UKIP in The Supreme Court: Party could face bankruptcy

UKIP’s legal representatives will be fighting for the party's political life over the next two days.

They are to face ELCOM in The Supreme Court.

The case concerns illegal donations made by Alan Bown to UKIP between Dec 2004 and Jan 2006. The donations were illegal because Bown was not on the electoral register.

ELCOM warned UKIP on 67 separate occasions that the donations were illegal. UKIP’s leadership ignored EVERY warning and continued to take Bown’s money.

Andrew Smith – UKIP treasurer at the time – even recommended misleading ELCOM over their failure to comply with the rules:

From: "Smith Epping" To: "Geoffrey Kingscott" Cc: "Nigel Farage (UKIP)" ; "Douglas Denny"

Subject: Treasurers meeting

Thank you Geoffrey for organising the meeting. We need to give the Electoral Commission every reason to believe we are serious about compliance, in order to provide the next Party Treasurer with a good story to tell when we next fail to meet the statutory requirements.

They should be invited to any big regional meeting and to Party Conference to speak at least to a break-out meeting to Treasurers.

It would have been a suitable event for prospective Party Treasurers to learn a lot about what the job entailed. Were any of them there?

I thought the practical points which emerged, in the absence of the Electoral Commission, were a lesson for the NEC on what their priorities should be. The branches are crying out for better admin and they are full of good ideas.

I hope the NEC takes good notice of your report of the meeting.

AS

End of email.

Smith, despite this dishonesty was still allowed to become a UKIP MEP candidate!

In 2007, the Electoral Commission said it wanted UKIP to forfeit all Mr Bown's donations.

However, Westminster Magistrates' Court ordered the party to pay back only £18,481.

Elcom was going to accept the ruling. However, Farage couldn’t keep his big mouth shut.

Taken from a UKIP press release and originally published on the UKIP website in 2007:

Tuesday, 7th August 2007

Plans by the Electoral Commission to forfeit over a third of a million pounds from a political party have been overruled today. The Commission had demanded that the UK Independence Party forfeit £367,697 claiming the donations were impermissible.

But a judge has ruled that the party need only pay about 5% of the total requested: a £4000 cheque from a company based in the Isle of Man and the last seven donations, totalling £14,481, from Mr Alan Bown, who was inadvertently not on the electoral register in 2005.

UKIP leader Nigel Farage said he was absolutely delighted at the ruling by the judge, but condemned the Electoral Commission and said that if they had been sensible, the case need never have seen the light of day in the first place.

"The Electoral Commission used this case as a way to make up for their complete failures over the cash for honours scandal and the £2.4m donations to the Liberal Democrats by a man now in prison" said Mr Farage.

"They decided to kick the smallest boy in the playground to justify their own existence, thinking that we would not be able to fight back. There was no element of proportionality in their decision which would have been disastrous to smaller parties had they had their way.

"We have always admitted that we made mistakes over these donations, but they were human error, rather than evasion.

"Other parties have full time treasurers and receive money from the tax payer towards running costs, but a small party like UKIP does not have these luxuries.

"If Mr Bown's company had given the money there would not have been a problem, and a good regulator would have seen this case and discussed it properly with us.

"Unfortunately, we do not have a good regulator, only the Electoral Commission who, instead of behaving sensibly, decided to throw all their toys out of the pram. If they had been less intransigent a lot of time and money would have been saved."

The party expresses particular thanks to the legal team of Alan Newman, QC. and Danny Dionissiou from Moreland solicitors, who were recruited by party secretary Michael Zuckerman.

End of statement.

Is it any wonder that ELCOM saw red and decided to fight on?

It is also interesting to note that David Abbott - a member of UKIP’s NEC at the time - had advised Farage and Zuckerman to pay the £18,481 fine, apologise to ELCOM and move on:

“At the time of the original hearing the NEC had members who recommended paying the 18,000, admitting the party's 'error' and getting on with campaigning. The secretary (who is a famous West End lawyer, according to Mr Farage), and Mr Farage himself were ardently against this sensible approach.”

Farage and Zuckerman were having none of it.

The commission took the case to the Court of Appeal, arguing that all the donations should be forfeited. Three judges ordered the magistrates' court to change its original decision.

UKIP was ordered to forfeit £363,697.

The Court of Appeal said the gifts from retired bookmaker Alan Bown between Dec 2004 and Jan 2006 were illegal because he was not on the electoral register.

Party leader Nigel Farage threatened to appeal against the ruling, saying: "There is a very real danger that this could put UKIP out of business."

The money would go to the Treasury, not back to Mr Bown.

UKIP estimated that their total bill, including legal costs, could reach £750,000.

This is UKIP's response to the news that the Court of Appeal had ruled in Elcom’s favour. A copy was sent out to all UKIP members on email:

The UK Independence Party is stunned and disappointed by today's Court of Appeal judgement in favour of the Electoral Commission.

UKIP had already achieved a partial victory in the case, as Judge Tim Workman ruled in August 2007 that the ommission of donor Alan Bown's name from the electoral register of 2005 was "a genuine and inadvertent error".

The Party will now be seeking leave to appeal.The financial ramifications of the judgement will be significant, with the legal costs on top of the £350,000 forfeiture an added burden to the Party which does not have the funds available to meet the debt at this time.

UKIP Leader Nigel Farage said: "Something extraordinary is going on here. It is acceptable under the rules for Lakshmi Mittal, the Indian businessman, to give millions of pounds to the Labour Party and for the Liberal Democrats to be allowed to keep £2.4 million from an impermissible donor who has since received a lengthy prison sentence, yet the Electoral Commission goes on kicking the smallest boy in the playground!"

End of statement.

So once again Farage blamed everyone but himself.

UKIP’s leadership and their supporters also continued to claim that the party was only guilty of a trivial breach of electoral law due to an oversight by not checking whether their donor, Alan Bown, was on the electoral register.

So why did Andrew Smith advise misleading Elcom? Why did Farage, Zuckerman and Smith ignore repeated warnings from ELCOM?

There lies were exposed in a letter written by Peter Wardle, Chief Executive of The Electoral Commission. It dates from 2009 and was published in the Sunday Telegraph:

Ukip’s rulebreaking

SIR – It is not correct for Christopher Booker (October 25) to suggest that Ukip was guilty of only a “trivial breach of electoral law” due to an “oversight” by not checking whether their donor, Alan Bown, was on the electoral register.

The law is clear: political parties must check that a donor is on the electoral register each time they accept a donation over £200. Ukip chose not to do so on 67 separate occasions, over a period of more than a year, and despite repeated warnings from the Electoral Commission.

Ukip took donations it was not entitled to receive, which gave it financial resources it was not entitled to have under the law. Ukip accepted that these donations – which totalled more than £365,000 – were all impermissible. But the magistrates’ court ordered them to forfeit just £18,481.

The Electoral Commission’s view was that this treatment of one party which had not followed the rules was unfair to the majority that do follow the rules and which have previously forfeited impermissible donations. The Court of Appeal shared that view.

Christopher Booker also claimed that the Commission “seems unwilling to take further action” in relation to donations from 5th Avenue Partners to the Liberal Democrats. In fact, we are conducting an ongoing investigation into that issue.

Peter Wardle
Chief Executive
The Electoral Commission
London SW1

UKIP was given leave to appeal to the Supreme Court. And what if they lose? Costs will go beyond the £1 million mark.

UKIP faces financial ruin and oblivion thanks to the stupidity and arrogance of Nigel Farage, Andrew Smith and all those who colluded with them in this farce.

The Greeks called it Hubris.