THE ULTIMATE BETRAYAL? TORIES TOOK MONEY FROM A HEROIN BARON

The Conservative Party received a £1m donation from one of south-east
Asia's most notorious drug smugglers, his family alleged yesterday. Steve
Boggan and Anthony Bevins report the latest, and probably most damaging,
instalment in the Tory funding controversy

Ma Sik-chun, 59, channelled the money to the party in June 1994, according
to a series of front-page articles yesterday in the Hong Kong-based
Oriental Daily News, which the Ma family owns.

According to the reports, which were accompanied by a picture of Mr Ma's
son with John Major, the payment was made in an effort to smooth Ma
senior's return to Hong Kong from Taiwan, where he has lived as a fugitive
since 1978.

Three months after the donation was made, Ma Ching-kwan, Mr Ma's son, was
invited to dine with Mr Major at Downing Street. The Oriental Daily News
published a copy of the invitation and the menu - cucumber and tarragon
soup, roast lamb with rosemary and orange and caramelised lemon tart.

Conservative Central Office last night strongly denied that the party would
accept donations with any strings attached.

Ma senior fled to Taiwan after being charged in connection with one of
Asia's largest drug-trafficking operations. A year earlier, in 1977, his
brother, Ma Sik-yu, known in Hong Kong as "White Powder Ma", had taken the
same route after being tipped off that the police were about to arrest him
on similar charges.

In yesterday's Oriental Daily News, the family said they had asked for the
return of the £1m donation last April and they reproduced a receipt,
numbered A10885, from Tory headquarters in Smith Square, Westminster,
acknowledging the £1m gift.

According to the newspaper, the Conservatives were fully aware of the
source of the funds and originally made out the receipt to an "anonymous
donor". It is understood the family hoped it would smooth the return of Ma
senior to Hong Kong.

However, the reports say, the Conservatives decided that £1m was too large
an amount to be credited to an anonymous benefactor so "they realised they
needed a real name but . that it was not convenient to put Ma Sik-chun".
The newspaper claimed that the receipt was subsequently altered and made
out to his son "CK Ma", Ma Ching-kwan, who was then the chairman of the
Oriental Press Group, which publishes the newspaper.

The paper said the true source of the donation was the fugitive Ma,
although a separate donation of £548,000, was donated by the "Ma family" in
1994. It is understood the bulk of this money was given to the Tories to
fund a party printing press in Reading.

Last night the Conservative Party refused to discuss individual donors but
a spokesman said donations were never accepted with conditions attached.
"We will categorically say that the Conservative Party did not or would not
accept donations conditional on favours," the spokesman said.

Asked by The Independent whether the numbered receipt as amended was
authentic, the party refused to comment. It also failed to confirm or deny
it had received a request for the return of the £1m donation. However, the
spokesman said the party would return any money if it was proven to come
from illegal sources.

Mr Major's office said he was in the United States yesterday and,
therefore, not available to explain why CK Ma's presence at Downing Street
on 27 September 1994 was not listed at the time as one of the former Prime
Minister's official engagements.

According to the Oriental Daily News, Chris Patten, the former Governor of
Hong Kong and former Conservative Party chairman, acted as a "go between"
for the donation from Ma Sik-chun.

Mr Patten firmly denied the allegation yesterday, describing it as a
"complete and utter fabrication".

"I know nothing about any donations Mr Ma may have made to Central Office,"
he said. "It would have been wholly improper for me to be involved [in
fund-raising] once I left the chairmanship of the party.

"Mr Ma's [junior's] father was treated in accordance with all the usual
rule of law considerations. The truth of that is what has happened. Where
is he now?"

In the year the donation was made, former Cabinet minister David Mellor was
hired as a consultant by the Oriental Press Group in his capacity as a
lawyer. It is understood that part of his role was to advise the family on
whether Mr Ma senior could return to Hong Kong. Mr Mellor listed the
consultancy in the Members' Register of Interests. He declined to comment
yesterday.

Commenting on the donation a Labour Party spokesman said last night: "If
this is true, then it is both a disgrace and a disaster for the Tory party.

"We have always said that once the source of their foreign funding became
known, it would be an enormous embarrassment from which it would be
difficult for them to recover. William Hague and his predecessors have got
some very serious questions to answer and we will keep pressing them very
persistently."

With Lord Neill's official inquiry into party funding already taking
written evidence, the bombshell charge could not have dropped at a worse
moment for Mr Hague.