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SCOTT JAGOW: In Britain, political parties are being accused of knighting people in return for donations. A third person has been arrested in the campaign finance scandal. Stephen Beard reports from London.

STEPHEN BEARD: Police won’t reveal the identity of the arrested man, but he’s believed to be a wealthy company boss.

He was given a knighthood by Tony Blair’s Labour government. And then he lent the Labour party almost $2 million. The loan, it is alleged, would later be quietly turned into a gift.

Police are investigating claims that in return for such donations, party leaders have even nominated people for a seat in the unelected House of Lords, a working legislature rather like the Senate. That would be illegal.

Opposition spokesman Mathew Oakeshott says party leaders should not be doling out these honors.

MATHEW OAKESHOTT: It’s very difficult to believe that a party leader is not subconsciously or consciously going to be affected by if somebody has given or lent millions of pounds to the party.

The scandal is getting dangerously close to the Prime Minister. His chief fundraiser has also been arrested and bailed pending further enquiries.

In London, this is Stephen Beard for Marketplace.