Finally the truth comes out of the arse of the Thatcherite toff Pearson.
DESPITE having one of its former MEPs jailed for expenses fraud last year, the UK Independence party has benefited from the current distrust of the larger parties and is fielding its candidates in the general election on an anti-sleaze platform.
Yet its commitment to upholding political standards has now been revealed as less than perfect.
Stuart Agnew, a UKIP MEP, and Lord Pearson of Rannoch, the party’s leader, have told undercover reporters how a real donor's name could be kept secret by passing tens of thousands of pounds through intermediaries. If carried out, one or more of the suggested methods could have been illegal.
Our disclosures will embarrass UKIP and Pearson, who also told the undercover reporter that some UKIP members were “neanderthals” and described Agnew, 60, as “one of our only really sane MEPs”.
An undercover reporter approached Agnew last month, saying that her aunt wanted to make a substantial donation to UKIP while keeping her identity secret. This was, the reporter explained, because her aunt was a senior civil servant who would find it professionally embarrassing to have her name publicly linked with the party.
Agnew, who joined UKIP 11 years ago and was elected to the European parliament in 2009, was initially circumspect. Asked if the real donor’s name would have to be revealed publicly, he said: “I’m afraid if it’s significant it would have to be.” But within minutes he appeared to contradict himself.
“If she can trust you she could give you a huge sum of money and you could give it to the party,” he said.
“I will try and look into all these things though to see what can be done so there are a few options,” he added.
A few days later, Agnew rang to say that after taking advice from “experts” he had “encouraging information” and suggested a meeting.
Last Thursday he met the undercover reporter at a hotel in Colchester, Essex. Agnew began by outlining the law on giving anonymous donations. Any donation of more than £7,500 to a party headquarters, or £1,500 to a party individual or branch, must be declared to the Electoral Commission and the donor’s name given.
Although Agnew did not mention it, if a donation of more than £7,500 is made via a third party or agent, the details of the real donor must also be given to the political party so that they can be supplied to the commission, which then publishes them on its website. Making anonymous large donations by proxy is not allowed.
After summarising for the reporter the level permitted for anonymous donations, Agnew said: “Now this is where it gets a bit more complicated. She [the aunt] can give money to what’s known as an unincorporated association.”
Unincorporated associations, which do not have to file accounts, are allowed to make donations to political parties. There have long been suspicions, however, that they can be used as “filters” to pass money from donors who want to remain anonymous.
New rules state that donations totalling more than £25,000 a year from an unincorporated association will result in further scrutiny from the commission. It then demands a full list of everyone who has given to the association over the course of the previous year.
Even for donations of less than £25,000, however, the association is still required to disclose the true name of any donor who is using it as a proxy to give money.
Agnew suggested using Global Britain, which was set up in 1997 by Pearson and two other peers and now also includes fellow UKIP peer Lord Willoughby de Broke. It describes itself on its website as a “geo-political think tank” which conducts Eurosceptic research. Last May it donated £80,000 to UKIP in the run-up to the Euro elections.
Agnew said: “I’ve spoken to Nigel Farage [the UKIP MEP and former leader] and he says at the moment you can put £25,000 into Global Britain and you will remain anonymous.”
He went on: “Of course, there is an element of trust though that your aunt wants that money into UKIP. Now, as the thing is run by Malcolm Pearson and as he is the leader of UKIP, there’s a pretty good chance, isn’t there, that that money will go in the right direction.” Agnew later rang Farage in front of the reporter to recheck the possibility of giving the amount to UKIP via Global Britain.
Agnew continued to run down his list of ways of giving anonymously. He said: “Another thing she [the aunt] could do: you are her niece — she could give you £3,000 before April 5, in other words before the end of the tax year ... as a present, as a gift. You would then immediately give UKIP a donation of £3,000.” Agnew said she could then do the same next week — now in a new financial year — and in both cases avoid any tax penalties.
Adding all those methods together would allow the “aunt” to donate £38,500 anonymously, he said.
Then he raised the stakes even higher. “Your mother [sic] can make you a loan of £100,000 to buy a house ... and you would then become a donor to the party for £100,000 and your name would go up on the [commission] website.” Agnew said when the real donor died, she could state in her will that the loan was now a gift, thus writing it off. “You are seen to be the donor rather than her,” he said.
He added: “A loan can be for any amount if you are looking at a way of getting a substantial sum of money in your name. But remember, your name would then go on the website. And it would take quite an investigative journalist to try and work out [who you are].
“Nobody knows your particular status, you could have inherited money.” During the meeting Agnew also admitted that he was using taxpayers’ money to pay half the salary of an assistant — UKIP regional organiser Peter Reeve — whose amount of actual work for him was “virtually none”.
“I can tell you that Peter is paid partly by me out of my assistance allowance here partly by David [Campbell] Bannerman [another UKIP MEP]. He does very little work for us, virtually none. He is working for the party. And that’s strictly illegal.”
Salaries paid via MEPs’ assistance allowance must not fund party work. The EU’s anti-fraud watchdog Olaf has been investigating some of Agnew’s fellow MEPs over a similar matter.
The day after the meeting, Agnew spoke on the phone to the reporter a number of times. He said he had talked to Pearson about the possibility of making the donation to UKIP via Global Britain.
“He did confirm that two anonymous donations can be made. Up to £7,500 can be made directly to the party and £25,000 to Global Britain,” he said, describing the latter method as a “loophole”. “If your aunt is willing to give us £32,500 [£25,000 plus £7,500] then it can be done anonymously.”
Another undercover reporter then spoke to Pearson, who said the money given to his unincorporated association would be passed “straight on” to UKIP: “I could pass it on the same day.”
He insisted: “The Electoral Commission knows that we will be doing all this, because someone else who is a major Conservative donor also wanted similar anonymity. The main thing is that it mustn’t be a straight filter.”
Asked if he could guarantee her name would not come out, he said: “Yes, we did it in the European elections [in 2009]. We passed on £80,000 from one person in effect ... and that caused no difficulty at all.” He said he would check with the Electoral Commission and “if there was any doubt I would honestly rather go without rather than risk it”.
When confronted, Pearson said he thought unincorporated associations were allowed to pass on donations of not more than £25,000 directly. He also said he would have given the donor’s name to the commission, although he said he was “not sure” if he had passed on the name of Patrick Barbour, a former Tory donor who he said was the person who donated £80,000 to UKIP through them last year. He claimed Barbour had given Global Britain £100,000 saying he would be “happy” if most of it went to UKIP.
He explained why he thought Barbour had wanted to stay anonymous: “He’d rather the Conservative party didn’t know he was giving that sort of money, you know,” he said.
He said: “It still is my understanding that I do not think that what I said yesterday to your [undercover] reporter is wrong. I’m sorry if it is, and I’ll apologise.” Pearson said he was regularly in touch with the commission over Global Britain and donations.
Agnew said: “It’s not cut and dried and the acts are complicated. The law is often very difficult to interpret.”
Bannerman denied Reeve did no work for him and Agnew. He said Reeve worked for UKIP only “in his spare time”. Reeve agreed.
Farage said: “I said to Stuart Agnew, I can’t take this any further, that she [the aunt] would have to come and meet face to face with Lord Pearson and talk about it.”
Barbour said of his donation last year: “I am pretty sure that I left it up to [Pearson’s] discretion what it was spent on.”
In a later call he said he had not given to Global Britain in order to conceal an anonymous donation to UKIP.
A spokesman for the commission said it would take “appropriate action” if breaches of the rules had occurred.