UK Cash for Honors Scandal: A Guide

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On Feb. 1 it emerged that British Prime Minister Tony Blair had been questioned for a second time by police investigating allegations that seats in the House of Lords were sold for political donations. The interview, which took place on Jan. 26 at 10 Downing Street, was kept secret at the request of Scotland Yard. Previously questioned by police in December, Blair was again treated as a witness, not as a suspect.

The news of the Prime Minister's questioning is the latest blow to the Labour government. Blair's chief fundraiser and Middle East envoy Lord Levy—who was arrested in July over suspicion of selling honors--was arrested again on Jan. 30, this time on suspicion of conspiracy to pervert the course of justice. Both Blair and Levy have denied any wrongdoing. A guide to the inquiry that has all the British classes chattering.

Why the fuss?

British political parties nominate candidates for life peerages, which give recipients the title of lord or lady and allow them to sit in Britain's 748-member upper chamber of Parliament. Under a 1925 law, the sale of honors is illegal. Police are now attempting to find out if some peerages recommended since 2001 by all major parties were given in return for donations and secret loans. (More than 90 people have been questioned so far, including former Conservative leader Michael Howard.) They are also investigating whether another law, which says that all donations of more than $10,000 must be declared, has been broken. In recent weeks, police appear to have shifted the focus of their investigation to attempts to withhold information by Downing Street employees. On Dec. 19, Ruth Turner—Blair's director of government relations—was questioned on suspicion of attempting to pervert the course of justice. Turner also denies any wrongdoing.

How did the investigation start?

Police began to look into party finances after four businessmen nominated for peerages in 2005 were blocked by the House of Lords Appointments Commission. The body was concerned that the men had recently handed over large amounts of cash to the ruling Labour Party. A spokesman for one of the men, entrepreneur Sir Gulam Noon, claimed Noon had been encouraged by Blair's chief fundraiser Lord Levy to omit details of a $460,000 loan to the party from his application.

Has anyone been charged?

No. Police were due to hand their investigation file to prosecutors at the end of January. However, recent arrests mean that the handover—and charges, if any—are not now expected until March

Has the Prime Minister been damaged?

Allegations of Labour sleaze are harmful to a Prime Minister who came to power in 1997 promising that his government would be "whiter than white." Blair had been expected to step down after local elections in May—he pledged that he would quit within 12 months last September—but pressure is now building for the Prime Minister to speed up his departure. David Cameron, the leader of the opposition Conservative party, has called on Blair to stand down immediately "in the national interest."

What happens next?

Blair is adamant that he won't be pushed out of office early. In a defiant interview with BBC radio on Friday, the Prime Minister stated that he would not quit over the cash for honors scandal. The British public, he said, "will have to put up with me for a bit longer."