The 'dark money' that paid for Brexit
The secret cash that bankrolled Brexit, the loophole it's hiding in, and how we unravel it.
In the coming weeks, the Electoral Commission will publish details of how much cash the various larger campaigns threw at the European referendum. The list of big spenders will include some familiar faces: the Conservatives, Labour, the official Leave and Remain initiatives.
But there will be an unlikely name featuring among those big beasts, too: Northern Ireland’s Democratic Unionist party.
Just how much the DUP spent on Brexit remains to be seen. But the Electoral Commission have already let slip something surprising: it’s more than £250,000. And the most obvious reason that a relatively small party had so much to spend on this campaign? Because political donations in Northern Ireland are kept secret.
You might not realise it, but it’s pretty likely you even saw some of the DUP’s Brexit campaign spending. Look closely, for example, at the imprint at the bottom of these placards in Edinburgh in the week of the vote:
It wasn’t just a few stray leaflets or placards that the DUP paid for. On June 21, two days before the vote, the party funded a four-page wraparound pro-Leave advert in the Metro freesheet. While it’s possible to buy such adverts for as few as 10,000 issues of the paper, openDemocracy has spoken to people who saw this propaganda in editions in London, Manchester, Edinburgh, Dundee, Cardiff, and Sunderland. A UK-wide wrap around advert in the Metro costs £250,000: on its own, far more than any Northern Irish Party has ever spent on even the most significant election campaigns.
One place the advert didn’t appear is the one place the DUP stands for election: Northern Ireland. The Metro doesn’t circulate there.
“It is safe to assume that this was the most expensive single piece of propaganda ever issued by an Irish political party,” commentator Fintan O’Toole wrote in the Irish Times.
So, why did the DUP spend so much campaigning to leave the European Union? And where did they get all the money to do so? The likely answers take you down into a loophole in UK electoral law that allows dark money to flow through Northern Irish politics, and into the British system.
When someone else is paying...
A quarter of a million pounds is unlike anything the DUP has spent in the past. Just a month before the EU referendum, the party won 38 seats in the Northern Ireland Assembly elections and retained its position as the largest party there. To do this, they spent less than £90,000.
The 2015 general election – where the DUP won eight seats and became the fourth-equal biggest group in Westminster – cost the party only £58,000. In fact, the total combined spend of all Northern Irish political parties for the 2015 general election was just £221,143. The DUP’s most recent accounts show that its total expenditure for the whole of 2015 was £511,766, and its net assets at the end of the year were around £195,000. A bill of more than £250,000 only months later would therefore have left them bankrupt – unless they got significant extra income from somewhere.
But what’s really significant is that, because of the aforementioned loophole, we aren’t allowed to know where any such donations came from.
Of course, it’s theoretically possible that the DUP raised all of this money from its membership through raffles and crowdfunders. But it seems far more likely that the extraordinary sum spent on this ostentatious Brexit advert came from major donations. In which case we won’t have any idea who really helped to bankroll this key part of the Leave campaign.
You see, in the rest of the UK, parties must report all donations of more than £7,500 to a national party or £1,500 to a local branch. But the names and addresses of donors to Northern Irish political parties and campaigns are not made public, ostensively because of “special circumstances”: the security situation is used as an excuse for donations to be reported to the Electoral Commission, but kept ‘sealed’, so that you and I can’t know who they are from.
You see, in the rest of the UK, parties must report all donations of more than £7,500 to a national party or £1,500 to a local branch. But the names and addresses of donors to Northern Irish political parties and campaigns are not made public, ostensively because of “special circumstances”: the security situation is used as an excuse for donations to be reported to the Electoral Commission, but kept ‘sealed’, so that you and I can’t know who they are from.
The Electoral Commission has confirmed to openDemocracy that in the European referendum, where the whole country was treated as a single constituency, donations made to a Northern Irish party such as the DUP could be used to fund campaigning in Scotland, England and Wales, and yet Northern Irish secrecy laws still apply to this cash.
This means that anyone who wanted to donate to the Leave campaign without facing the public accountability required by laws in Great Britain could simply funnel money through the DUP. Whether this is just because such a donor is a bit of a wallflower, or because of something more sinister which Leave campaigners may wish to hide from the public eye, we don’t know.
There is, though, one way we could find out, which we’ll get to in a moment. But first, it’s worth looking at some of the context for all of this.
The DUP and the other Brexiteers
Whilst we don’t know how the DUP came into so much cash all of a sudden, there have been a number of claims that they were looking for money in the run up to the vote.
Arron Banks, the multi-millionaire who poured millions into Brexit, has claimed that the DUP asked for £30,000 a month over four months to back his campaign. In his book 'The Bad Boys of Brexit', Banks says he told the DUP "that's not the way we operate."
The DUP has denied Banks’ claim and insisted that the party’s EU referendum spending reflected their commitment to Brexit. DUP member of the Stormont assembly Mervyn Storey said the Metro advert was “a price worth paying”.
But many have questioned the DUP’s Brexit spending. The Metro adverts “are a donation hidden in plain sight. A very large donation was funnelled through the Northern Irish donor black hole,” says Niall Bakewell from Friends of the Earth Northern Ireland, who have long campaigned for full disclosure of political donations.
But many have questioned the DUP’s Brexit spending. The Metro adverts “are a donation hidden in plain sight. A very large donation was funnelled through the Northern Irish donor black hole,” says Niall Bakewell from Friends of the Earth Northern Ireland, who have long campaigned for full disclosure of political donations.
“It is hard to understand why the DUP would spend that amount of money on an advert in London or anywhere else in GB. Where are the benefits to the DUP in doing that?” Alliance party leader Naomi Long told openDemocracy.
“It is certainly possible that funds were being channeled through a party in Northern Ireland to take advantage of the veil of secrecy that surrounds our party political donations,” Steven Agnew, leader of the Northern Irish Greens, said to openDemocracy, “It would concern me greatly if it was found that ‘donor tourism’ was taking place.”
DUP corruption allegations
The shady role of the DUP in the Brexit movement adds to a long list of questions about the party’s commitment to transparency amid a series of financial scandals. A botched renewable heating subsidy scheme that could end up costing the Northern Irish exchequer upwards of £450m precipitated the collapse of Stormont earlier this year amid allegations that key advisers had close links to profiting industries. As enterprise minister in 2012, DUP leader Arlene Foster approved the creation of this Renewable Heat Incentive (RHI) scheme.
In 2010, Foster’s predecessor Peter Robinson was forced to temporarily stand aside after a BBC documentary revealed that his wife Iris Robinson – then an MP and councillor – had procured £50,000 in loans to finance a restaurant for her teenage lover. She failed to declare her interest in the business despite sitting on the council that granted its operating licence.
In 2010, Foster’s predecessor Peter Robinson was forced to temporarily stand aside after a BBC documentary revealed that his wife Iris Robinson – then an MP and councillor – had procured £50,000 in loans to finance a restaurant for her teenage lover. She failed to declare her interest in the business despite sitting on the council that granted its operating licence.
Last year, Ireland’s National Assets Management Agency reported its former Northern Ireland advisor, Frank Cushnahan, to police over corruption allegations related to a €1.6bn land sale. Mr Cushnahan had been appointed on the recommendation of the DUP.
Northern Ireland needs transparency
Concern around political party funding in Northern Ireland has been growing. Transparency International UK has called for legislation to allow for scrutiny of political reporting by the end of this year.
The Electoral Commission began to keep a record of donors to NI parties from 2007 but public access to this record was temporarily banned by the government. This ban, called the ‘Prescribed Period,’ was only due to last until October 2010 but its end date has been repeatedly extended.
In 2010, 77% of respondents to a Northern Ireland Office consultation supported full transparency of political donations. After that, Westminster passed a law which states that from January 2014 onwards donations made to political parties in Northern Ireland could at some point in the future be made public – including donations used in the Brexit campaign. However, under the Northern Ireland Miscellaneous Provisions Act (2014) this will not happen until the UK government judges it is safe to do so.
The Electoral Commission began to keep a record of donors to NI parties from 2007 but public access to this record was temporarily banned by the government. This ban, called the ‘Prescribed Period,’ was only due to last until October 2010 but its end date has been repeatedly extended.
In 2010, 77% of respondents to a Northern Ireland Office consultation supported full transparency of political donations. After that, Westminster passed a law which states that from January 2014 onwards donations made to political parties in Northern Ireland could at some point in the future be made public – including donations used in the Brexit campaign. However, under the Northern Ireland Miscellaneous Provisions Act (2014) this will not happen until the UK government judges it is safe to do so.
Which is the simplest way that we could find out where this mystery cash for the DUP's Brexit spending came from: Northern Ireland Secretary of State James Brokenshire has it within his power to simply release them.
Campaigners in Northern Ireland have long called for donor names to be published, saying they have seen no evidence to suggest that those giving over £7,500 a year to a political party are any more at risk than any other willing, partisan participants in Northern Ireland politics. Indeed, under legislation dating from 1983 the identity of those who donate money to individual election candidates can be accessed, although contributions to parties cannot.
Campaigners in Northern Ireland have long called for donor names to be published, saying they have seen no evidence to suggest that those giving over £7,500 a year to a political party are any more at risk than any other willing, partisan participants in Northern Ireland politics. Indeed, under legislation dating from 1983 the identity of those who donate money to individual election candidates can be accessed, although contributions to parties cannot.
Publicly most Northern Irish political parties, including the DUP, support ending donor secrecy but in practice only the Alliance and the Green party actually publish their donations.
openDemocracy contacted the DUP, the official Vote Leave campaign, and Aaron Banks’ Leave.EU to ask about the source of the Brexit campaign funds. The DUP didn’t get back, Vote Leave denied any knowledge and Leave.EU said that they believe, though can’t prove, that the funding came through Vote Leave.
Transparency is at the heart of democratic politics. Whatever the source of the mysterious DUP funds, voters have a right to know how one of the most significant political campaigns in recent British history was financed. Any dark money in a campaign pot poisons it all: a loophole like this allows a hiding place for any penny with an embarrassing provenance or private interest behind it. Until the funders behind the DUP campaign are fully disclosed, we should assume there is a good reason that someone doesn’t want us to know who they are. The Northern Ireland Secretary James Brokenshire has it within his powers to reveal the source of this cash. It is vital that he does so.
We have launched a petition calling on him to do just that. Please sign it, below.
"Call on Northern Ireland Secretary James Brokenshire to publish the names of all major donors to political parties in Northern Ireland, in line with campaign transparency laws in Great Britain."
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