THE First Minister yesterday denied influencing a land deal after it emerged he met a high-profile Labour donor shortly before an award of £16 million in compensation was made.
Willie Haughey, a former director of Celtic Football Club, was in the midst of a compensation row over the route of the M74 through his premises in Glasgow when he met Jack McConnell at a social event.
The businessman asked Mr McConnell if the Executive was involved in the negotiations. Mr Haughey confirmed that he received a reply within days.
Opposition parties said the meeting raised questions over Mr McConnell’s own involvement in the land deal. But both Mr McConnell and Mr Haughey insisted there was nothing sinister about the brief interaction.
The meeting took place in November or December 2003 - neither side can recall exactly when. At that time papers show an ongoing wrangle between Mr Haughey’s City Refrigeration Holdings (CRH) and Brian Kerr from the Valuation Office Agency - a branch of the Inland Revenue - regarding the sale of the properties.
In November 2003, Mr Kerr made a fully-costed recommendation of 7.4 million compensation which was then rejected by CRH, which made a claim of 26.5 million.
However, weeks later, CRH was offered 10.2 million, then 12.8 million, and talks were opened with the Executive’s regional selective assistance officials.
A deal was effectively sealed on 6 April, 2004 for 13.3 million, but the figure has since risen to 16.5 million plus a tenancy agreement involving rent at a discounted rate.
When Mr Haughey met the First Minister, the valuation was still ongoing. However, he said his brief conversation with the Mr McConnell was simply to check that the district valuer was not part of the Executive.
Mr Haughey said it was just a "ten-second conversation" but within days he received a phone call telling him the valuation was nothing to do with the Scottish Executive.
Mr Haughey, who reportedly donated 330,000 just days before the meeting, said claims Mr McConnell had a personal involvement in the valuation was "laughable".
"I made sure all the Ts were crossed and the Is dotted because of my profile, and because I am a member of the party we wanted to make sure every single thing is above board 100 per cent and double- checked," he said.
A spokesperson for Mr McConnell also denied the First Minister had personally influenced the land deal. However, she confirmed that the pair had met and that Mr McConnell subsequently checked whether the Executive was involved.
She continued: "After finding that the Executive had not been involved in the deliberations between the company and the district valuer, the matter was closed."
The Tories claim there are still unanswered questions. A spokesman said: "Some important questions have been raised in the media, and we are sure everybody concerned will want the full answers to emerge since substantial amounts of money are involved."
Nicola Sturgeon, the Holyrood leader of the SNP, said: "We are not suggesting any wrongdoing on the part of the First Minister.
"It is the case, however, that the First Minister has now admitted an involvement in the case prior to the offer of increased compensation to Mr Haughey’s company.
"It is important in the interests of complete transparency and accountability that the full details of Mr McConnell’s interest and activity, however limited these may be, are made public now."
After years of wrangling, the Executive gave the go-ahead for the 500 million extension to the M74 two weeks ago.
Rosie Kane, the Socialist MSP for Glasgow who lives along the route, was "utterly disgusted, appalled and ashamed" by the latest development.
She said: "This route will bring pollution and toxic fumes. It seems the decision-making in relation to this route is toxic as well. It is people getting their pockets lined at the expense of the community."