Coincidence, not quid pro quo

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It remains to be seen whether the large donations given to Reform Ltd by two economic migrants a week or so ago will still be legal when legislation going through parliament is actually enacted. Although the government was very clear in advance that the legislation would be backdated to the date it was announced, the level of detail needed to know whether a particular donation would or would not be legal was not provided. We do know that Farage and his team have said that the economic migrants concerned have asked for, and will get, nothing in return. Their donations might help to elect a government sympathetic to their modus operandi, but that will just be a fortunate (for them) coincidence.

One of the things that the money will be used for, according to the company, is the development of policy. Whilst the donations won’t determine the nature of the policies developed, it is not entirely unreasonable to suppose that the donors are unlikely to want to fund the development of policies which might impact them financially in a negative way. Again, that will just be coincidence, not cause-and-effect.

We’ve had a taster of the sort of policies which might emerge in this report today. We don’t know who has funded the work – ‘think-tanks’ are notoriously shy when it comes to financial transparency concerning their own activities. The organisation is described, though, as being “linked to Reform”, a formula (not unique to Reform Ltd; most parties seem to use similar mechanisms) which frequently allows policies to be floated with a degree of credible deniability should that be felt necessary.

Amongst the policy proposals are the abolition of capital gains tax and inheritance tax, along with a number of pension schemes enjoyed by public servants, including teachers. Oh, and the abolition of the state pension, which would be reduced to a means-tested benefit available only to the very poorest of pensioners. It doesn’t take a lot of thought to work out who might be the beneficiaries of such a policy. Those who see paying pensions as “unaffordable” seem to see reducing taxes on the wealthiest as entirely affordable. I can’t imagine a couple of billionaire economic migrants being exactly displeased if their donations were to lead to such policies. It would, of course, be another of those amazing coincidences rather than any form of quid pro quo.

Distinguishing between bribes and gifts isn't as easy as we might think

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The essential difference between a bribe and a no-strings gift is not as straightforward as one might think; it appears to revolve around the presence (or absence) of a clearly stated quid pro quo. Give a politician a sum of money to change his views on an issue of importance to you, and it’s a bribe; give it instead to a politician whose policies just happen to include agreeing with you on the same issue, in order to help him win an election, and it’s just a simple gift. Haven’t all those of us who have ever donated to a political party wanted to see people who support our own personal priorities win? There might be something of a moral difference between wanting to see a party win because of a belief that it would be a good thing for people at large on the one hand, and a belief that we will gain personally on the other, but it’s hard to define – and sometimes the two things will, inevitably, overlap.

That distinction between the presence and absence of a quid pro quo might look a little different from the perspective of a mega-donor, though. Reform Ltd have stated that “Our donors want nothing and will never be given a peerage, knighthood or a government contract”. Maybe not. They don’t need government contracts, and peerages and knighthoods are over-rated anyway. Getting a government which is ‘friendly’ towards crypto-currency speculators would certainly benefit them though. Charitably, it might be possible that such a thought has never crossed the minds of either of the two mega-donors, but if we look at action and outcome from their perspective, the lack of a direct, stated quid pro quo doesn’t alter the fact that they’ve paid a lot of money in the hope of achieving a particular result from which they might just happen to benefit. Purely coincidentally, of course.

The difference between the tens, or perhaps hundreds, of pounds which many of us will have donated in any given year in the past, and the millions being placed on the table here is primarily one of scale. Scale matters, though. A party receiving thousands of small donations towards a campaign can never end up being, or merely just feeling, beholden to any one of those donors: it isn’t the same for a party whose entire election costs are being more than covered by just two donors – who just happen to have similar financial interests in the outcome. A cap on the size of any individual donation is long overdue, and the government’s prevarication on the issue is more than a little puzzling. It would be possible, of course, simply to scrap political donations altogether and fund parties from the public purse. It’s not likely to be popular and would probably create a whole industry finding work-arounds, but it’s an option.

A cap is more likely and practicable but where that cap should be set is another question, because there isn’t a clear and obvious point at which any given donation ceases to be just one of many and becomes election-changing. Maybe it should be set by reference to a variable which is outside the immediate direct control of any government or party – something like the average wage for a full-time employee. Maybe we could get lucky, and the scale of the two latest donations will have the opposite effect to that intended, and encourage Reform Ltd’s potential voters to wonder whether a party funded like that can really represent them. I won’t hold my breath, though.

Those with the vested interests aren't the ones who should be deciding the rules

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Back in April, Gianni Infantino, the head of FIFA, apparently demanded that the security arrangements for a visit to Vancouver should be at a level higher than that provided for Canadian PM Mark Carney, and at a level normally reserved for the likes of the US President or the Pope. Here in the UK, it seems that Farage has refused the security arrangements he was offered – which are equivalent to those provided for members of the Cabinet and the leader of the official opposition – as being inadequate, and said that his company would continue to provide his security instead. In the case of Infantino, it appears to have more to do with validating his own sense of self-importance than with security; perhaps there is at least an element of the same thing with Farage. Two entitled men with an exaggerated sense of their own importance, seeking special treatment. There is a valid question about what level of security is needed for people in the public eye and how should it be provided and paid for, but, even more importantly – who decides?

People who feel themselves to be under threat naturally want the best security they can get, but are probably the least appropriate people to decide what that level should be. But leaving it to the ‘experts’, which is the obvious alternative, depends on an assumption that those experts really are expert, and don’t make mistakes – an assumption which is necessarily flawed when we’re dealing with human judgement. There isn’t a simple answer (which is not to say that the government will not fall back on its usual simplistic answer to all issues – set up a review). I do wonder, though, whether Farage’s motives are as straightforward as he claims. After all, when public servants are providing security, they are subject to the normal scrutiny of public servants, and it’s more than possible that Farage wouldn’t want the security services, let alone various other authorities in the UK, to know where he was and who he was with at all times. And I really don’t believe that I’m just displaying a naturally suspicious mind by saying that.

He has attempted to turn the issue into a justification for the sort of large individual donations on which he and his company seem to depend. Without such large donations, he seems to be saying, Reform Ltd would not be able to afford the level of security which he deems necessary. It’s a complete non-sequitur – spending millions on security depends solely on the total amount of donations received, not on the amount of each one. It does, though, betray how dependent he is on a small number of enormous donations, underscoring that his company is struggling to attract the larger number of smaller donations on which other parties often depend. It is also, I suppose, possible that the widow giving her mite might just possibly be less happy than one of Farage’s fellow millionaires with her contribution being spent on security rather than electioneering. Or expelling foreigners. But here’s the thing: in the same way that people feeling threatened are not the best people to decide on what security they require, politicians dependent on the largesse of millionaires are not the best people to decide on the rules surrounding political donations.

Gift or grift?

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The owner and proprietor of Reform Ltd claims that no rules were broken by the £5 million gift made to him prior to his decision to stand for election again in 2024. The gift, he claims, was entirely personal and not related to politics at all. It’s hard to believe that a gift of that magnitude to pay for security had no impact on the decision to stand for election of a man who had been reluctant to do so for reasons of security. The gift was described as ‘unconditional’, with no requirement to spend it on security, and it’s also hard to believe that a sudden windfall of £5 million had no impact on the spending of the recipient on things other than security, even if only by leaving him more of his own money. Given that Sir Starmer was obliged to declare donations for new suits and spectacles, it’s hard to see how the same rules allow undeclared donations of £5 million. Perhaps the various bodies looking into the donation will reach the same conclusion as Farage, although many might think that that would tell us more about the rules than about the gift or the individuals involved.

The donor’s generosity didn’t stop with the party’s owner and proprietor; he also became the largest individual donor in political history with his largesse to Reform Ltd. There’s no corruption involved, apparently, because he didn’t ask for anything in return. That’s probably true – but he didn’t need to. The Reform Ltd stance on cryptocurrency was already well-established. He doesn’t need the party to change any policies for his investment to pay off, he just needs the party to win power. And therein lies a gaping hole in the rules concerning donations to political parties. Giving donations to parties to buy a favourable change in policy is unlawful; giving donations to a party in an attempt to buy an electoral victory which will allow it to implement an already-adopted favourable policy is entirely within the rules.

The difference between gift and grift turns out to be a lot smaller and harder to define than many might think. What we need isn’t one or more enquiries into whether or not rules have been broken, but a change in the rules themselves. Most particularly, we need a cap on the amount anyone can give a political party – or an individual politician – in any financial year. And it needs to be a low cap – a figure in thousands rather than tens of thousands, let alone millions.

Loopholes and principles are not easy bedfellows

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The ill-starred romance between Farage and Musk didn’t last long, which presumably means that the enormous donation which had been mooted might not arrive after all. It turns out that a mega-rich man actually expects something in return for his patronage. Who’d have thought it? In this case, the expectation was slavish support for his views on issues of the day (including the immediate release of a convicted criminal) however unfounded in mere facts and evidence those views might be. It leaves Farage with a difficult choice – stay in post and beg for money elsewhere, or make way for his Musk-anointed successor. Farage is claiming that he would “never sell out my principles”, but telling us that he won’t sell something he has never possessed doesn’t actually tell us a lot about his next moves.

The real debate about political funding should be examining the mysterious process of transubstantiation, during which profit generated elsewhere and then funnelled through a UK-based company magically becomes British money and therefore a legitimate source of political donations in a state which theoretically only allows such donations from UK sources. Interestingly, it only becomes British money for the purposes of political donations, and apparently doesn’t also become liable for UK taxes. As I say, it is truly a mysterious process. It’s a loophole, of course, and one which a party committed to eliminating sleaze and dubious funding might be seeking to close, particularly if the sums are so large as to completely tip the scales. However, a party which happily accepts a large donation from a company registered in a tax haven will inevitably find itself more than a little compromised on the issue. Dodgy funding is only an issue when other parties benefit from it, it would seem. In the meantime, all is well as long as ‘no rules are broken’, the only basis on which most politicians seem to consider the issue of morality, rather ignoring the fact that it is they who make the rules in the first place. Those who deliberately leave loopholes in rules from which they can benefit themselves can’t really complain if someone else uses the same loopholes.

Compasses aren't easy to come by these days

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The last Prime Minister but one seemed to believe that rules were for everyone else, but that someone who would be world king should feel no obligation to abide by them. That sense of entitlement was coupled with a sense of utter shamelessness; no matter how egregious his behaviour, he simply ignored all criticism and carried on regardless. For most of his life, it's an approach which worked. Being ashamed of nothing and willing to ignore all criticism meant that most problems eventually ceased to be newsworthy, even if people kept muttering darkly about them from the sidelines.

Whilst Wales’ new First Minister isn’t in the same league as Boris Johnson, his approach to the large donations received from a convicted environmental criminal seems to be modelled on that used by Johnson – ignore it and hope it will go away. Sooner or later, he assumes that his critics will simply give up – they don’t have the votes in the Senedd to force him to do anything, as long as his own side continue to vote the right way, despite the obvious misgivings harboured by some of them. The opposition parties will presumably continue to make their repeated demands for an investigation, although it's far from clear what the point would be: what would actually be investigated? The First Minister himself has repeated, what is beginning to seem like endlessly, the mantra that ‘no rules were broken’ and nobody seems to have any clear contrary evidence of any breach of any rules, whether rules laid down by the law, the rules of the Senedd, or the rules of the Labour Party.

The complaint, however, isn’t that he behaved in a way contrary to any rules, but that his behaviour was unethical and inappropriate, something which anyone capable of feeling shame might see as being far worse. It is, though, something which is much harder to ‘investigate’. Whilst the feeling that it was indeed both of those things might be near universal outside his own immediate circle, whether behaviour is considered ethical or not is ultimately a subjective issue rather than an objective one. For those – a group which presumably includes the First Minister – who believe that ethical behaviour is simplistically defined as doing no more than avoiding any breach of rules, his behaviour cannot be considered to be other than entirely ethical. For those who expect that people who would lead or govern us should be expected to possess a moral compass of their own (and know how to use it), abiding by ‘the rules’ is never going to be good enough.

Given the ethnic background of both the First Minister and the current Prime Minister, the old adage about the colour of pots and kettles seems singularly inappropriate, but in an outbreak of what one might instead call ‘Comparative Hypocritical Immorality and Pomposity Syndrome’, the PM who happily accepted either £10 million or £15 million (his oft-demonstrated inability in basic arithmetic prevents him from knowing which, but he’s well and truly had his CHIPS either way) from a racist and misogynist has demanded an investigation into a FM whose willingness to accept tainted money from a criminal has so far been limited to a ‘mere’ £200,000 (although that limit hasn’t, so far as we know, as yet been tested by any higher offer). Is Brexit to blame for the current shortage of moral compasses, or is there some deeper problem at work?

Is this what we deserve?

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The Labour and Conservative parties have each had their own little financial scandals in recent weeks. The Tories have taken £10 million (or perhaps £15 million) from a man who makes casual racist remarks which he apparently thinks are merely ‘rude’, whilst Labour’s new leader in Wales took £200,000 from a man twice convicted of environmental offences. At first sight, there seems to be no comparison – it doesn’t require more than a very rudimentary command of basic maths to understand that £15 million is bigger – a lot bigger – than £200,000.

But that comparison is over-simplistic – we also need to think about the differing electorates involved here. Hester’s millions were intended to help Sunak appeal to the entire UK electorate. At 46.6 million, that equates to about 32p per target voter. The donations to Gething, however, were intended to help him win an internal Labour Party election. Whilst the party seems to have avoided publishing detailed numbers, some estimates put the total eligible to vote at around 100,000, meaning that the donation was worth about £2 per target voter. The egregi-ometer no longer points so unswervingly in the direction of Sunak and the Tories.

One could attempt to argue that there is some sort of moral difference between a man with previous convictions and one who is merely under police investigation, or even that casual and unthinking racism is in some way less serious than environmental crime; but they’re not arguments that I’d like to try making in their position (although that doesn’t mean that they won’t try). I’m more interested in the similarity of their responses. Both men have effectively said something along the lines of “I’ve followed all the rules on donations”. It’s not a statement that I’m in a position to dispute. It does, though, raise two big questions. The first is whether rules which allow this sort of behaviour when it comes to political financing are fit for purpose – and many will probably conclude that they are not. The even bigger question is whether we are prepared to accept that the only responsibility we place on politicians is to follow the letter of the law at all times. Should we really never expect them ever to take a step back and think about morality, and whether what they are doing complies with some sort of sense of right and wrong?

They are both acting and talking as though the fuss will soon blow over and this particular scandal will be laid to rest alongside all the others. The worst part of it is the horrible feeling that they might be right. Along with Thomas Jefferson.

Living dangerously

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It was, apparently, Emo Philips, an American actor and comedian, who came up with the joke that, “When I was a kid I used to pray every night for a new bicycle. Then I realised that the Lord doesn't work that way so I stole one and asked Him to forgive me.” But it is the English Conservative and Unionist Party which has decided to adopt a variation on this approach when it comes to dealing with racism and misogyny. Instead of trying to eliminate racist language by Tories, their response to the outrageous (and, to date, undenied) remarks attributed to their biggest donor has amounted to saying that a rich Tory donor can say whatever he likes as long as he apologises afterwards. And pays the party enough money. It all seems a bit reminiscent of medieval popes selling indulgences.

The linguistic acrobatics being performed by those who want to keep hold of the tainted £10 million are a wonder to behold. The miscreant himself claims that there was no racist or sexist intent in the words used as though the words ‘black’ and ‘women’ were meaningless and added nothing to what he said. Then there’s the claim that he can’t be racist because he does business in Jamaica. On that simplistic basis, neither were the slave owners; they were simply businessmen trying to turn a penny or two. The suggestion by number 10 that his words were wrong, but he’s given an apology for ‘being rude’ and we should all just move on sit oddly against a background where the government is determined to ‘crack down’ on anyone who breaks the Conservative consensus about what it is to be British. It invites us to consider that being racist is an entirely acceptable part of their definition of British values as long as an insincere apology is issued later by anyone whose words somehow leak into the public domain.

The reluctance to part with £10 million, especially after it’s already been spent, is, I suppose, understandable for a party obsessed with the financial value of everything, but principled it is not. Faced with the obvious car crash which was coming his way the moment the words leaked out, Sunak had two political options open to him. The first was immediate condemnation, accompanied by the return of the cash. Decisive, even if untypical, action would have wrong-footed the opposition, but the story (as a source of political damage to the Tories) would have gone away after a few days. Sunak seems incapable of instant reaction, so his default option was the second. That is to delay reacting as long as possible, and then try to brazen it out in the belief that the news media would move on. Consciously choosing the second option inevitably brings a third option into play, but it’s one that politicians only ever fall into by accident. Starting out by trying to brazen it out and then buckling under pressure is the worst of all in political terms: not only does it look weak, unprincipled, and indecisive, it also concedes that the original decision was wrong and the opponents were right all along. And it looks at least possible that pressure from his own side from people who have a genuine and entirely legitimate fear of being brought down along with him may yet push him that way. Living dangerously may be a lifestyle choice for some, but for Sunak it’s entirely accidental.

The right to vote doesn't determine honesty

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It seems like only days ago (probably because it was only days ago) that Boris Johnson was warning people against being Russophobic. Hardly surprising, in a way, for a man who just a few years ago declared himself to be a committed Russophile. (To say nothing of his being a fervent Sinophile, which is also not a spectacularly good look at present.) In his view, there are good Russians (who donate large sums of money to the Conservative Party) and bad Russians (who owe their wealth, mostly crooked in origin, to the active intervention, or at least passive tolerance, of the Kremlin). The alert may notice that there is no necessary contradiction between the two categories, leaving us with a significant number of Schrodinger’s Russians (those who are simultaneously both good and bad). This week, the Prime minister has warned that allowing foreigners who have made their homes here to vote in local and Senedd elections would open up the UK’s political system to donations from foreign governments, singling out Russians for his attention, in what would look strangely like a Russophobic statement if it hadn’t come from a man who told us that we must not be Russophobic.

Some may struggle to reconcile these two statements – after all, given the extent to which the PM’s party has benefited from generous donations from Russians who qualify to donate by virtue of being on the electoral register, it’s reasonable to wonder why he is now so strongly against it. There is, though, a key difference. The extremely large donations which have been made to his party have come from wealthy Russians who have been allowed to buy UK citizenship, using the money which they’ve effectively stolen from the Russian state and its citizens, aided and abetted by the kleptocracy in the Kremlin. Allowing ordinary, common or garden foreigners – teachers, lecturers, doctors and the like – to vote (and thus donate money from their legitimate earnings) might aid parties other than his own, whereas any sensible billionaire (and especially the crooked variety) looking to protect his own interests doesn’t require a huge degree of intelligence to work out which party is most likely to be of assistance to him. (And with luck, he might even get a peerage as well.)

In reality, the problem here is nothing to do with either nationality or voting rights; it is to do with the rules around political donations and their enforcement. Whether a billionaire donor is Russian or British is irrelevant – the questions should be about the provenance of the money being donated and the extent to which any quid pro quo is involved. Assuming that a donation is legal and clean just because the donor is registered as a UK voter (thereby allowing the receiving party to claim ‘no rules were broken’) is an enormous weakness in the UK’s system. It is, though, not a devolved issue. The Welsh government can decide who may vote in its elections but it can’t change the rules on donations; only the UK government can do that. Instead of criticising the Welsh government for opening up the franchise to all those who’ve decided to make their homes here and contribute to our communities, the UK government should be looking to clean up the rules over political donations rather than using them as an excuse for limiting the franchise. When we look at who benefits from the current lax rules, it doesn’t exactly take a lot of effort to work out why they’re not doing that.

Identifying the transaction

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There is a scene in The Godfather where an undertaker asks a favour from the mafia boss which involves something ‘unpleasant’ happening to a third party. The favour is granted willingly and unconditionally, with a simple statement that, at some future date, the Godfather might well need a favour from the undertaker – and some years later, that is precisely what happens when the undertaker is asked to patch up the body of the Godfather’s hot-headed son before his mother sees it. Two unrelated favours, in a sense – but there is a transaction hidden there, and all involved know it, even if it would be difficult to prove to the standards of a court of law.

Political donations can work in a similar way, and the transactional nature of some of them is also very difficult to prove. Take the case of Alexander Temerko and his company, Aquind. Both have been making generous donations to the Tory Party and an assortment of ministers and MPs (including Welsh Secretary, Simon Hart) for some years, involving a total of £1.1 million. The money was always given as ‘no strings’ donations, of course, out of the heartfelt generosity of Temerko and the ultimate owner of Aquind, Viktor Fedotov (although the latter denies having any control over the donations). One of the other beneficiaries was Penny Mordaunt, who now seems to have incurred the ire of Temerkov by daring to campaign against a business project of his. His response was to describe her as an “absolutely uncontrollable woman” – clearly, he expected that she would be more ‘controllable’. I wonder what could possibly have led him to think that? This case has come to light because an MP has NOT done what was clearly expected of her – in how many other cases have MPs discovered that their views on particular projects just happen to align with those of donors?

The issue here is nothing to do with the nationality of those involved – Temerko is Ukrainian-born, as it happens, although with strong links to Putin’s Kremlin, even if Fedotov is Russian. The issue predates the current hostilities which are leading to some people asking more questions, albeit late in the day. Having said that, it’s always possible that oligarchs used to operating in a political culture where politicians do what they are paid to do may have greater expectations of subsequent compliance than those used to operating in a less overtly corrupt political culture. The question, though, is a broader one – the fact that there are no conditions imposed at the time of making donations to influential politicians doesn’t mean that a return favour might not be requested or expected, even if not until some years later; and politicians who accept large sums, especially from dodgy sources (and surely donations from companies with no obvious source of revenue ought to provoke a question or two, at least) should ask themselves why they are being given the money rather than enthusiastically accepting it because ‘no rules have been broken’. Might there just possibly be unstated expectations for the future?

Lawyers for Aquind have said that all donations were “entirely lawful, properly declared and have not been made in return for any special treatment”, and doubtless they are correct – there was no clear ‘transaction’ involved in any of them. The same thing could be said in relation to the case of the Godfather’s favour to the undertaker. But it doesn’t take a lot of thought to work out what might have become of that undertaker had he refused to return the favour when requested.

Growing bananas by the Thames

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Proving that there’s a direct causal link between a political donation and a favour granted is difficult at the best of times. The PM’s flat redecoration was funded by a man who was also seeking support for a pet project, and linking the two things in a single e-mail, as the PM appears to have done, inevitably raises the suspicion that there is a relationship between the two. Labour’s request that the police investigate is good knockabout politics, but is unlikely to be enough to ‘prove’, to the standard of evidence required by a court of law, that the one facilitated the other. The PM’s defence, through his spokesperson, is that the project never went ahead, so there was no corruption. It’s a bit weak, though – it could equally be argued that the ‘favour’ was giving the matter consideration. There is no doubt that it was indeed ‘considered’ before being rejected, and the question is surely whether publicly-funded time and effort would have been expended on even considering it if the request hadn’t come from a major donor.

There was a rather more clear-cut example of the relationship between donations and access last week, when another donor asked for his money to be refunded, apparently because it didn’t get him the level of access to ministers that he was led to expect. It comes to something when the degree to which donations and access are linked is regarded as being so normal that legal action can be threatened in an effort to enforce the implied terms of what might look to some as an essentially corrupt contract, or else demand repayment for default. But why does anyone think that rich people and businesses make large donations to a political party in the fist place? Whether the expectation is that they will get special favours, or merely that the overall legislative and regulatory climate will benefit them, is a question of degree not kind. An implicit quid pro quo is ever present, and is not a bug but a feature of political funding in the UK.

The UK is increasingly resembling a banana monarchy – like a banana republic but with a hereditary head of state. Whilst it’s true that we don’t actually have large scale banana production yet, that’s only because would-be banana producers haven’t yet bought sufficient access to the PM to be able to convince him that a giant banana plantation alongside the Thames is almost as good, in terms of his legacy, as a new garden bridge over the river. OK, the bananas wouldn’t grow alongside the Thames, but then we never got the bridge either. Some people made a lot of money from it, though. And isn’t opening up opportunities to make money what those large political donations are ultimately all about?