Alex Hardie reports on a Charity Commission inquiry into the Mariam Appeal which found that its trustees, including founder, controversial Respect MP George Galloway, "were not sufficiently vigilant and did not properly discharge their legal duties".

The findings were made regarding "significant donations" connected with improper transactions made under the oil-for food programme. However, overall the Commission is satisfied that the funds received by the charity were spent on its humanitarian purpose.

The inquiry, opened in December 2005, sought to ascertain whether funds resulting from contracts made under the UN oil-for-food programme were donated to the Appeal, and if so, to establish the legal status of those funds. It also examined the extent to which the Appeal's trustees properly discharged their duties and responsibilities in receiving those funds.

In October 2005 reports were published by the Independent Inquiry Committee appointed by the UN and a US Senate Committee on Homeland Security and Governmental Affairs on the oil-for-food programme. The reports concluded that certain allocations of contracts in the programme had involved the payment of illegal surcharges to the then Iraqi Government. Commissions earned by certain individuals, including one of Mariam's trustees Fawaz Zureikat, on the sale of the oil were connected to these contracts.

The Commission concluded that at least $376,000 donated by Zureikat to the Appeal resulted from such contracts and therefore came from improper sources. The inquiry report states: "The charity trustees knew about the sanctions and the programme. Given the complex setting within which the Appeal had to work, the Commission's view is that they should have been extremely vigilant in their acceptance of donations. In consequence, the Commission is of the view that the charity trustees of the Appeal did not make sufficient further enquiries as to the source of the funding from Mr Zureikat to assess whether it was proper and in the interests of the Appeal to accept these funds."