Keir Starmer‘s chief of staff ignored official warnings that he had to declare hundreds of thousands of pounds in political donations, the Daily Mail can reveal.
Records released by the Electoral Commission show Morgan McSweeney was told explicitly in November 2017 that donations to his Labour Together think-tank were covered by electoral law and had to be declared.
Despite this, he failed to declare nearly £740,000 in gifts over the following three years. Labour Together was later fined for more than 20 breaches of electoral law involving undeclared donations.
The revelation piles further pressure on Mr McSweeney to set out exactly why he failed to declare huge sums of money at a time when he was throwing Labour Together’s organisational weight behind Sir Keir’s bid to become Labour leader.
Tory chairman Kevin Hollinrake has accused Mr McSweeney of ‘hiding’ donations in breach of the law – and has urged the commission to call in the police.
Last night, he told the Daily Mail: ‘The facts are clear. Morgan McSweeney engaged in a significant cover-up of a secret slush fund that he used to install Keir Starmer as Labour leader.
‘No matter what spin Labour try and use, these documents and the leaked legal letters show that there is now nowhere for the Prime Minister’s chief of staff to hide, even as Starmer continues to demonstrate his appalling judgment by backing him.
Keir Starmer’s chief of staff, Morgan McSweeney, ignored official warnings to declare hundreds of thousands of pounds in political donations (Sir Keir and Mr McSweeney pictured together)
‘The Conservatives will not let Labour get away with this.’
A leaked email this week revealed that Mr McSweeney told Labour lawyers he spoke to the 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 told Mr McSweeney that the commission ‘have a record of a number of calls with Labour Together but none with you’.
Mr Shamash warned that unless Mr McSweeney could back up his claim it risked antagonising the commission, which had launched a major investigation into the issue.
He advised that it might be better to portray the episode as an ‘admin error’ and ‘not refer to you at all’ – a course of action the think-tank eventually deployed.
But although the Electoral Commission has no record of a call with Mr McSweeney in 2018, it does have details of a call with him the previous year in which he was told that Labour Together had to declare its donations because it was a ‘members’ association’ engaged in political activity.
Officials told the think-tank’s then director that he should declare all donations immediately and write to explain why he had not been doing so.
A summary of the call reads: ‘Labour Together have not been reporting donations to us. Mr McSweeney was under the impression that Labour Together did not have to report because they do not campaign. However, Labour Together is a registered members’ association on our system… I advised him to report the donations to us with a cover letter saying why they had not been reported sooner.’
The watchdog followed up the next month, explaining Labour Together’s legal duty to report all donations of more than £7,500.
The clear-cut warning raises fresh questions about why Mr McSweeney continued to claim Labour Together was not required to declare its funding.
The clear-cut warning raises fresh questions about why Mr McSweeney continued to claim Labour Together was not required to declare its funding
Mr McSweeney left the think-tank in 2020 to work for Sir Keir. It was only then that his replacement, Hannah O’Rourke, found almost three years of donations worth £739,000 had not been declared and filed a series of ‘late’ declarations to the commission.
In September 2021, the Electoral Commission fined Labour Together £14,250.
Tory MP Alex Burghart said the leaked email from Mr Shamash ‘seems to show that Labour Together… deliberately withheld information from the Electoral Commission about donations it had received’. He told BBC Radio Four: ‘This is incredibly serious – it is a criminal offence to deliberately withhold information from the Electoral Commission about money you have received.’
But work and pensions secretary Pat McFadden said he had full confidence in the PM’s ‘very talented’ chief of staff and described attacks on him as politically motivated.
Labour Together declined to comment on the latest revelations. A Labour source said: ‘This was thoroughly investigated years ago and action was taken. The Tories can sling mud all they like, it doesn’t change the facts here.’
The commission said it would respond to Tory requests for a fresh investigation ‘in due course’.
