Conservatives fined record £70,000 for campaign spending failures

Party’s former treasurer reported to police after Electoral Commission found ‘significant failures’ in election spending

The Conservative party has been fined a record £70,000 and its former treasurer reported to police after an Electoral Commission investigation found “significant failures” by the party to report its campaign spending.

After a year-long investigation, the watchdog found the Conservatives failed to declare or accurately report more than £275,000 of campaign spending at three byelections in 2014 and at the 2015 general election.

It imposed the record fine after taking into account the party’s “unreasonable uncooperative conduct” during the investigation and the fact that its actions led to “realistic prospect of its candidates gaining a financial advantage over opponents”.

The report made judgments against Conservative HQ (CCHQ) and its former registered treasurer, Simon Day, as part of its investigation into whether the party accurately reported its national expenditure on the election campaign.

However, its findings also have significant implications for up to 20 MPs and agents under investigation by police for potential breaking election spending limits.

The watchdog concluded that local candidates should have partially declared some items recorded as national spending, including the expenses of activists bussed in to campaign in key marginal seats and a crack team of party officials sent to help organise in South Thanet, where the Tories were fighting off the then Ukip leader, Nigel Farage.

The Electoral Commission is only authorised to examine national spending, but the police are responsible for examining whether spending on local campaigns is within legal limits of between about £11,000 and £16,000 depending on the size of the constituency.

On Wednesday it was revealed a dozen police forces had passed files to the Crown Prosecution Service over allegations that Conservative MPs under-declared how much was spent during their local campaigns. Prosecutors now have to decide whether to charge the MPs or their agents, after a 10-month investigation.

The Conservative party said it accepted the Electoral Commission findings but attempted to downplay them as a “reporting error” and claim that “political parties of all colours have made reporting mistakes from time to time”. However, it continued to deny that any local spending returns were wrongly declared, as the party gears up for a battle to defend its MPs and agents from the possibility of police prosecutions.

“CCHQ has always taken the view that its nationally directed battlebus campaign – a highly-publicised and visible activity with national branding – was part of its national return,” a spokesman said.

The party also made clear it had advised local candidates that the battlebus spending should be recorded as national, not local spending, amid furious accusations by some of the MPs under police investigation that they were being “cut adrift” by the central party.

“MPs in constituencies visited by the battlebus would have no reason to consider whether it should be included in their local return – they were directed that the bus would be visiting as part of CCHQ’s national spending,” the party said.

Police have not named the MPs under investigation, but it emerged on Tuesday that Craig Mackinlay, the Tory MP for South Thanet, was interviewed under caution over his spending returns.

The Electoral Commission said it could not give a precise figure as to the extent of wrongful recording of spending in South Thanet. But it said: “The commission notes that as a consequence of the party reporting these costs, they were missing from Mr Mackinlay’s candidate campaign expenses return.

“Consequently it appears that the party understated the spending it incurred on Mr Mackinlay’s campaign, and as a result there is doubt as to the accuracy and completeness of his election expenses return.”

Overall, the spending return for the UK general election was missing payments worth at least £104,765 and payments worth up to £118,124 were either not reported to the commission or were incorrectly reported by the party. Invoices and receipts were missing for £52,924 worth of payments.

Day, the then registered treasurer of the party, had failed to ensure that spending was accurately reported, committing two offences under the Political Parties, Elections and Referendums Act 2000, the commission said. One of those offences had been reported to the Metropolitan police.

“Knowingly or recklessly making a false declaration under this section of the act is a criminal offence and falls outside the remit of the commission’s civil sanctioning powers,” the commission said in a statement. “It will be a matter for the police as to what steps they take following the commission’s referral.”

The Labour party and the Liberal Democrats have also been fined in recent months for breaching campaign spending rules.

Sir John Holmes, chair of the Electoral Commission, said he was concerned that parties would come to see such fines as “a cost of doing business” and that the commission needed to be granted powers to impose heavier fines proportionate to the levels of spending.

“Our investigation uncovered numerous failures by a large, well-resourced and experienced party to ensure that accurate records of spending were maintained and that all of the party’s spending was reported correctly,” he said.

“Where the rules are not followed, it undermines voters’ confidence in our democratic processes, which is why political parties need to take their responsibilities under the legislation seriously.”

Concerns about the Conservative party’s spending in South Thanet were first raised by a Channel 4 News investigation in 2016. Nick Timothy, Stephen Parkinson and Chris Brannigan, three advisers to Theresa May, were among the crack team of Tory HQ officials working from South Thanet, but their expenses were not recorded in Mackinlay’s local spending returns.

A separate Daily Mirror investigation also questioned the cost of the party transporting activists into key constituencies across the UK during the 2015 general election campaign and whether that had been accurately reported.

In its investigation into South Thanet, the commission found two unnamed campaigners were assigned to oversee the party’s campaign against Ukip nationally, but had in fact “played key roles in determining Mr Mackinlay’s campaign messages and in drafting campaign material promoting Mr Mackinlay’s electoral success”.

In one communication, one of the aides offered a critique of a Mackinlay YouTube campaign video about traffic problems in Sandwich, stressing the need for wider messaging.

“The evidence shows that, to a significant extent, the team based in South Thanet went about their ‘anti-Ukip’ work by promoting and supporting Mr Farage’s rival for the constituency, the party candidate, Craig Mackinlay,” the report found.

“The commission concluded that it was not accurate for all of the party’s spending on the team in South Thanet to be considered party campaign spending. Some should have been apportioned to Mr Mackinlay’s candidate expenses.”The Conservative MP Roger Gale questioned the timing of the commission’s release, saying it could potentially prejudice the police investigations. “What I do find astonishing is the timing of this,” he told BBC Radio 4’s Today programme.

“Because of course we know that a number of cases have been referred to the Crown Prosecution Service and it seems to me that what the Electoral Commission has blundered into is a decision which could well prejudice decisions taken either way.”


Jessica Elgot and Rowena Mason

The GuardianTramp

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