Michael Spencer, broker picked by David Cameron to be party treasurer, raised �11.4m with aggressive charm offensive
The transformation of Tory funding under David Cameron has been highlighted by new research which shows the City of London dominated donations in the runup to last year's general election.
Michael Spencer, the city financier and chief executive of the internet stockbroker ICAP who was appointed by Cameron as Tory treasurer, masterminded an aggressive charm offensive which saw funding from the financial services sector soar.
It rose from �2.7m in 2005 to �11.4m last year, according to new research from the Bureau of Investigative Journalism, a non-profit organisation based at City University in London.
While in part this can be attributed to Cameron's greater popularity than his predecessor, Michael Howard, the amount coming from the City has more than doubled in percentage terms, and now accounts for more than half the Tories' funding. It rose from 24.7% of donations in 2005 to 50.8% in 2010.
Cameron faced criticism before the election for failing to rein in Lord Ashcroft, the party's former treasurer and later deputy chairman, when it emerged that he had enjoyed non-dom tax status while running the Conservatives' operation in marginal constituencies. Cameron, who was privately furious with Ashcroft for refusing to be more open about his tax affairs, was frustrated because he thought he had dealt with the controversy by appointing Spencer as the Tory treasurer after his election as party leader in 2005.
Spencer was given a clear remit. This was to ensure that the party was less dependent on a small number of extremely generous donors, such as Ashcroft, by increasing the number of donors who gave no more than �50,000 each a year.
This was also designed to strengthen the Tories' hand in negotiations in party funding reform as they sought to limit individual donations to all parties to �50,000. Labour has resisted this on the grounds that it would cut off donations from trade unions. But the research published last night showed that the Tories have a long way to go before they rely on individual donations of no more than �50,000. The research showed that 57 individuals gave donations of over �50,000 as the party geared up for the general election.
David Rowland, a property tycoon, donated �4m over two years. He was due to succeed Spencer as Tory treasurer until he stood down after a hostile media campaign orchestrated by opponents in the party.
Michael Farmer, founder of the RK Capital hedge fund, is the second biggest individual donor identified in the research after handing the Tories �2.9m over five years. Stanley Fink, another hedge fund manager who was given a peerage and who succeeded Spencer as treasurer last year after the resignation of Rowland, is in third place. He donated �1.9m.
George Magan, who gave the party �485,000, was given a peerage alongside Fink last year.
Roger Nagioff, former head of fixed trading at Lehman Brothers, has donated �180,000. Nagioff left the bank seven months before its collapse in September 2008. The collapse of Lehman Brothers is generally seen as the start of the global financial crisis.
The research also found:
? City donations to the Tories amount to �42m since 2005. Total donations since then total �101m.
? The top 10 City donors gave the party �13.16m, accounting for 13% of overall Tory funding since 2005.
Dr Stuart Wilks-Heeg, an authority on political party funding at the University of Liverpool, told the bureau: "The findings raise issues about how influenced and impartial the Conservatives are as they set about reforming and regulating the banking industry. It is admittedly difficult to prove that because parties access money from specific sources that there is a feed through into the policies they adopt. Yet, given Given we have just experienced a blowout in the financial system, and are witnessing an ongoing struggle over its regulation, the scale of Conservative party funding from the City must be an issue ? not least for a party committed to 'taking big money out of politics'. This is a very important piece of work."
Iain Overton, editor of the Bureau said: "The scale of money from the City to the Conservative Party poses the question: are the Conservatives able to separate the interests of their financier backers from the wider national interest?"
A Conservative party spokesman said: "On the very day that the chancellor raised another �800m in tax from bankers ? having already introduced the toughest rules on bankers' pay anywhere in the developed world ? it beggars belief anyone could claim donors to the Conservative party are influencing policy. It would be more pertinent to ask why Labour continue to allow their policy to be dictated by the unions, who provide 80% of their funds."
Source: http://www.guardian.co.uk/politics/2011/feb/08/city-conervative-party-election-campaign-funding
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