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Electoral Commission announces outcome of investigation into donations reported by the Conservative Party from Bearwood Corporate Services Limited

News release published: 04-03-2010

The Electoral Commission, the independent elections and party finance watchdog, today announced the outcome of its investigation into donations reported by the Conservative Party from Bearwood Corporate Services Limited (BCS).  Donations totalling over £5.1million have been reported by the party between February 2003 and the end of 2009.

The investigation considered whether there had been a breach of the Political Parties, Elections and Referendums Act 2000 (PPERA).  In particular, it looked at:

Whether BCS was a permissible donor:
To be a permissible donor, a company must be registered at Companies House; be incorporated within the UK or another EU member state; and be carrying on business in the UK at the time the donation is made.  

The Commission concluded that Bearwood Corporate Services Limited met the permissibility requirements for making political donations.

Whether the donations were correctly reported as coming from BCS:
The Commission considered whether the donations were correctly reported as coming from BCS, rather than from BCS as an agent for someone else (including its parent company Stargate Holdings or Lord Ashcroft).

The Commission considered that, on the evidence before it, there is no basis to conclude that the donor was anyone other than BCS.

Whether the Conservative Party fulfilled its compliance duties:
The Commission considered whether the Conservative Party fulfilled its compliance duties, in particular its duty to ascertain the identity of the donor – in other words, to be certain who the donor was before accepting the donations.

The Commission considered that there is insufficient evidence to conclude, on the balance of probabilities, that the party was uncertain as to the identity of the donor when accepting the donations.

In light of its conclusions on these three points, the Commission concluded that no breach of PPERA has been established and that accordingly no legal action in relation to the Conservative Party should be taken.  The Commission has, however, asked to meet party officials to ensure that they are clear about their responsibilities for complying with the law.

The Commission’s current powers are limited, notably that it does not currently have the power to require anyone to attend an interview, and only has the power to require the provision of documents from a party and its officers, but not from reported donors or others.  Within the limits of its current powers, the Commission conducted a thorough investigation.  It obtained and considered a large volume of documents, including a substantial quantity of internal documents provided by the Conservative Party.  The Commission asked various officers and staff within the party to attend interviews on a voluntary basis, but these requests were not agreed to.

Commenting on the conclusion of the investigation, Jenny Watson, Chair of the Electoral Commission, said: “The Electoral Commission has conducted a thorough investigation within the powers available to us – which are limited in some respects - to examine whether or not the rules on donations agreed by Parliament had been broken.  This was, inevitably, a lengthy investigation due to the volume of evidence, legal issues and financial analysis involved.

“The law requires that to be a permissible donor, a company must be registered at Companies House, or incorporated in the EU, and carrying on business in the UK.  The Commission has concluded that Bearwood Corporate Services Limited met those tests.”

“We also looked carefully at whether BCS acted as an agent for anyone else when making the donations, and considered that, on the evidence before the Commission, there is no basis to conclude that the donor was anyone other than BCS.”

“We had concerns, based on some of the evidence, about the degree of certainty within the Conservative Party about the identity of the donor, But based on the evidence before us, the Commission considered that there was not sufficient evidence to conclude that the party was uncertain about the identity of the donor when they accepted the donations.  We have asked to meet party officials to ensure that they are clear about their responsibilities for complying with this aspect of the law.”

The full case summary is available here (PDF).

Ends

For more information please contact:

Electoral Commission press office on 0207 271 0704
Out of hours 07789 920414
Email press@electoralcommission.org.uk

Notes to editors

1. The Electoral Commission is an independent body set up by the UK Parliament.  Our aim is integrity and public confidence in the UK’s democratic process.  We regulate party and election finance and set standards for well-run elections.

Journalist