The Scottish Labour party were today reeling after it emerged that Strathclyde police have been asked to investigate Labour run Glasgow council following the cocaine scandal and the resignation of former council leader Steven Purcell.
Glasgow East MP John Mason and James Dornan leader of the SNP opposition at Glasgow council have written to the Chief Constable of Strathclyde Police, Stephen House, requesting an investigation into issues surrounding the resignation of the former council leader.
The calls follow allegations in the press that the Labour party, Labour politicians and Labour donors may have benefitted from decisions made by Mr Purcell when he was leader of the council.
The Times of London revealed that businessman Willie Haughey, who has donated £1.1m to Labour, is alleged to have benefited financially from a number of decisions involving Mr Purcell. It reported that last year Mr Haughey attended a private dinner attended by PM Gordon Brown and Scottish Secretary of State Jim Murphy.
Mr Haughey donated a two week stay at his Florida villa at February's Labour fundraising event in The Glasgow Hilton, which Gordon Brown also attended.
Purcell, who resigned and left the country after the cocaine revelations, is reported to have chaired a meeting that saw Mr Haughey awarded nearly £1m of public funds. A council official is said to have spoken with Purcell with concerns about his close links to Haughey.
Mr Haughey also had a compensation award increased from £7.4m to £13.3m after he reportedly approached Labour politician Jack McConnell, then first minister. The award was as a result of having to relocate his company HQ which was on land required for the M74 motorway extension. UK Prime Minister Gordon Brown opened the new headquarters of Mr Haughey's company in 2009.
James Dornan, leader of the SNP opposition on the council, said: “Mr Haughey has been a major beneficiary of decisions taken by Glasgow city council and we want to see a full and proper investigation. We believe all recent decisions must now be reviewed.”
Ben Wallace the Conservative spokesman for Scotland, said: “Scotland’s biggest Labour donor is in receipt of millions of pounds of Labour-controlled government funds.
“There needs to be an investigation to expose Labour’s links to its donors in Scotland and contracts placed by Labour authorities.”
Wallace said he would write to the Scottish justice minister Kenny MacAskill asking for an investigation.
The police have also been asked to investigate the dealings of council construction quango City Building which was set up in 2006 by Mr Purcell. City Building’s managing director is Willie Docherty, the husband of Glasgow Labour councillor Sadie Docherty.
Scotland on Sunday reported that the firm paid £2,000 for a table at a Labour Party fundraiser and that it entertained senior Labour figures, including Labour's Holyrood leader Iain Gray and his wife. Current conventions state that public bodies do not make contributions to political parties.
The paper also revealed that three of the four councillors on the board of City Building were appointed by Labour and in 2008 a former general secretary of Scottish Labour, Lesley Quinn, was made a senior manager.
The firm is also reported to have lavished money on leasing luxury cars and spent almost £20,000 in 2008/09 on dinners, many of which were attended by Labour councillors. According to official documents no councillors from any other parties have ever been entertained by City Building.
City Building was central to Steven Purcell's plans to modernise public services in Glasgow; the firm made a profit of £2.2m in the 2008-9 financial year.
A spokesman defended the table at the Labour Party fundraiser saying:
"We are satisfied with our cross political party approach to this matter. City Building is a limited liability partnership and it has broken no rules whatsoever nor has it made any contribution to a political party."
These latest developments will heap further pressure on Scottish Labour as acrimonious splits emerge in their East Lothian and Airdrie constituencies.