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Deputy PM Nick Clegg suggested ways businessman could split donation

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Channel 4 Dispatches airing on Monday 23 March also features:

· Donor pays for private lunch with Business Secretary Vince Cable

· Key Liberal Democrat fundraiser resigns

· Undercover investigation into party fundraising of 3 largest parties

· More revelations to come

Deputy Prime Minister Nick Clegg is facing criticism over his role in the Liberal Democrat’s acceptance of a potential illegal donation, following an investigation by Channel 4’s Dispatches.

The Liberal Democrat leader was secretly filmed meeting a potential donor and discussing ways the businessman could avoid public attention from his donation by using members of his family and splitting his donation across calendar years. Nick Clegg’s involvement has been criticised by Sir Alistair Graham, former chairman of the Committee For Standards in Public Life.

Wealthy entrepreneur Paul Wilmott, who was posing as a potential political donor for Channel 4 Dispatches, was invited to meet Nick Clegg on 27th November at a small reception in the Guildhall in Bath.
Liberal Democrat peer Lord Strasburger – who at the time was a key member of the Party’s fundraising committee – introduced Mr Wilmott to the Deputy Prime Minister. Mr Wilmott had told Lord Strasburger that he was thinking of donating £50,000 but would rather his name not be linked to the donation. Lord Strasburger had suggested that it was ‘perfectly legal’ for Mr Wilmott to uses his wife or stepfather.

During a discussion between Nick Clegg, Paul Wilmott and Lord Strasburger, the peer says to the Liberal Democrat leader: “Paul [undercover donor] is trying to find a way to support us without sticking his head too far above the parapet and we’re working out how to involve his family in making donations.”
In response Nick Clegg says: “A very useful thing as well, it’s not a financial year calendar it’s an end of year calendar, so you can do things either side.”

“But thank you very much for the support you give, it is much needed and will be very well used.”

According to electoral law (PPERA) a party must identify donors if they give a political party more than £7,500 in a calendar year. The party must provide the donor’s name to the Electoral Commission which discloses it in a public register. It is a breach of PPERA if there is an attempt to deceive who the donation has come from.

Nick Clegg has spoken out about the need of transparency in party fundraising. His suggestion of splitting a donation across a calendar year is not a breach of these rules but has been criticised by Sir Alistair Graham.

Sir Alistair Graham, who was shown the undercover footage filmed by Channel 4 Dispatches, said: “I’m really surprised that those comments came from Nick Clegg because what he’s suggesting is not perhaps a breach of the rules … He himself as a party leader required to show very high levels of leadership in ethical matters in politics should have said ‘look,... if the donation is over £7,500 it’ll have to be declared who the donation is made by’. It should have been as simple as that and its very surprising that it wasn’t.”

On Friday, Lord Strasburger stood down from the Liberal Democrat’s fundraising committee and resigned the Party whip, following evidence obtained by the Channel 4 Dispatches investigation.

Lord Strasburger, was secretly filmed telling Mr Wilmott, that it is ‘perfectly legal’ to put donations in his wife’s or names of other family members. Lord Strasburger later accepted a £10,000 cheque that had been made in the name of an individual pretending to be Mr Wilmott’s stepfather. The cheque was cashed by the Liberal Democrats on February 4th. Parties have 30 days to return the donation otherwise it is deemed to have accepted the donation.

Sir Alistair Graham told Channel 4 Dispatches: “My thoughts are that Lord Strasburger has been involved in an unlawful process where there is a real attempt to deceive where the money is coming from when the laws quite clear that it’s an offence to deceive where the money is coming from.”

He added: “It’s the treasurer of the party who is directly and legally responsible for these ah, matters, but also the leader is involved as well, but the treasurer if he is not told that genuinely where the donation has come from is in a very difficult position.”

The Channel 4 Dispatches investigation into political donation also features Business Secretary Vince Cable speaking to our undercover donor at a private fundraising lunch about the benefits of introducing a Financial Trading Tax. The lunch at the Bath Spa Hotel on 2nd November was arranged by Lord Strasburger at a cost of £1,000 per guest.

Mr Wilmott had received an invitation to the lunch in an email from Lord Strasburger on 24th October which said: ‘I politely remind you to bring your cheque book so that you can decide on the size of your kind donation after your conversation with Vince.“

Mr Wilmott said: “I’m not easily shocked, but I have been surprised at just how quickly I’ve been given access to very senior politicians and able to discuss policy with them just by suggesting I was willing to become a party donor. I can't help wondering how far I could have got if we'd had more time.”

Background to the investigation
As the election approaches, Channel 4 Dispatches decided to conduct a unique political experiment to test how transparent parties are when it comes to fundraising.

We wanted to know what access you get to senior politicians if you are a rich donor and whether that access actually buys you influence.
For that we needed a wealthy individual. Somebody who was willing and able - to donate up to £50,000, but was less willing to have his/her your name linked to that donation.

Paul Wilmott agreed to be our undercover donor. He is a successful entrepreneur, mathematician and former hedge fund manager agreed to be our undercover donor. He built his businesses from the application of mathematics to financial trading.

Paul Wilmott used to be a member of the Conservatives and in the past has given money to UKIP.

For the purposes of our experiment, he has joined the three largest parties.

Lord Strasburger
Over a six month period Lord Strasburger invited our undercover donor to several Liberal Democrat events including private receptions with government ministers and the party leader.

After a private lunch with Vince Cable our undercover donor handed Lord Strasburger a donation of £1,000 for attending the lunch.
A few weeks later Paul Wilmott had a private meeting with Lord Strasburger and hinted he was thinking about a future donation of around £50,000, but wasn’t keen on being identified.

Political parties must register with the Electoral Commission the details of donors who give them more than £7,500 annually. But Lord Strasburger suggests ways to get around this issue.

Lord Strasburger (LS): So the question I’ve got to ask you, I have to ask you this, is there any inclination on your part to help the party.
Paul Wilmott (PW): oh I think so, I think so… the stumbling block though as we mentioned was the privacy issue… erm
LS: Right, you don’t, you don’t want it to be published, erm have you got any er business entity that you could do it through….
PW: the, the problem there would be all my businesses are in my name, I actually tend to put name in the title of my business.
LS: Erm what’s your concern? Is it a personal concern or is it a business concern?
PW: Well its just its….
LS: because your wife could make the donation if you’re… if it was a business concern.
PW: right, right…
LS: that would take it away from you a bit.
A few weeks later Lord Strasburger invited our undercover donor to a reception with the Party Leader, and Deputy Prime Minister, Nick Clegg.
Privately at the reception they continue the discussion about donations.
PW: One was that idea you had of donating in my wife's name.
LS: Yes
PW: Is that something that has been done before successfully?
LS: Oh yes, ye ye, ye ye.
PW: Successfully?
LS: It’s perfectly legal, perfectly legal.
PW: OK
LS: As long as she’s genuinely your wife.
Our undercover donor also asks if the donation can come from his stepfather who doesn’t share his name.
PW: Is that possible?
LS: Yes
PW: OK, OK.
LS: Does he, well would he in the normal run of things be able to spend that money himself? Does he have those sort of funds?
PW: Um it’s not something we talk about money, or indeed politics um if that’s an issue maybe dividing up into different.
LS: Ye, ye ye.
PW: Alright.

Donation of £10,000
In January, at an event to celebrate Bath MP, Don Foster’s retirement, our undercover donor handed Lord Strasburger a cheque for £10,000. Paul Wilmott explained that the cheque was in his stepfather name but the money was actual his own.

PW: It’s a cheque, it’s just the first instalment.
LS: OK.
PW: It’s it’s for ten thousand and as discussed it’s in, it’s written, signed or it’s a cheque from my step father because of this issue about the names etc.
LS: Perfect.
PW: There’s his name and address in there so you can check up on things.
LS: Wonderful.
PW: What else? Ye he’s he’s, I’ve made sure he’s got the money to pay this so everything is. You know won’t be any problems.

Channel 4 Dispatches wanted to make sure that Lord Strasburger understood that although the donation cheque had been made by our undercover donor’s fictitious stepfather, it was the donor himself who had given the money.

So an email was sent from the undercover donor to Lord Strasburger explaining that ‘The money I transferred to him [The stepfather] hasn’t cleared yet and I promised I’d cover it! Is there any chance you could hold off cashing the cheque till Monday?’

Lord Strasburger replied to say: ‘It turns out that your step father’s cheque was presented on Friday. I hope this is not a problem.’
The cheque was cashed on Wednesday the 4th of February.

On seeing our footage Sir Alistair Graham say: “Well my thoughts are that Lord Strasburger has been involved in an unlawful process, where there is a real attempt to deceive where the money is coming from when the law’s quite clear that its an offence to deceive where the money is coming from.”

“Yes well it’s the treasurer of the party who is directly and legally responsible for these ah, matters, but also the leader is, involved as well, but the treasurer if he is not told that genuinely where the donation has come from is in a very difficult position.”

Right to replies
In a statement to Dispatches Lord Strasburger says:

“That the party had banked the cheque on 30th January having first confirmed that the stepfather was a permissible donor from the information provided by Mr Wilmott.”

‘’….I do not think I have committed any offence. Having said that… I have invited the Electoral Commission to carry out an investigation into my actions.’’

‘’In the meantime I have stopped fund-raising for the Party. Also for the sake of the Party, I have decided to temporarily withdraw myself from the Liberal Democrat group in the House of Lords until the investigation is completed.’’

In a statement, the Liberal Democrat Party told Channel 4 Dispatches:
''Both Nick Clegg and Vince Cable...have behaved entirely correctly... It is perfectly normal when presented with someone who is considering making a donation to explain the rules as ..... Nick Clegg did ....''
In relation to the donation of £10,000 they said that the Federal Party had acted entirely correctly.

''The Federal Party immediately ran its usual compliance checks ...... These checks revealed that the donation fulfilled all the criteria for an eligible donation from an eligible donor. The Federal Party had no reason to believe that the donation was made other than by the person named on the cheque.''

In relation to Lord Strasburger they said:

''After looking into the matters raised in your letter, we immediately referred the issue to the Electoral Commission to investigate. We shall comply fully with their investigation and any recommendations they may make as a result''.

“Going forward the Party said it would be strengthening its compliance checks and in particular.”

''We will require all declarable Federal party donors to explicitly confirm that any donation comes from them personally and draws on their own.”

How To Buy A Meeting With A Minister – Channel 4 Dispatches, Monday 23rd March at 8pm

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