Blair aide arrested in alleged cover-up in cash-for-honors probe

LONDON — The chief fundraiser for Prime Minister Tony Blair's Labour Party was arrested Tuesday on suspicion of hampering a police investigation into whether the party offered seats in the House of Lords and other government honors in exchange for cash.

Michael Levy, a close friend of Blair's and special envoy to the Middle East, was arrested on "suspicion of conspiracy to pervert the course of justice." He was released on bail and has not been charged with a crime.

In July, Levy was arrested on suspicion of breaking the law by offering government honors to people who lent large sums of money to the ruling party.

A tennis partner of Blair's who became wealthy in the music industry, Levy has been dubbed "Lord Cashpoint" by British tabloids for his central role in the scandal. He issued a statement Tuesday denying "any allegations of wrongdoing whatsoever."

Many people here see the new charge outweighing last summer's because it suggests an effort by people close to Blair to hide an offense. "The cover-up seems to be the main focus now," said Tim Knox of the Center for Policy Studies in London. "It's a serious crime, and it could be easier to prove" than the initial charges.

"Increasingly, this sorry affair has the whiff of Watergate about it," Edward Davey, a member of Parliament from the Liberal Democrats, told the BBC. Suspicion of a cover-up is particularly angering people, Davey said.

In all, four people have been arrested in a growing scandal that has made Blair the first sitting prime minister to be questioned by police in a criminal inquiry. The next step is for prosecutors to review the findings and decide whether to press charges.

Blair announced last fall that he would step down, but he did not say exactly when. Under pressure from his own party and with his approval ratings plunging, Blair said he would not attend his party's next conference, to be held in September.

The cash-for-honors scandal, as it is known here, has increased public disillusionment with Blair, and many say it could force him to resign early.

Earlier this month, Ruth Turner, a close aide of Blair's at his Downing Street office, was arrested on the same charges of offering government honors for money and suspicion of perverting justice. Two other people, Christopher Evans, an entrepreneur and major Labour Party donor, and Des Smith, a Labour government adviser, also have been arrested in the case. All were later released.