Tories cleared over Ashcroft donations

An Electoral Commission report today cleared the Conservative Party and its deputy chairman Lord Ashcroft of breaching electoral law in relation to £5.1 million of donations from Bearwood Corporate Services.

The Commission rejected allegations that Bearwood - which is controlled by Ashcroft - was not carrying on business in the UK and was therefore ineligible to donate money to political parties.

However, the Commission has asked to meet Conservative officials to ensure that they are clear about their responsibilities for complying with the law.

The Commission's 18-month investigation was sparked by a complaint from Labour MP John Mann, amid Labour concerns that the billionaire's money was being used to boost Conservative candidates' chances in key marginal seats in the forthcoming election.

But the long-awaited report found today that Bearwood (BCS) met the requirements of a permissible donor by being registered at Companies House, incorporated within the UK or another EU member state, and carrying on business in the UK at the time the donation is made.

It concluded: "No breach of PPERA (Political Parties, Elections and Referendums Act 2000) has been established and... no legal action in relation to the Conservative Party should be taken.

"The Commission has, however, asked to meet party officials to ensure that they are clear about their responsibilities for complying with the law."

Parties receiving donations from companies are required to check that the money is coming from the firm, rather than from someone using it as a front.

Today's report said there was "no basis to conclude" that the donor was anyone other than Bearwood.

And it said there was "insufficient evidence to conclude, on the balance of probabilities, that the party was uncertain as to the identity of the donor when accepting the donations".

But it revealed that a number of Conservative officers and staff declined to be interviewed on the issue. The Commission has no power to force people to attend interviews.

After studying internal party emails and documents, including from constituency associations which had received Bearwood funding, the Commission formed the view that "there was evidence to suggest that at least since 2006 the party would have reason to question whether the donor was Lord Ashcroft rather than BCS".

Gifts from BCS "were often referred to in internal party communications as 'Ashcroft' donations", noted the report.

To establish a breach of the rules, the Commission had to prove that the party was uncertain of the money's provenance by ascertaining its "state of mind" in regard to the Bearwood donations.

The party's registered treasurer assured commissioners in writing that he was in "no doubt" as to the identity of the donor, dismissing comments suggesting that the party regarded the money as coming direct from Ashcroft as "loose language".

And the report said: "The Commission asked various officers and staff within the party to attend interviews on a voluntary basis, but these requests were not agreed to."

A Conservative spokesman said the party has "a clean bill of health".

"Following an 18-month investigation, the Electoral Commission has definitively concluded that donations made by Bearwood, the company in which Lord Ashcroft has an interest, were legal, permissible and correctly reported," he said.

"It has now been put beyond doubt that donations from Bearwood were entirely legitimate.

"Separately, we also know that Lord Ashcroft is non-domiciled, putting him in exactly the same position as Labour and Lib Dem donors such as Lord Paul.

"This means the Conservative Party's clean bill of health with the Electoral Commission remains fully intact.

"It is now clear that the continuing attacks on Michael Ashcroft are part of a politically motivated campaign orchestrated by the Labour Party in advance of the general election in order to distract attention from the real issues facing this country."

Electoral Commission chairwoman Jenny Watson expressed disappointment that the Tories had not agreed to have staff interviewed.

"Legally they are under no obligation to come for an interview with us, but we were disappointed that we weren't able to come to reach agreement with the party to interview people," she told BBC2's The World At One.

"They did provide us with a substantial amount of documentation, and I think people should be reassured that we have looked very carefully and thoroughly at the evidence before us and this is the conclusion we have come to."

Mr Mann said the report opened up more questions than it answered.

"Insufficient evidence is a theme of this report, and one of the reasons for insufficient evidence, which is quite extraordinary, is that David Cameron's top officials wouldn't co-operate with it, they wouldn't meet," he said.

"Same old Tories - so much for transparency and openness. Here we have the public body that monitors political parties and senior Conservative officials refused to meet them to answer questions.

"I mean, what's going on? There is a lot of cover up and this report specifies that the Electoral Commission doesn't have enough powers to get into these complex issues."