Appeal court orders search of Galloway's charity papers

Civil servants have been ordered to reconsider disclosing thousands of documents relating to a fund run by former MP George Galloway during Saddam Hussein's regime.

The surprise ruling by the Court of Appeal threatens to revive an old controversy that led to Mr Galloway's memorable appearance in front of a US Senate committee looking into an allegation that the Mariam Appeal, which he founded, had received money from Iraq.

Mr Galloway flatly denied the allegation and said that it had been investigated and dismissed by the Charity Commission – though afterwards the Commission issued a statement saying they were not looking in detail at where the appeal's money had come from. They had investigated how it was spent and concluded that the funds were used properly.

Mr Galloway's spokesman, Ron McKay, said yesterday that the development was a legal dispute over freedom of information between journalists and the Charity Commission in which the former MP was not directly involved.

"Presumably the Charity Commission has decided as a matter of principle that its inquiries are not covered by the Freedom of Information Act," he said. "This is a matter for the Charity Commission and the judge.

"George is quite sanguine about anything that will happen. We're going back many years, and I'm not sure what anyone expects to find."

Before the 2003 Iraq war, Mr Galloway – then a Labour MP – was a prominent opponent of the sanctions imposed on Saddam Hussein's regime. He launched the Mariam Appeal in 1998 to campaign against sanctions and raise money for Iraqis hit by them.

In 2005, the Senate subcommittee for Homeland Security asked Mr Galloway whether the charity had received money through an Iraqi an oil firm, Aretio Petroleum, which was permitted by the UN to sell oil provided the proceeds were used to buy food. Mr Galloway told the senators: "I have never heard of Aredio Petroleum. The Mariam Appeal never received a single penny from Aredio Petroleum.

"The Mariam Appeal's finances have been investigated by the Charity Commission... They found no impropriety. And I can assure you, they found no money from an oil contract from Aredio Petroleum – none whatsoever."

Afterwards, the Charity Commission published a statement saying: "We did not undertake a detailed review of sources of income to the appeal because the original concern was about the use to which funds had been put."

Their statement added: "We have no evidence to show that the income received by the fund came from an improper source. But had recent allegations been known to us at the time of our inquiry, we would have made the information available to the appropriate UK authorities."

In its 2007 report, the Charity Commission disclosed that in August 2005, the Mariam Appeal received a donation of $340,000 (£207,000) from a Jordanian businessman, Fawaz Zureikat. Three days earlier, an oil company had paid $740,000 (£450,000) into Zureikat's account. Their findings were based on bank statements and other documents, which the Charity Commission says is exempt from Freedom of Information legislation.