Loopholes in the law are allowing ‘dark money’ to infiltrate British politics, with analysis revealing that almost £1 in every £10 donated to political parties and politicians comes from unknown or questionable sources. Ta.
A study by Transparency International (TI) found that cash from companies that have never made a profit, cash from unincorporated organizations that don’t have to declare their donors, and foreign donations through intermediaries. It is said that all prohibited donations from individuals are flowing into this system.
Foreign governments have also donated millions of dollars in the form of flights, meals and hotel accommodations. Gifts and hospitality from governments such as Qatar, Saudi Arabia and Azerbaijan are permitted, but all other types of donations must come from approved UK sources. “It is becoming increasingly clear that this loophole poses reputational and security risks to our democracy,” TI said.
The findings were revealed in the campaign group’s report to be published this week. TI researchers analyzed 78,735 donations worth £1.19bn reported to the Electoral Commission between 2001 and 2024. As a result, £115 million was found to have come from unknown or “suspicious” sources. This equates to almost £1 in every £10 donated to political parties from private funds.
Of the £115m from unknown or questionable sources, more than two-thirds (£81.6m) went to the Conservative Party, more than Labor, which receives more from membership fees and unions. is partly explained by a high dependence on private donors.
In response, the Electoral Commission, which regulates political funding in the UK, said reforms were needed to “further strengthen the system”. A spokesperson said: “We stand ready to work with the government and parliament to make improvements.”
Analysis obtained by the Observer also revealed that the total amount of individual donations to political parties has increased dramatically, from £30.6m in 2001 to £85m in 2023. Meanwhile, between March 2001 and July 2024, £48.2 million was donated to British politicians. A party by a donor who claims or proves to have purchased privileged access, influence, or prestige. £42m came from donors alleged or proven to have been involved in other corruption, fraud or money laundering. Despite new transparency rules introduced by Parliament in 2010, £38.6m of funding came from unincorporated bodies that did not report the source of their income. £13 million came from donors alleged or proven to be intermediaries or hidden sources of foreign funds. And £10.9 million came from companies that did not make enough profits to support political donations.
Beyond monetary donations, researchers analyzed the Transparency Register since 2001 and found that MPs have accepted £11.6 million in overseas visits, including £4.5 million from foreign governments, parliaments and regime-linked groups. I discovered that
Among the biggest funders of overseas travel was Qatar, which spent £460,000 on gifts and entertainment for British politicians, mainly in the run-up to the 2022 World Cup. Saudi Arabia spent £400,000. Bahrain spent £200,000. Azerbaijan spent £140,000.
TI said this was made possible by “a gap in the law that allows foreign governments, including hostile countries, to court British politicians through fully-paid overseas visits”.
Other similar democracies, such as the United States, have clear rules governing funds for foreign travel sponsored by foreign governments.
In some cases, politicians continued to promote the interests of the government they gave gifts and entertainment. In 2022, the Observer revealed how Alan Cairns, then chairman of the Qatar All Party Parliamentary Group (APPG), gave a Commons speech praising Qatar before the World Cup.
The former Conservative MP had received donations worth £9,323 from the Qatari government for two trips to Qatar in 2022. The disbanded Qatar APPG issued a statement via Cairns saying the group had played an “active role in scrutinizing all aspects of the UK-Qatar relationship, including human rights, ethics, education, energy and infrastructure”. .
TI’s analysis also revealed how companies can donate without having a clear track record of doing business in the UK. They must be registered with the Companies Office, incorporated in the UK and ‘carry on business here’.
However, TI said this was a “low bar” as political parties are required to check for suspicious activities such as dormant companies, but are not prohibited from receiving funds from political parties.
Another “loophole” means that since 2010, unincorporated groups (those that are neither legal entities nor required to disclose their funders) have been making large donations to British political parties and MPs. This includes private clubs associated with both the Conservative Party and the Labor Party.
Activists say the findings show the UK is vulnerable to “big donors, suspicious and corrupt individuals and undue influence from foreign governments”. This year’s Corruption Spotlight press conference concluded, “Our country’s campaign finance laws have many loopholes, and the enforcement system is inadequate.” It’s sturdy enough. ”
However, despite long-standing concerns, the UK government’s response appears to be heading in the wrong direction.
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During the period covered by the TI analysis, the criteria for reporting donations increased by 136%. In 2022, under the Conservatives, the Electoral Act 2022 stripped the Electoral Commission of its powers to prosecute criminal offenses and gave ministers the power to set strategic and policy priorities. It was done.
The rules for unincorporated organizations will also be changed, meaning that despite a 2021 warning from the Commission on Standards in Public Life, unincorporated organizations will no longer be able to meet the Electoral Commission unless they donate more than £37,270 a year. There is no longer any need to register. The back channels of foreign funding to influence UK elections.
TI policy director Duncan Hames said the findings call for urgent reforms, including ending funding from unincorporated organizations and shell companies and lowering campaign spending limits to reduce reliance on private donations. He said that it shows the need for
“Gaps in political funding rules are failing to stop money from questionable sources from pouring into politics,” he said. “We need tougher spending controls, reforms to bring dark money out of the shadows, and more accountability for those who abuse the system. We don’t know whose money it actually is. .”
“There are concerns that if the current rules are not updated, we will be selling politics to the highest bidder,” said Jess Garland, director of research at the Electoral Reform Association.
The Electoral Commission said independence and impartiality were “at the core of our work” and that it had a duty to “monitor and ensure compliance with contribution regulations”.
A spokesperson said, “We will take enforcement action if necessary.”
It also said that while current law provides transparency around the source of political donations, “reforms are needed to further strengthen the system”, including stronger due diligence checks and legislation banning donations from companies that are not making a profit in the UK. “It’s necessary,” he added.
It also said it was ready to work with politicians to deliver improvements, including “providing expert advice on the feasibility and impact of proposed legal changes”.
The Labor Party has previously pledged to protect democracy by reforming the UK’s political funding laws, stating in its manifesto that it would “protect democracy by tightening the rules around donations to political parties”. However, it has not yet been made clear how this will be done.
The Ministry of Housing, Communities and Local Government, which oversees election integrity, has been contacted for comment.
