Danny Alexander in fresh donations controversy

Tom Gordon

Scottish Political Editor

DANNY Alexander was last night at the centre of a new donations row after accepting money from a millionaire defender of tax avoidance.

The LibDem Chief Secretary to the Treasury, who in 2013 said he was “livid” at companies and individuals “avoiding paying the proper amount of tax”, took £5000 from non-dom David Giampaolo last month.

In 2012, Giampaolo, chief executive of the exclusive investment club Pi Capital, co-authored a newspaper article titled “It’s not wrong to avoid tax”.

The SNP accused Alexander of “rank hypocrisy” and urged him to return the money.

Alexander, the MP for Inverness, Badenoch and Strathspey, is already under pressure after being caught up in an undercover newspaper sting last week.

He was filmed meeting a fake Indian entrepreneur and would-be LibDem donor who had been advised by party fundraiser Ibrahim Taguir on how to bypass the rules on donor declarations.

Taguir subsequently stepped down as the party’s general election candidate in Brent Central.

LibDem leader Nick Clegg was forced to defend Alexander, saying he had done nothing wrong and had simply been “polite” when he thanked the person for his donation.

With the SNP tipped to take his seat in May, Alexander has been furiously piling up cash to avoid defeat, declaring £86,000 in donations to his local party in the last three months alone.

However, £50,000 of this has come from Orion engineering boss Alan Savage.

In 2011, Savage admitted in court that he had put a girlfriend on his payroll to save money on tax despite her not doing any work, a wheeze put to a stop by the Inland Revenue.

Alexander was criticised for that donation after the Sunday Herald revealed it last month.

Now the MP is under fire again for the Giampaolo donation to his local party.

In their article, Giampaolo and Geoffrey Wood, emeritus professor of economics at the Cass Business School, argued governments actually want companies to avoid tax.

“Those who complain about avoidance by companies should see that the more tax a company avoids, the more its owners and employees will pay,” they wrote.

“Criticising corporations for avoiding tax is actually criticising them for doing what governments want.”

Giampaolo and Wood also blamed governments for tax avoidance by companies.

“If politicians want taxes to yield what they expect – want them to be compulsory – they should keep them simple, not make them so complex that the result is a surprise.”

Sniping at protesters who boycott Starbucks and other multinationals which go out their way to pay minimal tax, they added: “What place does morality have in this?”

The article drew an angry reply from Labour MP Michael Meacher, who wrote: “The law is part of a moral framework… If companies with a turnover in billions don’t pay their fare share in tax, is it right that everyone else, including the very poor, has to pay more or put up with service cuts?”

Florida-born Giampaolo, 56, made his fortune in gyms in the US and UK before heading up London-based Pi Capital, an invitation-only investment club for 300 of the UK’s super-rich.

His donation to Alexander was made just before the scandal of HSBC’s Swiss private bank helping clients evade tax sparked a national debate about tax avoidance.

Drew Hendry, the SNP candidate in Alexander’s constituency, said: “Danny Alexander has become a serial blunderer when it comes to who he and his party should be taking money from – and all the money in the land couldn’t counteract the unpopularity of the LibDems for imposing Tory policies on Scotland.

“After the revelations about LibDem attempts to dodge the law over donations, we now have the rank hypocrisy of Danny Alexander accepting a donation from an apologist for tax avoidance – not content with having previously taken money from a tax avoider.

“He needs to return this donation immediately, otherwise his position as Chief Secretary is surely untenable.”

A source close to Alexander said: “This donation has been reported in line with current regulations. Danny has always maintained that individuals and companies should pay the tax that they owe. In Government, he has done more than any other person to close down loopholes and invest in HMRC to help them increase compliance across the tax base.”