ASHCROFT INNOCENT SAYS US

The former US ambassador to Belize last night defended the beleaguered Tory
treasurer Michael Ashcroft, saying the American authorities had no evidence
that he was involved in illegal activity of any kind.

George Bruno, who left the ambassadorial post in November 1997 after a
three-year spell, said the US government was "not concerned" about Mr
Ashcroft and insisted there was no official investigation into him by any
agency.

Mr Bruno, 56, said references to Mr Ashcroft in reports compiled by the
Drug Enforcement Administration (DEA) and published by the Times newspaper
"meant nothing".

"One must ask whether this is a politically motivated smear campaign," he
said. "If there is anything against Mr Ashcroft, I have not seen the
substance. This is a tempest in a teacup."

Mr Ashcroft has been under fire for three weeks after a series of articles,
principally in the Times, raised questions about his probity and fitness to
be treasurer of the Conservative party.

The articles focused on his business interests in Belize, and his
influencing its government to create a financial regime in 1990 which put
him in charge of the regulatory system for finance, banking and shipping,
and made him the offshore banking industry's main owner.

But in the most damaging allegations two weeks ago, the Times revealed that
Mr Ashcroft had been mentioned in DEA documents referring to four
investigations into drug trafficking and money laundering.

A further article last week led Mr Ashcroft, who has consistently denied
any wrongdoing, to issue a writ against the Times.

Yesterday Mr Bruno, who works for the Clinton administration in Washington,
said: "I am not aware that Michael Ashcroft engaged in any conduct that was
a matter of concern for the US government.

"I have heard the allegations and the rumours that have circulated about
him, but as a former US ambassador I can say the US government had no
information linking Mr Ashcroft to money laundering, alleged drug dealing,
or any other such illegal activity

"Nor were concerns ever raised by the US government about him to the
government in the UK or the government in Belize."

Mr Bruno said he was not aware of any past or present inquiry into Mr
Ashcroft. "As US ambassador, I would have known."

He also said it would be wrong to assume Mr Ashcroft was being investigated
merely because his name appeared in DEA documents. "I would question their
validity. I would be highly skeptical of any news organization having
access to classified DEA documents. I don't know from where these stories
came. But as someone once said, 'Where's the meat?' I haven't seen any."

The DEA last night refused to confirm or deny whether Mr Ashcroft's name
had appeared in any of its files, or whether there had ever been an
investigation into Mr Ashcroft.

A spokesman said it would be usual for an ambassador to be made aware of
any DEA inquiry that crossed borders.

The Tory leader, William Hague, last night defended his party treasurer,
saying he had every right to keep his position.

Speaking at length for the first time about the issue, Mr Hague told
Channel 4 News: "That's not what's going to happen to him. I'm being fair
towards him, fair towards the voters and fair towards the proper funding of
parties in this country."

The billionaire businessman was putting the finances of the Tory party on a
sounder footing and Labour did not like that, Mr Hague said.

"What Mr Ashcroft is doing is broadening the base of funding in the party.
He's bringing many more people in to contributing so we are not depending
on small numbers of donors."

He added: "I have always known he's been subject to a vendetta and a lot of
smear and innuendo. But I have never believed that you should obstruct
people from taking part in a political party, taking part in our democracy,
because somebody is running a vendetta against them."