Investigation: Leave.EU Group Limited

Overview

In February 2017 the Commission became aware of reports suggesting that services had been provided to Leave.EU by the US data analytics firm Cambridge Analytica and the US campaign strategist firm Goddard Gunster.

Leave.EU did not report spending on either.

Any services provided at no cost would have constituted a donation from an impermissible source.

An investigation was opened in April 2017. The scope of that investigation was extended as further evidence came to light. It examined:

  • whether Leave.EU exceeded its statutory spending limit for referendum campaigning. As a registered campaigner that was not a political party and was not the designated lead for one of the referendum outcomes, it had a limit of £700,000
  • the accuracy of pre-poll transaction reporting of regulated transactions (loans) totalling £6m given to Leave.EU in relation to the referendum
  • the completeness of Leave.EU’s referendum campaign spending return, looking at the same transactions, the spending, and the inclusion of supporting invoices and receipts for payments over £200

Update – 11 October 2019

Leave.EU appealed against the sanctions set out in the following report.

Judgments were given on the appeal by the Central London County Court: firstly on liability for the offences, on 21 March 2019, and secondly on the size of the penalties, on 8 April 2019. The Court substantively refused the appeal and confirmed all offences, but allowed parts of the appeal.  It upheld three of the penalties imposed, totalling £50,000, but reduced one of the penalties from £20,000 to £16,000. Leave.EU was therefore fined £66,000 in total. It has subsequently paid these fines.
 

Summary of findings

We made the following findings:

  • as a non-designated campaigner, the referendum spending limit imposed by section 118(1) and Schedule 14(1)(2)(c) PPERA on Leave.EU was £700,000. Leave.EU reported spending of £693,094, which is £6,906 under the spending limit. Leave.EU failed to include a minimum of £77,380 in its spending return, which meant that it exceeded its spending limit more than 10%. We are satisfied that the actual figure was in fact greater, given the failure to report an appropriate proportion of the cost of services provided by Goddard Gunster. The responsible person for Leave.EU authorised those expenses to be incurred by or behalf of Leave.EU. We are satisfied beyond reasonable doubt that she knew or ought reasonably to have known that the expenses would be incurred in excess of the spending limit
  • on 28 April 2016 in its pre-poll transaction reports, Leave.EU reported the receipt of three regulated transactions from Mr Arron Banks totalling £6m. These were the only reported sources of funding for Leave.EU’s referendum campaign. Leave.EU did not report these transactions correctly. The dates the transactions were entered into, the repayment date, the interest rate and the provider of the transactions were all incorrectly reported. These transactions were also incorrectly reported in Leave.EU’s referendum spending return. While the repayment date and interest rates were correct in that return, the date the transactions were entered into and the provider were not. Variations to the transactions were also not correctly reported.
  • Leave.EU paid for services from the US campaign strategy firm Goddard Gunster that should have been reported in its spending return but were not. Those services from Goddard Gunster were paid for before the regulated period started on 15 April 2016, but Leave.EU made use of them during the regulated period. Accordingly, a proportion of the cost of services from Goddard Gunster should have been included in Leave.EU’s spending return. The Commission cannot, on the available evidence, quantify the exact proportion of this spending which should have been declared
  • Leave.EU failed to include spending of £77,380 in its referendum spending return, being fees paid to the company Better for the Country Limited as its campaign organiser
  • Leave.EU failed to provide the required invoice or receipt for 97 payments of over £200, totalling £80,224

Based on the evidence we have seen, we are satisfied that Leave.EU did not receive donations or paid-for services from Cambridge Analytica that should have been reported in its spending return.

Public statements from both Cambridge Analytica and Leave.EU (including its directors Mr Arron Banks and Mr Andy Wigmore) from 2016-17 implied services were being provided; however, the evidence shows that the relationship did not develop beyond initial scoping work and no contract was agreed between them.

Finally, we found that it was more probable than not that Leave.EU’s spending return under-stated the apportioned value of 15 payments totalling £129,720.

However, the lack of clear records held by Leave.EU on how these activities were used over time meant that we could not determine beyond reasonable doubt whether the reported value was right or wrong. No offence was found in respect of these payments.

Further information

Evidence

The Cambridge Analytica issues

The Cambridge Analytica issue

We investigated whether Leave.EU had received services from Cambridge Analytica that:

  • fell within the definition of referendum campaign activity
  • should have been reported either as a donation in kind (if provided free or at less than commercial rate) or referendum spending

Based on analysis of the evidence obtained during the investigation, we are satisfied that Leave.EU did not receive donations or paid-for services from Cambridge Analytica that should have been reported in its spending return.

Public statements from both Cambridge Analytica and Leave.EU (including its directors Mr Banks and Mr Wigmore) from 2016-17 implied services were being provided.

However, the evidence shows that the relationship did not develop beyond initial scoping work and no contract was agreed between them.

Information about the activities of Cambridge Analytica continues to be disclosed. We will keep under review whether that provides evidence of involvement by Cambridge Analytica in Leave.EU’s EU referendum campaign.

Evidence

The Goddard Gunster issues

The Goddard Gunster issues

We investigated whether Leave.EU had received services from Goddard Gunster that:

  • fell within the definition of referendum campaign activity
  • should have been reported either as a donation in kind (if provided free or at less than commercial rate), notional spending or referendum spending

We are satisfied beyond reasonable doubt that Leave.EU did pay for services from Goddard Gunster that should have been reported in its spending return.

Further, we are satisfied that the responsible person for Leave.EU failed, without reasonable excuse, to include these payments in Leave.EU’s referendum spending return.

Further, these facts form part of an offence under section 122(4)(b) in respect of the referendum campaign spending return for Leave.EU.

Those services from Goddard Gunster were paid for in advance of the regulated period commencing on 15 April 2016, but a proportion of the benefit from them was made use of by Leave.EU during the regulated period.

Accordingly, a proportion of the cost of services from Goddard Gunster should have been included in Leave.EU’s spending return.

We cannot, on the available evidence, quantify the exact proportion of spending in relation to the services provided by Goddard Gunster which should have been declared, but have found that it was incorrect not to declare any of this spending as referendum expenses.

Evidence

The Better for the Country issues

The Better for the Country issues

We are satisfied beyond reasonable doubt that Leave.EU, without reasonable excuse, failed to include spending of £77,380 in its referendum spending return, comprising fees paid to BFTCL as its campaign organiser.

These facts form part of an offence under section 122(4)(b) in respect of the referendum campaign spending return for Leave.EU.

Evidence

The further omitted invoices

The further omitted invoices and payments issues

The law requires a referendum spending return to be a complete statement of all payments made and for each payment of over £200 to be accompanied by an invoice or receipt.

Further, where a payment is made before the referendum period started but the benefit of it is made use of during the referendum period then it too must be included in the return.

We found beyond reasonable doubt that the responsible person of Leave.EU failed, without reasonable excuse, to provide the required invoice or receipt for 97 payments of over £200, cumulatively totalling £80,224.

The responsible person of Leave.EU therefore committed an offence under section 122(4)(c) of PPERA.

We also found that it was more probable than not that Leave.EU’s spending return under-stated the apportioned value of 15 payments totalling £129,720.

However, the lack of clear records held by Leave.EU in respect of the apportioned value meant that we could not determine beyond reasonable doubt whether the reported value was right or wrong.

Evidence

The spending limit issue

The spending limit issue

As a non-designated campaigner, the referendum spending limit imposed by section 118(1) and Schedule 14(1)(2)(c) of PPERA on Leave.EU was £700,000.

Leave.EU reported spending of £693,094, which is £6,906 under the spending limit.

We found beyond reasonable doubt that Leave.EU failed to include a minimum of £77,380 in its spending return, which meant that Leave.EU exceeded its spending limit by more than 10%.

We are satisfied that the actual figure was in fact greater, given the failure to report an appropriate proportion of the cost of services provided by Goddard Gunster.

The responsible person for Leave.EU authorised those expenses to be incurred by or on behalf of Leave.EU.

We are satisfied beyond reasonable doubt that she knew, or ought reasonably to have known, that the expenses would be incurred in excess of the spending limit.

We therefore determined that both Leave.EU and the responsible person committed offences under section 118(2)(c) of PPERA.

Evidence

The spending return declaration

The spending return declaration

Under section 123(2)(a) and (b)(i) of PPERA, referendum campaign spending returns must be accompanied by a declaration to us made by the responsible person of the campaigner.

The responsible person is required to state that they have examined the return and, to the best of his or her knowledge and belief, it is complete and correct as required by law.

It is an offence for the treasurer to knowingly or recklessly make a false declaration.

Civil sanctions do not attach to this offence; it can only be pursued via a criminal prosecution.

We are satisfied that we have reasonable grounds to suspect that the responsible person for Leave.EU either knowingly or recklessly signed a false declaration accompanying the Leave.EU referendum spending return.

In line with its Enforcement Policy, we have referred this matter to the Metropolitan Police Service.

Legal framework

Leave.EU background

Diweddarwyd ddiwethaf: 13 Mehefin 2021
Adolygiad nesaf: 8 Gorffennaf 2020