Britain's Liberal Democrats party is facing a possible investigation by the country's elections watchdog over donations totalling £2.4 million (€3.5 million) from a company owned by a Swiss-based financier, it was reported today.
The London Times said the Electoral Commission had mounted an inquiry into whether the donations by 5th Avenue Partners breached the laws banning political parties from taking money from foreign donors.
The news of a possible investigation has emerged during the party's annual conference. The allegations are potentially crippling for the party.
A commission spokeswoman said: "We are looking into an allegation about whether the donations made by the company, 5th Avenue, are permissible.
"We are really at the early stages of reviewing with the party where this donation came from and if the company involved are permissible donors."
A Liberal Democrat spokeswoman confirmed the party was "in correspondence" with the commission over the donations, but said they were confident that they had done nothing wrong.
In a statement, the party's chief executive Lord Rennard said: "We believe that we have acted in good faith and properly in relation to all donations received by the Liberal Democrats and that all donations we have received are from individuals entitled to donate to British political parties or from companies based and trading in the UK".
By law, any company donating to a British political party must be registered at Companies House and trade within the UK.
According to The Times, 5th Avenue Partners - which is wholly owned by a Swiss company belonging to the financier Michael Brown - was only established in June last year.
The paper said it leased offices in London on March 11th this year, more than a month after the first donation was made to the Liberal Democrats. Mr Brown complained he felt "totally let down" by the way in which the party had handled the matter.
"If the people who handled my donation were elected to run the economy, I would not be happy - it would be disastrous," he told The Times.
"As a donor, I rely on the party to verify that the donation is proper. In the case of the donation made by my company, very little due diligence was undertaken."
PA