[R-G] [BillTottenWeblog] Death of the Noble Idea

[Bill Totten]

Big money trumps everything in politics, even the most dearly-held beliefs

by George Monbiot

Published in the Guardian (February 05 2008)


It is not difficult for Britain's major political parties to move on
from their funding scandals: there's a new one every week. Every
revelation blots out the memory of its predecessors. Peter Hain's
misdemeanours dropped out of the news before we had heard the half of
it. I want to drag you back there for a moment, because there's an
aspect to this story which was either missed altogether or mentioned
only briefly in most reports. It says far more about the rotten state of
British politics than Hain's failure to declare his donations.

The new scandal concerns the identity of one of his donors. There is no
suggestion of illegality here: it is a moral issue. But it illustrates,
perhaps more clearly than ever before, the abandonment of everything the
Labour party once claimed to stand for. It shows us that in any contest
between money and principle, the money wins.

Hain was not the first beneficiary of Isaac Kaye's munificence. Mr Kaye,
who has made many tens of millions of pounds from his drugs companies,
gave the Labour party a few thousand in both 1997 and 1998, and GBP
100,000 in 1999 {1}. But Hain had two powerful reasons not to put his
hand in this man's pocket.

The first is that the company Kaye used to run, Norton Healthcare, is
now subject to the biggest prosecution for alleged fraud ever launched
in the United Kingdom. Norton is one of five firms accused of
dishonestly fixing the price of drugs sold to the National Health
Service. The charges relate to the period 1996-2001, when Kaye was
chairman of the company. In 2006, Norton paid the Department of Health
GBP 13.5 million to settle a civil case concerning the same
allegations{2, 3}.

Norton Healthcare has been involved in other controversies. In 1998 the
Department of Health named it as one of the companies offering
"inducements" to doctors and chemists: Norton gave them mountain bikes
and Marks and Spencer vouchers if they stocked its products. Labour's
health minister complained that "it is completely unacceptable for
pharmaceutical companies to encourage health professionals to use their
products through free gifts and other sweeteners". {4}

In the same year, the government announced that it was giving a Norton
plant in London's Docklands GBP 990,000 in the form of "regional
selective assistance", whose purpose is to boost employment. This grant,
the government claimed, would promote "inward investment in the
manufacturing sector". As Private Eye points out, the fund - as its name
suggests - is normally used to bring jobs to the regions (which means
places other than London) {5}. But there was something even odder: the
week before the government announced this funding, Norton's parent
company revealed that it would stop manufacturing in the UK, and would
shift the jobs in that sector to Ireland {6}.

But the particular discomfort for Mr Hain concerns Kaye's activities in
his previous place of residence. Until 1985 he lived in South Africa,
where he was involved in another "gifts for influence" scandal. His
drugs company, Alumina, gave cars, televisions, chandeliers, swimming
pool equipment, tennis courts, shares and trips abroad to people working
in the health sector, including academics who sat on the government's
advisory panels, the head of the Medical Research Council and the
minister of health {7, 8, 9}. When these gifts were exposed, Kaye
explained that they were "not an inducement, but in appreciation of
their having prescribed drugs marketed by the Alumina group". {10} The
official inquiry into the scandal found that he had "no scruples about
applying dishonest or unethical methods". {11}

More importantly as far as Hain is concerned, Isaac Kaye has been
accused of providing campaign finance for National Party candidates
during the apartheid years. Kaye admits to funding the National MP John
Erasmus. An article in the Daily Express, drawing on an award-winning
investigation by the South African journalist Martin Welz, alleges that
Kaye seconded one of his company's executives to campaign for another
candidate, Gerrit Bornman {12}. It also claims he provided cars to help
Lapa Munnik, the minister of health and a fierce defender of apartheid,
win a by-election. Gerrit Bornman told the Express that Kaye had been a
"substantial" backer of the National Party. I tried to contact Mr Kaye,
but I was told he was unavailable {13}. In the past he has denied
funding the National Party and has maintained that his company's gifts
were not intended to win favours {14}.

Taking money from Isaac Kaye defaces Peter Hain's only remaining
conviction. When Hain became a Labour cabinet member and was obliged to
ditch everything he once believed, he was allowed to keep just one
political memento: his admirable record of opposition to the apartheid
government. When he moved from South Africa to Britain he became this
country's leading opponent of apartheid. The regime first tried to kill
him then tried to fit him up for a bank robbery. He was a brave and
remarkable campaigner. But in 2007 he trampled his medals into the mud
to get the money he needed.

This is the story of our political system, of most of the world's
political systems. You enter politics with the highest ideals and end up
grovelling to multi-millionaires. Campaign finance is not the only
reason for the corruption of leftwing political parties. But any system
without a cap on individual donations encourages the mass abandonment of
political programmes. You need to spend much less time and effort and
money to secure thousands of pounds from a rich man than to shake it out
of the piggybanks of hundreds of new members. Who can blame you if you
adjust your programme to please the millionaires?

The newspapers say that our system is one of the least corrupt in the
world. It's probably true - but so much the worse for the world. The
British Labour Party knows that no enormity would persuade the trade
unions to disaffiliate. So it can ignore their demands and concentrate
on the needs of the multi-millionaires. In 2006 and 2007, 27% of its
money came from individual donations of more than GBP 100,000 {15}.
Aside from the largesse of Lord Sainsbury and Lakshmi Mittal, almost all
of this is City money, much of it from men who run private equity
companies{16}. To what extent this influences Labour's failure to tax
the super-rich, we will never know - which is, of course, the problem.

Because the Labour Party (thanks to the endless funding scandals) is
always on the brink of bankruptcy, Gordon Brown has promised to do
something {17}. But, in line with the recommendations by the Phillips
Review of party funding, he proposes to cap donations at GBP 50,000.
Witness the democratisation of British politics: even the ordinary
millionaire can now participate.

Why should one person be allowed to give the equivalent of 1388 Labour
Party membership fees? Brown's formula would preserve Labour's funding
link with the trades unions - and the super-rich. I don't mind how it is
done; whether, as both the Phillips review and the Power Inquiry
recommend{18, 19}, the state gives more, or whether the cap is set at
GBP 100 and parties must rely on a host of tiny individual gifts. (Who
cares if they have less cash with which to bamboozle us?) Just get the
big money out of politics.

www.monbiot.com

References:

1. Kevin Maguire, 13th April 2002. The drug tycoons at the centre of the
controversy. The Guardian.

2. Simon Bowers, 5th April 2006. Norton pays NHS pounds 13.5 million
over price fixing. The Guardian.

3. Jane Merrick, Ian Drury, 11th January 2008. Hain on the rack over
secret donors. The Daily Mail.

4. Michael Gillard, 28th September 2000. Apartheid Supporter Who Is a
GBP 100,000 Backer of Labour. The Daily Express.

5. In the Back, 1st October 1999. The Kaye catalogue. Private Eye, no 986.

6. In the Back, 24th December 1999. Take the money and run ... Private
Eye, no 992.

7. No author, March 2000. Another South African Makes Good in the UK.
Noseweek, South Africa,
no 29.

8. Michael Gillard, ibid.

9. Martin Shipton, 12th January 2008. 'It's inevitable Peter Hain will
have to resign'. Western Mail.

10. Michael Gillard, ibid.

11. Quoted in Eye Told You So, April 2002. Private Eye, Issue 1052.

12. Michael Gillard, ibid.

13. I phoned the company with which he is now associated, Trevi Health
Ventures, on February 1st and was told that Mr Kaye is "not available".
When I asked what this meant, they put down the phone. I tried again and
the same thing happened.

14. See Michael Gillard, ibid.

15. I calculated this from the Electoral Commission's Register of
donations to political parties, viewed 1st February 2008. The accounts
for 2007 are not quite complete.
http://www.electoralcommission.org.uk/regulatory-issues/regdpoliticalparties.cfm

16. Four City donors - Nigel Doughty, Sir Ronald Cohen, Jon Aisbitt and
William Bollinger - have given a total of GBP 2.25 million over 2006 and
2007.

17. Patrick Wintour and Richard Norton-Taylor, 6th November 2007.
Homes and funds at heart of Queen's speech, but plans for troops may
take centre stage. The Guardian.

18. Sir Hayden Phillips, March 2007. Strengthening Democracy: Fair and
Sustainable Funding of Political Parties.
http://www.partyfundingreview.gov.uk/files/strengthening_democracy.pdf

19. Isobel White, 14th March 2006. Power to the People: the report of
Power, an Independent Inquiry into Britain's Democracy.
http://www.parliament.uk/commons/lib/research/notes/snpc-03948.pdf

Copyright (c) 2006 Monbiot.com

http://www.monbiot.com/archives/2008/02/05/death-of-the-noble-idea/

TO POST A COMMENT, OR TO READ COMMENTS POSTED BY OTHERS, please click
on the word "comment" highlighted at the end of the version of this
essay posted at http://billtotten.blogspot.com/