For those wanting to know more about Oleg Deripaska’s ailing metals empire, Catherine Belton’s weekend piece is indispensable. One observer likens the Russian oligarch’s business to a house of cards.

A worrying aspect for UK taxpayers is who he owes money to. Mr Deripaska is presently scrambling to repay Royal Bank of Scotland, a UK bank that is set to be part-nationalised. In this small and indirect way, Britain is exposed to the Russian oligarch’s financial fortunes.

RBS is part of a group of banks that lent $4.5bn to Mr Deripaska to help him build a 25 per cent stake in Norilsk, the world’s biggest nickel miner. Strictly, he has until Friday to refinance the loan. The banks are expected to extend the deadline as they wait for the Kremlin to bailout Mr Deripaska.

But if no fresh funding materialises, the banks will find themselves owning a stake in a Russia’s biggest nickel producer — an asset some in the Kremlin have prized. As Vince Cable, Liberal Democrat deputy leader, said:

“It is fascinating and alarming to see the prospect looming of the semi-nationalised RBS bank finding itself owning part of a major and highly sensitive Russian mining company by accident. I trust that the government is already thinking through the strategic as well as the financial implications of this development.”

All the evidence suggests that allowing corporate donors does nothing for transparency or the simplicity of the political finance system.

Peter Riddell’s piece neatly exposes the logical contortions in electoral law. Why should a foreigner banned from donating be permitted to give as much as they like via their wholly-owned EU based company, as long as it does business in the UK?

But one point he doesn’t raise is why companies are permitted to donate at all.

The US realised this was a bad idea a long time ago and banned direct corporate donations. The 1907 Tillman Act — named after “Pitchfork Ben” Tillman, a vile racist Senator who made his name rampaging through the South attacking blacks and Republicans with his “Red Shirt” band of paramilitary terrorists — was the first attempt by Congress to clean up politics.

Tillman’s motive — stopping funding to civil rights politicians — was pretty disgraceful. But the means he sought was supported by the likes of Theodore Roosevelt, who were more interested in tackling dirty politics.

The big question is what the purpose is in giving as a company? Strictly the decision should be passed through the board. But how many companies shareholders are united in their view of politics, let alone corporate boards? A politically united company is more than likely to be owned by one person. If the decision is down to an individual, what is the point of giving through a company?

Ideally the system would allow for public spirited companies to give to all three parties and show their support for the system. But are there any examples of that? A much more prevalent practice has been individuals sanctioning their companies to donate rather than use their own name. You have to wonder why.

Banning corporate donations would clear up a lot of the controversy about foreign-donors, tax-status and disguised donations.  Why isn’t it being done? Well, the Tillman Act banned companies and unions from giving. Now that would be controversial.

Amid the furore over George Osborne’s meeting with Oleg Deripaska, it is worth highlighting what the shadow chancellor thinks about people who made their money in Russia during the wild 1990s.

In a speech to Demos in late August, Mr Osborne said: “In the free-for-all of Russia in the immediate aftermath of the collapse of communism, instead of fair reward for effort we saw the unfair wholesale transfer of state resources to individuals.”

I’m not sure exactly when Mr Osborne took his holiday in Corfu, but I can’t imagine it was too long before or after making those comments.

As this blog has noted, the Tories have in the past accepted donations from two billionaire brothers who made their fortune in Russian metals and survived what was called the “Great Patriotic Aluminium War”. David and Simon Reuben, who now run a London-based property empire, have quietly donated almost £200,000 to the Tories via six companies.

Mr Deripaska was actually given his first big break by the Reuben brothers, who helped the 25-year old buy the Sayansk aluminium plant in 1994 via their company Trans-World. The brothers, Mr Deripaska and Lev Chernoi, a Tashkent-born metals trader who was striken with polio as a child, went on to build a formidable business in Russia.

As David Reuben once told the FT: “We were risk-takers. That’s why we went into Russia, and that’s why you don’t see any of the big producers, the Alcoas, the Alcans, in Russia. They are not risk-takers. It was only people like us.”

The Reuben brothers later fell out with Mr Deripaska and sold their giant aluminium holdings to Roman Abramovich and Boris Berezovsky, who reached a deal with Mr Deripaska to create Rusal.

Charles Clover, the FT bureau chief in Moscow, wrote a fascinating piece on the “Aluminium Wars” for the FT in 2000.

In 1994, the Reubens met up with another formidable Russian businessman, Oleg Deripaska, who had access to shares in the Sayansk smelter, the third largest and most profitable smelter in Russia.

At one point the three smelters gave the Reubens, along with Mr Chernoi and Mr Deripaska, control of 7 per cent of global aluminium production. The group also had a share in the Novolipetsk steel mill, and had taken control of plants in Kazakhstan which made raw material for the Russian plants.

It would surprise few who know Russia’s rough-and-tumble business world that the group has clashed with both the authorities and its competitors. Trans-World lost control of Krasnoyarsk smelter for four years after the plant’s director simply deleted its shareholding from the registry with a computer keystroke in October 1994.

The 1994-1998 period in the Krasnoyarsk region has been dubbed the “Great Patriotic Aluminium War”, in which local mafia and factory directors were sucked into a bloody battle for control of the smelter.

Dozens died in a series of murders, including local bankers, crime bosses and factory officials. The victims included both allies and competitors of Trans-World, though David angrily denies any hint that they or their partners had any role in the violence. “There is absolutely no truth to any of the allegations that Trans-World has been involved in any illegal activity in Russia,” he says.

“Let me be clear. Trans-World has one unshakeable principle - that is a commitment to follow legal principles and norms wherever we work. On more than one occasion we have been on the receiving end of actions that have lacked any legality.

“In 1994 they seized our shares in Krasnoyarsk. A vacuum was created and this attracted a lot of competitors, each one vying to gain power over the others,” he says.

In the end Trans-World regained control of the smelter, helped by the interventions of Aleksander Lebed, the former Russian army general-turned-politician. Mr Lebed was elected governor of Krasnoyarsk in 1998, assisted by campaign finance from Mr Chernoi.

There’s lots of talk in Westminster over Peter Mandelson’s meetings with Oleg Deripaska, a Russian billionaire who owns the world’s biggest aluminium producer.

This makes Mr Deripaska the third aluminium tycoon to have played a walk-on role in British politics.

The Conservatives have accepted almost £200,000 from Simon and David Reuben, two billionaire brothers who also made their fortune in Russian aluminium during the wild years of the 1990s. They have since reinvented themselves as London-based property investors, controlling swathes of real estate around the capital.

Ben Wegg Prosser, a former aide to Lord Mandelson, has blamed the speculation over Mr Deripaska on George Osborne’s “blabbermouth”, which he “will come to regret”.

Lord Oakeshott, Lib Dem Treasury spokesman, was horrified by the idea that Tory donors might have short-sold stocks, HBOS in particular (see my previous blog).

But what of Paul Marshall, co-founder of hedge fund Marshall Wace, who has given the Lib Dems about  £162,000 in recent years? Guido alludes today to the fact that Marshall Wace likes to short stocks.

What he doesn’t mention is that three separate funds run by the hedge fund were among those who disclosed short positions in HBOS after the FSA four-month ban on financial short-selling was brought in .

Oakeshott (pictured left) had described hedge funds which shorted HBOS as “wolves”. How come the discrepancy?

A Lib Dem spokesman says that the party has chastised short-selling despite having taken the Marshall donation. The Tories, by contrast, have refrained from any criticism. Not sure this explanation really washes.

And then there is Michael Brown, the controversial character who gave the Lib Dems £2.4m. Brown loved speculating in the City, although it is not clear if he went short as well as long.

Some readers may be excited by the fact that Tory donors have sold some equities short during the recent financial crisis. That may seem like a gift to Labour during these perilous times.

But this is a time for cool heads. Bear in mind that the last high-minded group to attack short-sellers - the Church of England - was revealed as hypocritical last week when it emerged that its own investment arm uses similar practices.

Not only does the church lend stocks to short-sellers but…I quote… 

“As well as aiding shorting by lending stock, the church commissioners had £13m invested in Man Group, the biggest listed hedge fund manager, at the end of last year. The commissioners also sold a £135m mortgage portfolio last year, says their annual report, despite Dr Williams’ criticism of trading debts for profit.

“Through the Church of England pensions board, which manages another £847m, the church invested this year in a fund from Auriel Capital, a London hedge fund, which aims to make money from currency trading - including short selling currencies.”

Could any of the newspaper groups attacking the Tory hedge funds have any investments (direct or indirect) in the same vein? Or any of the Labour donors? Just a thought.

UPDATE: Jon Aisbitt, non-executive chairman of Man Group (one of the world’s largest hedge fund managers) gave £1m to Labour.

The Treasurers’ report* in Labour’s annual accounts says there has been a “dramatic improvement” in Labour’s pension fund. It has swung from a £6.3m liability in 2005 to a surplus of £1.9m at the end of last year.

Sounds good, for sure. But much of the difference is down to the way in which actuaries use a discount rate for the scheme’s liabilities. In 2005 the rate was 4.7 per cent, in 2007 it was 5.8 per cent.

In simple terms this change means that future liabilities are presumed to be smaller (they have shrunk in the accounts from £42.9m to £38.1m).

That simple fact alone explains £4.8m of the good news.

Nothing fishy in this, I hasten to add. I spoke to a pensions expert yesterday who said that discount rates in general have risen in the last two years. But the point is that the situation has been improved by what is simply an ”actuarial gain”.

Another point to make is that the scheme has £23m of its £40m of assets in the stock market…..which has nosedived since Christmas. For that reason alone, the current state of play in the pension fund - if it was marked to market - is probably not so rosy.

 * Incidentally guys (Treasurers Jack Dromey and Chris Lennie), you signed it on 27 June 2008, not “2007″. I’m told this is a ‘typo’.

Those outside the Westminster village may be bemused that an op-ed (today’s Guardian) on Labour’s future could be seen as a statement of leadership intent.

David Miliband’s language is carefully coded.

No such doubts exist here though. There are the omissions (no mention of Gordon Brown), the timing (he could have kept his head low) and the criticisms (he says Labour could have done more to improve the NHS).

The rumour is that Number 10 feels betrayed. The word “traitor” has cropped up in conversation.

My colleague Sue Cameron, whose Whitehall contacts are unmatched, writes in this morning’s FT that Miliband should wait instead of risking “doing a Hague”.  

The 43-year old looked defensive this afternoon, saying: “I think that my article today was a challenge to David Cameron and not a challenge to Gordon Brown.”