Friday, November 30, 2007

EXCLUSIVE: Brown's Team Broke Electoral Law by Tearing Up Cheque

Bear with me with this... Gordon Browns campaign, by tearing up the cheque, appear not to have followed the requirements of the Political Parties, Elections and Referendums Act 2000. for rejecting a donation. The Act is clear that where the procedures, set out in Law, have not been followed within 30 days of receipt of the donation, the donee is deemed to have accepted the donation. So what are the required steps?

s56 of the Act sets out the requirements, and whilst this section may appear to relate to parties, not individuals, Schedule 7, part II, (8) of the act explains that s56 – s60 also apply to individuals.

Section 56
5) For the purposes of this Part a donation received by a registered party shall be taken to have been accepted by the party unless— (a) the steps mentioned in paragraph (a) or (b) of subsection (2) are taken in relation to the donation within the period of 30 days mentioned in that subsection; and
(b) a record can be produced of the receipt of the donation and—
(i) of the return of the donation, or the equivalent amount, as mentioned in subsection (2)(a), or (ii) of the required steps being taken in relation to the donation as mentioned in subsection (2)(b), as the case may be.

And subsection (2) states
(2) If a registered party receives a donation which it is prohibited from accepting by virtue of section 54(1), or which it is decided that the party should for any other reason refuse, then—

(a) unless the donation falls within section 54(1)(b), the donation, or a payment of an equivalent amount, must be sent back to the person who made the donation or any person appearing to be acting on his behalf,
(b) if the donation falls within that provision, the required steps (as defined by section 57(1)) must be taken in relation to the donation,

So, under the letter of the Law, Gordon Brown, by not having returned the cheque, and having a record of doing so, was deemed to have accepted the donation. Is this just being pedantic? Well consider the situation in a long running election campaign. A cheque is received by a party that they have doubts about, but they may need the money…They decide to hedge their bets. The cheque could be placed in a draw and only banked if things become desperate and they decide to take the risk. In the event that the monies are not needed, the cheque could simply be torn up. No record exists as to when this happened, and it can always be argued that it was torn up immediately. The requirement in Law for the payment to be returned, and a record kept, prevents this from happening.

At the very least, Brown cannot make the same claim that Harman has been making – that she has not broken the letter or the spirit of the Law!


Anonymous said...

does anybody know how long a leadership candidate has to declare a donation with the electoal commission and if so what the threshold is??

Anonymous said...

You rotter! I just got a nose full of warm coffee.

Anonymous said...

A cheque is only a promissory note legally - it does not count as receiving a donation, this only happens when it is banked.

Best to have some basic legal/financial knowledge before you start making legal interpretations and accusing others of breaking the law.

Anonymous said...

Brown WAS Labour Party Treasurer for a brief period recently.Does the treasurer pay any penalties for breaking the law during his tenure?(Under The Labour Party's constitution)?

Anonymous said...

I'm starting to feel uneasy about all this. What if Brown, Harman, Hain, Alexander, Benn are considered too honest and upright to be of use to the sort of sleazebags who found Blair so bribeable? So a group of crooks got together and scattered them with cheques and then shopped them. If Brown fell the Labour Party might be stupid enough to replace him with the appalling Miliband and that would no doubt suit them better.

Anonymous said...


Marvellous. Your MBE is in the post (or it should be).

You have established that Gordon Brown was completely INDIFFERENT to the Law - i.e., he may have broken it (and it looks like he did) or he may NOT have broken it. But the point is that he personally, and the Labour Party, clearly couldn't give a flying **** either way.

Yet he has stood up, with all the props that his Office can provide him, pontificating about all this. The world can now see that this Emperor has no clothes. He stands before us as a middle aged bumbler, Mr. Bean indeed, mumbling soundbites as if they matter.

What about his legendary 'command of detail', his work ethic, his intellect, his micro management?

He leads a party which can't obey the Law and can't manage it's accounts, let alone something as challenging as a party at a brewery.

He's finished.

Anonymous said...

And if a cheque is received from some-one who includes no address, or a false one? Send to the bank with "Return to payer" written on it I suppose, or pass it to the Treasury as a confiscated "unlawful" donation?

It's a mess certainly iaim, but really, aren't there more important issues to be dealt with than this ridiculous cock-up?

It's all very funny for the viewers, but if you have to read that stream of gobbledegook in order to decide where you stand, the fun soon goes out of it!

The Huntsman said...

That may or may not be right.

It depends on how the law would construe the word 'accept' and whether that would be at the moment it was paid into an account, paid by the drawing bank or simply received as a cheque. A smart lawyer will argue the former. I cannot at the moment see a specific definition of 'accept' so it remains moot. Knacker of the Yard won't want to take a punt on anything not absolutely cut & dried.

As I have pointed out on my blog today the PPERA 2000 is a dog's dinner of an Act and very porrly drafted (I think intentionally) and has any number of gateways through which a coach & four may be driven.

But a good point to raise nevertheless.

Anonymous said...

Iain, I'm as happy as the next man to see Brown implicated but for completeness could you provide a link to any evidence or statements that show they received a cheque rather than simply refusing a verbal offer of money?

Anonymous said...

Brilliant. The Act also requires that any rejected donations are notiifed to the Electoral Commission.

Anonymous said...

Iain, I'd be delighted were this to be true, but I'm with "anonymous 4:46pm" on this; I can't see a cheque per se as being "a donation"; cleared funds are a donation, not a cheque which can be paid in or torn up.

Would be great if I were wrong and you were right though!

tory boys never grow up said...

Anon 4:46 isn't quite right a cheque is a bill of exchange which is defined as follows per the Bills of Exchange Act 1882

"A Bill of Exchange is an unconditional order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person, or to bearer".

Nevertheless until the cheque is presented to the bank nothing is received so anon's point is basically correct.

You have in effect libelled/smeared Brown and his team - of course you could argue ignorance in defence - just like Peter Watt. If you have any sense I would retract very quickly.

I am afraid Christmas has come early for all the Tory boys - but don't worry Lent will soon be here!

Anonymous said...

this proves that the whole thing is a load of balls. abrahams has a case to answer as to why he wanted to disguise his donations, if in fact he did want to do that. beyond that, it's all bad admin. these rules are very very complex and frankly, human beings switch off at some stage and just take the line of least resistance.
unless it's proved that abrahams was seeking or was promised some gain in return for his donations, then this is going nowhere. pettyfogging disputes about technical mistakes are nothing. and i am not a nulab stoolpigeon, i loathed blair and was convinced that he had sold peerages.

Anonymous said...

after lecturing the whole country for years on what is right and what aint

THEY drew up this Act !

in a fit of fake morality

gawd , the tears are streaming .

Anonymous said...

Anon @4:46
Perfectly correct. A cheque is a promissory note, as is a banknote.

However, a cheque like a banknote, doesn't cease to exist simply because it is 'torn up'. As long as it can be proved to have existed and as long as the 'promise' is still in existence the situation is unchanged.

Anonymous said...

I tend to agree with the posters who say that a cheque does not constitute a donation that has been "received". Leslie could argue that by tearing up the cheque, he had prevented the donation from being received and thus avoided triggering s. 56.

Still, I think the fact he tore it up shows that he knew there was something fishy about it, not that he had never heard of the woman. I mean, if he had just not heard of her, but there was the possibility that someone else knew who she was, he would have sat on it pending investigation into who Mrs Kidd was.

Anonymous said...

desperate dan 4.52pm

Surely,in the event that Gordon was "forced from office" on such a serious matter relating to the honesty and integrity of the government - the only course would be to call a General Election on a matter of confidence rather than just anoint another leader as PM ?

I suspect, however, that the whole thing is largely academic notwithstanding the febrile atmosphere being generated at the moment by political commentators

Anonymous said...

If they had reason to believe that a criminal offence had been attempted (eg: making an undisclosed payment on behalf of someone else without excuse) then in tearing up the cheque they would be destroying evidence and helping to conceal a crime. It's not an academic point: if you dispose of the cheque then it is no longer available as evidence of the attempted payment. If the putative donor has not, for instance, made a note of the payee on the cheque book stub/sent the cheque with an accompanying letter there may be no other evidence of the existence of the cheque.

Anonymous said...

Anon @ 4:52 said
And if a cheque is received from some-one who includes no address, or a false one? Send to the bank with "Return to payer" written on it I suppose, or pass it to the Treasury as a confiscated "unlawful" donation?

FFS. I am sick of reading comments from people who haven't read the law. If the donor cannot be identified, the cheque has to be passed to the EC.

Anonymous said...

"Anon 4:46 isn't quite right a cheque is a bill of exchange which is defined as follows per the Bills of Exchange Act 1882"

If this is the level of discussion some people are desperate for a way out.

If you don't want the cheque but you don't send it back, that means you really do want the cheque.

Anonymous said...

Try telling the HMRC that you have not received payment because it was only a cheque and you haven't banked it yet!

I have been scouring through some of the guidance at the Election Commission to obtain definitive advice as to when a donation has been received (as opposed to accepted, which can be up to 30 days later).

The only reference I can find is on page 16 of a document titled "Guidance for permitted Participants: donations and referendum expenses"

It states as an example
"A permitted participant receives a donation on 27 April. The donation is in the form of a cheque sent to the permitted participant’s office in London from an individual in another part of the country.

Whilst clearly arguable in Law - as most things are, it does tend to suggest that the Electoral Commission consider a donation in the form of a cheque as having been received when the cheque was received.

Anonymous said...

Iain - are you really hoping to become an MP and thus part of our legislature ? Then please read up on some basic law.

Anon at 4.46 got it as right as makes no difference.

I detest Brown, but throwing poorly thought out accusations at your opponents can only weaken the impact of any good points you make. Debating 101 !

Anonymous said...

Started well, but now it's all descending into utter pedantry. Look at Guido too for this.

I know techncially you're right but can we please focus on the big scandal of funnelling the cash through Tory supporters - money laundering effectively.

That's the only way everyone (except pedants) will turn against this Government. All else is waffle.

lilith said...

Instant disbelief that the cheque was "torn up". People don't tear up cheques, not unless they are their own, or they have been asked to by the issuer. It is weird to tear up a cheque. The natural thing to do with a cheque you do not feel able to cash is to just return it with "thanks, but no thanks".

Mark Wadsworth said...

The cheque could be placed in a draw

"In a drawer", I think you'll find.

Anonymous said...

What would the likes of Casper Andreas, Jorg Andreas or Chris Stafford make of this?

Or, for that matter, Bob Condron or Sean Fisher?

We demand to know!

ziz said...

Anyone wanting to be seen NOT accepting anything is best advised to return the item with a accompanying letter.

This is a policy adopted by many companies for their buying departments.

Anonymous said...

Oh dear!

Chris Paul said...

Surely this is complete twittery Iain? Certainly the stuff re s54. AFAIK this was not rejected as being from an impermissable donor or lender.

But being a chooser rather than a beggar and with no opponent's to best Brown surely had no difficulty raising enough. He didn't have a particular cash target or need to win an arms race.

Alex said...

Iain, I think you are about as wrong here as you could try to be.

First of all, the donation was not rejected because the donor was known to be an impermissible donor, nor because the identity of the deonor could not be determined. It was simply because the Brown team did not know her, and thus didn't know why she was giving the money and therefore rejected it, presumably because they didn't need it.

Secondly, as others have said, a donation is not received until there is cash in the bank, i.e. until the cheque is presented. By tearing up the cheque, no money was passed to Brown's campaign team and hence there is nothing to repay (not that he was under any obligation to repay it in the first place).

All of which supports my theory that politicians should be the last people drafting laws because: (a) they don't understand them, and (b) they are too ... political.