Fox may face police inquiry over claims law on donations broken

Former Defence Secretary Liam Fox faces the prospect of a police investigation into claims he and his best man, Adam Werritty, broke the law by soliciting donations and keeping them secret.

City of London Police and the Electoral Commission have been asked to look into allegations that Dr Fox and Mr Werritty misled donors and failed to declare funding.

Meanwhile, Foreign Secretary William Hague has indicated that the scandal will prompt the coalition Government to look at wider problems with the lobbying system.

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Dr Fox resigned as Defence Secretary on Friday following growing scrutiny of his relationship with Mr Werritty.

His role was taken by Philip Hammond, who was replaced as Transport Secretary by Justine Greening, in a Cabinet reshuffle so hastily conducted that David Cameron reportedly contacted his Ministers from a train platform surrounded by morris dancers.

Bassetlaw Labour MP John Mann said he had asked police to investigate Dr Fox’s dealings and to determine whether a “potential fraud” had been committed.

“Mr Werritty gave out business cards saying he was an adviser to Dr Fox,” Mr Mann said. “If that is not the case and he was getting money – for whatever purpose – by misrepresenting his relationship with the Defence Secretary, that cannot be right.”

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Millionaire venture capitalist Jon Moulton is understood to have approached Cabinet Secretary Sir Gus O’Donnell to complain at being “misled” by Dr Fox.

Mr Moulton said Dr Fox asked him to donate to Pargav, a not-for-profit company set up by Mr Werritty, but he was unaware it was funding Mr Werritty’s travel to meet Dr Fox on official trips.

A report by Sir Gus into Dr Fox’s links with Mr Werritty, to be published tomorrow, is expected to be highly critical.

It has been disclosed that Mr Werritty had met Dr Fox 22 times at the Ministry of Defence and joined him on 18 overseas trips since he came to office last year.