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Tue 15 October 2019
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Turlough Conway, who broke Byline Times‘ exclusive investigation into the Nigel Farage and PayPal affair, says the Electoral Commission have a duty to check key elements in the Brexit Party’s funding.

“How open can we be?” Farage asked on a recent campaign visit to Exeter. The truth is The Brexit Party funding system could not possibly be more closed.

Tomorrow, the Electoral Commission has stated that it will pay a visit to the Brexit Party’s headquarters. “As part of our active oversight and regulation of these rules, we are attending the Brexit Party’s office tomorrow to conduct a review of the systems it has in place to receive funds, including donations over £500 that have to be from the UK only.”

Foreign donations are illegal to political parties. No ifs and no buts.

Since we broke the PayPal funding scandal more new information has come to light highlighting the increased risk that the Brexit Party might pose to the electoral process, and legal clarity has emerged showing exactly how its funding structure and its output may be incompatible with legal compliance. This has lead major public figures such as Gordon Brown to speak out.

In Glasgow, the former Prime Minister said: “Now Mr Farage heads a new Brexit party, which is making questionable claims about the true source of its funding at a time when the Electoral Commission has warned of the dangers of multiple, small, anonymous donations being a cover for dirty money.”

He also stated that Farage is “not a man of the people – he’s a man of the PayPal”.

No matter if a donation is a one-off or cumulative, records must be kept to tell if it is legally permissible or not.

Labour’s Ben Bradshaw joined calls for an immediate investigation, as did LSE Professor Damian Tambini. The latter said that loopholes in the donation structure were a serious problem.

“Our election finance controls are failing,” Tambini told the Guardian. “UK law has strict bars on foreign finance of election communications, and overall limits on campaign spending… The Electoral Commission should signal that they are looking into this.”

In 2018, the Electoral Commission’s guidelines stated: “In the run-up to major elections and referendums we also carry out targeted campaign monitoring to check that people are complying with the rules on spending and donations.”

But there are risks when it comes to both Farage and the Brexit Party.


Farage’s History on Election Fundraising

Firstly, it has come to light that, apart from Leave.EU in 2016, there have been issues in another campaign involving Nigel Farage. This was from a media sting operation in 2010:

Ukip’s party leader and an MEP have been recorded on tape describing how to get around the rules on donations set out by the Electoral Commission,. The Sunday Times recorded Stuart Agnew describing how donors could funnel money into the party in secret by passing tens of thousands of pounds through intermediaries as the party filled its coffers ahead of the general election.

The MEP was recorded as saying: “I’ve spoken to Nigel Farage [Ukip MEP and former party leader] and he says at the moment you can put £25,000 into Global Britain and you will remain anonymous.”

Secondly, it has emerged that George Cottrell has significant involvement in the fundraising of the Brexit Party with separate sources describing his as “acting treasurer”.

George Cottrell
Brexit Party’s “Acting Treasurer” George Cottrell after US arrest in 2016

Cottrell was arrested while with Farage and Richard Tice, the chair of the Brexit party and co-founder of Leave.EU, in 2016. He was charged with 21 counts of money laundering, bribery, blackmail and wire fraud. He served only eight months in prison due to a plea deal which included showing the FBI the methods he had used to launder money. It is astonishing that any campaign could contemplate having this man near it, bearing in mind his skillset and history.

(It is worth remembering that Andy Wigmore of LeaveEU transferred Cottrell’s case details to a high ranking Russian Official in the Russian Embassy in London via a confidential email, as reported by Carole Cadwalladr and Byline Times’ Peter Jukes in the Observer last year.)

Foreign Donations and Security Settings

To compound the above, it has been discovered that many foreign donations are flooding through the Brexit Party PayPal funding structure. Money can be paid with any currency which is exchanged to British pounds.

Again, the Brexit Party could restrict this, but it chooses not to. PayPal makes it easy to block payments without confirmed address or from a foreign country. For example, from their site.

Read the following topics to learn more about blocking payments:

On the legal side, QC Jolyon Maugham has shown that it was not possible to either donate less than £500, or leave your details via the Brexit Party’s website (unlike every other political website we have checked). Electoral law applies to a large donation regardless of whether it is paid in one large sum or multiple small donations. Either way, “if it is part of a larger donation, the party also has to demonstrate that it knows who the donor is”. This is not possible under the Brexit Party’s web-based funding infrastructure.

Importantly, Maugham states that “there are ‘very good reasons’ for the Electoral Commission to investigate this case”, and to do so as soon as possible. As he argues, “activities today may later be proven unlawful, but that doesn’t stop the effect they have today”.

The Electoral Commission Guidelines themselves seem to bear out Maugham’s logic

No matter if a donation is a one-off or cumulative, records must be kept to tell if it is legally permissible or not – and that means the legal name and address of the person, as it appears in the electoral register or home address, if the donation is made from a UK citizen living abroad.

In a twitter thread, renowned legal Scholar Ewan McGaughey describes the starting point of the law as “the Representation of the People Act 1983 section 71A which defines ‘donation’ to mean ‘any gift to the candidate or his election agent of money’ (no £500 exemption). It says a donation ‘must not be accepted’ if it is not a ‘permissible’ donation under the Political Parties, Elections and Referendums Act 2000. s 54(2) nobody outside this list can donate”.

This means, quite simply, that foreign donations are illegal to political parties. No Ifs and no buts.


The Brexit Party Responds

When asked about the use of George Cottrell in its fundraising, a Brexit insider – referring to his connections to wealthy donors – was reported as saying: “We were not going to not use him were we?”

On BBC Radio 4’s Today programme this morning, Brexit Party chairman Richard Tice was not able to deny the campaign was accepting foreign money.

He was asked three times if more than £2.5million in small donations to Nigel Farage’s campaign included foreign money. He could have answered the question, yet chose not to accusing such assertions as “ridiculous” and rooted in jealousy.

Eventually, Mr Tice conceded he did not know if some of the cash pouring through the party’s PayPal account is in foreign currency, insisting that “as I understand that’s not illegal”. He later tweeted: “correct we only receive sterling and only have a GBP [GB pounds] PayPal account. So any conversion is done at the client end not our end. We do not accept foreign currencies at all. We operate in full compliance with electoral law”.

The Electoral Commission must use these responses to assess the risk. If the Brexit Party did not receive foreign donations, Mr Tice would have said so.

“I don’t sit in front of the PayPal account all day so I don’t know what currencies people are paying in,” he said.

I have a feeling the Electoral Commission will have a more efficient way to ascertain this information tomorrow.


Questions the Electoral Commission Must Ask the Brexit Party

From my investigations for Byline Times, the Electoral Commission could examine the following along with its other checks:

Man of the PayPal

Do all PayPal payments correspond to real people on the “Registered Supporter” database?

Were they all uploaded in the sequence expected?

Did all the people on the database personally upload their details?

Is there any sign of automation either on the database or PayPal account?

Can you tell if there is a single source for multiple PayPal “registration” payments?

An example red flag could be a lot of users who do not receive emails: This could be to avoid them discovering their details were on the database without their knowledge. These users should be contacted. You cannot make a legitimate PayPal Payment and NOT receive emails.

For the Donate Button payments:

Can you ascertain if there is one source for many donations?

Are there signs of unusual accounts?

Are there any signs of automation?

How many of the Payments are foreign? Is there a pattern?

Obviously if answers are not obtainable or unsatisfactory more detailed data on server traffic must be obtained to find the truth. It is essential that the effects of activities taking place today are if necessary mitigated today to protect today’s and tomorrow’s democratic processes.

I trust the Electoral Commission will be both fair and thorough in carrying out their duties tomorrow.

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