Would you trust a ‘Fact Checking’ service run by an organisation which falsified its accounts?
Hope not Hate chief Nick Lowles announced yesterday that they are starting a ‘fact-checking’ service called 'Dispel' to "challenge, probe and analyse the growing threat, and lies, posed by and from the radical and populist right". Perhaps they should begin with a less grandiose ambition and start by looking at the accounts they presented to the Electoral Commission following the European Election in 2014.
Under electoral law, as a registered third party Hope not Hate were permitted to spend a total of £195,759 across the UK. They declared a total spend of only £129,894.04[i], and yet somehow this included an 8-page wrap on 761,000 copies of the Daily Mirror.
Their invoices which are filed with the Electoral Commission show they paid only £ 54,434 for this - £ 30,434 for printing[ii] and £24,000 for distribution[iii]. And yet the Daily Mirror’s rate card for advertising shows that the normal price for a 4 page wrap is £ 220,000 plus VAT[iv] (£264,000 total), which equates to £68,241 more than their total permitted electoral spend just for that single item or £209,566 more than the declared cost.
Under the terms of Schedule 11 Section 2(a), (c) & (e) of the Political Parties, Elections and Referendums Act 2000[v] the £209,566.00 should be regarded as a gift or donation (goods or services provided below market rate) and should have been registered with the Electoral Commission at the £ 264,000 figure.
According to UK VAT legislation, VAT on donations is still liable at their standard market rate. By the Daily Mirror issuing invoices for only £54,434 including £ 4,000 of VAT, they helped Hope not Hate evade a VAT liability in the order of £34,000 - VAT on £220,000 is a further £ 44,000, although the printing is VAT free.
That is bad, but it is not all. Hope not Hate also ‘forgot’ to include their monthly consultancy fees paid to US campaigners Blue State Digital in January and February which amounted to a further £8761.74 + VAT, or a total of £10,514.09 (as per their invoice for May[vi]). When these figures are added to Hope not Hate’s declared expenditure of £129,894.04, they give a total expenditure of £ 349,974.14 for an under-declaration of £220,080.10 contrary to Section 94 of the Political Parties, Elections and Referendums Act 2000[vii].
This figure also raises another point. Controlled expenditure over £250,000.00 requires a report prepared by an auditor in respect of expenditure reports submitted under Section 96 of the Political Parties, Elections and Referendums Act 2000. This has not been done, and the submission of unaudited accounts for sums exceeding £250,000.00 is contrary to Section 97 of the same Act[viii].
To prevent this getting too long, we will return another day to various other offences contained within their accounts. Failure to Appoint Auditors, Exceeding Spending Limits for Registered Third Parties, VAT Evasion and False Accounting will do for today.
The only question which remains to be asked is “would you trust a fact-checking service run by people who are guilty of these criminal offences?”