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The Brexit Party is facing the accusation it is breaking the law over donations it has received since its launch in early April.
Writing exclusively for Scram News, leading barrister Jolyon Maugham says that the Brexit Party could be breaking electoral law by attempting to use a loophole to avoid collecting information about large donors.
Nigel Farage claims that the Brexit Party had 60,000 paid-up donors in the first nine days after the party’s launch, raising £1.5 million. Yet as Maugham and others have pointed out, the Brexit Party website asks for virtually no information about its donors.
You have to hand over your name and card details to PayPal, including your address, but the webpage explicitly states that your details won’t be shared with the party. And there is no way to donate over £500 on the party’s website. It’s a legal requirement for the electoral register to log the information of donors who give over £500.
In contrast, every other major party website provides a way to donate over £500, and all relevant personal details are shared with the party. The Brexit Party has effectively created a system that masks information about its own donors. They could be receiving donations from anyone, anywhere, without knowing.
Maugham therefore suggests that the anonymous system created by the Brexit Party could be encouraging patrons to break up large, one-off donations into lots of payments under £500.
As mentioned, under current electoral law, a political party doesn’t have to declare the source of donations under £500.
However, Maugham claims that this principle only applies when a party can show that a smaller payment is in fact not part of a larger donation. If it is part of a larger donation, the party also has to demonstrate that it knows who the donor is.
In Maugham’s view, 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.
Scram News referred these allegations to Labour MP Stephen Kinnock, who chairs the new All Party Parliamentary Group on Electoral Campaigning Transparency. He said the APPG would soon be launching an inquiry to see how powers can be provided to the Electoral Commission to clean up a system that has “been polluted by dirty money and dodgy data.”
He added: “In the meantime, it does seem that the Electoral Commission should urgently look into the fundraising activities of the Brexit Party, to check that they comply with the Political Parties, Elections and Referendums Act 2000.
“It could potentially be the case that the Brexit Party is ‘gaming the system’ by forcing large donations to be broken down into smaller ones, thus dodging the verification requirements that apply for donations that are greater than £500.
“No doubt there is a perfectly reasonable explanation for this, and I am sure that the Brexit Party would welcome engagement with the Electoral Commission, to dispel any concerns that have been raised.
“Looking to the future, it may be possible for this loophole to be closed by dropping the threshold for verifying a donor down to 1 pence, and that’s an option that we shall be exploring very soon, through our APPG inquiry.”
We asked the Brexit Party to respond to this story, but as of the time of publication they have failed to reply.
Responding to our report, an Electoral Commission spokesperson said:
“The Brexit Party, like all registered political parties, has to comply with laws that require any donation it accepts of over £500 to be from a permissible source. It is also subject to rules for reporting donations, loans, campaign spending and end of year accounts. We have already been talking to the party about these issues.
“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. If there’s evidence that the law may have been broken, we will consider that in line with our Enforcement Policy.”
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