On the trail of the dark money which funds Trump, Davidson and Brexit

Loopholes in that constitution are at the root of the dark money which helped Ruth Davidson reach second place in the 2016 Holyrood election, funded hard Brexit support inside and outside Westminster and played a role in the murkiness around Donald Trump’s election campaign.

My colleagues at openDemocracy and I have, along with The Observer and others, uncovered millions of pounds which poured into the various Leave campaigns from unknown sources. I went through all the local Tory Party accounts in Scotland to expose the dark money which drove Ruth Davidson’s Ruth Davidson party, led by Ruth Davidson, to second place in the 2016 Holyrood election.

We have shown how dark-money-funded think tanks are pushing a hard Brexit from outside Parliament, while the ERG – also recipients of questionable cash – promote it within the House of Commons. And we’ve exposed the total failure of the police and regulators to take serious action.

READ MORE: Figures reveal new Tory ‘dark money’ donations of £12.5k from secretive trust

Take a step back from each of these stories and they point to a broader crisis. The constitution of the British state is utterly broken.

And yes ... the UK doesn’t exactly have a constitution in the traditional sense. Along with only three other countries in the world – Saudi Arabia, Israel and New Zealand – the rules that underpin how we govern ourselves are not codified. They are a mulch of convention, tradition, and ruling-class reinvention-when-it-suits-them, underpinned by the theoretical idea that “the crown in Parliament” is sovereign: an idea which dates from the height of the empire, and is clearly now nonsense.

This mess has played a key role in taking us to where we are now, and should be key to defining what we do next, but before I get to why, it’s worth outlining some basic facts about the British state, because, (as writer Dan Hind has pointed out) despite the BBC spending nearly a billion pounds a year on current affairs programming, surveys show that roughly 0% of us understand the basics of our structures of governance.

READ MORE: North Ayrshire Tories reject official request to reveal source of £100k donation

Let’s start with one of the obvious questions about any government: what territories does it govern?

In the case of the UK, this is a bit complex: there are the four “home” nations (though most people in Northern Ireland don’t see it as a nation in its own right, but part of either a “British nation”, or of Ireland).

Each of the four has its own different governance arrangement, each of which is a mess.

The Northern Irish Assembly is currently sitting on the record for how long a legislature can go without sitting. The Welsh Assembly has had endless commissions on what powers it should have. England is a nation without a parliament. And the readers of this paper will be familiar with the position Scotland finds itself in.

Then, there are the 14 Overseas Territories. These make up a significant majority of British territory, most of which is in the Southern hemisphere, and range in size from the vast British Antarctic territory to Pitcairn in the Pacific; and in population from Bermuda (64,000 people) to the uninhabited South Georgia.

And then there’s the three Crown Dependencies, though the Bailiwick of Guernsey itself has three autonomous parts: Guernsey, Alderney and Sark.

Consistently, when we uncover dark money in British politics, it’s been smuggled through one of these loopholes in the British constitution.

When we exposed how the DUP had been given a £435,000 donation from a secret source, via the Constitutional Research Council, this was possible because Northern Irish law protected door secrecy – a situation which had been allowed to persist because of the political mess in Northern Ireland.

The millions spent on Leave campaigning which Arron Banks (pictured above) claims came from him, but which our research, eventually backed up by the Electoral Commission, suggests may have originated elsewhere, came into the vote through Gibraltar, from the Isle of Man, and before that, who knows?

Scottish Limited Companies have emerged in investigations as being involved in Trump’s campaign.

These are a product of the age old problem that Scotland’s distinct legal system is governed from Westminster, which doesn’t really have the understanding or attention span to keep on top of it – a problem which has only partly been solved by devolution: most of company law is still reserved.

This web of loopholes hasn’t just emerged by chance. A recent report by the Transnational Institute in the Netherlands argued, compellingly, that offshore money has, along with the wealth of billionaires, become the backbone of contemporary global capitalism.

In different ways, Britain, Ireland and the Benelux countries are the main vertebrae in that spine, protecting the cords which carry the wealth of the wealthy between their electronic accounts.

We can all think of the ways that today’s billionaires made this money – from the generation of oligarchs who asset stripped the Soviet Union in the 1990s to Gulf oil men to Mexican drug lords to today’s digital king-pins. But what they have in common is that they’ve taken the UK’s leaky constitution, and re-wired it into an uncommonly modern machine for protecting the wealth of the supremely wealthy – and for laundering the cash of those who don’t want its origins to be known. It’s not coincidence that more than half of the companies listed in the Panama Papers were registered in the UK or its Overseas Territories.

The economic impact of living in the world’s money laundry is pretty devastating.

The National Crime Agency has said that so much money is now cleaned up in London’s housing market that it’s a key factor in pushing up house prices. And as the cost of housing rises, money is sucked out of the rest of the economy. Those who might otherwise invest in something productive instead put their money into bricks and mortar, speculating that house prices will continue to rise, and steering the nation’s wealth into a vast bubble from which ultimately only the wealthy benefit.

All of this is only possible because of the deep failures of Britain’s semi-autonomous regulators and law enforcers. In the Autumn of 2017, after the Electoral Commission had decided not to look into a £675,000 donation from Vote Leave to 23 year old fashion student Darren Grimes in the dying days of the 2016 referendum, my colleagues put in a freedom of information request to the commission, asking for all of their internal emails on the subject. After we published their contents, the commission changed its mind, and decided to investigate, eventually finding that Vote Leave had indeed broken the law, and, in a parallel case, finding that Arron Banks and Leave.EU had broken electoral rules.

Both cases were referred to the Metropolitan police. And so I scrolled ahead in my diary, and popped in an entry a few months ahead, reminding myself to check if the Met had done anything. Obviously, I thought, they wouldn’t have. You don’t get to be the world’s money laundry by employing inquisitive officials.

After three weeks of ringing their press office, and months after the Electoral Commission had referred the case to them, the Met finally admitted that they hadn’t yet opened an inquiry. After we forced Sadiq Khan (pictured above) to ask them why not, they told him that they had only received the relevant documents recently. I asked the Electoral Commission how this had happened.

Exasperated, their usually diplomatic press officer explained that the commission had told the Met many months earlier that the documents were ready for them. The police hadn’t bothered to come and collect them.

Here’s the point. Our dark money investigations have exposed how the offshore money that’s been hidden in the loopholes of Britain’s constitution has started to shape the UK’s politics. They have shown how Britain’s institutions, captured as they are by the rich and powerful, are not really capable of regulating the rich and powerful.