Morgan McSweeney could face police investigation over electoral fraud claims

Sir Keir Starmer’s chief of staff could face a police investigation over his failure to declare £739,000 of political donations after he was accused of a “deliberate attempt to conceal” the money.

Morgan McSweeney “lied” to the Electoral Commission about why the donations had not been registered, his enemies allege, and Sir Keir then failed to tell Parliament he had benefited from the donations during his leadership campaign.

The donations were made to the think tank Labour Together, which at the time was headed by Mr McSweeney, and which helped propel Sir Keir to the Labour leadership as part of a plan to purge the party of hard-Left MPs.

Labour Together was fined £14,250 by the Electoral Commission in 2021 over its failure to register the payments.

However, leaked emails have since brought to light fresh evidence that this was not merely an oversight but, it is alleged, a deliberate decision to hide the payments from public scrutiny.

Kevin Hollinrake, the chairman of the Conservative Party, told the Daily T podcast that Mr McSweeney had “lied to the Electoral Commission” and “covered up the reasons these donations were not declared”.

Steve Reed, the Housing Secretary, has now been dragged into the row because he was on the board of Labour Together. On Thursday, he refused to say whether he was told donations were being declared in line with the law.

The Electoral Commission is examining the leaked emails and is expected to decide before the weekend whether to launch a fresh investigation or even call in the police to investigate.

Deliberately misleading the Electoral Commission is a criminal offence under the Political Parties, Elections and Referendums Act 2000, and the Commission has the power to ask the police to investigate breaches of the Act.

There is no suggestion that Mr McSweeney or anyone else benefited financially from the concealment of any payments, and it is unclear why he decided not to declare them.

One theory is that Labour Together was trying to protect Jewish or wealthy donors from personal attacks by the hard Left at a time when anti-Semitism was rife in Labour.

Major donors to Labour Together included the businessman Sir Trevor Chinn, the president of United Jewish Israel Appeal, which funds trips for British Jews to visit Israel and has been criticised for using settlements in the West Bank to house participants.

Between 2018 and 2020 he gave £140,000 to Labour Together and also donated £50,000 directly to Sir Keir’s leadership campaign. Last year, he was awarded the Israeli Presidential Medal of Honour by Izaac Herzog, the president of Israel, for services to the country.

Sir Keir’s rivals for the leadership might also have gone on the attack over the funding of his campaign if they had known more about the donations. Other major donors to Labour Together included Martin Taylor, a hedge fund manager, who gave £515,000 to it between 2018 and 2020 as well as donating £95,000 directly to Sir Keir’s leadership campaign.

Earlier this week, it emerged that Gerald Shamash, a Labour Party solicitor, had advised Mr McSweeney in 2021 to tell the Electoral Commission that there was “no easy way to explain how Labour Together finds itself in this situation” after racking up £739,492 in late-reported donations.

Mr McSweeney claimed he had been told by the Electoral Commission that Labour Together did not have to declare donations, but an email sent to him by the Commission in 2017 made clear the think tank did have to declare donations, a point which was also made in a phone call with him a few weeks earlier.

Mr Shamash said it might be better to claim the non-reporting of donations as an “admin error” and not mention Mr McSweeney by name.

In the same 2017 email to Mr McSweeney, the Commission queried whether donations that had at that point been declared to it were received by Labour Together or Mr McSweeney personally.

The author of the email pointed out that: “On the form you wrote your name and an address that appears to be a residential address rather than the organisation’s name and the address Labour Together is registered at.”

Mr Hollinrake said: “[Mr McSweeney’s] explanation to the Electoral Commission was that this was just an admin error…but the correspondence now clearly shows that this was not an admin error. It was a deliberate attempt to conceal these donations because they’re embarrassing the Labour Party at the time.

“Potentially, it’s a criminal offence if you conceal donations.”

He added: “[Sir Keir] has on the record said he never got any benefit from Labour Together. That is a complete lie.”

Mr Reed was asked on BBC Radio 4’s World At One programme whether Mr McSweeney told him the donations were being properly declared while he was on the board of Labour Together. He refused to answer directly, saying only that the matter had been investigated and “is now closed”.

The Electoral Commission said it had received a letter from the Conservative Party setting out the allegations against Mr McSweeney and expected to publish a response before the weekend.

A Labour source said: “This was thoroughly investigated years ago and action was taken. The Tories can sling mud all they like, it doesn’t change the facts here.”

The source added: “Neither Keir, nor his leadership campaign, accepted monetary or in-kind donations from Labour Together during the leadership election.”

Why is McSweeney under the spotlight?

Morgan McSweeney is facing fresh scrutiny over breaches of electoral law in his previous job as director of Labour Together.

He failed to declare £739,000 in donations to Labour Together between 2017 and 2020 at a time when the organisation was working to get Sir Keir Starmer elected as Labour leader.

Labour Together was later fined £14,250 for 20 breaches of electoral law after Mr McSweeney’s successor told the Electoral Commission about the payments that had not been declared by Mr McSweeney. But he is now facing new allegations of deliberately concealing the money from the authorities.

Why has this resurfaced?

The Electoral Commission’s 2021 investigation into the donations appeared to have put the matter to bed, but fresh evidence has now come to light about Mr McSweeney’s actions that could re-open the case.

Mr McSweeney has claimed that he had been told the donations did not have to be declared, but a newly discovered email from a senior Labour lawyer shows that the lawyer suggested he put the undeclared donations down to an “admin error”, because he had twice been told by the Electoral Commission that the donations did have to be declared.

It has also come to light that Mr McSweeney put himself down as the recipient of donations, rather than Labour Together, with a residential rather than a business address.

Who could have gained from this?

There is no suggestion that Mr McSweeney or anyone else made any personal financial gain. So what could Mr McSweeney’s motive have been in keeping the “slush fund”, as the Tories have called it, a secret from the Electoral Commission?

The answer may well lie in internal Labour Party politics. Mr McSweeney and Labour Together’s mission was to oust Jeremy Corbyn as Labour leader, replace him with Sir Keir, and purge the hard Left from the party.

By concealing the payments, Labour Together also concealed the names of donors, some of whom were Jewish, or wealthy businessmen, or both.

At a time when the Labour Left was riven with anti-Semitism, it would have been in Labour Together’s interests to keep donors’ names out of the public domain in order to protect them personally from Left-wing attacks, and also to protect the Starmer campaign from political attacks about who was funding it.

Has Starmer done anything wrong?

Sir Keir repeatedly said during his leadership campaign that the names of his donors would be revealed in the usual way. His donors’ identities were published only after the leadership campaign concluded.

However, he has never declared Labour Together as a donor to his campaign in the parliamentary register of interests, despite evidence, say the Conservatives, of “donations in kind” from Labour Together to his campaign.

It is possible that Sir Keir could now be told by the Parliamentary Standards Commissioner to correct the record, apologise to Parliament or even receive a stronger sanction such as suspension.

What are the possible consequences for Mr McSweeney?

The Conservatives have asked the Electoral Commission to look again at the failure to declare the donations, alleging that the new evidence shows the breach was more serious than had previously been known.

The Electoral Commission has the power to refer the matter to police, as misleading the Electoral Commission under the Political Parties, Elections and Referendums Act 2000 is a criminal matter.

If Mr McSweeney became the subject of a police investigation – which would hang like a dark cloud over Downing Street for months – his position as the Prime Minister’s chief of staff might well become untenable.

[Source: Daily Telegraph]