Sir Keir Starmer‘s chief of staff ‘hid’ a £50,000 donation on the very day he was told he had a legal duty to declare his funding.
Official documents reveal that Morgan McSweeney’s Labour Together think-tank received the cash injection on the same day the Electoral Commission confirmed in writing that he was required by law to report all donations of more than £7,500.
Despite the warning that donations must be declared within 30 days, it was kept secret for more than three years, by which time Mr McSweeney was working as Sir Keir’s chief of staff.
The news raises fresh questions about Labour Together’s claim that its failure to report more than £730,000 in donations in a three-year period was the result of ‘human error and administrative oversight’.
It also piles pressure on the Electoral Commission to reopen an investigation into the episode, which originally led to Labour Together being fined for more than 20 breaches of election law.
Tory chairman Kevin Hollinrake, who has urged the watchdog to call in the police over the ‘hidden’ donations, said: ‘This is just the latest staggering revelation about the
Morgan McSweeney scandal.
‘The Prime Minister’s right-hand man was warned by the Electoral Commission twice that he needed to declare donations, and yet engaged in an industrial-scale cover-up of a slush fund he used to install Keir Starmer as Labour leader – including the very same day he was warned by the watchdog.
Morgan McSweeney with Sir Keir Starmer in Downing Street
‘This scandal strikes right at the heart of Starmer’s government. The Conservatives have demanded a full investigation and will continue to fight until the public get the truth.’
Electoral Commission records show that the watchdog warned Mr McSweeney in November 2017 that he had a legal duty to declare donations – and told him to write a letter to explain why he had not been doing so. Mr McSweeney argued that Labour Together was not covered by the law as it was not involved directly in campaigning.
But the Commission wrote back to him on December 6, 2017, to confirm that the think-tank was considered a ‘members’ association’ under the law and had a duty to declare its funding streams. It told him: ‘As the board of Labour Together is mainly made up of Labour Party members, it is considered to be a Members’ Association… under the Political Parties, Elections and Referendums Act 2000, Members’ Associations fall under ‘regulated donee rules’…
‘For any permissible donation, a Members’ Association has up to 30 days from the day they accept it to report the donation.’
Despite the clear warning, Mr McSweeney failed to report a £50,000 donation received that day from hedge-fund boss Martin Taylor. It was not declared until February 2021, more than three years later and almost a year after Mr McSweeney left.
A leaked email revealed this week that Mr McSweeney told Labour lawyers he spoke to the Electoral Commission in ‘early 2018’ and was advised that Labour Together did not have to declare donations.
But top Labour lawyer Gerald Shamash told him that neither the watchdog nor Labour Together had any record of the conversation taking place. The scale of the undeclared donations meant there was ‘no easy way to explain how Labour Together finds itself in this situation’, Mr Shamash said.
He advised that it might be better to portray the episode as an ‘admin error’ and ‘not refer to you at all’ – a course the think-tank eventually deployed.
The crisis threatened to widen yesterday after Housing Secretary Steve Reed refused to answer questions about what he knew about the donations.
Instead, Mr Reed, who was on the board of Labour Together at the time, told BBC Radio Four’s World At One that the matter was ‘closed’ following the Electoral Commission’s first probe in 2021, in which it fined the think-tank a ‘relatively small’ £14,250.
Labour Together said it ‘proactively raised concerns’ about the failure to declare donations and ‘fully co-operated’ with the Electoral Commission investigation.
The Electoral Commission said its original investigation ‘proved beyond reasonable doubt that failures by the association occurred without reasonable excuse’. It added that it was considering the Tories’ request to reopen the inquiry.
