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A senior Conservative MP has registered a £5,000 donation from a company that appears to be inactive – in what could constitute a breach of electoral rules.
Robert Jenrick recently received the donation from ‘Firefly Digital Limited’, which has been registered as ‘dormant’ since 2017, according to filings with Companies House – as journalist Peter Geoghegan reported on Friday.
But electoral rules in the UK are explicit that donations can only come from permissible sources – which for firms means that they must be “carrying on business in the UK”. In other words, they must be actively trading. This rule prevents shell companies being used to funnel improperly cash to political figures, for example, non-Brits living overseas.
Firefly Digital Limited, however, has filed dormant company accounts for seven years, with the latest records showing assets of just £1 and no profits. This strongly suggests that it is not actively conducting business within the UK.
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Firefly Digital Limited is ultimately owned by Hilton Nathanson, a British-Australian hedge fund manager. Nathanson also donated £5,000 to Levelling Up Secretary Michael Gove last year.
Jenrick was forced to resign as Housing Secretary in 2020 amid a donations scandal, when it emerged that he had overturned a planning inspector’s decision to award planning permission for a £1 billion property scheme by media tycoon Richard Desmond – just a fortnight before he donated £12,000 to the Conservative Party.
Jenrick said he had no knowledge of Desmond’s donation and claimed that his decision to overrule inspectors was “not unusual”, the BBC reported at the time.
After being contacted by Byline Times, a spokesperson for Robert Jenrick blamed an administrative error on the £5,000 donation from Firefly Digital Limited, which his team said led to the sum being incorrectly registered with the House of Commons authorities.
“The donation was made from Firefly Capital Limited, a UK trading company,” the spokesperson said. “Unfortunately, an administrative error at our end meant this donation was misregistered as ‘Firefly Digital Limited’.
“As soon as we became [aware] of this error, we liaised with the parliamentary authorities who have agreed to correct the record. This will be reflected in their next update.”
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Jenrick has been touted as a potential Conservative leadership contender from the right of the party, should Rishi Sunak stand down following a likely general election defeat. He has been speaking at a string of hardline events, including ones hosted by the Liz Truss-affiliated group Popular Conservatism, and the Legatum Institute’s ‘Free Market Roadshow’.
It is possible that Byline Times first alerted Jenrick’s team to the issue. The MP’s spokesperson added: “Our office became aware of the error last week and immediately asked for it to be corrected.”
But Lord Chris Rennard, who has led much of the Liberal Democrats’ work on electoral law, said: “The laws governing the permissibility of donations to parties have been in place since 2000. All the parties produce briefings on the subject and there is no excuse for a legislator to fail to make the most basic enquiries showing that the company was registered as dormant and not doing business in the UK.”
He added that fears over inappropriate donations were well-founded, calling for “greater transparency and a cap on the size of donations”.
As reported by Byline Times last week, transparency campaigners have raised concerns that individuals can use companies to donate money to politicians.
“The law is intended to provide transparency and controls over the provenance of funds in UK politics, yet it is increasingly clear it does neither sufficiently,” Steve Goodrich, head of research and investigations at Transparency International, said. “That it can be so hard to identify where corporate donors’ money comes from shows there’s something seriously wrong with the rules.
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“As a minimum, businesses should only be able to donate if they can cover these costs from profits generated in the UK within the last two years.”
The Electoral Commission’s guidelines state that, for a company to be a permissible donor, it must be registered at Companies House, incorporated in the UK, and actively carrying on business in the UK. Dormant companies are specifically flagged as requiring extra scrutiny to ensure compliance.
Recipients – in this case, Robert Jenrick – are responsible for checking that donations are made within the rules, according to the Electoral Commission. For dormant companies, that can include checking the company’s latest accounts, websites, and other relevant business activities to see if they are actively trading.
A spokesperson for the Electoral Commission told Byline Times: “The law requires regulated donees [i.e. recipients], such as MPs, to take reasonable steps to ensure that a donation is from a source that is permissible at the time the donation is received.
“MPs report donations to the Register of Members’ Financial Interests. These are then forwarded to us for publication on a monthly basis. Where there is evidence that the law has not been followed, we may consider it in line with our enforcement policy.”
The remit of the Electoral Commission was significantly weakened by the Elections Act 2022, with it now lacking the power to launch prosecutions. It can only levy relatively small fines.
The Parliamentary Standards Commissioner said it did not comment on individual cases.
If you have a political story or tip-off, email josiah@bylinetimes.com.
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