Cash for access sting forces Tory treasurer resignation

By Alex Stevenson

Conservative treasurer Peter Cruddas has been forced to quit after a cash-for-access sting exposed him offering time with the PM in exchange for a £250,000 donation.

The shocking revelations have been condemned by the Labour party, which is now calling on David Cameron to reveal how much he knew about Mr Cruddas' methods of winning donations.

Mr Cameron said it was "quite right" that Mr Cruddas had resigned and that "it shouldn't have happened".

He had himself referred, in a 2010 speech on lobbying, to "the far too cosy relationship between politics, business and money" as "the next scandal waiting to happen".

Yet in a sting by the Sunday Times newspaper, assisted by a former Cameron aide, the prime minister was himself used as the bait by the Tory treasurer as he discussed a potential donation by individuals pretending to be from a Liechtenstein-based wealth fund called Zenith.

"100 grand is not premier league. It's not bad – it's probably bottom of the premier league," Mr Cruddas says says in the video. "Two hundred grand, 250 is premier league."

Mr Cruddas, the founder of internet securities dealer CMC Markets, was ranked 90th on the Sunday Times Rich List. He donated £258,000 to the Conservative party in the third quarter of 2011.

"The first thing when we talk about your donations is get you at the Cameron and Osborne dinners," he adds in the video.

"You really do pick up a lot of information… within that room everything's confidential and you will be able to ask him practically any question you want."

He then suggests that donors who are "unhappy about something" can have their concerns put to "the policy committee at No 10" – and that some of the party's bigger donors have dined with Mr Cameron and his wife Samantha Cameron in their private apartment in Downing Street.

He adds: "Things will open up for you, but you need to go in with a bit of – you know – it's no good scratching around and it's 10 grand now… – minimum 100 grand, minimum.

"It will be awesome for your business, you'll be well pleased, because your guests will get a photograph with David Cameron."

Mr Cruddas apologised for his "bluster" and explained he had not consulted any politicians or senior officials in the party before his initial conversation with Zenith.

"Specifically, it was categorically not the case that I could offer, or that David Cameron would consider, any access as a result of a donation," he said in a statement.

"Similarly, I have never knowingly even met anyone from the No 10 policy unit.

"I deeply regret any impression of impropriety arising from my bluster in that conversation."

Mr Cameron has announced the Conservatives will hold a "proper party inquiry" into the issue "to make sure this can't happen again".

But Labour's shadow minister without portfolio Michael Dugher said that it was "not appropriate for the Conservative party to investigate itself" in a letter to the prime minister.

He instead called for a "full, independent inquiry" and asked that the matter be referred to the independent adviser on standards in public life.

The Conservative party pointed out that it did not formally consider a donation from 'Zenith', pointing out that taking donations from a company based overseas does not comply with the rules.

"All donations to the Conservative party have to comply with requirements of electoral law, and these are strictly enforced by our compliance department," it said.

'Zenith' staff were reportedly told they would be able to channel the money through British company directors, however.

Mr Cameron added: "What happened is completely unacceptable. This is not the way we raise money in the Conservative party… I'll make sure there's a proper party inquiry to make sure this can't happen again."

Labour sought to contrast the news with the Budget's cuts to "pensioners and hard-working families", as part of the Conservative party's broader bid to help millionaires.

"Pensioners, the young unemployed and squeezed middle families cannot afford to buy this sort of access or influence which is just another reason why this government is out of touch with the overwhelming majority of British people," Mr Dugher said.

"David Cameron comes should clean. Will the PM say exactly what he knew and when about an apparent effort to sell access and influence in Downing Street?"

Former foreign secretary David Miliband went further, telling BBC1's The Andrew Marr Show: "The idea that policy is for sale is grotesque.

"This goes to the heart of the relationship between a party and the government. It crashes through the lines that should exist between party and government.

"My own view is the reason they didn't win the last general election is the public didn't really believe the party had changed. The revelations today go to the heart of the claim you can trust the Conservative party because they've got rid of those bad old ways."

Mr Cameron insisted that he had reformed the way his party secured its funding, however.

"I took over a party with £28 million of debt, it's now virtually debt free," he insisted earlier.

"We've massively broadened our donor base. We have very strict rules, very strict compliance, and I'm going to make sure the rules are properly complied with in every case."

Peter Facey of Unlock Democracy said the time had come for ministers to take "urgent action" to resolve the party funding deadlock.

"The fact that he felt confident about making such an offer suggests that this culture is ingrained within the Conservative party; one resignation will not be anything like enough," he commented.

"Nor are the Conservatives the only party to be implicated: we have seen dozens of similar stories do the rounds in the recent past."

He said Mr Cameron "knew what the stakes were" when he said before the election that covert lobbying was the next big scandal waiting to happen.

Mr Facey added: "Every day he fails to sort this mess out, his very competence and integrity are brought further into question."