Vote Leave, the official pro-Brexit campaign in the EU referendum, is being investigated for potentially breaking strict electoral law.
The Boris Johnson-fronted organisation is under investigation by the election watchdog over payments of more than £600,000 it made to a fashion student just days before the historic vote.
Darren Grimes was given £625,000 by the group in the days leading up to the June 23 vote, with a further £50,000 handed over by a Leave backing donor.
A donation of £100,000 to the anti-EU Veterans for Britain group is also being looked into.
If it is confirmed that these donations pushed Vote Leave over the £7million spending limit imposed by the Electoral Commission in the run up to the vote, the police could bring charges against those running the organisation.
Bob Posner, the Electoral Commission’s Director of Political Finance and Regulation and Legal Counsel, said: “There is significant public interest in being satisfied that the facts are known about Vote Leave’s spending on the campaign, particularly as it was a lead campaigner with a greater spending limit than any other campaigners on the ‘leave’ side.
“Legitimate questions over the funding provided to campaigners risks causing harm to voters’ confidence in the referendum and it is therefore right that we investigate.”
A spokesperson for the Commission confirmed Vote Leave could be hit with a £20,000 fine and the case could be referred to the police if the law has been broken.
Earlier this year the Commission looked into claims the group had breached the spending limit, but decided no action should be taken.
But more information has now come to light which has given the watchdog “reasonable grounds to suspect an offence may have been committed”.
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Grimes, who now works for the anti-EU website Brexit Central, ran a young-people focused campaign called BeLeave, listed as an “Outreach Group” on Vote Leave’s website.
Under electoral law, the money paid to Grimes by Vote Leave would count towards the official limit if there was coordination of activities.
Speaking earlier this year, Grimes said the money was spent on a Canadian political consultancy firm called AggregateIQ.
He told BuzzFeed: “AggregateIQ helped us reach as many people as possible.
“As a digital campaign targeted toward millennials, it was essential we reached our target audience.
“AggregateIQ used video advertising, Google Ads, landing pages on our website to inspire sign-ups and help us get out the vote on polling day using text messages and newsletters.”
Despite describing BeLeave as a “digital campaign” the group’s Twitter account has only 4,129 followers, while its Facebook page no longer exists.
Veterans For Britain was handed £100,000 by Vote Leave on May 20, 2016, with a further £50,000 coming from Better For the Country Ltd.
Ahead of the referendum, the Electoral Commission published clear guidance on the rules governing groups working together, warning that “campaigners need to be very careful that they understand the rules on working together. If campaigners don’t follow the rules they may breach their spending limits.”
The document added: “Working together means spending money as a result of a coordinated plan or arrangement between two or more campaigners during the referendum period that is intended to, or is otherwise in connection with, promoting or bringing about a particular outcome in the referendum.”