Revealed: the link between Liam Fox donors and Tory HQ

Adam Werritty funded by businessmen introduced to former defence secretary by party treasurer

guardian.co.uk, Rajeev Syal, Rupert Neate and Nicholas Watt, Wednesday 19 October 2011

Liam Fox attacked the media in his resignation speech. He will face
 a fresh inquiry into his links with Adam Werritty. Photograph: Dan Kitwood/
Getty Images Europe

The Liam Fox affair has reached the Conservative party's high command for the first time after it was confirmed that its leading fundraiser introduced donors to the former defence secretary, who then introduced them to his best man, Adam Werritty.

In a blow to Downing Street's central tactic of distancing itself from Fox – saying that he was operating in his own way – the Conservative party admitted that its senior treasurer was the conduit for donors to the former defence secretary.

Howard Leigh passed on the details of donors who wished to support Fox's campaign during the 2005 Tory leadership contest. They were then persuaded by Fox to give money to Werritty's not-for-profit company Pargav, according to a source, and some of the money was spent visiting Fox on lavish trips abroad. Leigh was one of party's treasurers at the time.

The disclosure is an embarrassment for the Tories and will pose further difficult questions for Fox, who has been told that he faces a parliamentary inquiry into his behaviour and Werritty. In his resignation statement in the Commons, Fox attacked the media for pursuing him.

"Last week's media frenzy was not unprecedented, and it happens where a necessary free press and politics collide," Fox said. "But I believe there was, from some quarters, a personal vindictiveness, even hatred, that should worry all of us."

A Conservative spokesman confirmed Leigh's role in helping to introduce Fox to the donors whose recent support was used by Werritty to fly around the world to meet the former defence secretary.

The spokesman told the Guardian: "Howard Leigh introduced donors to Liam Fox's office during the 2005 leadership campaign. Some of them subsequently maintained contact with Dr Fox's office. Mr Leigh had no knowledge of Pargav and has not introduced donors to Dr Fox for some time."

A source close to Leigh said: "Howard Leigh was as shocked as anybody to find that donors' funds were being used to fund Adam Werritty's trips. There is no way that he would have countenanced that."

Leigh is now the senior treasurer of the party. He is understood to have met Werritty on a number of occasions, but does not regard him as a friend. A party source says the donors approached Leigh asking to donate money to Fox's campaign, not that they were solicited by Leigh.

The Tory spokesman declined to say which donors had been introduced to Fox by Leigh, and did not expand on whether they knew of how their money had been spent by Werritty. Backers of Pargav include Mick Davis, a South African-born mining magnate known for his pro-Israel views; Tamares real estate, an investment company owned by Poju Zabludowicz, the chief funder of Israeli pressure group Bicom; and Michael Lewis, a former vice-president of Bicom, who donated £13,832 to Atlantic Bridge and £5,000 to Fox.

Davis, Zabludowicz and Lewis would not comment on Wednesday on how their donations had been solicited or what they believed the money was to be used for. However, Lewis has stated he had no knowledge of how his donations to Fox's leadership campaign were used.

A source with knowledge of some of the donations said some initial contributions were made to Fox's charity, Atlantic Bridge, and renewed in subsequent years without close scrutiny of where the money was going. He said some of the donors were also under the impression that the approaches had been approved by the Conservative party. "I don't think it was core Tory party fundraising but there were core Tory party fundraisers who were willing to support it."

Another source said there had been no co-ordination between the Jewish donors to fund Werritty, though some had initially felt well-disposed to help Fox because of his pro-Israel position. Both Davis and Leigh serve on the Jewish Leadership Council, a body with representatives from community and religious groups. Davis has been chairman of the council's executive committee since 2009.

Leigh chairs the elite Leaders' Group, which has more than 70 members who pay up to £50,000 a year for the privilege of meetings with David Cameron. Tory insiders say he has helped to bring in more than £2m a year through fundraising events, according to reports.

He is the managing director of Cavendish Corporate Finance, which helped Cameron's wife, Samantha, collect a windfall following the £18m sale of Smythson, the stationery and leather goods emporium company where she is creative dire ctor.

Leigh passed the donors over to Fox in 2005. At the time, Fox was the leading candidate of the party's right in the leadership campaign against Cameron and David Davis. Tory sources claim Fox then maintained contact with the donors and was responsible for passing them to Werritty, who then funnelled £150,000 to Pargav.

The parliamentary standards commissioner, John Lyon, announced that he would investigate a complaint about the former defence secretary lodged by Labour MP John Mann, after Mann asked him to examine allegations that Fox allowed Werritty to live rent-free in his London flat, which allowed him to run a business from a property funded by parliamentary allowances.

Fox apologised to MPs after Sir Gus O'Donnell ruled that he was guilty of multiple breaches of the ministerial code for a "blurring of lines" between his official and private responsibilities. In a carefully constructed sentence, Fox said: "The ministerial code has been found to be breached. For this I am sorry."

Fox accused the media for hounding his family and accepting "unquestioningly" claims by Harvey Boulter, the Dubai-based businessman. "It is difficult to operate in the modern environment, as we know, where every bit of information, however irrelevant or immaterial, is sensationalised, and where opinions or even accusations are treated as fact.

Boulter rejected Fox's criticism. He said: "It is most certainly not fair or correct for Fox to again brand me as a blackmailer. He knows very well that I was trying to settle a legal dispute … this is a negotiation."

He added: "If Fox had not issued an incorrect statement in the first place, which the Guardian forced him to correct publicly, then he would not have exposed his adviser to scrutiny."

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