Byline Times’ exclusive report on the loopholes in the Brexit Party’s PayPal funding system led to a visit from the elections watchdog, which subsequently revealed impermissible donations – but questions remain.

Following Byline Times’ investigation into the Brexit Party’s Paypal funding methods, the elections watchdog, the Electoral Commission, visited the party on 21 May to review the systems it had in place to receive funds.

A month later, the commission concluded that “the fundraising structure adopted by the party leaves it open to a high and on-going risk of receiving and accepting impermissible donations”.

It made a number of recommendations to the Brexit Party – including that it should check and identify all of the online payments it had received to ensure that the party had not accepted any donations that it was not entitled to, including foreign money.

However, the latest figures published by the Electoral Commission on political party donations and loans have raised concerns as to whether the Brexit Party heeded this advice.

As a result of the watchdog’s visit on 21 May, the Brexit Party altered its funding system to register the identities of donors. Prior to this, it was not recording the identities of those contributing. In line with the change, the filings from the Electoral Commission reveal that a number of prohibited donations occurred rapidly the day after the visit. This is because the changes the visit instigated resulted in illegal payments to the Brexit Party becoming visible and a pattern rapidly emerging.

However, while the filings confirm that vast amounts of impermissible foreign donations were moved through the Brexit Party’s PayPal structure, they also reveal that Nigel Farage’s party has not reviewed any donations it received before the visit by the Electoral Commission on 21 May. Not a single impermissible donation was reported from this period to the watchdog.

Tip of the Iceberg?

When Nigel Farage launched his party on 12 April this year he claimed that, during the preceding 10 days, it had amassed funding at record rates – £750,000, all in small donations of less than £500. He had “never seen anything like it in his 25 years in politics,” he declared.

Under UK electoral law, donations to political parties under £500 can be accepted anonymously as they are exempt from the requirement to store addresses and check that the donor is a UK resident.

As the PayPal function for receiving donors’ addresses on the Brexit Party’s donation system was disabled, it amassed a number of anonymous payments. If several separate payments of £500 or under were made to the party, which exceeded individual donation limits by actually coming from the same source, these would be impermissible.

Just six days after the Electoral Commission insisted on more checks following its visit to the Brexit Party, it made up 60% of all reported illegal payment transactions for all political parties for the entire three month period, all from separate seemingly unconnected donors.

The Electoral Commission told Byline Times that it was “the legal duty of the party to report any impermissible donations it receives and it is the responsibility of the party to record details of permissible and impermissible donations”.

Full Investigation Still Needed

Given the volume of impermissible donations revealed after the visit, it is hard to avoid the suspicion that these exposed illegal donations are the tip of the iceberg of a larger body of hidden illegal donations flowing into the Brexit Party’s coffers during the entire period of the European Elections.

In June, the Electoral Commission gave evidence to Parliament’s Digital, Culture, Media and Sport (DCMS) Sub-Committee on Disinformation and indicated that a full investigation could occur.

However, a response to a Freedom of Information request submitted to the watchdog revealed how sensitive it was about the inspection prompted by Byline Times.

“Some of the information you have requested relates to our visit to the Brexit Party on 21 May 2019,” the Electoral Commission wrote. “It is important that we are able to conduct such regulatory work in confidence, and disclosure would result in those we regulate having detailed knowledge of our approach to our regulatory work, with the real risk that it would provide assistance to any organisation seeking to evade the rules.”

Absence of evidence is not evidence of absence, and the £500 donations loophole does nothing to increase transparency and trust in electoral finances. The Brexit Party has had a profound influence on British politics since its inception. All parties must be treated impartially.

Despite these glaring gaps in its finances, the Electoral Commission has told Byline Times that it is not investigating the Brexit Party’s funding, but that it reserves the right to launch an investigation if more evidence comes to light in the future.