During the EU referendum, Vote Leave made several “donations” – often into the hundreds of thousands of pounds – to smaller, pro-Brexit campaigners with a shared mission. Vote Leave chose not to register these as “referendum expenses”. Lawyers argue this was a breach of campaign spending rules, used by the official Leave campaign to overreach its £7 million spending cap.
The UK’s electoral watchdog has investigated and found no breach of referendum spending rules in at least one case. It is now facing legal action over that decision from the Good Law Project, which is challenging the Electoral Commission’s inaction over the controversial donations.
At the very least, the case exposes a gaping loophole in our democracy. At worst, the law was broken, and the “will of the people” bought by Brexit hardliners.
The litigation centres on payments of £625,000 made directly to Canadian digital consultancy firm AggregateIQ by Vote Leave, but declared as “referendum expenses” by Darren Grimes, then a young fashion student from County Durham with his own pro-Brexit social media campaign, BeLeave.
This was a clear tactic by Vote Leave to circumvent the referendum spending cap. Vote Leave campaign committee member Steve Baker, now a minister in the Brexit department, sent a round-robin email before the campaign suggesting Vote Leave might create separate legal entities, each of which could spend up to £700,000, thus allowing them to “spend as much money as is necessary to win”. Vote Leave’s finance director, Antonia Flockton, told a parliamentary committee after the referendum “when it became obvious that we were in surplus funding, we chose to donate to other campaigns”.
A freedom of information response last month revealed the Electoral Commission found “no reasonable grounds to suspect that any breaches” of the spending rules had occurred.
The watchdog has defended its decision in an email to InFacts, citing the EU Referendum Act (see 22), arguing a “common plan or arrangement” between Vote Leave and BeLeave had to be in place for joint spending rules to apply, and that it was fine for separate campaign groups to “liaise and discuss campaigning approaches”. What’s more, Vote Leave’s payment directly to AggregateIQ on behalf of BeLeave was also “acceptable under the law”.
The Good Law Project say this misses the point. The main issue is not whether the two groups had a “common plan”, and therefore whether the donations count as joint spending and should have been registered by Vote Leave (although it seems clear they were working together). Rather the Good Law Project argues that these payments are not donations at all, but straightforward referendum spending by Vote Leave. To deny this is to undermine the purpose of the law, which is in place to stop wealthy campaigners spending potentially unlimited sums of money by, for example, buying services for others who are known to be campaigning for the same result.
The Electoral Commission told InFacts it had no further comment to make on this point.
The Good Law Project is also demanding answers from the Electoral Commission. In particular, have there been other investigations into similar arrangements with other groups? Vote Leave are known to have also given £100,000 to Veterans For Britain for AggregateIQ’s services.
If the case is successful, the Electoral Commission’s decision to accept the Leave campaign’s spending will be quashed. It will then have to reopen its investigation into Vote Leave and maybe prosecute it. Ultimately the validity of the referendum could be brought into question.
Pro-Europeans in Parliament and across civil society must make a noise about this, and demand those responsible brought to account. Otherwise Britain might have been dragged out of Europe on the basis of a potentially illegal campaign.
You can make a contribution to the Good Law Project’s work on this case via their Crowd Justice page.
A previous version of this article described Darren Grimes’ social media campaign as “anti-Brexit”. This has been corrected to “pro-Brexit”.