ASHCROFT ADMITS US DRUGS INQUIRY

MICHAEL ASHCROFT, the embattled Tory treasurer, has confirmed that his
affairs had been investigated by the US Drug Enforcement Adminstration, even
as it emerged that senior Conservatives raised concerns over his appointment
to such an important position in the party.

The Times on Saturday revealed that the DEA in America had a number of files
naming Mr Ashcroft and his Belize-based businesses in connection with four
separate investigations into money laundering and drug trafficking.

A source at the DEA, a federal United States body with sweeping powers to
stem the flood of drugs pouring into America, said there were no plans to
prosecute the Tory treasurer.

However, he added that his name, along with his business interests including
the Bank of Belize, had been "tied to our inquiries".

The documents seen by The Times - including one relating to an inquiry with
a European dimension - are substantial enough for Mr Ashcroft to be given
his own code reference number.

In an interview with BBC Radio 5 Live yesterday, Mr Ashcroft said: "I've
been chasing that down over the last 24, 48 hours. What I have managed to
piece together is that that was something that terminated in 1992 and in
which it was more a general look at Belize than me in particular."

He said it was "outrageous" to suggest that he had personally been involved
in money-laundering or drug-trafficking. But he added: "There again, I do
operate in the Central American area and therefore I would expect that
someone who is one of the largest movers and shakers is always of interest."

Yesterday it was reported that the CIA had also gathered information on
Belize International Services, a company then half-owned by Mr Ashcroft.

In a series of newspaper interviews yesterday Mr Ashcroft acknowledged that
the political storm around him had damaged the Tories. "This is not good for
the Conservative Party, I accept that," he said, "but everyone takes a
buffeting in politics and I guess I've been overdue."

William Hague has so far resisted pressure to hold a party ethics inquiry
into the businessman's activities and yesterday Mr Ashcroft made it clear
that he had no intention of resigning from the post of treasurer. "I'm one
of life's buccaneers and I'll take on a very aggressive challenge."

The 53-year-old businessman, who lives most of the year in Florida but has
extensive financial interests in Central America and the Caribbean, denied
that Belize had ever had a problem with money-laundering.

"In Belize there is little cash in the system and the US dollar deposits
that they do have are all cleared through the US federal reserve system so
Belize is not the right place for anybody to go to attempt money
laundering," he said.

Mr Ashcroft also denied that his companies had ever had any regulatory role
in the country's offshore sector, even though until recently he had owned a
controlling interest in the company charged with the management of the
Belizean shipping and financial services registers. However, he accepted
that his company had helped the Belize Government to establish its offshore
sector and fought to protect its tax-exempt status when a subsequent
administration tried to change it.

Mr Ashcroft was scathing about Charles Drace-Francis, a senior British
diplomat who, in a leaked Foreign Office memo, had criticised his appearance
and given warning that he might try to "stir up trouble" for Britain abroad
unless he was allowed to set up a new bank in the Turks and Caicos Islands,
another off-shore tax haven.

The businessman, who did not attend university and worked his way up from
factory hand through car auctions and the private security industry, said:
"I'll never appeal to that type and I don't want to. I think it's obvious
that they think this Ashcroft fellow, who's not a public schoolboy, is not
quite their ticket."