A top Labour lawyer advised Sir Keir Starmer’s Chief of Staff to describe £700,000 in ‘hidden’ donations as an ‘admin error’, according to a leaked email.
The crisis engulfing Morgan McSweeney deepened after a bombshell email shed new light on a notorious episode in which his think-tank was fined in 2021 for 20 breaches of electoral law involving undeclared donations.
The email, from a top Labour lawyer, advised Mr McSweeney to drop his unsubstantiated claim that he had been told donations totalling £739,492 did not have to be declared. It warned him that unless he could back the claim with evidence it risked antagonising the Electoral Commission. And it recommended that he describe the episode off as a simple ‘admin error’.
The Conservatives today stepped up calls for the police to investigate the handling of the affair.
Tory Party chairman Kevin Hollinrake said: ‘The evidence is clear – Morgan McSweeney has been caught red-handed hiding hundreds of thousands of pounds which helped install Keir Starmer as Labour Leader.
‘This latest scandal at the very heart of government is incredibly serious – and potentially criminal – yet Keir Starmer has expressed his full confidence in his Chief of Staff, once again demonstrating his poor judgement and raising serious questions.
‘Nothing-to-see-here Keir may think he can ride this one out as he tried to over the Mandelson-Epstein scandal, or perhaps he is too weak to fire a Chief of Staff who tells him what to think, but Conservatives will not stop fighting until we get to the truth. That is why we are calling on the Electoral Commission and the police to urgently investigate.’
Mr McSweeney was the mastermind of Labour’s election landslide and is Sir Keir’s right-hand man.
But he is facing growing unrest from Labour MP’s over the Party’s dire poll ratings. And he has faced fierce criticism in recent weeks for his disastrous advice to Sir Keir to appoint Lord Mandelson as US ambassador despite knowing he had stood by the notorious paedophile Jeffrey Epstein after his conviction for child sex offences.
The new revelations threaten to re-open a controversy that Labour has tried to bury.
In September 2021, the Electoral Commission found more than 20 breaches of donations law by Labour Together, and levied a fine of £14,250. The watchdog had explicitly told Mr McSweeney in 2017 that he must declare donations within a 30-day limit. However, dozens of donations made to Labour Together between 2018 and July 2020 were not declared until after Mr McSweeney left the organisation that year.
The newly revealed legal advice appears to contradict Labour Together’s public claim that the undeclared donations were the result of ‘human error and administrative oversight’ – and its insistence that it had been as ‘open and transparent’ as possible.
Mr McSweeney initially did declare donations to the group when he took over as director of Labour Together in 2017.
However, early in 2018 he stopped reporting donations – apart from one disclosure of £12,500 from Trevor Chinn, a Jewish businessman and friend of Sir Tony Blair.
It was only after Mr McSweeney left to work for Sir Keir as new Labour leader that his replacement, Hannah O’Rourke, found almost three years of donations worth £739,000 had not been declared and filed a series of ‘late’ declarations to the Commission.
The Prime Minister leaves Downing Street with Morgan McSweeney, who has been engulfed in crisis following the leaked email
The leaked email was sent to Mr McSweeney by Labour’s chief lawyer Gerald Shamash in February 2021.
Mr McSweeney appears to have argued that he was advised by the Electoral Commission in a phone call in early 2018 that his think-tank did not need to declare its donations.
But Mr Shamash warned that neither the watchdog nor Labour Together has any record of the conversation ever taking place.
He said that unless Mr McSweeney would provide evidence of the call – and explain why he believed previous advice from the Electoral Commission could now be ignored – Labour Together may have to claim the law breaches were the result of an administrative error.
He warned that using Mr McSweeney’s claims could antagonise the watchdog – and suggested that neither he nor his defence should be mentioned ‘at all’ unless he could provide evidence to back it up.
Mr Shamash tells Mr McSweeney that the Electoral Commission ‘have a record of a number of calls with Labour Together but none with you’.
He added: ‘My concern is that unless you are able to help with the questions I pose below, we probably should not refer to you at all as the Electoral Commission would undoubtedly take more defensive approach in respect of a member of their staff. Currently we seem to have the Electoral Commission in a position where they are not being unhelpful in their calls with [redacted] but we need to be careful’.
He concluded: ‘It may be better if Labour Together cannot deal substantively with questions I pose then perhaps best to simply base our case as to the non-reporting down as admin error.’
The fresh revelations pile new pressure on Mr McSweeney to explain exactly why he decided to conceal hundreds of thousands of pounds in donations at a time when the think tank was throwing its organisational weight behind Sir Keir.
Labour Together has previously boasted that it ‘helped rally the party membership behind Keir Starmer’ when he was fighting to succeed Jeremy Corbyn as party leader in 2020.
A biography of Sir Keir revealed that Mr McSweeney began advising him and offering the use of hundreds of thousands of pounds worth of polling data, as early as the summer of 2019 – before Labour had even lost the election that year.
Downing Street has refused to answer questions about Mr McSweeney’s time at Labour Together.
But the Prime Minister’s official spokesman said Sir Keir continued to have ‘full confidence’ in his Chief of Staff despite the growing controversy.
Labour Together has been asked to respond to the latest revelations.
Earlier this week, a spokesman said: ‘Labour Together proactively raised concerns about its own reporting of donations to the Electoral Commission in 2020.
‘Their investigation, with which Labour Together fully co-operated, was completed in 2021. The outcome was made public.’
The Electoral Commission said it had ‘thoroughly investigated’ the late reporting in 2021. A spokesman said: ‘We were satisfied that the evidence proved beyond reasonable doubt that failures by the association occurred without reasonable excuse. Offences were determined and they were sanctioned accordingly.’
