Wishawgate exposes Labour's ugly side

Yesterday’s verdict from the Electoral Commission - a slap on the hand for the Motherwell and Wishaw Constituency Labour Party - seemed to suggest a mild offence. Yet David Triesman, the Labour Party’s general secretary, is expecting the worst.

His memo last month predicted that Mr McConnell will pay a price at the polls. Once again, a trivial matter has exposed something far more ugly and dangerous: the nepotism, feuding, and favouritism which still stains the Scottish Labour Party.

Wishawgate started when, in October, leaked accounts of the party’s Motherwell and Wishaw branch showed a discrepancy of some 11,000. The constituency is shared by Mr McConnell and Frank Roy, its Westminster MP.

It also emerged that some of this money had been used to pay a hotel bill of Christina Marshall - then Mr McConnell’s personal assistant.

She was born into the Scottish Labour network through her father, David Marshall, MP for Glasgow Shettleston. She met Mr McConnell when they both worked for Beattie Media, the public relations company.

Ms Marshall, 25, had already hit the headlines. In 1999, she testified during the "Lobbygate" imbroglio where Mr McConnell was accused - and later cleared - of facilitating special access to ministers for Beattie Media’s clients.

Paying the accommodation of a party worker is, in itself, no great sin. But the Sun disclosed that Ms Marshall had been treated to the Caledonian Hotel, Edinburgh’s five-star finest, running up a 168 bill.

Here was the first damaging snapshot of Scottish Labour’s modus operandi. The bill was paid from a fund started by a trade union - which collects its cash from the working men and women Labour purports to represent.

Here, such funds were being creamed off so the party elite - and their acolytes - can upgrade to a five-star hotel rather than endure the hardship of a Travelodge. Hardly the socialist ideal.

Back in April last year, Mr McConnell was none too keen to elaborate on the missing money - even when it was discovered the First Minister failed to provide receipts for some 3,000 of expenditure.

The Motherwell and Wishaw auditor asked plenty questions. But, he later claimed, the responses from both Mr McConnell and Mr Roy were either "contradictory or failed to answer the questions".

This was why, in September, the auditor sent his concerns to John Smith House, home of the Scottish Labour Party, where Lesley Quinn, its general secretary, promised to investigate.

Now for the next twist. This upstanding auditor was one Hugh Mulholland, a local party activist who lost out to Mr Roy in the selection process for the safe seat of Motherwell and Wishaw for the 1997 election.

At the time, Mr McConnell was general secretary of Scottish Labour and vetting candidates. Mr Mulholland had been denied a sure ticket to Westminster; he had an axe to grind with both men.

Hence his passing on of the matter to Ms Quinn - and her statement that there would be an inquiry. So when the First Minister was questioned in the Scottish Parliament, he said the matter was being dealt with at headquarters.

In an eerie echo of the defence given by Henry McLeish during Officegate, he said: "I would do nothing, absolutely nothing, that would ever bring this parliament into disrepute."

The investigation, meanwhile, continued. Three funds had now come to light. The Development Fund account, started with a 5,000 donation from the salaries of members of the ISTC, a steel union. This was the one which paid for Ms Marshall’s hotel bill.

Then came the Motherwell and Wishaw Constituency Labour Party account, from which 11,000 was missing. There had been mysterious transactions between this and the Red Rose Dinner account - set up for a fundraising event attended by Mr McConnell.

This leads to the most fascinating event of the affair. The Red Rose Dinner is a rum affair. Last year, it saw Mr McConnell and Mr Roy joined by luminaries such as John Reid, then Northern Ireland Secretary.

And the host of the dinner? A convicted drug dealer named Justin McAlroy who was being investigated for his links to the Russian mafia. Six days after the dinner, he was shot dead outside his home in Cambuslang.

His father was Tommy McAlroy, the part-owner of Dalziel Park Golf and Country Club - which donated six months’ membership to Mr J McConnell.

The First Minister was, unsurprisingly, cleared of any wrongdoing by Ms Quinn’s probe. In a letter to Sir David Steel, he further blamed a "lack of communication" between Mr Mulholland and the former treasurer of his constituency.

This brings in the final character: Elizabeth Wilson, who was later accused of taking the funds for herself. And where was all this money deposited? Step forward North Lanarkshire Municipal Bank, run by Labour councillors, including Mrs Wilson’s husband. So close is the network that these people have set up their own banks.

This Scottish Labour structure was seen during the McLeish fiasco when it emerged he had let one of his offices to Digby Brown, a firm of lawyers which chases injury claims for trade unions and seemed to be hand-in-glove with the party. Former employees of this tiny firm include Douglas Alexander, now a Cabinet Office minister and Brian Fitzpatrick MSP . So it goes on.

Wishawgate again opened the lid on the bizarre clan system which is behind Scottish Labour - giving a snapshot which Scots voters may find deeply unappealing when asked whom should represent their country.

Originally, no-one would believe that bungled office lets could bring down a first minister. But offices were not the issue then, in the same way that the dodgy accounts is not the issue now. Mr McLeish fell because he was a spider, not the fly caught in the web of Scottish Labour. The Wishawgate affair, like Officegate, Lobbygate and Monklands before it, simply exposes the system which has always existed under this political establishment.

Each of these scandals lifts up a garden stone, underneath which unpleasantness is found to be crawling. This is the purpose of devolution - to let Scots see for themselves the people who have been governing their country for decades.

In May, for the first time, Scots will be able to vote on whether they like what they see. And this is why the Wishawgate, and yesterday’s findings, can be such a danger to Mr McConnell.

Voters do not care if a witless Lanarkshire accountant messed up. They do care if devolution has meant passing power to a small cadre of council hall stooges now forming a coalition with Scotland’s vested interests.

The question now is whether the Scottish National Party can exploit all this in time for election day, given that they have promised not to engage in negative campaigning.

The garden stone has, once again, been lifted by Wishawgate.

There is much to be gained in asking voters to come take a look at what lies underneath Scottish Labour.