HAIN FACES SLEAZE WATCHDOG !

Peter Hain has been reported to the Parliamentary Standards Commissioner for failing to declare £103,156 in gifts to his Labour deputy leader bid. The watchdog will investigate whether the work and pensions secretary broke the rules on MPs' conduct.

Downing Street said Gordon Brown had "full confidence" in Mr Hain, who has said his failure to declare the donations was an innocent mistake. But Plaid Cymru has calleD for Mr Hain, who is also Welsh secretary, to resign.

The Conservatives have held back from calling for Mr Hain's resignation, pending the outcome of the investigation by standards commissioner John Lyon. But Tory work and pensions spokesman Chris Grayling said: "If he gets severely criticised by the standards commissioner I think there will be very real doubts about his future." Mr Lyon will prepare a report for the Committee on Standards and Privileges, which has the power to suspend Mr Hain from Parliament.

The complaint against Mr Hain was lodged by David Davies, Tory MP for Monmouth, who said MPs had to declare donations in the register of members' interests, as well as to the Electoral Commission, within four weeks. Peter Hain's campaign took out a full page ad in the Daily Mirror

Mr Davies told BBC Wales: "What happens next is up to the Committee for Standards, and Gordon Brown, but there has to come a point where people say it's not feasible for him to be running two departments when all this has gone on."

In a statement on Thursday evening, Mr Hain admitted he had failed to declare £103,156 in donations to his failed campaign to become Labour's deputy leader to the Electoral Commission. He said he had been too busy with his duties as the then Northern Ireland secretary to concentrate on the "day-to-day administration and organisation" of his deputy leadership bid, something he now "regrets". The Electoral Commission is carrying out its own investigation into whether electoral laws were broken.

In his statement, Mr Hain said it had become necessary to raise more cash after the deputy leadership contest finished in June last year, because "unpaid invoices" emerged during the summer and autumn.

Anyone who's worked with Peter Hain - which I've done over the years - would know But he learned on 29 November last year that these donations had not been declared within the required timescale, and "immediately" informed the Electoral Commission.
The commission has since been kept in touch with progress on establishing which donations were not registered, added Mr Hain.

In another development, it has emerged that a trustee of a think tank which channelled £25,000 into Mr Hain's deputy leadership bid - John Underwood, a former Labour communications director - was also closely involved in the financing of the campaign.

The cash, in the form of five donations, was not declared to the Electoral Commission. More than £25,000 in donations and a further loan of £25,000 were made by individuals through the Progressive Policy Forum (PPF), which does not have a website and whose registered address is a solicitor's office in London. A third donor, Isaac Kaye, the former head of a company raided in 2002 by police investigating alleged price fixing of NHS drugs, gave nearly £15,000 through the PPF.

Steve Morgan, the lobbyist brought in to run the later stages of Mr Hain's campaign, also gave £5,000 using the same method. The think tank was set up in December 2006, shortly after the launch of Mr Hain's deputy leadership campaign. The money was passed to the campaign but not declared to the Electoral Commission as donations.

Mr Hain said all of the individuals who had given money to the PPF were asked if they were happy for the cash to be transferred to his campaign. But the BBC has spoken to one donor who said he had not been consulted.

Another donor, diamond dealer Willie Nagel, who donated £25,000 to the PPF and made three-month loan for the same amount, was not told the cash was given to Mr Hain's campaign, according to the Financial Times. A spokeswoman for Mr Hain said he stood by everything he had said in his statement and would not be making any further comment.

Elfyn Llwyd, Plaid Cymru's leader in Parliament, told BBC Wales the latest revelations meant Mr Hain's position was no longer tenable. He said: "Yesterday I didn't say Mr Hain should consider his position, but today's revelations are dynamite. "More than sorrow than in anger, I am forced to say his position is untenable. "This appears to be playing fast and loose with the law and cabinet ministers can't do that."

Labour MP for Battersea, Martin Linton, who was part of Mr Hain's campaign team, told BBC News he had never heard of the PPF think tank. But he defended what he described as an "innocent oversight".

"Anyone who's worked with Peter Hain, which I've done over the years, would know that it could only be what he says it is - an honest innocent oversight - and he's very sorry for it." The extra donations mean Mr Hain spent £185,000 on his campaign, rather than the £82,000 he had declared previously, and much more than the other contenders.

The Neath MP came fifth in the six-way race to replace John Prescott as Labour's deputy leader, a contest won by Harriet Harman. His campaign is thought to have spent heavily on courting trade union support and, on 8 June last year, took out a full page advertisement in the Daily Mirror, thought to have cost £25,000.
BBC NEWS REPORT.