SNP urged to explain 'extraordinary coincidence' in finance row

And when pressed on when she first knew her husband gave the party she leads a £107,000 loan to help bail out its finances, she replied: “I can’t recall exactly when I first knew that.”

Maybe it’s a Monday thing. 

Or perhaps the First Minister, famed for her grasp of detail, is getting jumpy. 

Although Bryson had been headlines for days, the controversy over the loan seemed to blow over in December, and she may have assumed it was long gone.

If she did, she was mistaken.

The next day, the Herald revealed the loan and two part repayments had caused three breaches of Electoral Commission rules because of late reporting, although the Commission

had let the party off with “guidance” because of its otherwise clean record.

Today, the Herald on Sunday can reveal scrutiny of the SNP’s finances, potentially including the loan, is being stepped up by Police Scotland as part of a long-running fraud inquiry.

Operation Branchform was launched in July 2021 after the independence activist Sean Clerkin lodged a complaint about possible fraud involving hundreds of thousands of pounds raised for a second referendum that seemed to have melted into the SNP’s books. 

Like many a political headache, the saga has its roots in Brexit. 

On 13March 2017, Ms Sturgeon stood in the drawing room of Bute House and announced plans for a referendum to give Scots a choice between staying in the UK with Brexit or independence and remaining in the EU.

The same day, her husband, the SNP chief executive Peter Murrell, launched a fund-raising website, Ref.scot, with a target of collecting £1million.

He axed the crowdfunder four months later after the party lost 21 of its 56 MPs in June’s snap general election, by which time it had raised £482,000.

Despite Ms Sturgeon being forced to “reset” her Indyref2 plans, the party promised the money was “earmarked” and would “only be used for the specific purpose of a referendum campaign”.

The SNP also appealed for funds on its Yes.scot website, saying donations would be used to send an independence prospectus to all 2.4million homes in Scotland. It never happened.

With no sign of the booklets or a major campaign, some SNP supporters started grumbling about what became of the money that was raised. 

It was mostly low-level, but it became a roar in October 2020 when the SNP’s annual accounts for 2019 came out and showed the party had £97,000 in the bank and £272,000 in reserves. That was a lot less than the Yes.scot cash and the £482,000 ringfenced for Indyref2.

With the influential Wings Over Scotland website leading outrage about a missing fortune, SNP treasurer Colin Beattie issued a statement intended to “quash rumours” and social media “conspiracies”, but which only generated more controversy.

He said the Referendum Appeal Fund had a current balance of £593,501 that could be deployed “instantaneously”. 

READ MORE: Sturgeon 'can't recall' when she knew husband loaned SNP £107,000

He also claimed no political parties separated out such ringfenced, or “restricted”, funds in their accounts. In fact, the SNP used to do it until a few years ago, and the Scottish Greens and Scottish Liberal Democrats still do.

In a now infamous phrase, Mr Beattie said the referendum donations were “woven through” the accounts.

The following month, SNP members elected a raft of new faces to the party’s ruling body, the National Executive Committee (NEC), including, significantly, a new treasurer.

Mr Beattie was replaced by the Dunfermline MP Douglas Chapman. MP Joanna Cherry KC was also brought on to the NEC. Neither would last long.

On 20 March 2021, three members of the SNP’s finance and audit committee quit at an NEC meeting after being refused access to the party’s books, including Frank Ross, then Lord

Provost of Edinburgh, and two activists later to join Alex Salmond’s Alba party.

A week later, after reading about the resignations on Wings Over Scotland, Mr Clerkin gave a statement to two officers from Police Scotland’s Financial Investigation Unit.

At the start of April, Wings Over Scotland reported the police complaint had been lodged, generating more bad headlines for the SNP, at what was already a fevered time for the party.

For months, Scottish political life had been dominated by the feud between Mr Salmond and Ms Sturgeon about the Government’s botched inquiry into misconduct claims against him. Mr Salmond had claimed Mr Murrell had been part of a plot to ruin him.

Both first ministers had given evidence to a Holyrood inquiry, whose opposition majority concluded Ms Sturgeon had misled parliament. That verdict came out on 18 March 2021.

READ MORE: SNP loan from Sturgeon's husband led to multiple rule breaches

On 26 March, Mr Salmond launched his Alba party. With Wings Over Scotland close to Mr Salmond, many in the SNP concluded the stories about missing funds were simply designed to damage their party and boost Alba.

But after the election, in which Alba flopped, the bad news kept coming. 

At the end of May, Mr Chapman resigned as treasurer after just five months, saying SNP HQ had denied him the financial information he needed to do the job properly.

Ms Cherry then quit the NEC saying she had been prevented from improving “transparency and scrutiny”. 

Because Mr Chapman quit with immediate effect, Ms Sturgeon became acting treasurer for four days under Electoral Commission rules, before Mr Beattie was reinstalled on 3 June.

On the same day, the SNP leader told an STV reporter: “I’m not concerned about the party’s finances. Money hasn’t gone missing.”

However some SNP members continued to have concerns, and a few even asked for their donations back.

As the police continued their preliminary inquiries, on 19 June 2021, the NEC discussed the referendum appeal and Mr Beattie issued another long statement to members about it.

He said £666,953 had so far been raised and faithfully earmarked for independence campaigning, and “an amount equivalent to the sums raised” would be spent as and when required.

Despite the lack of Indyref2, he also said that by the end of 2020, the party had already spent £51,760 of the money. 

In an intriguing phrase, Mr Beattie added that he and Mr Murrell had “responsibility for managing cashflow and ensuring that all liabilities are met when they fall due”.

The very next day, barely a fortnight after Ms Sturgeon insisted she wasn’t concerned about the SNP’s finances, Mr Murrell felt it necessary to lend the party £107,620 to “assist with cashflow”.

The Electoral Commission confirms that 20 June 2021 this was the official “start date” of the arrangement.

A spokesperson said: “As set out in electoral law, this is the date the transaction was entered into, so this would be the day the parties involved in the transaction agreed to it.”

On 13 July 2021, after receiving a further six complaints about SNP donations and consulting with prosecutors, the police launched a full blown investigation into potential fraud around the SNP’s fundraising.

Giving the timing of the June NEC, Mr Beattie’s statement and Mr Murrell’s loan, the Scottish Conservatives this weekend said it would be an “extraordinary coincidence” if the loan and the referendum fund issues were not linked in some way. 

The SNP has refused to say if the two are connected.

If they are tied, that could bring the loan into the scope of the police inquiry, making life more uncomfortable for Mr Murrell and Ms Sturgeon.

All loans to political parties above £7,500 must be reported promptly to the Electoral Commission, and the SNP should have declared Mr Murrell’s to the watchdog by the end of July 2021.

It wasn’t reported for a year. Two part repayments were also declared late. 

Since the SNP came to power in 2007, the party has received 17 loans from banks and individuals, ranging from £4,000 to £500,000. All were reported on time to the Electoral Commission. Only the loan from Mr Murrell was not.

His identity was also disguised in the SNP accounts for 2021, where the loan’s source was given as “executive management” rather than Mr Murrell by name.

When Wings Over Scotland reported the loan’s existence in December, the SNP said it was a “personal contribution” by Mr Murrell to “assist with cashflow after the Holyrood election”.

However, the SNP has refused to say if the loan was needed because of election campaign costs, or was simply given “after” the election chronologically.

Police Scotland were asked in December to add the loan to their fraud probe. An officer from the Financial Investigation Unit told a complainer he had “made a note of this for review”.

Last month Mr Clerkin publicly complained about the length of time the police investigation was taken, saying it appeared to be no further forward almost two years after his initial complaint.

That now appears to be changing.

The Herald on Sunday understands officers have contacted SNP figures ahead of taking detailed statements.

The SNP was asked yesterday whether the First Ministerr or Mr Murrell were due to speak to the police, but the party did not reply. 

Scottish Tory chairman Craig Hoy said: “Nicola Sturgeon has serious questions to answer over this extraordinary coincidence in relation to her husband loaning his employer a six-figure sum. These questions are not going away and the situation is getting

increasingly murky for those at the very top of the SNP.

“Now that this timeline has been revealed it is little wonder the First Minister was so evasive about this when she was questioned by the press at her podium on Monday.

“The public will quite rightly be concerned that the SNP’s CEO and husband of the first minister loaned over £100,000 to assist with cashflow issues only a day after the party’s treasurer had sought to reassure members over their referendum related donations.

“This stinks of SNP secrecy and it is time those involved were fully transparent with the public about what exactly went on here.”

The Herald on Sunday put a series of questions to the SNP about the loan, including whether it was linked to the referendum fund, whether it was discussed by the NEC, when Ms Sturgeon first knew about it, and why £60,000 of the loan had yet to be repaid more than 18 months later.

In response to the questions, an SNP spokesperson said: “We’ve set out previously that this was a personal contribution made by the chief executive to assist with cashflow after the 2021 elections. The Electoral Commission has issued the party with guidance, and we’re determined to restore our good compliance record.”

A Police Scotland spokesperson said: “A report which outlines enquiries already undertaken and seeks further instruction has been submitted to the Crown Office and Procurator Fiscal Service. We are working closely with COPFS as the investigation continues.”

A spokesperson for the Crown Office and Procurator Fiscal Service said: “A Police Scotland request for advice and direction has been received. COPFS will continue to work with police in this ongoing investigation.”