Conservative Party fined for inaccurate donation report

The Conservative Party has been fined £17,800 by the Electoral Commission after failing to accurately report a donation and keep a proper accounting record.

The sanction was imposed on the party, following the conclusion of a detailed investigation. The investigation looked at whether any transactions relating to works at 11 Downing Street fell within the regime regulated by the Commission and whether any such funding was reported as required.

The investigation found that the party failed to fully report a donation of £67,801.72 from Huntswood Associates Limited in October 2020. The donation included £52,801.72 connected to the costs of refurbishment to 11 Downing Street. The full value of the donation was not reported as required in the party’s Q4 2020 donation report.

The Commission also concluded that the reference in the party’s financial records to the payment of £52,801.72 made by the party for the refurbishment was not accurate.

The investigation found that decisions relating to the handling and recording of this donation reflected serious failings in the party’s compliance systems.

Louise Edwards, Director of Regulation at the Electoral Commission, said:

“Our investigation into the Conservative Party found that the laws around the reporting and recording of donations were not followed.

“We know that voters have concerns about the transparency of funding of political parties. Reporting requirements are in place so that the public can see where money is coming from, inaccurate reporting risks undermining trust in the system.

“The party’s decisions and actions reflected serious failings in its compliance systems. As a large and well-resourced political party that employs compliance and finance experts, and that has substantial sums of money going through its accounts, the Conservative Party should have sufficiently robust systems in place to meet its legal reporting requirements.”

For the offence of failing to accurately report the full value of the donation from Huntswood Associates on 19 October, the Commission has imposed a sanction of £16,250. For contravening the requirement to keep proper accounting records, a sanction of £1,550 has been imposed. 

Main findings of the investigation

On 19 October 2020, Huntswood Associates Limited transferred £67,801.72 to the Conservative Party. According to the evidence, Lord Brownlow, director of Huntswood Associates Limited, indicated that £15,000 of that was for an event. He specifically identified the remaining £52,801.72 as a donation to cover an earlier payment of that value made by the party to the Cabinet Office. The Cabinet Office had paid three invoices over summer 2020, totalling £52,801.72, for the refurbishment of the private residence at 11 Downing Street. Those payments were made on the basis of an agreement that the sum would be repaid by the party, which it was on 6 August 2020. The party anticipated being repaid by a proposed trust, which was under consideration but had not at that time been created.

On 27 January 2021, the party submitted its Q4 2020 donation report to the Commission. It reported receiving £15,000 from Huntswood Associates Limited. The party did not report the remaining £52,801.72 it received.

Our investigation, launched on 28 April 2021, considered whether the £52,801.72 was a donation and reportable to the Commission. We determined that it was, and should have been reported.

In the party’s financial records and accounts, the £52,801.72 it paid to the Cabinet Office was recorded as a “blind trust loan”. The payment was not a loan and the trust had not been formed, so such references did not accurately reflect the circumstances of the expenditure. 

Lord Brownlow also paid directly to the supplier a number of additional invoices relating to the refurbishment, totalling £59,747.40. We considered whether these transactions met expenses incurred directly or indirectly by the party, which would make them donations under the definition in electoral law. From the evidence gathered, we were not satisfied that the party had agreed to meet these expenses or that Lord Brownlow’s payment was meeting a cost incurred by the party. They were therefore not judged to be reportable donations, and so we found no offences in relation to those payments.

Ends

The Commission is committed to providing transparency about its decision-making, and to promoting compliance with the law. Given the public interest in this case, we have published an investigation report detailing our findings, which is available on our website.

For more information contact the Electoral Commission press office on 020 7271 0704, out of office hours 07789 920 414 or press@electoralcommission.org.uk