FINANCE watchdogs are to investigate contracts awarded to a Scottish company which donated £5,000 to the Labour party five months after winning £30m of government work.
The Commons Public Accounts Committee and the National Audit Office have been called in after concerns about a donation last June from Euan Snowie, the finance director of Stirlingshire-based Snowie Ltd.
Snowie handed over the money after the was
te management company was awarded clean-up work by the Scottish Executive and the Department of Environment, Food and Rural Affairs following the foot-and-mouth epidemic.
Snowie, who runs the family-owned firm with three brothers, insisted last night that the donation was not connected to the work. But the latest controversy linking gifts to the Labour party and lucrative government contracts will re-ignite the debate over how political parties are funded.
Conservative MP George Osborne confirmed that the Public Accounts Committee, of which he is a member, will examine the circumstances of the Snowie Ltd contracts as part of an inquiry into whether the government achieved value for taxpayers’ money during the foot-and-mouth crisis.
He is also referring the details to the National Audit Office, which is currently scrutinising decisions taken by the government as the number of infected animals escalated during the spring.
Osborne, who believes the contracts were "not properly put out to tender", said: "It certainly seems pretty suspicious that a company that got such lucrative contracts happens to be one that gives money to the Labour party.
"The priority for the government was speed - they needed big contractors to transport and dispose of animals, and the priority was to get the job done. But when you accelerate the awarding of contracts, you have got to be absolutely sure that there is no suspicion over how they are awarded and you have to be extremely careful about being above board."
Snowie Ltd trebled its staff to 500 almost overnight after the government decided to cull thousands of animals to try to contain the FMD crisis.
The company, which had a turnover of £17m in 2000, also has contracts with all three of Labour’s water quangos in Scotland and with a string of local authorities.
A spokesman for the company confirmed that Euan Snowie had attended Labour fund-raising dinners but stressed that he had also attended similar events run by the Conservative party.
Snowie Ltd is no stranger to controversy. During the foot-and-mouth outbreak, the company took dead animals to a mass grave near Lockerbie and to rendering factories and was also the main contractor dealing with the mass burial in Cumbria.
But its management of burial sites was called into question when 900 animals were buried at the wrong location at Tow Law, Country Durham, and had to be reburied.
On three occasions it has also been fined for breaching environmental standards.
Snowie Ltd was prosecuted in February and October 2000 and June 2001 for breaking waste regulations.
In October 2000, it pleaded guilty to causing liquid waste to enter a tributary of the Cadger Burn, near Blairingone. The tributary feeds into the Gartmorn Dam, which supplies Alloa’s drinking water. The company was found guilty and fined £1,000.
Earlier in the year, it was fined £3,000 after admitting it allowed distilling waste from breweries to run into a tributary of the River Teith, in Doune, Perthshire.
Last June, it was fined £5,000 after injecting waste into land at a farm south of Saline, West Fife, in a manner that the Scottish Environmental Protection Agency claimed was likely to cause pollution.
The company has also been at the centre of controversy for spreading abattoir waste on land in Clackmannanshire. That practice is not illegal and is not related to Snowie’s fines, but local people have campaigned hard against it.
Snowie vehemently rejects any suggestion that the donation was part of a cash-for-favours deal. He told Scotland on Sunday: "The two things are completely unconnected. It is completely irrelevant."
Snowie referred further questions to his press spokesman, who said: "Snowie donated £5,000 to the Labour party, but the Labour party didn’t award foot-and-mouth contracts. They were awarded by the Scottish Executive and DEFRA. I cannot see the connection." He added: "A payment of £5,000 would not swing such a large contract."
A Scottish Labour spokesman said: "Big donations have no effect whatsoever on how the Labour party conducts itself.
"If people have any evidence that this is not the case, they should come forward with it rather than throwing around unsubstantiated allegations of wrongdoing."
