Demands for More Scrutiny of Political Donations as Conservative Donor Tied to ‘Laundromat’ Court Case

Demands for More Scrutiny of Political Donations as Conservative Donor Tied to Major ‘Laundromat’ Court Case

Javad Marandi, a major Conservative Party benefactor, is named as a ‘person of importance’ in a money laundering court case, sparking fresh questions over party donations, Josiah Mortimer reports

Anti-corruption campaigners have urged ministers to back reforms to boost scrutiny of donations to political parties, after Javad Marandi, an international businessman and major donor to the Conservative Party, was named as someone found to be “a person of importance” in a court case about money laundering. 

Javad Marandi – an international businessman, property tycoon and philanthropist – was not a party or a witness to the case, but was nevertheless described by the court as “a person of importance” in the dirty money prosecution brought by the National Crime Agency (NCA) to seize funds held by relatives of the Azerbaijani politician Javanshir Feyziyev. 

In particular, Marandi was identified by the court as the beneficial owner of the Seychelles-incorporated Avromed Company, which allegedly received substantial funds through the Laundromat and paid out US$48 million to Marandi himself and US$106 million to another company of his between 2005 and 2017. 

A portion of criminal proceeds ultimately forfeited by a member of the Feyziyev family in the civil recovery proceedings was found by the court to have come “via the medium” of Javad Marandi. 

No findings of wrongdoing have been made against Mr Marandi and this case was a civil – not a criminal – case, brought against others. But his alleged involvement with key persons and companies at the heart of the Laundromat “raises a number of unanswered questions with significant public interest,” Spotlight on Corruption says. 

Lobbying Links

The lifting of an anonymity order protecting Marandi’s identity offers a “chance to ask whether we need more checks” on who political parties should take donations from – not least those deemed “persons of importance” in law enforcement investigations. 

The group is also asking whether there is a possibility that the Azerbaijani Laundromat may have been used for a “foreign influence operation” within the UK. 

The government recently blocked modest calls from the House of Lords for parties to publish an annual statement on their efforts to prevent foreign influence secured via donations and to ensure more background checks on large donors. 

Marandi has been a substantial donor to the Conservative Party, contributing a total of £663,800 from 2014 to 2020. This includes a donation of £250,000 made just before the general election in December 2019. Marandi was honoured with an OBE in the New Year’s list. (No wrongdoing is alleged on his part). 

The businessman was also invited to join the Conservative Party’s “advisory board”, a group composed of wealthy donors. It appears he attended these meetings at least once with the group reportedly used as a consultative body by the Conservative Party. That gives its members unique access to senior ministers and officials, Spotlight on Corruption says. 

Marandi has recently advocated for the UK government to reduce regulations on small businesses and financial services. He funded a report by the Centre for Policy Studies in 2022, which suggested that the government needs to cut “red tape” and further liberalise the UK’s financial services sector. In March of the same year, Marandi participated in a roundtable at the Department for International Trade to discuss the report with Anne-Marie Trevelyan, who was then the minister for international trade.

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Big Questions

In an urgent question in the Commons on Tuesday, Dame Margaret Hodge MP warned “the Conservative party won’t regulate itself” and called for new rules to ensure due diligence and checks on the source of political donations. 

Lib Dem Christine Jardine MP said the revelations about Tory donor Marandi “raise questions about the relationship between money and power in politics at present…If the PM is serious about restoring integrity to politics, will the government launch an independent inquiry into these and other donations?” 

Minister Chris Philp said: “No one wants to see dirty money flowing through London” but he added: “People have a right to be seen as innocent until proven guilty”. 

Labour’s Cat Smith MP also called for the government to back a change in the law so loopholes allowing foreign donations to parties – e.g. via a UK-registered proxy individual – can be closed.  

But Chris Philp MP rejected the calls, saying the Elections Act 2022 is strong enough – despite it opening up more donations from Brits who live abroad, allowing them to vote and donate no matter how long they have lived outside the UK. 

Byline Times asked the Prime Minister’s spokesman whether the government would reconsider its blocking of more transparency around donations. The PM’s spokesman said: “I’m not aware of any plans to change our approach.”

Wrongdoing Denied

Prior to the removal of his anonymity Marandi released a statement which denied any wrongdoing and pointed out at no time has he been investigated or questioned by any authorities, his businesses are fully audited and, in response to the NCA’s evidence he subjected himself to “three separate reports by two highly reputed law firms” which he said unequivocally contradicted the court findings in the Laundromat forfeiture case. The decision as regards him is “unsafe”, he said.

Marandi has been named as a background figure in several previous court proceedings. In January 2022, the Westminster Magistrates’ Court ordered the civil forfeiture of £5.6 million held in UK bank accounts by relatives of the sitting Azeri politician Javanshir Feyziyev, including £1 million in payments from Marandi, that were found to have been filtered through the Azerbaijani “Laundromat”, Spotlight on Corruption noted. 

Dr Susan Hawley, Executive Director of Spotlight on Corruption, said: “The abject failure of political parties to do proper checks on who is donating money to them and the source of their funds is frankly scandalous. It leaves our democracy highly vulnerable to dubious influences and dirty money. 

“The huge risk of Russian money in donations should have been a moment for a real reckoning – as should reports of China’s attempted influence over our politicians – but this doesn’t seem to have happened. This case should be a serious wake up call to all political parties to develop proper ‘know your donor’ policies.”

A briefing from the group stated: “As the UK’s anti-money laundering framework has been progressively tightened over the last decade, the minimal checks that parties are required to undertake on donations are an increasingly glaring anomaly.”

A Lords amendment calling for more scrutiny of party donations, rejected by Tory MPs, will return to the Lords most likely at the end of May.