“This loophole won’t wash. This is not over, we will continue to reveal more evidence, and continue to push for a full investigation by the Parliamentary Standards Commissioner into Keir Starmer,” say Tories.
Labour is facing a deepening integrity crisis after the release of leaked legal correspondence and fresh criticism of the Electoral Commission’s handling of undeclared donations linked to Keir Starmer’s rise to the Labour leadership.
The controversy centres on Morgan McSweeney, now the Prime Minister’s chief of staff, who was a director of Labour Together during the period when the group failed to declare £739,492 in donations to the Electoral Commission. Conservatives say those funds bankrolled Starmer’s leadership campaign while being kept from public view.
An email sent on 3 February 2021 by solicitor Gerald Shamash to McSweeney appears to confirm the scale of the undeclared donations. Shamash admitted: “The amounts of the late reported donations is £739,492 and there are in my view, no easy way to explain how LT finds itself in this situation.” He went on to suggest the group should present the failure to report as “admin error” if challenged.
Despite this, the Electoral Commission has confirmed that no offence was committed. Its explanation hinges on the fact that the inquiry into Labour Together’s finances was voluntary rather than compelled by statutory powers.
In its statement, the Commission said: *“Under schedule 19B, paragraph 13(3) PPERA, a person who knowingly or recklessly provides false information in purported compliance with a requirement imposed under or by virtue of this Schedule, commits an offence.
“We encourage all regulated entities to engage with us in an open and transparent manner, including during our investigation processes. This offence only applies where we have used our investigatory powers under Schedule 19B PPERA. Our investigation was conducted on a voluntary basis. This means we did not make use of these powers to compel compliance with any requirement imposed under or by virtue of Schedule 19B PPERA, including the use of any type of disclosure or investigation notice to compel information and explanation.”
In other words, because the Commission’s review of Labour Together was carried out on a voluntary basis rather than through formal investigatory powers, knowingly providing false information could not amount to a criminal offence.
Conservative Party chairman Kevin Hollinrake called this a failure of accountability. “The Electoral Commission’s decision not to investigate McSweeney is wrong. The Commission must now publish all of their Morgan McSweeney Files to ensure the public has full transparency. It is clear that Morgan McSweeney deceived the Electoral Commission, but has dodged a criminal offence on a technicality. This loophole won’t wash. This is not over, we will continue to reveal more evidence, and continue to push for a full investigation by the Parliamentary Standards Commissioner into Keir Starmer.”
The leaked Shamash email and the Commission’s explanation fuel growing claims that Labour has concealed the financial backing that helped deliver Starmer the leadership. The Conservatives argue the episode exposes both a culture of cover-up inside Labour and a regulatory system too weak to hold them to account.
Labour has not yet issued a detailed response.
