Barrowman investigation prompts calls to clean up British politics

Political finance laws need to be tightened say campaigners after Conservatives accepted ￡50,000 from obscure firm connected to Doug Barrowman and Michelle Mone

On Monday, this newsletter reported on a major investigation that revealed that the Conservatives had accepted a ￡50,000 donation from a firm connected to Michelle Mone’s financier husband, Doug Barrowman.

Now, in response to the story, transparency campaigners and opposition politicians have called on whoever wins next week’s general election to tighten Britain’s lax political party financing laws.

“The rules themselves need to be strengthened, and the Electoral Commission should have their powers strengthened so that they can investigate and prosecute those who break the rules,” said former Labour MP and longtime anti-corruption champion Dame Margaret Hodge.

Hodge also called on the Electoral Commission to “urgently” investigate the ￡50,000 donation to the Conservatives revealed earlier this week.

The donation was made through a small company called Pulse Accounting Ltd which, at the time, was owned by one of Barrowman’s business associates, and had been previously owned by an offshore trust company directed by two of Barrowman’s employees.?

The Pulse donation was made in October 2020 - just months after a company controlled by Barrowman and Mone was given a ￡203 million PPE contract, which is currently subject of a National Crime Agency fraud investigation.?

Pulse Accounting had never donated to British politics before, or since then.?

The links between Pulse and Barrowman raise the question of whether the company was used as an intermediary by the Isle of Man resident to make the donation. Barrowman did not respond to questions, while the Conservative Party declined to comment on the specific donation.?

Because of its small size, Pulse Accounting was not required to file detailed public accounts. That makes it difficult to determine if the funds came from business carried out in the U.K. as required by electoral laws.??

This is a key regulatory gap when it comes to small company donations, said David Howarth, a former Liberal Democrat MP who served as an electoral commissioner between 2010 and 2018.

“The company has to be doing business in the U.K. but that can be really hard to find out,” he said. “The electoral regime was set up for big businesses – who used to donate a lot but have basically stopped donating altogether – but quite a lot of these companies [donating now] are very small and you can’t see what they’re doing.”

George Havenhand, senior legal researcher at Spotlight on Corruption, said that “U.K. electoral law has serious weaknesses that make our democracy vulnerable to undue influence.”

“At a minimum, parties should be obliged to determine the true source of donated funds,” he added.

Labour’s manifesto commits to “protect democracy by strengthening the rules around donations to political parties" but contains no specific detail.

The Conservatives, meanwhile, have been accused in recent years of repeatedly weakening the Electoral Commission. The 2022 Elections Act, for instance, effectively ended the regulator’s independence by requiring the Commission to follow policy and strategy issued by the government of the day.?

The Commission has called the obligation inconsistent with the role that an independent regulator plays in a healthy democracy.

A version of this story also appeared on the Organized Crime and Corruption Reporting Project.

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