Think tank ‘crossed the line’ on Brexit, Charity Commission finds

A controversial think tank called the Legatum Institute has been strongly criticised by charity regulators following an investigation first reported by The Ferret last year.

The investigation by the Charity Commission found that Legatum’s work on Brexit “crossed a clear line” and “failed to meet the required standards of balance and neutrality”.

Legatum, which is a registered charity, has emerged as one of the most influential think tanks in Westminster. Ministers have often cited its work to support Brexit policies on everything from tariffs to the Irish border.

In November, The Ferret broke the news that the Charity Commission had opened a compliance case into Legatum following reports that the charity was “promoting the views of pro-Brexiteers”.

Legatum under investigation by Charity Commission

Now this investigation has found that a Legatum report, Brexit Inflection Pointdid not present “balanced, neutral evidence and analysis” and was “not consistent” with the charity’s objectives to promote education.

The report, which called for the UK to leave the single market and the customs union as soon as possible, “may be seen as promoting a political view…for the aim of a particular final outcome, and recommending specific government action that reflects this,” the regulator found.

The Charity Commission has ordered Legatum to remove the report from its website and given formal regulatory advice to its trustees about maintaining independence and neutrality.

Previously, The Ferret has reported documents that show that the Charity Commission raised concerns about whether Legatum was “capable of becoming a charity” when the charity was registered in 2011.

Commenting on the Charity Commission report, David Holdsworth, the regulator’s chief operating, said: “Our case found that the Legatum Institute Foundation breached regulation with the publication of its Brexit Inflection Point report.

“Charities with educational purposes have a valuable role to play in public debates, but they must act responsibly. On such a highly political issue it is especially important that trustees can clearly demonstrate they are operating in line with our guidance to inform the public in a balanced and evidence-based way.

“With this report, the trustees failed to meet the required standards of balance and neutrality.”

After the European Union referendum, Legatum became one of the most prominent pro-Brexit voices in British politics. Former Vote Leave chief executive, Matthew Elliott, joined the think tank, along with a number of leading Eurosceptics.

Legatum was said to have “unparalleled access” to Brexit minister David Davis and other senior government figures. A recent openDemocracy investigation found that Brexit minister Greg Hands had arranged monthly meetings with Legatum’s chief trade advisor, who has since joined the Institute of Economic Affairs.

Singham had multiple undeclared meetings with another Brexit minister, Steve Baker, according to reporting by Buzzfeed. On his website, Baker describes the Legatum Institute as “remarkable”. A former Legatum trade advisor, Crawford Falconer, now holds a senior position at Liam Fox’s Department of International Trade.

Legatum’s links to Russia have also been the subject of intense media scrutiny. The charity was set up by Christopher Chandler, a New Zealand-born tycoon who was once a major shareholder in the Russian state energy firm Gazprom. In May a Conservative MP used parliamentary privilege to name Chandler as an “object of interest” to French intelligence services in 2002, suspected of working for the Russian secret service.

Former Labour minister, Liam Byrne MP, said the “incredibly damning” Charity Commission report “lays bare Legatum’s abuse of charity rules to pursue a hard Brexit agenda which its founder Mr Chandler tried to deny”.

“Here we have a New Zealander with acquired Maltese citizenship and a fortune made in Russia, creating a Mayfair think-tank that abused charity rules to help win an argument for hard Brexit. We have got to now debate how we stop this ugly new elite soft-power driving Britain over a cliff,” Byrne said.

SNP MP Martin Doherty-Hughes, vice chair of the all-party parliamentary working group on charities and volunteering at Westminster, said: “This is a clear infringement of well know charitable legislative framework and highlights the insidious nature of this so called think tanks approach to the Brexit, the Charity Commission for England is well within its rights to throw the book at Legatum – I hope they do.”

Jolyon Maugham of the Good Law Project called for the Charity Commission to look into other charities campaigning on Brexit.

“Charities are supported by public funds. And the quid pro quo is an obligation to deliver the public good – not the ideological agenda of wealthy private donors. The Legatum case, I am afraid, is endemic of a much bigger problem.

“The Charity Commission must now turn to look at whether it is right that taxpayers are obliged to fund the activities of other pamphleteers like the Institute for Economic Affairs, the so-called Taxpayers’ Alliance, and the Adam Smith Institute.”

The Charity Commission investigation is not the first time that the regulator has raised concerns about Legatum’s charitable status. Back in 2011, when Legatum was registering as a charity, the regulator wrote that it was “not clear” whether Legatum was “capable of becoming a charity”, according to emails released following freedom of information requests.

In an email response Legatum told the Charity Commission that its research would be “be based on neutral evidence and statistics and any conclusions made will be based on such evidence”. The regulator subsequently granted Legatum charitable status.

The Legatum Institute’s chair of trustees, Alan McCormick, said he was “pleased” that the Charity Commission had concluded its review but “concerned” by the request to remove the Brexit report from the think tank’s website.

“Whilst we understand and will fulfil the Commission’s request to remove the Brexit Inflection Report from our website, the Legatum Institute stands by its view that free trade and free enterprise have done more to lift people out of poverty than any other system. This is not a ‘political’ position but a position informed by empirical evidence and the experience of nations over the centuries – it is supported by a huge body of evidence and research.”

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