FORMER JUNIOR minister Liz O'Donnell is at the centre of a major row with the Progressive Democrats after refusing to return money the party claims belongs to it.

PD officials have written to O'Donnell a number of times requesting she repay an €8,700 election expenses rebate that was paid into her account by the Standards in Public Office Commission (Sipo). But O'Donnell is refusing to return the money.

Almost €2m in election expenses has been reimbursed to more than 300 candidates who ran in last year's general election. Candidates who have exceeded a quarter of the quota are entitled to apply to Sipo for a refund of their electoral expenses.

The money was recently paid back electronically into the private bank accounts of the candidates even though many of the expenses may not have been accrued by them but by members of their election teams.

Colm Fahey, chairman of the PDs in Dublin South, said, "Everyone is amazed that she has not returned the money to the party."

Another PD party source said, "Liz was pictured in the Irish Independent recently at a fundraiser for Barack Obama, which went down like a lead balloon among PD members given that she hasn't paid the money back to her former party."

Copies of a letter written by the local constituency organisation to O'Donnell demanding the return of the money have been given to each member of the party's national executive.

Speaking about the row, O'Donnell said: "It is my understanding the repayment was made to the candidates personally. I have no further comment to make."

Sipo explained: "Section 21 (d) of the Electoral Act provides that reimbursement should be made to each qualified candidate. After a candidate makes a return to us, we issue them with a reimbursement application form and the Department of Finance makes the repayment. The Department of Finance wants to make the repayment by electronic funds transfer (EFT) directly into the candidate's personal account and it is a matter for the candidate to give the money back to their political party."

There is a lot of deep-seated resentment towards O'Donnell in the PDs, as Fahey explained. "She didn't even inform the party that she was leaving."