How dark money enters UK politics through illegal donations?
By Tajul Islam
In recent years, the integrity of the UK’s democracy has come under increasing threat from foreign interference.
From AI-driven disinformation campaigns to cyberattacks on the Electoral Commission, authoritarian regimes, particularly Russia and China, have developed sophisticated strategies to disrupt democratic processes.
However, one critical element of UK politics that leaves the system vulnerable to exploitation is the growing reliance on private donations, a trend that has parallels with the money-dominated political landscape of the United States.
Recent statistics indicate that political parties in the UK received a staggering £55.5 million in donations from April to June 2024, marking one of the highest quarters on record.
This surge is accompanied by changes in spending limits; in 2023, then-Secretary of State Michael Gove raised the cap on campaign spending from £30,000 per constituency to over £54,000, citing inflation since the year 2000.
This increasing dependency on large donations creates a fertile ground for individuals willing to exploit the system, placing their financial backing behind their preferred political party while circumventing existing regulations.
The influx of foreign money into UK politics raises serious concerns about the potential for undue influence over political decisions.
A stark example is the $630,225 donation made to the Conservative Party in February 2018 by Ehud Sheleg, a British-Israeli art dealer.
This donation was part of a fundraising campaign that significantly aided Boris Johnson’s victory in the 2019 general election.
It was later revealed that the funds originated from a Russian account associated with Sheleg’s father-in-law, Sergei Kopytov, a former pro-Kremlin politician.
Such instances underscore how foreign donations can serve the interests of external parties rather than the British electorate.
In July 2024, the Bureau of Investigative Journalism (TBIJ) conducted a probing investigation into the ability of the six major political parties to detect and prevent illegal donations.
The investigation involved arranging payments from an individual not on the UK electoral roll, with total contributions exceeding £500—the legal threshold for political donations in the UK.
Alarmingly, five out of the six parties accepted the funds without questioning their legitimacy.
While one might assume that the issue revolves around individual donors, it is, in fact, just the tip of the iceberg. Since 2020, more than £13 million has been funneled into political parties through “unincorporated associations,” a loophole that has been heavily exploited, with nearly two-thirds of these funds benefiting the Conservative Party.
Unincorporated associations are informal groups formed for a common purpose, such as community organizations or religious congregations.
These entities are not required to file annual financial statements or maintain official accounts, making them highly opaque.
Under current UK law, an unincorporated association is not obliged to register with the Electoral Commission unless its political contributions exceed £37,270 in a calendar year.
Even then, it can avoid disclosing the origins of the money.As highlighted by Gavin Millar KC, a leading expert in election law, unincorporated associations can act as front donors, allowing funds from impermissible sources to flow into UK politics undetected.
A report published by the Committee on Standards in Public Life in July 2021 warned that these associations offer a channel for foreign money to influence UK elections.
The report recommended that donations should originate from profits generated within the UK, but no legislative changes have followed.
The onus to disclose the source of funds lies with the person acting on behalf of the donor. However, this self-regulation allows for significant evasion of scrutiny.
If a British citizen, such as the wife of a Russian oligarch, donates in her own name while registered on the electoral roll, authorities are likely to accept the donation without further investigation.
The existing framework relies heavily on self-reporting, which is inherently flawed.
Millar illustrates this vulnerability with a hypothetical scenario: authorities may simply accept the donation from an individual on the register without delving deeper into the origin of the funds.
This creates a significant loophole, one that has not gone unnoticed by experts advocating for reform.
Millar argues that the current system’s vulnerability is largely due to the reliance on self-regulation by both parties and donors, coupled with weak enforcement mechanisms.
“There is no state entity with the powers and resources needed to properly regulate the system. Neither the Electoral Commission nor the police are equipped for this task,” he asserts.One proposed solution is to pivot away from private funding altogether.
In the European Parliament, the majority of party funding is sourced from public money allocated from the EU budget, which minimizes the influence of wealthy individuals and foreign entities seeking to make large donations.
In 2021, for example, about 80% of a typical European party’s funding was derived from this public pool, significantly reducing the necessity for private donations.
Shifting to a public funding model, where resources are allocated based on the number of elected representatives, could mitigate the risks associated with private donations.
This would create a more equitable system, less susceptible to external influence and manipulation.
Implementing such substantial changes to the political funding landscape would require the party currently in power to take the initiative in reforming the very system that has benefitted them.
This is an unlikely scenario, given the entrenched interests at play and the reluctance of parties to relinquish their financial advantages.
The risks posed by dark money and foreign influence will likely persist unless a collective effort is made to address the existing vulnerabilities within the system.
As the debate over the future of political funding continues, the focus must remain on safeguarding the democratic process from exploitation.
Only through transparency, accountability, and significant reform can the integrity of the UK’s political landscape be protected from the corrosive effects of dark money and foreign interference.
