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Friday, February 23, 2024

Donor scandal hits Welsh Labour

As the Welsh Labour leadership battle comes to its conclusion, a new and unexpected turn has thrown the outcome into doubt, while at the same time tainting the Senedd's scandal-free reputation, at least when compared to Westminster.

The BBC reports that one of the Welsh Labour leadership candidates, Vaughan Gething has accepted £200,000 for his campaign from a company run by a man who was convicted twice for environmental offences.

The paper says that the donor's director, David Neal was given a suspended prison sentence in 2013 for illegally dumping waste on a conservation site. Four years later he was prosecuted again for not removing it.

Gething also received donations from two other companies run by Mr Neal in Autumn 2018, when he last ran to become Welsh Labour leader:

All donations have been declared to the Electoral Commission, whose records show the economy minister accepted two donations of £100,000 each from Dauson Environmental Group.

One was given last month, while the second was given five days after Mr Drakeford resigned.

Mr Gething has vowed to introduce tougher penalties for those who break environmental rules.

Mr Neal is a director with significant control in Dauson Environmental Group. In 2013 he was prosecuted for illegally dumping waste at a conservation site on the Gwent Levels.

Cardiff Magistrates Court heard that toxic liquid had leaked into the water at the time. Mr Neal was given a suspended sentence of three months.

His companies Atlantic Recycling and Neal Soil Suppliers were also prosecuted and given fines and costs of £202,000.

In 2017, he was given another suspended sentence of 18 weeks, with fines and costs of £230,000 after failing to remove the waste.

The site falls within a Site of Special Scientific Interest (SSSI) for its fauna and flora. In both cases he admitted the offences.

Atlantic Recycling and Neal Soil Suppliers donated a total of £38,000 to Mr Gething in 2018.

Another one of his companies, Resources Management UK Ltd, recently faced action by Natural Resources Wales after complaints about the smell at Withyhedge Landfill in Pembrokeshire.

Residents dubbed it a "a stink bomb on steroids".

Mr Gething has also declared in his Senedd register of members interests that he has received the donations for his leadership campaign from Dauson Environmental Group.

However, this is not the only question about donations being asked of Mr Gething. 

Nation Cymru reports that the Economy Minister has denied having any involvement in the awarding of a £1.8m PPE contract during the Covid pandemic to a company that has made a donation to his leadership campaign.

Gething was Health Minister at the time the contract was awarded to BCB International Ltd, which is based in his Cardiff South and Penarth constituency and which he has visited in his Ministerial capacity.

BCB's core business involves the supply of outdoor survival gear, and its donation is far smaller at £1,000, but it has added to concerns about the source of Mr Gething’s campaign funds.

All of these donations have been correctly declared in the Senedd and to the Electoral Commission, and there is no question of impropriety with regards to the awarding of contracts. As a spokesperson says, Gething did not make decisions on individual contracts awarded to BCB International or any other company during the pandemic.

There is though more. Nation Cymru says that four people associated with a company that donated a total of £21,200 to Mr Gething’s earlier leadership campaign in 2018, when he stood unsuccessfully against current First Minister Mark Drakeford, have been arrested as part of a £140m property fraud inquiry:

The Times reported: “Fraud investigators conducted raids yesterday morning [February 21] into the collapse of a property investment group that owns historic buildings across the country. Four people were arrested and are being questioned by Serious Fraud Office (SFO) officials investigating the Signature Group investment business. More than 1,000 investors ploughed at least £140m into the Liverpool-based group.

“It had 21 developments including the Shankly and Dixie Dean hotels in Liverpool, the George Best hotel and Crumlin Road courthouse in Belfast, and the Exchange Hotel in Cardiff’s former Coal Exchange building.

“The group operated for more than seven years, buying up predominantly historic buildings for redevelopment into luxury hotels, flats and offices. Investors lent money to Signature or bought a hotel room, apartment or office space in one of the group’s properties, with promised returns of between 8% and 15%. Lawrence Kenwright, 58, the founder, and his wife Katie, 46, were declared bankrupt last month.

“Nick Ephgrave, director of the SFO, said: ‘We have people up and down the country left out of pocket, and buildings left derelict at the centre of our cities. This is now an active criminal investigation.’ “

When the company took over the Coal Exchange, Mr Kenwright tweeted: “Vaughan Gething is why we came to Cardiff to bring the Exchange Hotel back to life – a building which had been laying derelict for years. It was @vaughangething who cleared the path for us, even though it was not part of his remit – he did it due to it being the right thing to do.”

On September 8 2018 Signature Living donated £10k in cash to Mr Gething’s campaign, together with a non-cash donation worth £1,200. On September 28 2018 Signature Living made a further cash donation of £10k to the campaign.

Again, Vaughan Gething's spokesperson makes the point that he accepted the donation in good faith, declared it in line with the rules, and was deeply disappointed by the project’s eventual failure. He has no involvement or interest in the running of the business concerned.

I have written here many times how the dependence of politicians and political parties on donations from private individuals can expose them to awkward questions. The issue is about appearances rather than wrongdoing.

In this case it is now up to Welsh Labour members and ultimately the public to decide, did Vaughan Gething, a candidate for First Minister, show poor judgement in taking this money, or was he just unlucky?

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