Scottish Tory 'dark money' unit fined for failing to declare income

The watchdog said the SUAT had “consistently failed” to provide proper notification of its activities, and so failed to provide proper transparency.

The Scottish Tories were urged to "come clean" about its links to the operation.

THE SUAT said there had been "administrative errors", but no impropriety.

The largest fine, of £1300, was for failing to notify the Commission of political contributions made as an unincorporated association.

Two £250 fines were for failing to report donations as a members association.

The SUAT, which has been at the heart of a row over so-called ‘dark money’, or untraceable funds, accepted the findings and paid the fines last month.

The 50-year-old organisation has given the Tories more than £320,000 since 2001.

Until the SNP confronted Theresa May about it at Prime Minister’s Questions last year, the SUAT had never published accounts, declared its income, or named its trustees.

It was classed by the Commission as an “exempt trust”, meaning the Tories were not required to check whether its income came from permissible donors.

However after a lengthy investigation into its status, the Commission said today that the SUAT was not only an exempt trust, but also an unincorporated association and a members association, which must be more transparent.

The Commission concluded the SUAT was a permissible donor to political parties, and that monies it gave the Conservative and Unionist Party were properly reported by that party.

READ MORE: Questions piling up over Scots Tory donations 

However, as an unincorporated association, SUAT was also required to notify the Commission when it made political contributions of more than £25,000 in any calendar year within 30 days of the value of contributions reaching that point.

SUAT made political contributions exceeding £25,000 to the Tories in 2010, 2015, 2016, and 2017 but failed to provide the required notifications within the required timescale.

SUAT also failed to provide further notifications of any gifts it had itself received by the due dates. All of the notifications were delivered during the Commission’s investigation.

In addition, as a members association, SUAT was required to report donations it received that were over £7,500 to the Commission within 30 days.

SUAT accepted two donations which it failed to report on time: £50,000 on 6 February 2014 and £157,350 on 13 March 2017.

The largest donation to the SUAT was a bequest from a former trustee, Ann Hay, a former secretary of the Scottish Conservative and Unionist Association.

In June, the Herald revealed the chair of the SUAT has been named and shamed on  government list of tax cheats.

READ MORE: Scottish Tory fundraising chief listed by HMRC as 'tax cheat'

Businessman Robert Miller-Bakewell was included on HMRC’s public register of “deliberate tax defaulters” after owing the authorities almost £200,000 in tax and penalties.

It showed he incurred penalties of £60,512 in relation to capital gains tax of £138,313, and the “period of default” was between April 2012 and April 2015.

Mr Miller-Bakewell, of Melrose in Roxburghshire, has been the chair of the SUAT since 2012. 

He told the Herald at the time his tax affairs were up to date and he had “no outstanding liabilities” to HMRC, but failed to say if that was because he had paid them or denied owing the sums.

SNP MP Pete Wishart said: "There have been serious questions over the relationship between the Scottish Tories and the dark money Scottish Unionist Association Trust – today the shady links and dodgy donations have added further pressure on the Scottish Tories to come clean.

“The dark money scandal has been lingering around the Scottish Tories like a bad smell and we now know that serious offences have been committed by this shadowy organisation – including a damning indictment by the electoral watchdog that it had consistently failed to provide proper notification of its activities, and as a result, the public did not have the transparency it was entitled to.

"The links between SUAT and the Scottish Tories are at the heart of all of this and we need to know that this will not happen again, and that all further donations will be legal and transparent.

"Many current Tory MPs secured significant donations from SUAT which no doubt assisted them in their election campaigns. 

"Political parties cannot continue to treat electoral law as an afterthought and continue to be cavalier with their financial arrangements. Electoral legislation is in place to protect the electorate and ensure a level and transparent playing field. All political parties and their donors must abide by the laws. 

“Where SUAT will no doubt treat these derisory fines as petty cash I am grateful to the Electoral Commission for its investigation and outcome.

"We need to clean up Scottish politics and liberate it from 'dark money'." 

Green MSP Ross Greer said: "The Scottish Tories have been funded by dark money for years.

"Now this damning Electoral Commission report has been published, they need to urgently explain themselves.

"It is frustrating that the fines for this substantial number of violations totalled just a small fraction of the money actually funnelled through SUAT.

"The Electoral Commission desperately needs the power to deliver substantial fines and other enforcement mechanisms. Otherwise, the flood of dark money which is poisoning our politics will only continue."

Labour MSP  James Kelly said: "Hundreds of thousands of pounds of dark money has been syphoned into the Scottish Tories in recent years.

"Whilst it is welcome to see those who broke the rules be punished, it is disappointing that the fines levied against this Tory donor group is just a fraction of the money passed on to the party.

"The Electoral Commission must take pro-active action against the dark money that floods the Tories’ coffers instead of this type of reactive punishment which consists of just miniscule fines with no real consequences.”

Louise Edwards, the Commission’s director of Regulation, said: “The reporting requirements for members associations and unincorporated associations are clear, so it is always disappointing when regulated organisations fail to provide accurate reports on time.

“Properly, SUAT’s donations to the Conservative and Unionist Party were reported by that party and published so the public could see them.

“But SUAT consistently failed to provide proper notification of its activities as an unincorporated association and as a members association.

“As a result, the public did not have the transparency it was entitled to have of SUAT’s finances. The Commission will continue to enforce these requirements to ensure that voters have the information they need.”

A spokesman for the Scottish Tories said: “This is a matter for the Scottish Unionist Association Trust. As the Electoral Commission states, these donations were properly reported by the Conservative party.”

In a statement, the SUAT's trustees said: "The trustees are grateful that the substantive points have been found in SUAT’s favour, and its donations have been found to be permissible; the small fine relates to administrative errors.”