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Donations by 5th Avenue Partners Limited to the Liberal Democrats: statement

News release published: 20-11-2009

The Electoral Commission, the independent elections and party finance watchdog, today announced the outcome of its investigation into donations made by the company 5th Avenue Partners Ltd to the Liberal Democrats. Donations totalling over £2.4m were made in 2005.

The investigation considered whether there had been breaches of the Political Parties, Elections and Referendums Act 2000 (PPERA). In particular, it looked at whether the company, reported as the donor, was a permissible donor. It also considered whether the company was in fact the true donor. If a party accepts impermissible donations, the Electoral Commission can apply to a court to seek forfeiture of an amount equivalent to the sum accepted.

To be a permissible donor, a company must be registered under the Companies Act 1985, incorporated within the UK or another EU member state, and be carrying on business in the UK. The Commission has concluded that 5th Avenue Partners Limited met these requirements at the time the donations were made, and therefore was a permissible donor.

The Commission also considered whether there was a basis for concluding that either Michael Brown, as an individual, or 5th Avenue Partners GmbH (the parent company of 5th Avenue Partners Limited) was in fact the true donor. Neither of them would have qualified as permissible donors under PPERA.

The Commission has concluded that there is no reasonable basis to conclude that the true donor was someone other than 5th Avenue Partners Limited.

Commenting on the outcome of the investigation, Electoral Commission Chair Jenny Watson said:

“The law sets out who can make donations to political parties and makes sure that information about where parties get their money from is in the public domain, so voters can see for themselves how politics is funded. Our job is to make sure those rules are followed.

“Parliament considered carefully the rules on company donations in 2000, and set out specific requirements, including that a company must be carrying on business in the UK in order for it to be a permissible donor.

“We have conducted a thorough investigation into these particular donations to the Liberal Democrats, and considered a substantial body of evidence: evidence from the criminal proceedings against Michael Brown; documents obtained from the City of London Police, including analysis by forensic accountants; and evidence provided by the party.

“Having considered all the evidence in this case, we have concluded that 5th Avenue Partners Limited met the requirements to be a permissible donor. The Electoral Commission will be taking no further action in this case.“

The full case summary is available on our website.

Ends

For more information please contact:

Electoral Commission press office on 020 7271 0704
Out of office 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.

2. Enquiries concerning the donations began in May 2005 but were suspended in March 2007 following a request from the City of London Police. The Commission was only able to resume its investigation at the conclusion of the criminal proceedings in November 2008, at which time Michael Brown, the sole director of 5th Avenue Partners Limited, was convicted of theft, furnishing false information and perverting the course of justice. During its investigation the Commission has made a number of enquiries and obtained and considered a large volume of documents, including evidence used in the criminal proceedings against Michael Brown. Those documents became available to the Commission in May 2009, some time after the investigation was resumed.

Journalist