It all started off with Peter Hain (in the Cabinet with two jobs – Work and Pensions and also Wales) admitting that he had failed to declare a £5,000 donation to his Labour Deputy Leadership campaign. But it didn’t end there, oh no…

It turned out that actually he had failed to declare £103,156 of donations (more than half of the £185,000 he received in total). This is far worse than ‘just’ £5,000, but also it showed how badly run his deputy leadership campaign was, spending far more than other candidates all just to achieve a glorious fifth.

This in turn has led to flak for Labour minister Phil Woolas MP, his campaign chairman, who didn’t exactly get value for money from all that spending, and indeed the campaign managed to run up huge debts.

Moreover, other senior campaign figures are now indulging in mutual and public recriminations, blaming each other for the failure to declare so much money. One of his former campaign team members now thinks that Peter Hain should quit over the whole affair, with other dissent also now coming to light.

But aside from the internal recriminations, there are increasing questions over who exactly made all those donations. £51,613 came via a think tank, the Progressive Policies Forum. It doesn’t seem to have had much existence other than simply funnelling money on to the Hain campaign. It was only formed in December 2006, by John Underwood, who subsequently acted as the treasurer for Hain’s Deputy Leadership campaign.

As the BBC put it:

The Progressive Policies Forum is the think-tank that hasn’t troubled itself with much thinking. It has published no pamphlets, organised no meetings and come up with no policy suggestions.

Some of the money paid to the think tank was passed on almost straight away (possibly even the same day) to the Hain campaign, which does raise the question of why pay the money to the think tank at all in the first place if it was simply going to pass it on immediately. 

Moreover, some of the campaign donors are, shall we say, not exactly the sort of people you’d expect Peter Hain to get on well with. To quote Rod Liddle:

If you could define the least appropriate person to have funded Peter Hain’s bid to become deputy leader of the Labour party, who would you come up with? Peter, remember, was the leftie candidate, known for his stand against apartheid, his mistrust of global capitalism and support for the welfare state. So, how about this: a boss of a multinational pharmaceutical company accused of cheating the NHS out of money through his involvement in a price-fixing cartel, who supported a member of a pro-apartheid party in South Africa? Step forward, Isaac Kaye, former boss of Ivax Pharmaceuticals. He was one of Peter’s generous, secretive donors.

It has also all got rather murky as to whether the individuals knew that the money they were giving to the Progressive Policies Forum would be passed on to Peter Hain.

For example, it was first reported that Willie Nagel didn’t know his money would go on to Hain’s campaign. He denied this in a written statement issued via his lawyers, but only in as much as the (presumably carefully worded, given it was a written statement via lawyers) statement said that he, “had no objection that this money be used to support Peter Hain’s campaign”. Which isn’t as fulsome a response as it could have been, and therefore leaves yet more questions hanging in the air.

And then there is the question of Peter Hain’s fondness for supporting people or firms that had financial connections with him. Guido Fawkes has been assiduously blogging about these (here, here and here), and though he hasn’t yet found a ‘smoking gun’, there is a clear pattern emerging.

Peter Hain now faces a pair of investigations: from the Electoral Commission and also – by the looks of it – from the Parliamentary Commissioner for Standards. He also faces the risk of ‘death by a thousand cuts’ as the media and blogging coverage continues to drip out new revelations day after day. Yesterday, for example, was several days into the latest Hain donations crisis (and a month and a half after the first £5,000 admission, which came in late November), and yet it still managed to be lead story on the TV news on both BBC and Sky for much of the day. Grassroots support for Hain in the Labour Party also seems to be rather lacking.

But on the good news front, his website has now been changed.

The official Liberal Democrat take on all this is:

Liberal Democrat leader Nick Clegg said it was “intensely embarrassing” for Mr Hain but warned against a rush to judgement while investigations were under way.

He told the BBC: “From what I’ve heard I can’t really distinguish between what appears to be either utter incompetence in the way his campaign was run, or deliberate obfuscation.”