Watchdog to consider whether leave campaigner broke campaign finance rules in run-up to EU referendum

The election watchdog has launched an investigation into whether donations and loans from the Brexit campaigner Arron Banks and one of his companies broke campaign finance rules in the run-up to the EU referendum.

The Electoral Commission will investigate donations worth £2.3m, assessing whether Banks was the “true source” of loans made in his name. It will also establish whether Better for the Country was the “true source” of donations made to Brexit campaigners or whether it was “acting as an agent” for some other source of funds. Banks is a director of Better for the Country and the majority shareholder.

The money given by Banks to Leave.EU in the run-up to the referendum was believed to be the biggest donation in British political history. Banks has previously claimed he is worth £100m. An estimate by the Sunday Times puts his fortune at £250m. However, an analysis by Open Democracy suggests the actual figure may be considerably lower.

According to a statement from the Commission, the investigation will also investigate whether “any individual facilitated a transaction” with a “non-qualifying person”. Donors from outside the UK and Gibraltar were impermissible donors for referendum campaigning.

The investigation will also assess whether the recipients of the donations took appropriate steps to identify the source of funds.

Questions have been raised about overseas influence in both the referendum campaign and the US election won by Donald Trump. This week, the former Trump campaign chairman Paul Manafort has surrendered to federal authorities after charges were filed against him over money laundering and conspiracy against the United States. Manafort’s links with Russia have come under close scrutiny.

Banks has boasted about meeting the Russian ambassador, but insisted no political funding came from Russian sources.

Last month, a Labour MP called for an inquiry into Banks and the use of “dark money” in the referendum campaign. Ben Bradshaw urged parliament and the Electoral Commission to examine claims of illegal donations “very carefully”.

Speaking in parliament, Labour MP Ben Bradshaw said there was “widespread concern over foreign and particularly Russian interference in western democracies”.

After the news broke on Wednesday Banks tweeted in response:

Arron Banks (@Arron_banks) Gosh I'm terrified https://t.co/t46IBFhfpV

Later he issued a statement acknowledging a long lunch with the Russian ambassador to the UK but insisting that “The Guardian allegations of Brexit being funded by the Russians and propagated by Ben Bradshaw” were “complete bollocks”.

He added: “My sole involvement with the ‘Russians’ was a boozy six-hour lunch with the ambassador where we drank the place dry (they have some cracking vodka and brandy).

“Turning to the investigation, we believe that a judge-led inquiry reporting to Parliament that investigates the main campaign groups, Vote Leave, Remain, and Leave.EU would be the best way to clear this nonsense up once and for all.

“The Remain ‘Electoral Commission’ isn’t up to the job and consists of political place men from all main parties.”



Bob Posner, the director of political finance and regulation and legal counsel at the Electoral Commission, said there were “questions over the legitimacy” of the donations.

Posner said: “Interest in the funding of the EU referendum campaigns remains widespread. Questions over the legitimacy of funding provided to campaigners at the referendum risks causing harm to voters’ confidence. It is therefore in the public interest that the Electoral Commission seeks to ascertain whether or not impermissible donations were given to referendum campaigners and if any other related offences have taken place.”

Banks was registered as a “permitted participant” in the EU referendum, which meant he spent more than £10,000 during the campaign. Better for the Country was not registered as a permitted participant. Its reported donations, made between March and June 2016, were given to Brexit campaigner groups including Grassroots Out Ltd, Trade Unionists Against the EU and UKIP.

The rules around donations to permitted participants at the EU referendum are set out in the Political Parties, Elections and Referendums Act 2000. The Electoral Commission has the power to fine Banks up to £20,000, and in serious breaches can refer the case to the police.



On indictment, the penalty under PPERA for one charge of “facilitating the making of donations by impermissible donors” is up to a year in jail. A charge of “failure to provide information about donors” also carried the possibility of up to a year in jail.

The Electoral Commission is already investigating whether one or more donations – including of services – accepted by Leave.EU was impermissible, and whether Leave.EU’s spending return was complete. The Commission’s statement warned that other offences might emerge during the course of the inquiry.