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A “dark money” trust that gave £364,000 to the Scottish Conservatives has been fined £1,800 by the UK Electoral Commission for failing to properly report donations.

The Scottish Unionist Association Trust (SUAT), an unincorporated association based in Glasgow, also failed to report two donations totalling £207,350 within a required timescale.

The Electoral Commission said SUAT had “consistently failed to provide proper notification of its activities as an unincorporated association and as a members association”, leaving the public without “the transparency it was entitled to have of SUAT’s finances.”

The Electoral Commission reached its conclusion after a 14-month investigation prompted by a report in The Ferret highlighting inconsistencies in SUAT’s status in June 2018. The result of its investigation comes three days after we reported criticisms that the election watchdog was taking too long to investigate SUAT.

One inconsistency identified by The Ferret was the reported status of the trust in declarations of its donations to the Tories. Following its probe, the Electoral Commission concluded that SUAT is an exempt trust, an unincorporated association and a members association. The Commission said that under these guises SUAT failed to properly report donations and contributions.

SUAT was hit with a £1,300 fine for failing to notify the commission of political contributions made as an unincorporated association. Two fines of £250 were issued for failing to report donations as a members association.

As an unincorporated association, SUAT is required to notify the commission when it makes political contributions of more than £25,000 in any calendar year, within 30 days of the value of contributions reaching that point.

SUAT failed to report donations to the Tories exceeding £25,000 in 2010, 2015, 2016, and 2017, within the required timescale. The trust also failed to provide further notifications of any gifts it had itself received by the due dates, the Electoral Commission probe revealed.

As a members association, SUAT was required to report donations it received that are over £7,500 to the Commission within 30 days.

SUAT accepted two donations which it failed to report on time. The trust received £50,000 on 6th February 2014 and £157,350.07 on 13th March 2017.

The election watchdog confirmed that SUAT had accepted the commission’s findings and paid the fines. The commission also said SUAT had been properly reported by the Tory party.

“The reporting requirements for members associations and unincorporated associations are clear, so it is always disappointing when regulated organisations fail to provide accurate reports on time,” said the commission’s director of regulation, Louise Edwards.

“Properly, SUAT’s donations to the Conservative and Unionist Party were reported by that party and published so the public could see them. But SUAT consistently failed to provide proper notification of its activities as an unincorporated association and as a members association.”

She added: “As a result, the public did not have the transparency it was entitled to have of SUAT’s finances. The commission will continue to enforce these requirements to ensure that voters have the information they need.”

As we report elsewhere, the fine has been condemned as “derisory” by the SNP, and prompted calls for urgent reform. On social media the financial penalty has been dismissed by many as “peanuts”, “spare change” and “pathetic”.

A spokesman for the Scottish Conservatives said: “This is a matter for the Scottish Unionist Association Trust. As the Electoral Commission states, these donations were properly reported by the Conservative party.”

SUAT has been approached for comment.

The trust gave £318,876.66 to the Scottish Tories between 9 April 2001 and 28 February 2018, as well as direct donations to acting leader, Jackson Carlaw MSP, the MPs David Duguid and Douglas Ross, and to the election campaigns of former Scotland Secretary, David Mundell MP.

Since June 2018, when the Ferret first highlighted inconstancies in SUAT’s status, the trust has donated a further £34,208 to the party.

Former Scottish Tory leader Ruth Davidson told the BBC last year that “almost all” the party’s candidates would have benefitted from SUAT. An STV report found that SUAT donations accounted for a fifth of the party’s spending during the 2017 general election.

Behind the secretive trust

SUAT gave conflicting information about the trust’s legal status and address which it has since been forced to clarify. One address, in Melrose, was revealed to be that of SUAT chairman, Robert Miller-Bakewell, a former Scottish Conservative executive member and current deputy chairman of the Scottish Borders Conservative and Unionist Association.

HM Revenue and Customs later added Miller-Bakewell to its public register of “deliberate tax defaulters”.

The resulting pressure from opposition parties, the media, an intervention by First Minister, Nicola Sturgeon, and questions to then-Prime Minister, Theresa May, prompted SUAT to publish its true address and the names of its trustees in July 2018.

SUAT then disclosed it had net assets of £2.35 million at the end of 2017, which it had “predominantly invested in UK listed equity investments”.

One SUAT trustee, former Scottish Tory MP and shadow secretary of state for Scotland Peter Duncan, faced criticism after we revealed that he had lobbied Tory MSPs on behalf of his communications firm, Message Matters.

This prompted calls from the Scottish Greens for Duncan to choose between his roles as a Holyrood lobbyist and trustee of a body that funds the Scottish Tories. It also sparked calls for tighter lobbying rules from transparency campaign group, Spinwatch.

Duncan resigned as a SUAT trustee in July 2018. He told BBC Radio Scotland that it was advisable to have “more separation” from his work in lobbying politicians and “sensible” for him “to take a step back”.

However, he denied any conflict of interest and insisted that the money given by SUAT to the Scottish Tories was not “dark money”. It came from investing the proceeds of “tombolas and raffles” in the west of Scotland over 50 years, Duncan said.

The Ferret also reported in July 2017 that the campaign group, Unlock Democracy, had written to Westminster’s Parliamentary Commissioner for Standards to request an investigation into inconsistencies in the reporting of donations from SUAT by two Scottish Tory MPs.

Duguid, the MP for Banff and Buchan and Ross, the MP for Moray, both received £7,500 from SUAT, but each politician gave the trust a different legal status and addresses in the Register of Members’ Financial Interests.

The probe was unable to commence until the Electoral Commission had published its results.

What did The Ferret uncover?

SUAT is listed as an unincorporated association on Electoral Commission donation records but was not included in the commission’s register of unincorporated associations. Under commission rules, unincorporated associations that donate more than £25,000 in a calendar year are required to register and report gifts in excess of £7,500.

Title deeds obtained by The Ferret also revealed that property was transferred to SUAT after a cut-off date, which should apparently disqualify it from being an ‘exempt trust’.

Trusts can be considered exempt if they meet certain requirements as specified by the Political Parties, Elections and Referendums Act 2000. One of these requirements is that no property has been transferred to a trust since 27 July 1999.

However, title deeds for a Glasgow building owned by SUAT show that ownership was transferred to SUAT by the similarly-titled Glasgow Unionist Association Trust on 5 February 2014. The building is also used as the office of the Glasgow Tories and other Tory associations.

The lengthy 14-month Electoral Commission probe prompted criticism from Unlock Democracy and Jo Maugham QC, a barrister with the Good Law project. Maugham said that if “investigations take so long that they cross over into other democratic events, it undermines their whole purpose”.

This story was updated at 16.00 on 17 September 2019 to mention criticisms of the size of the fine, and to link to our coverage of that issue.