Dark Money and Democracy: Review of Peter Geoghan’S Democracy for Sale
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Dark Money and Democracy: Review of Peter Geoghan’s Democracy for Sale ‘Major changes are never impossible. Who would have thought that a coalition of people, working over two decades could convince a country to leave a major international organisation? But with a lot of perseverance, we managed to make history.’ Michael Elliott, founder Tax Payers Alliance and Vote leave. Political parties have always required money to project themselves into the democratic marketplace. Given their role of defending and advancing the interests of property holders and business, the Conservative Party has never wanted for rich donors and supporters. In its early days, the Liberal Party also could call upon rich business sponsors and, of course, Lloyd George supplemented such income by selling honours to those rich enough to buy them. Labour’s rise was funded by and still survives upon regular donations from UK’s trade unions. ‘Dark money’ is a term used to describe funding of legitimate political activities with money which has been funnelled in anonymously, often through ‘backdoors’ like ‘front’ organisation or offshore tax havens. Peter Geoghan’s superb and alarming book (2020), Democracy for Sale: Dark Money and Dirty Politics, Head of Zeus, analyses and assesses the impact of such dodgy finance but offers very much more. This book by a brilliant young investigative journalist, working for the website Open Democracy, also tells, in fascinating detail, the inside story of: the growth of Euro-scepticism to its triumph in 2016 and how the ERG - ‘a party within a party’ finessed the final victory; how the growth of social media gave the anti-EU cause a dangerously powerful tool which helped them succeed; and how the far right in western countries over the past decade has been enabled to advance often into government. He also explains how weak and insufficient official regulation plus transformative digital technology allowed these forces to grow its strength to a point where democracy itself is now in considerable existential danger. As he concludes: ‘Far from being an aberration, dirty politics is the new normal.’1 Geoghan identifies the far right as the major recipient of ‘dark money’ but should anyone think this is mere knee jerk left-wing criticism - I’m sure he’s no Tory - they should recognise the impeccable research behind the book. His story begins with a body established early in the new millennium. Tax Payer’s Alliance (TPA): This was set up in 2004 by 25-year-old Mathew Elliot, intent on applying American libertarian methods to British politics: it advocated ending the BBC’s licence fee and replacing the NHS by US style private insurance provision. Soon the TPA enjoyed a £1m annual turnover and employed a dozen staff. Elliott defended the right of those donating to ‘charities and campaigns’ to remain anonymous. Investigations revealed funding came mostly from Tory donors like JCB’s Anthony Bamford, billionaire banker-businessman, Peter Cruddas (former co Treasurer of the party) and the unconvincing ‘front’ organisation the Midlands Industrial Council.2 In 2011 Elliott was appointed to lead the campaign against the referendum proposal to change the UK voting system from First Past the Post to the Alternative Vote. It focused on finance, claiming it would cost £250m to deliver AV. The crushing 2-1 victory of No to AV meant Elliott, already friends with anti-EU zealot, Daniel Hannon, was a natural to set up the 2016 Brexit campaign, Vote Leave. Elliott also, daringly, hired maverick firebrand, Dominic Cummings, who had earlier, using tabloid style stunts and financial arguments, 1 Peter Geoghan (2020), Democracy for Sale, Head of Zeus, p6. 2 Ibid, p18. successfully defeated the referendum campaign to establish a regional assembly in the north east. UK Election Laws and the Brexit Campaign: These laws comprise 50 Acts and 170 statutory Instruments; expert in this area, Gavin Millar QC, is quoted as saying ‘almost no one knows how it all works’. 3 This might explain why Vote Leave’s cavalier spending during the campaign was never properly called to account. Another strong factor was that the maximum fine for breaking UK election law is only £20,000 - small change to causes with deep pockets filled from dubious sources. Moreover - one of democracy’s perennial weaknesses - there is no check on the veracity of claims made during campaigns. During the last three days of the campaign Vote Leave placed millions of Facebook ads spreading outright lies about immigration: one claimed, ‘Turkey’s 76 million people are being granted visa-free travel by the EU.’ Turkey, of course had only applied for EU membership but had no chance of being allowed in. Cummings admitted that without the Turkey ploy plus the false NHS/£350m red bus claim, Remain might have won the vote. In the wake of the Leave victory, there was almost no calling to account of the campaign’s excesses. DUP used as ‘Front’ to Avoid Overspending: It seems almost certain that Vote Leave channelled close to half a million pounds via Ulster’s DUP into the UK campaign to avoid breaching ‘spending limits imposed by election laws.’4 This money, ‘donated’ by a fictional organisation called the Constitutional Research Council was then used to conduct and fund the campaign elsewhere in the UK. Arron Banks, Cambridge Analytica and Brexit: Businessman with South African connections whose wealth has never been fully explained; had tried several times to be elected, without success (just like Farage) so clearly had political ambitions. After the Referendum was announced, Banks donated £1m to UKIP and later a total of £8.4m to anti-EU causes plus many gifts in kind – staff, offices etc; a record donation by anyone in British political history. Cambridge Analytica (CA) was favoured as a possible source of using psychographic techniques to target political ads - it was bankrolled by Trump backer, billionaire hedge funder, Robert Mercer and his daughter Rebekah who sat on CA board and also backed Breitbart run by Steve Bannon. These techniques have been viewed by many as undermining democracy in that they can provide political campaigners with such a wealth of data that, using new digital techniques, voters’ opinions can be divined and voting behaviour predicted, thus providing huge advantages to its users. Banks was rumoured to have broken election laws by overspending and external donations both of which he fiercely denied plus dodgy connections with the Russian ambassador and interests within Russia; Banks also had a Russian wife. He claimed his South African diamond mines were worth £100m but Channel 4 inquiries revealed they had not produced more than a few low standard diamonds. Banks took out a loan from his offshore business to cover his spending on the referendum. He won his case against the Electoral Commission re overspending; however, the case proved it was legal for companies in offshore to underwrite political donations: a virtual open door. 3 Ibid, p25. 4 Ibid, p89. Electoral Law and Foreign Dark Money: Foreign interests can set up shell companies purely for the purpose of donating to political causes- the Electoral Commission accepted this was a ‘weakness in the law’.5 In 2016 Britain First (member of which murdered Jo Cox) set up a shell company - Albion Promotions - to hide £200,000 of donations; it was dissolved before any source of donations could be identified. Anyone not resident in UK for tax purposes or not domiciled in UK (‘non doms’) are banned from giving more than £7500 to a political party. But parties can raise millions from abroad: Tories received £5.5m from tax haven donors 2009-19. ‘The vast offshore empire that runs through Britain is tailor made for secretive donations…Future political donors will be able to make campaign contributions through secretive companies in the Isle of Man, Gibraltar and other offshore vestiges of empire…. In the US it’s the ‘super PACs which are used to funnel vast sums of dark money into the political system.’ Spending caps apply only to the period of the election campaign itself so any amount can be spent before and after. Electoral rolls are for use only during campaigns but Banks, via Leave EU – the Farage rival to Vote Leave - retained the data and used it to advance adverts for his insurance businesses including Eldon; he was fined £120,000. The European Research Group (ERG): Geoghan begins the provenance of this body by recounting how, back in the 1990s, James Goldsmith invested £20million of his own money into supporting Euro-scepticism.6 His own attempt to defeat David Mellor in Putney in 1997 failed: he memorably and ‘maniacally’ led chants of ‘out, out, out!’ when Labour took the seat. The ERG began as a group of Tory MPs who had lunchtime meetings during the 1990s, with Daniel Hannan - intent upon breaking up the EU - as its motivating force; Steve Baker later became its organising and transforming core. Baker’s attendance at an American Principles conference on global finance in 2015 drew him into the orbit of ‘dark money - funded US conservative groups.’; the Koch brothers and Robert Mercer - all billionaires - being the financial source.7 Baker also joined the Freedom Association - dubbed by David Baddiel as a ‘slightly posher version of the BNP’: the BBC apologised when Baker complained. On the ERG, Geoghan comments, ‘rarely has a pressure group exerted so much influence on a governing party’; of course, May’s vanished majority handed unusual power to the faction, but Baker’s militant stewardship maximised its control over May’s Brexit direction; even when he and his successor, Suella Braverman, were given ministerial office, Baker maintained his control.