Investigation into payments made to Better for the Country and Leave.EU

Overview

We have completed our current investigation into certain payments made to Better for the Country Limited (BFTC) and Leave.EU Group Limited (Leave.EU). These payments were for the purposes of meeting expenses incurred by BFTC (including on behalf of Leave.EU) in the 2016 EU Referendum. The Commission has reasonable grounds to suspect a number of criminal offences and have referred the matter to the National Crime Agency (NCA).

Update – 11 October 2019

The National Crime Agency, after its own investigation, has now concluded that there is no evidence that any criminal offences have been committed under PPERA or company law by any of the individuals or organisations referred to it by the Electoral Commission. 

Read the NCA’s decision.

Summary

A total of £8m in funding was provided to BFTC and Leave.EU to be available for paying expenses incurred by one or other of them in the EU Referendum. This included £6m provided to Leave.EU (paid on its behalf to BFTC to use for Leave.EU’s referendum spending), and £2m provided to BFTC.

BFTC used this money to spend at least £2.9m in the regulated campaign period for the 2016 EU Referendum, either by making donations to other campaigners, or by other spending.

Leave.EU told us that Arron Banks was the only other party to the £6m loans, and that the moneys were loans from him. BFTC told us it was funded by Mr Banks and his group of insurance companies and that Mr Banks was the source for the other £2m.

Following an investigation we launched on 1 November 2017, we have reasonable grounds to suspect that:

  • Mr Banks was not the true source of the £8m reported as loans
  • The parties to the financial transactions that led to the £8m being paid into BFTC’s bank account included a non-qualifying or impermissible company, Rock Holding Limited, which was incorporated in the Isle of Man
  • Leave.EU, Elizabeth Bilney (the responsible person for Leave.EU), BFTC, Mr Banks, and possibly others, concealed the true details of these financial transactions, including from us, and also did so by knowingly making statutory returns/reports which were incomplete and inaccurate, or false
  • Various criminal offences may have been committed

We have referred this matter to the NCA, for it to take forward. We will liaise with the NCA to provide whatever assistance it may require.

This report outlines the basis our referral to the NCA. As this is now a criminal investigation, only limited information can, at this stage, be made public about the evidence we hold, our analysis and the potential offences that may have been committed.

Our investigation

BFTC was set up in May 2015. It was not a registered campaigner in the EU referendum, but it ran Leave.EU’s campaign on its behalf, received £6m on behalf of Leave.EU, and paid Leave.EU’s referendum expenses. It also received £2m to use for referendum spending.

This funding, a total of £8m, was provided to Leave.EU and BFTC in late 2015 and early 2016. Leave.EU reported Arron Banks as the only source of its £6m. BFTC told us that Mr Banks and his insurance companies had made a loan to it of £2m for the referendum.

BFTC gave some £2.2m to other campaigners, which were reported as donations. It spent at least £750,000 on campaign payments on behalf of Leave.EU.

As a result of ongoing regulatory work we announced an investigation into BFTC and Mr Banks on 1 November 2017. This looked at whether Mr Banks was the true source of the loans and whether BFTC was the true source of the donations made by it to others. The law is that loans and donations to registered campaigners can only come from certain permissible sources, which essentially excludes overseas or foreign funding from any consequent impermissible influence on the outcome of the EU Referendum.

Further investigation information

Potential criminal offences

From the evidence we gathered, we have reasonable grounds to suspect that a number of offences may have been committed.

These relate to the financial transactions which led to the £8m being paid into BFTC’s bank account. Mr Banks and Ms Bilney (and through them BFTC and Leave.EU) gave us unsatisfactory explanations about these transactions, and we have reasonable grounds to suspect that they knowingly concealed and sought to conceal the true circumstances.

We also have reasonable grounds to suspect that a non-qualifying or impermissible person or body, Rock Holdings (incorporated in the Isle of Man), was a party to the relevant transactions.

Further information about potential criminal offences

Referral to the National Crime Agency

We have reasonable grounds to suspect a number of offences under electoral law may have been committed. Further offences are not within the regulatory remit of the Commission. For those offences where we may impose civil sanctions, our sanctions are limited at £20,000.

The sums of money involved in these matters are significant. The relevant funding amounted to £8m, which included loans of £6m to Leave.EU, a registered campaigner in the EU Referendum. BFTC was loaned £2m, and put at least £2.9m into the referendum campaign.

The financial transactions we have investigated include companies incorporated in Gibraltar and the Isle of Man. These jurisdictions are beyond the reach of the Electoral Commission for the purpose of obtaining information for use in criminal investigations or proceedings.

Having considered these and other factors, the Commission, having completed its current investigation, has referred this matter to the NCA. Roles and responsibilities

Last updated: 11 October 2019
Next review: 27 June 2020