Leave.EU fined for multiple breaches of electoral law following investigation

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.

Leave.EU has been fined £70,000 by the Electoral Commission for offences committed under electoral law, following its investigation into the campaigner’s funding and spend during the EU referendum.

The investigation concluded that Leave.EU incorrectly reported what it spent at the EU referendum. It exceeded its statutory spending limit and delivered incomplete and inaccurate spending and transaction returns.

Leave.EU failed to include at least £77,380 in its spending return, thereby exceeding the spending limit for non-party registered campaigners by at least 10%. The Commission also considers that the unlawful over-spend may well have been considerably higher than that. Services the group received from the US campaign strategy firm Goddard Gunster were not included in the spending return, despite a proportion of them having been used during Leave.EU’s referendum campaign.

The Commission found Leave.EU inaccurately reported three loans it had received. This included a lack of transparency and incorrect reporting around who provided the loans, the dates the loans were entered into, the repayment date and the interest rate. Finally, Leave.EU failed to provide the required invoice or receipt for 97 payments of over £200, totalling £80,224.

As part of the investigation, the Commission looked at whether Leave.EU received services from Cambridge Analytica that should have been declared on its spending return. The investigation found no evidence that Leave.EU received donations or paid-for services from Cambridge Analytica for its referendum campaigning and found that the relationship did not develop beyond initial scoping work.

Through its investigation, the Commission also has reasonable grounds to suspect that the responsible person for Leave.EU committed criminal offences and she has therefore been referred to the Metropolitan Police.

Bob Posner, Electoral Commission Director of Political Finance and Regulation & Legal Counsel, said:

The rules we enforce were put in place by Parliament to ensure transparency and public confidence in our democratic processes. It is therefore disappointing that Leave.EU, a key player in the EU referendum, was unable to abide by these rules. Leave.EU exceeded its spending limit and failed to declare its funding and its spending correctly. These are serious offences. The level of fine we have imposed has been constrained by the cap on the Commission’s fines.

Background to the investigation

Under the Political Parties, Elections and Referendums Act 2000 (PPERA) it was the responsibility of all campaigners to ensure that an accurate and complete campaign spending return was submitted to the Electoral Commission by the statutory deadline following the EU referendum.

In February 2017, through its proactive monitoring work, the Commission became aware of suggestions 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’s spending return did not include spending with either organisation. Any services provided at no cost would have constituted a donation from an impermissible source. An investigation was opened in April 2017 and the scope of that investigation was extended as further evidence came to light.

Scope of the investigation

The investigation examined:

  • The accuracy of pre-poll transaction reporting of regulated 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.
  • Whether Leave.EU exceeded its statutory spending limit for referendum campaign activity. 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.

Conclusions of the investigation

The Commission found that:

  • Leave.EU failed to include a minimum of £77,380 in its spending return, thereby exceeding its spending limit by more than 10%. The Commission is 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.
  • Leave.EU did not correctly report the receipt of three regulated transactions from Mr Arron Banks, totalling £6million. The dates the transactions were entered into, the repayment date, the interest rate and the provider of the transactions were all incorrectly 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.
  • Leave.EU failed to include in its referendum spending return, spending of £77,380 in 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, cumulatively totalling £80,224.

Report on an investigation in respect of the Leave.EU Group Limited.

Ends

For more information please contact the Electoral Commission press office:

Notes to editors:

  • The Electoral Commission is the independent body which oversees elections and regulates political finance in the UK. It works to promote public confidence in the democratic process and ensure its integrity by:
    • enabling the delivery of free and fair elections and referendums, focusing on the needs of electors and addressing the changing environment to ensure every vote remains secure and accessible
    • regulating political finance – taking proactive steps to increase transparency, ensure compliance and pursue breaches
    • using our expertise to make and advocate for changes to our democracy, aiming to improve fairness, transparency and efficiency
  • The Commission was set up in 2000 and reports to the UK and Scottish Parliaments.
  • The Electoral Commission has a range of enforcement powers under PPERA. For more information on the regulatory work of the Commission see the website here.
  • Any potential breaches of the rules which regulate non-political campaigners spending are considered in line with the Commission's enforcement policy which can be accessed here, details of sanctions issued can be found here.
  • An individual or organisation that is issued with a sanction by the Electoral Commission has 28 days to appeal that decision. Any such appeal is made to the County Court.
  • Unpaid fines will increase by 50% if not paid within 56 days of being imposed. After a further 28 days we may take action to obtain payment through the courts using the debt recovery process.
  • Any penalties that are imposed by the Commission go into the Consolidated Fund. This is managed by HM Treasury and not the Electoral Commission.