Brexit party at ‘high risk’ of donor fraud, says UK elections regulator

Brexit campaigner Nigel Farage (L) stands with party Chair Richard Tice (R) as he speaks at the launch of The Brexit Party. [EPA-EFE/NEIL HALL]

The UK’s Electoral Commission said on Tuesday (18 June) Nigel Farage’s Brexit party must account for all donations it has received since it was set up in March because it was open to a “high risk” of fraudulent donations.

In response to a Freedom of Information request, the Electoral Commission said that it had made an assessment based on a site visit to the Brexit party’s offices on May 21, just days before the European elections.

It added that Farage’s party should “review all payments, including those of £500 or below, it has received to date to ensure it has not accepted any donations that it is prohibited from accepting.”

In a statement published on Tuesday, the Commission said that “the fundraising structure the [Brexit] Party have adopted, coupled with insufficient procedures, leaves it open to a high and ongoing risk of receiving and accepting impermissible donations, and being unable to maintain accurate records of transactions.”

Speaking at a hearing of the UK Parliament’s sub-committee on disinformation on Tuesday, Bob Posner, chief executive of the Electoral Commission, told MPs that the party was open to a “high risk” to fraudulent donations via Paypal.

Most UK political parties use Paypal to collect donations and are required to be able to match addresses to bank accounts. However, the Commission told MPs that the Brexit party had not been collecting this data “systematically” and noted that its funding structure was based around attracting money from small donations, which “does have risks attached to it”.

Since launching in March, Farage’s party, which comfortably topped the poll at May’s European elections with 31%, claims to have raised more than £2.5 million in £25 donations from registered ‘supporters’.

“Yes, they need to take action,” said Posner, adding that “we’re not satisfied with the systems that they have in place.”

However, Posner and Louise Edwards, director of regulation at the Commission, told MPs that they had “very serious concerns” but no evidence that the Brexit party had broken the law. They added that the party was not currently facing a formal investigation, but considered that it was at a ‘high risk’ of not complying.

The regulator also conducted assessments of the pro-European Change UK party, the People’s Vote and Our Future Our Choice pressure groups, which campaign for a second referendum on the UK’s EU membership. But the Commission said “there was no reason for us to go to their premises”.

Arron Banks, a businessman who bankrolled the Leave.EU campaign, has accused the Electoral Commission of being institutionally biased against Brexit-supporting groups and parties, and the Brexit party is vigorously defending itself against accusations of impropriety.

On Monday, Scottish National party MEP, Alyn Smith, was forced to apologise and pay costs after Brexit party chairman Richard Tice threatened to sue for defamation because  Smith had accused the Brexit party of being “a shell company” that was a “money laundering front”.

The regulator has little power to act during election campaigns. Political parties are only required to submit their election spending records in August, three months after the polls were held.

[Edited by Zoran Radosavljevic]

Subscribe to our newsletters

Subscribe

Want to know what's going on in the EU Capitals daily? Subscribe now to our new 9am newsletter.