Arron Banks, one of the main financial backers of the Brexit vote, has been referred to the UK’s National Crime Agency for criminal investigation.
The referral follows a 12-month investigation by the Electoral Commission – which regulates elections and referendums in the UK – into £8 million of loans made by Banks and his company, primarily to the UKIP-affiliated Leave.EU campaign.
The Electoral Commission alleges that Banks and his associates lied about, and faked documentation on, the source of the £8m in funding he provided to groups supporting the vote to leave.
Banks, who made his money in the insurance industry, has claimed that the funding originated from himself and from his UK-based company Rock Services Limited, both of which are legally allowed to donate to the referendum.
However, the Electoral Commission says that the funding actually came from a shareholder loan to Banks from another company he owns – Rock Holdings Limited, which is based in the Isle of Man.
Because this is not a UK-based company, and it does not trade in the UK, this business is not allowed to donate to the campaign – meaning this money would be an inadmissible donation.
Banks and some of his associates then allegedly worked to cover up the true source of the funds, even – according to the Commission report – falsifying accounts to make it appear that Banks’ shareholder loan had come from his UK business rather than the Isle of Man.
The Commission, however, says Banks’ UK-based company did not have enough money to have provided the loan for the donation itself.
This is, for now at least, the core allegation against Banks, and what the electoral commission means when it says Banks was “not the true source” of the funds: it is not (yet) accusing Banks of acting as a front for someone else, but rather saying he dishonestly funded pro-leave campaigns from a company which could not legally do so.
These are very serious allegations, which include potential electoral offences but which could also attract criminal charges around false accounting and other issues against Banks and others around him.
Banks denies all the allegations, and as the matter has only today been referred to the National Crime Agency the investigation will likely go on for quite some time still.
However, if the allegations are proven it does not just spell a potential headache for Banks, but raises significant questions for other Brexiteers – even if it wasn’t the official Vote Leave campaign he was funding.
Banks was the source of £2.9 million of “regulated” campaign spending (the other £5 million was from outside the key period), which is almost 20% of the entire pro-leave spend. If this is found to have been an illegal contribution, it will raise yet more concerns around the legitimacy of an already contentious vote.
Expect all eyes to be on the NCA in the coming months.