Brexit campaigners spending was “unusual”, emails show

The Electoral Commission believed that spending by prominent Leave campaigners in last year’s Brexit referendum was “unusual” but did not warrant a formal investigation, according to internal emails.

The case centres around a young fashion student from County Durham called Darren Grimes who registered a pro-Brexit social media campaign in March 2016.  Called BeLeave, it was aimed at persuading young people to vote to quit the EU. At first, not many people noticed.

Since the referendum, though, Grimes – now deputy editor at BrexitCentral – and BeLeave have been the subject of much more public interest. And now, a string of emails released under freedom of information (FoI) law to WhatDoTheyKnow and given to The Ferret and openDemocracy shows the full scale of the loophole in Britain’s electoral rules exploited by Grimes and Vote Leave.

In its first ten weeks, BeLeave raised the sum total of £107 for its activities. But, as was widely reported, in ten days before the Brexit referendum, Darren Grimes spent more than £675,000 on a pro-Brexit social media campaign. At the time of writing BeLeave had a sum of 4,135 followers on Twitter. Its Facebook page appears to have been taken down, but was reported on Buzzfeed to have reached fewer than 6,000 fans.

But, as the FoI responses show, Darren Grimes didn’t actually spend any of the £675,000 himself. All the donations were paid directly by pro-Leave campaigners to AggregateIQ, to cover BeLeave’s bills for its social media campaign. In all, Leave campaigners spent over £3.3m with AIQ, a controversial data analysis company based in British Columbia that has been linked to Trump-backer Robert Mercer.

In internal emails the Electoral Commission describe Grimes’ spending as “unusual” and also find that he did break some of its rules. But the commission decided to take the matter no further as there was “no reasonable grounds” to believe that Vote Leave and Grimes had been working together, which would be prohibited under schedule one, paragraph 22 of the European Union Referendum Act 2015.

Campaigns are given spending caps to limit how much they can spend. If one campaign can simply get round its limit by donating to another, then the cap verges on meaningless. Legal experts and transparency advocates have questioned the Electoral Commission’s interpretation of the law on campaigners working together.

“In practice, if campaigner X is incurring bills in the knowledge that campaigner Y is going to pay those bills it is quite difficult to see that sensibly as anything but working together,” says Jolyon Maugham QC, one of Britain’s leading barristers.

“I find it quite difficult to see how Vote Leave would have paid this student’s bills unless he was incurring expenditure that they were happy with and had been prepared to approve in advance.”

Duncan Hames, director of policy at Transparency International UK said: “It is almost inconceivable that campaigners would donate to each other hundreds of thousands of pounds without some assurance or agreement as to what the money would be spent on.

“The idea that their use of the same principal service provider was somehow not co-ordinated but a mere co-incidence is as implausible as it is convenient for those campaigners investigated.”

Campaign spending limits

As a registered Leave campaigner, Grimes was permitted to spend up to £700,000 during the referendum. Earlier this year a Vote Leave source told a parliamentary committee that it had enlisted Grimes’s BeLeave campaign because it was close to breaching its £7 million spending limit and wanted to ensure all the money it had been given would be used. Under UK electoral law, this is fine – so long as there was no “plan or other arrangement” between Darren Grimes and Vote Leave about how the more than £675,000 was spent.

In order to avoid one registered campaign getting round its spending limit by simply setting up another and funneling extra money through that, campaigners are required by UK electoral law to declare if they are working together.

As the Electoral Commission guidance says, “working together means spending money as a result of a coordinated plan or arrangement between two or more campaigners”. If campaigns are working together, they have to declare expenditure together, which is designed to prevent them using such donations to get round spending caps.

There were controversies around joint working during the Brexit campaign. In February 2016, four months before the referendum, Tory MP Steven Baker, now a junior DExEU minister, told pro-Brexit colleagues that Vote Leave could “create separate legal entities each of which could spend £700k: Vote Leave will be able to spend as much money as is necessary to win the referendum.” A Vote Leave spokesman later had to clarify that “Steve would never encourage anyone to break the law”. .

In August 2016, Darren Grimes reported his campaign spending to the Electoral Commission on behalf of BeLeave. In email correspondence, Grimes told the commission that his spending “was done in isolation of Vote Leave Ltd”. He also initially told the commission that Vote Leave and another pro-Brexit donor had given BeLeave the money in cash. However, the true story is in fact more surprising than that.

Vote Leave didn’t actually give Grimes cash donations. Rather, Vote Leave paid the money directly to his sole ‘supplier’ AggregateIQ, a data analysis company linked to Trump-backer Robert Mercer that is based in small Canadian city, and which Vote Leave and other pro-Brexit campaigners spent more than £3.3m. Grimes confirmed that another donation – £50,000 from Vote Leave donor Anthony Clarke – was actually paid directly to AggregateIQ, too.

Grimes told the Electoral Commission that although Vote Leave paid his bills with AggregateIQ, they did not dictate what the social media campaign looked like.

“y understanding is that Vote Leave did not buy advertising services to gift to BeLeave but discharged BeLeave’s debt to AIQ by a transfer of cash at our request.

“It was a not a condition of the donation either that the donation be spent on advertising – but that is what we wanted to do given the limited time left in the campaign period and the nature of our campaign,” Grimes wrote to the Electoral Commission.

Grimes told the Electoral Commission that he had not co-ordinated with Vote Leave, although Vote Leave did directly pay AggregateIQ for social media on BeLeave’s behalf.

“We didn’t discuss with Vote Leave how we would spend the money apart from telling them that it was for our digital campaign and that is why we asked for the money to be paid directly to the company were working with AggregateIQ,” Grimes said. “Vote Leave had no say or input in our strategy or our campaign spending.”

The Electoral Commission found that by registering these donations as cash Grimes had misreported on his return “due to lack of understanding”. However, the commission decided that there were “no reasonable grounds” for suspecting that Vote Leave knew details of the social media campaign they were paying for on Darren Grimes’s behalf – knowledge which would have constituted ‘joint working’.

The commission ruled that a formal investigation was not in the public interest.

Potential co-ordination

On November 15, Buzzfeed journalist Jim Waterson wrote to the Electoral Commission asking if the commission was planning to investigate “potential co-ordination” between Vote Leave and Grimes’s campaigns.

In response staff said they “found no evidence that Darren Grimes and Vote Leave worked together in a way that broke the law… based upon what you have told us, we are content that there is nothing in the information you have provided below that needs us to re-consider this decision.”

In February 2017, the Electoral Commission launched an investigation into referendum spending by Vote Leave and Britain Stronger in Europe. The Commission also began looking at the role of AggregateIQ in the referendum campaign.

The Electoral Commission wrote to Darren Grimes again, this time asking him to “please explain why you chose to commission AggregateIQ in particular to undertake the work you reported in your spending return, rather than another company.”

In all, pro-Brexit groups spent more than £3.3m with AggregateIQ, with the vast majority recorded as official Vote Leave spending.

On 13 June 2016, Vote Leave paid AggregateIQ £400,000 for social media work on BeLeave’s behalf. There followed another payment of £40,000 on June 20, and £185,315 on June 21, just 48 hours before the Brexit vote.

Grimes is reported to have previously worked with Chris Wylie, a Canadian political strategist, who introduced AggregateIQ to Cambridge Analytica, the data company widely credited with propelling Donald Trump into power.

Writing on 3 March 2017, Grimes told the Electoral Commission that he decided to spend more than £675,000 with AggregateIQ after volunteering with Vote Leave and watching the US presidential election process.

“I attended some Vote Leave Ltd events during the campaign as a volunteer activist and socialised with some members of staff. I asked and was told that AIQ (AggregateIQ) was running Vote Leave’s digital campaign and I also became aware that AIQ had worked on Ted Cruz’s presidential campaign, that I was greatly impressed by. I was therefore confident that they could assist us in putting the proposed donation to effect in the time available,” Grimes said.

Grimes told the Commission that before Vote Leave approached him, his BeLeave social media campaign had struggled for funding, and for traction. “Until Vote Leave Ltd made me aware that they were in a position to make a donation and asked if BeLeave was able to make use of it we had not been able to put any funds behind pushing our messaging despite previous requests for donations.”

Grimes also reiterated that BeLeave had worked separately from Vote Leave. “Be Leave ran its own independent campaign from the outset and throughout, we did not take any instruction, collaborate with, or indeed discuss any aspect of our digital campaign, or out relationship with AIQ with anyone from Vote Leave Ltd, apart from the fact of the donation itself.”

The Electoral Commission also asked AggregateIQ about Grimes’s spending.

In March, AIQ president and CEO Zack Massingham told the Commission: “We did not discuss with Mr Grimes any of the work undertaken by AggregateIQ on behalf of Vote Leave Limited nor are we aware of any details being shared with Mr Grimes.”

Massingham also told the Commission that he had no reason to believe that Vote Leave and BeLeave were “not separate and distinct”. The Electoral Commission subsequently decided not to launch a larger investigation into Grimes’s spending.

Vote Leave and Grimes have both consistently said that there there was no coordination between the two campaigns. But barrister Jolyon Maugham QC says the Election Commission needs to do more to enforce its own rules.

“I think the British public deserves better than this from the Electoral Commission. It is the watchdog of our democracy. A true watchdog stands sentient and courageous. This looks more like the yearning for a quiet life of an ageing Labrador,” says Maugham in a detailed blog post on the issue of joint working.

Commenting Duncan Hames, director of policy at Transparency International UK highlighted the role of dark money in the Brexit referendum.

“Far from being the people’s plebiscite, the facts show the referendum campaigns were dominated by big money on either side of the debate. Our research found that over half of reported donations to referendum campaigners came from just ten people, with only a hundred donors accounting for almost all of the reported contributions that were made.

“Our electoral law is of no use if it is not enforced in practice.”

Darren Grimes could not be reached for comment.

This story was co-published with Open Democracy.

In Detail

Key source documents referenced in this story are below.

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