000 Political Parties, Elections and Referendums Act.

Meanwhile,the Daily Mail is going big with the story that the perennially cash-strapped Labour Party is forcing Labour local councillors

to hand over hundreds of pounds each from their publicly-funded allowances to Labour slush funds for electioneering and party propaganda.

The scam - also under investigation by sleaze watchdogs – has been branded a "national disgrace", an "outrageous abuse of taxpayers' money" and an "affront to democracy".

News that their money is being used to line Labour's pockets will enrage council tax payers who have seen their bills soar as town halls have been starved of cash.

Council tax has more than doubled since Labour came to power.

The Mail has more on the financial details and, in yet another article, reveals that all the main parties have their snouts in the same trough.

Tags: Cash for honours, local government