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Turlough Conway, who broke the story of the Brexit Party’s questionable PayPal funding structure, provides an analysis of what must now be done to safeguard our electoral processes.
In the days before last month’s European Elections, Byline Times revealed a massive loophole in UK electoral law and exposed the Brexit Party’s open door PayPal architecture, which could not be less secure against impermissible donors intent on exploiting it.
As a result, the elections watchdog, the Electoral Commission, conducted a preliminary investigation of the Brexit Party’s funding structures.
Its statement yesterday confirms that the very serious issues raised by this newspaper – that the funding structure of Nigel Farage’s party is “open to a high and on-going risk of receiving and accepting impermissible donations”.
Above all, the Electoral Commission needs to take steps to close this loophole.
The Electoral Commission has made specific recommendations to the Brexit Party in order for it to “comply with its legal responsibilities”.
But, what now needs to happen – both to uncover any illegal donations to date and to safeguard future elections against potential subversion via this loophole?
To recap: the legislation on donations to political parties is the Political Parties, Elections and Referendums Act (PPERA) 2000.
The main intention behind this law is that only those with a strong relationship with the UK are entitled to fund political parties.
The legal test is that individuals are required to be on the UK electoral register or that companies are registered in UK etc.
A party has a legal requirement to verify a donor’s identity and check that they are on the register, with the correct name and address.
If they are not on the register or their identity cannot be verified, political parties have a legal requirement to return the donation within 30 days. If this doesn’t happen, parties and their treasurers are guilty of an offence, unless they can prove that they believed the individual was on the electoral register.
The funding structure of Nigel Farage’s party is “open to a high and on-going risk of receiving and accepting impermissible donations”.
Electoral Commission
The law defines a minimum donation of £500, below which the donation can be anonymous. The intention of this was to reduce administrative overheads and paperwork. However, almost 20 years after PPERA was written, this now represents a black hole-sized entrance for impermissible donations to flood through, undetected, if the funding architecture is conducive.
The threat is that very large donations from an impermissible donor can be atomized into smaller amounts under £500 and flow unimpeded into a party, as long as the donor is unidentifiable. These anonymised multiple donations are indistinguishable from individual smaller donations as the funding structure does not demand identifiable information.
The ‘donate’ section of the Brexit Party’s website differs from other political parties as it is not mandatory, or even possible, for donors to leave any personal details during the donation process. The possibility of identification is removed by the Brexit Party choosing PayPal as the sole payment method and choosing to turn off all identifiers.
Likewise, the ‘registered supporters’ area is left wide open. There is nothing to guard against the £25 payments or the unverifiable supporters’ details being entered in bulk automation by a computer.
If a political party set about trying to design a system that would be more exposed to this loophole than the Brexit Party’s funding structure is, it could not be done.
The Electoral Commission claims that it has provided advice about online donations since 2015, specifying that all donations to political parties must be identified and that “as much information as possible” is requested from “people wanting to give funds, to be sure all payments are from a permissible source”.
This is correct. Whether a donor makes a large donation in one big lump or multiple small donations under £500, a party must be able to identify them to ascertain permissibility.
Clearly, the Brexit Party has not “requested as much information as possible” on who is giving it money. In fact, it is doing the opposite.
The Commission has provided the Brexit Party with recommendations to meet its legal requirements.
Byline Times revealed a massive loophole in UK electoral law and exposed the Brexit Party’s open door PayPal architecture, which could not be less secure against impermissible donors intent on exploiting it.
As part of this, the party must show that its past online donations are not large donations from impermissible donors by identifying those donors.
All of its impermissible or unidentifiable donations must be returned as per the law, with the Brexit Party and its treasurer having cases to answer if any returns have occurred more than 30 days after the donations were made.
And, most fundamentally, its funding structure must be massively overhauled to meet its legal requirements.
Similarly, the Electoral Commission must ensure that the Brexit Party has complied with, and will comply with, electoral law.
It is a crime for a political party to aid and abet illegal funding.
If such funding is discovered, then very inconsistent public statements made by the Brexit Party’s representatives about amounts of money coming through the ‘donate’ and ‘registered user’ routes are deeply troubling. As are misleading public statements implying that the Brexit Party doesn’t receive foreign donations, when the truth is that only PayPal converts foreign currency donations to Sterling. The commission must discover the truth in this case.
The Electoral Commission has made specific recommendations to the Brexit Party in order for it to “comply with its legal responsibilities”.
Above all, the Electoral Commission needs to take steps to close this loophole.
If it doesn’t, and the Brexit Party’s funding structure is not held to the same legal standard as other parties’, then any such judgement must be open to review.
It is up to the Electoral Commission now to impartially ensure that we can have confidence in these electoral processes.