DUP Treasurer Gregory Campbell MP. Image, BBC, fair use.

The Electoral Commission seems today to have directly contradicted Democratic Unionist Party claims that the party does not need to know the true source of their £425,000 Brexit donation.

As openDemocracy reported yesterday, Democratic Unionist Party MP Sir Jeffrey Donaldson told us that his party didn’t need to know the true source of the funds which it has said were paid to them by a mysterious organisation calling itself ‘the Constitutional Research Council’, and which were largely used for major pro-Brexit campaigning.

While Donaldson claimed the DUP doesn’t need to know how the CRC emerged seemingly from nowhere to being able to give them £425,000; the Commission made clear that parties are obliged to ask where their donations come from.

The DUP revealed the name of the Constitutional Research Council and its chair, Richard Cook, after pressure following openDemocracy’s revelations about their large campaign spend during the Brexit referendum. Following this confession, openDemocracy found that Richard Cook’s business associates in recent years have included the former head of Saudi intelligence and a Danish man who was involved with a major 1995 gun running case in India. DUP MP and co-ordinator of their Leave campaign, Jeffrey Donaldson, responded to questions about the true source of the donation by saying “we don't need to know who made the donations”, indicating that he didn’t believe that the party was required to go through a due diligence process to ensure that the Constitutional Research Council wasn’t simply being used as a front organisation through which to funnel money from an impermissible source.

As the Constitutional Research Council appears to have no traceable legal form – we do not even know its members – it is likely an “unincorporated association” in electoral law. Speaking to openDemocracy today, an Electoral Commission representative said “unincorporated Associations can’t act as the agent for an impermissible donation” and “the first onus is on the recipient (to ensure that a donation is permissible). If they can’t confirm permissibility then they need to return the donation”. But in Northern Ireland, uniquely, donations to and from unincorporated associations are kept secret.

The Electoral Commission also confirmed that in the European referendum, legal responsibility for doing so lay with the party Treasurer.

openDemocracy rang Democratic Unionist Party Treasurer, Gregory Campbell MP. We asked him what he had done to ensure the permissibility of the donation from the Constitutional Research Council. He responded by saying “could I ask you how you are funded?” We informed him that it’s all on our website. He asked us to elaborate. We did so, and repeated our question. He continued to avoid answering any questions about whether and how he had undertaken his legal duty to check the provenance of what must be one of the largest donations his party has ever received, then hung up.

Afterwards we emailed Mr Campbell the following questions.

1) What process did you go through as party treasurer to ensure that all of the funds paid to you through the Constitutional Research Trust came from permissible donors?

2) Jeffrey Donaldson has told us that the party doesn't need to know the true source of the funds. The Electoral Commission say that you do need to know the true source of your donation. Donations to unincorporated associations are regulated by the 2009 Act.

3) If it transpires that money paid to the CRC didn't come from a permissible source, then the party will be required to pay it back. Does the party have the funds to do so, and, if not, do you have a bankruptcy process?

4) Am I right in assuming that the DUP exists as an unincorporated association itself? If so, can you confirm for me the names and details of the governing body of the party, who will be wholly and personally liable for the debts of the organisation?

5) Have you informed all of these people of any financial risk they may face?

Mr Campbell has yet to respond.

Another knot in Northern Ireland’s donor secrecy loophole

The Electoral Commission also confirmed to openDemocracy that Northern Ireland’s donor secrecy loophole applies to donations given to unincorporated associations which then give this money to political parties in Northern Ireland. This means that while the DUP claim to have revealed the true source of their donation, Northern Irish secrecy laws are still preventing us from finding any substantial information about where the cash really came from.

Unincorporated associations are organisations which haven’t registered in any of the various ways that groups can establish themselves, such as companies, trades unions and mutuals. We have checked all of the available registers for all of these organisation types in the UK, and the CRC doesn’t appear on any of them, meaning that the group must either be an unincorporated association, or based in Gibraltar, from where referendum campaign groups were permissible, but where such registers are not online. Gibraltar Companies House has not yet got back to our request for any information they may have about the organisation*.

Under the Political Parties and Elections Act 2009, Unincorporated Associations which donate more than £25,000 to a political party must register with the Electoral Commission and notify it of every donation of more than £7,500 that they in turn have been given.

This legislation was introduced after the 2006 Midlands Industrial Council row, in which unincorporated associations were accused of being used to funnel anonymous money into the Conservative party.

However, while these donations to unincorporated donations are required to be published in the rest of the UK, the Electoral Commission keeps them secret if the ultimate beneficiaries of this money are parties in Northern Ireland, even if the original donor, the Unincorporated Association, and the campaign materials ultimately paid for with the money are all based outside Northern Ireland. In other words, the Constitutional Research Council seem to be hiding behind the same Northern Irish donor secrecy laws that the DUP were hiding behind until Friday.

Northern Irish MP Sylvia Hermon calls for donor transparency

Meanwhile, independent unionist MP for North Down, Lady Sylvia Hermon, has spoken to openDemocracy about her concern about the lack of transparency around the DUP’s Brexit campaigning, and £250,000-plus Metro advert they paid for with these donations in the week before the vote.

In an email exchange on the matter, she wrote:

“When I became aware of this particular advertisement in Metro, a publication not circulated in N. Ireland, I wrote to the Electoral Commission on 27th June last year seeking “assurances that this advertisement was properly notified, recorded and explained to the Commission”...

“I am very keen to see much greater transparency about this substantial donation to the DUP, and will be writing again to the Electoral Commission seeking further details.”

“This episode highlights, yet again, the need for full disclosure of all donations to political parties operating in N. Ireland. The time for excuses is over. The Secretary of State for Northern Ireland has the power to introduce much-needed change in this area, and he should not hesitate to bring forward the necessary legislation.”

We will inform readers of any further progress on this matter.

*Update: Gibraltar Companies House has now responded to confirm that the Constitutional Research Council is not a company registered with them.

Read more on our investigation into the DUP's secret donor:

The 'dark money' that paid for Brexit

Secretive DUP Brexit donor links to the Saudi intelligence service

The strange link between the DUP Brexit donation and a notorious Indian gun running trial