Dark Money Investigations

‘Second’ bank account: MPs demand probe into Rees-Mogg’s Brexit group

Cross-party demands for an urgent investigation into the financial affairs of the European Research Group follow openDemocracy’s investigation.

James Cusick
James Cusick
15 September 2018

Jacob Rees-Mogg: we're still waiting for answers. Image: Stefan Rousseau/PA Wire/PA Images

Senior MPs are calling for a deep investigation of the ‘second’ bank account and undisclosed funding held by Jacob Rees-Mogg’s group of hard-line anti-EU Conservatives.

They want full public scrutiny of the financial operations and shrouded membership list of the European Research Group (ERG). Their demands follow the latest disclosure in openDemocracy’s ongoing investigation into the ERG’s affairs, which revealed an undisclosed second bank account with unknown “sources of funding”.

“Transparent as mud”

Details of the accounts held by the ERG were branded a political “scandal” by the Liberal Democrats’ Brexit spokesman, Tom Brake. He called the activities of the ERG as “transparent as mud” and said the group’s reluctance to accept full public scrutiny of its accounts showed it had “something dubious to hide”.

Brake added: ”This scandal involving the finances of a hard-right Brexit group is, however, all too reminiscent of the dodgy and unscrupulous deals by the Leave campaign [during the EU referendum].”

John Trickett, Labour’s shadow minister for the Cabinet Office, said the Independent Parliamentary Standards Authority (IPSA) must now reopen its investigation into the ERG and “provide the public with much-needed answers to a long list of questions: how do the ERG use their public funding, and what is the source of their private funding and the identity of their members?”

A “circus”

Trickett said the continued lack of clarity over the ERG’s affairs and operations “carries the risk that this circus starts to make a mockery of our entire political system”.

The ERG, chaired by Rees-Mogg, but still effectively run by the former Brexit minister, Steve Baker, is thought to number close to 80 Tory MPs. It has been regularly dubbed a party within a party, recently dominating headlines over its manoeuvres to oust Theresa May as prime minister unless she abandons her ‘Chequers’ plan for the UK's future relationship with the EU.

IPSA, which regulates MPs’ expenses and business costs, raised concerns with the ERG earlier this year about its bank accounts. The watchdog asked for clarification from the ERG about “other sources of funding”, seeking assurances that public money was not being misused.

Before publishing our article this week, openDemocracy sent Rees-Mogg’s office all details of a disclosed email exchange between IPSA and the ERG outlining concerns about a second bank account and other funding. The group made no reply and has continued to remain silent.

Since 2011 the ERG has received over £300,000 in public funds. The money is paid to MPs for supposedly neutral, non-party-political pooled research. Current and former cabinet members who have channelled funds to the ERG include Michael Gove, Sajid Javid, Andrea Leadsom, Penny Mordaunt, Chris Grayling, David Gauke and David Davis.

One ERG bank account is designated for the funds it receives from IPSA. A second account, not known to IPSA in previous reviews of the group’s activities, held other sources of funding. The discovery of a second account prompted IPSA to seek clarification from the ERG about how the “separation” of private and public funding was maintained and whether appropriate rules had been followed.

Taxpayers footing the bill

The People’s Vote campaign, which are seeking to ensure the government’s Brexit deal is put to a full national vote, said the new revelations about the ERG’s accounts and funding “raised serious questions that had to be answered”. A campaign spokesperson said: “This is a group that receives taxpayers’ money. So the parliamentary authorities must now rightly investigate whether the taxpayer is footing the bill for a thinly veiled Brextremist lobbying organisation.”

Brake also said that the lack of transparency of the ERG, a group that could be critical to the outcome of an approved deal with the EU, was “yet another reason why the people should have the final say on Brexit”.

A deplorable silence

Ben Bradshaw, a former Labour cabinet member and a long-term critic of the ‘dark money’ used to fund the campaigns of anti-EU groups in the 2016 referendum and beyond, told openDemocracy that the ERG’s silence over democratic accountability was “deplorable”.

He added: “If, as the ERG now claim, they are interested in policy and not leadership issues, then they should publish their full membership list and open their account to full public scrutiny. Anything less will show they have something to hide. So far all they have revealed is disdain for the electorate, who they supposedly regard as simply an administrative inconvenience.”

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