Channel 4 News: Tory election fraud allegations: the full story — election expenses exposed

Last updated: 23 June 2016

​Election laws exist to protect our democracy and ensure a level playing field. Candidates and parties must declare all their campaign spending, and stick within spending limits, to stop richer parties gaining an unfair advantage.

Yet a Channel 4 investigation has uncovered compelling evidence suggesting large-scale and systematic abuse of election rules by the Conservative Party in last year's General Election and three key by-elections in 2014.

The alleged abuse strikes at the very heart of fairness in Britain and the integrity of our democracy. Now the Electoral Commission has launched an investigation, along with ten police forces across the country.

The by-elections

Support for Ukip peaked in the summer of 2014. Disillusioned Conservatives were turning to the party in numbers following its time in coalition with the Liberal Democrats; many demanding stronger action on immigration and the EU.

Conservatives appear to have overspent on three by-elections February 2016

Pressure came to a head after the resignation of Conservative Patrick Mercer, and two defections to UKIP. Suddenly, the Tories had three unexpected by-elections to fight in the second half of 2014. They put forward Kelly Tolhurst to contest Rochester and Strood, Giles Watling in Clacton-on-Sea, and Robert Jenrick in Newark-upon-Trent.

In each area, the party was determined to win. But did candidates break the law when declaring their election expenses? Channel 4 News has found almost £100,000 spent during these campaigns that appears not to have been declared. If it had to be declared and was included on spending returns, all three Conservative candidates would have breached the legal spending limits.

Chart shows the amounts declared by each candidate on their official spending returns, with the addition of costs uncovered by Channel 4 News from the by-election regulated period. The legal spending limit for by-election campaigns is also shown.

Our investigation has uncovered hundreds of pages of receipts for more than 2,000 nights of hotel stays. In each of three by-election campaigns, we found a pattern — luxury hotels for senior staff, while junior campaigners were put up cheaper rooms - usually the local Premier Inn.

The campaign spending was similar in other ways: 770 rooms were booked in the name or home address of one Conservative staffer - Marion Little - while others appeared under the name “Mr Conservatives”.

None of these hotel receipts seem to have been declared by the party.

Emails and staff rosters show that party workers named on hotel bookings were allocated to work on the by-election campaigns, and we’ve spoken to one party worker, Katie Woodland, who stayed in a hotel, and told how she spent days promoting the by-election candidate in Clacton.

Under the law, candidates and their election agents must not spend more than £100,000 on by-election campaigns. In all three seats, the Conservatives declared less than this limit. However, if the hotel costs we uncovered should have been included, the limit would have been exceeded.

The fight to stop Farage

The Channel 4 News investigation has also examined campaigns in last year’s General Election, including the fierce battle in South Thanet in Kent, where the Conservatives fought off Ukip leader Nigel Farage.

Did the Conservatives overspend in Thanet South? February 2016

General Election campaigns have a lower spending limit for candidates - between £10,000 and £16,000 depending on the size of the electorate. In South Thanet, the Conservative candidate Craig Mackinlay claimed his campaign spent just below the limit of £15,016.

However, our investigation raises questions about spending that seems to have been omitted from the local declarations. Under election laws, any costs incurred to promote a candidate, must be declared on local candidate spending returns.

More than, £18,000 spent accommodating Conservative Party workers in the Royal Harbour Hotel in Ramsgate, and a Premier Inn in Margate (just 800 metres outside the constituency border), were not declared on the spending return. Instead, they appear on the Conservative Party’s national expenses - normally reserved for party-wide costs.

John Strafford, head of the Campaign for Conservative Democracy, compares Conservative spending to the U.S., where elections can cost billions

However, our investigation has found evidence that party workers who used the rooms, were apparently campaigning for Mr Mackinlay. The next nearest serious marginal seat is also about an hour’s drive away.

A further £715 was spent on the Alpha Hostel, used to accommodate a bus load of activists who took part in a ‘Stop Farage’ campaign. The costs for the hostel appear not to have been declared at all.

Chart shows the amount declared by the candidate on the official spending return, with the addition of receipts uncovered by Channel 4 News for the Royal Harbour Hotel in Ramsgate, the Premier Inn in Margate, and the Alpha Hostel. The legal spending limit for the constituency during the General Election regulated ‘short period’ is also shown. Constituency limits are based on a formula that takes into account the size and nature of individual constituencies.

If these costs should have been declared in Mr Mackinlay’s candidate spending return, it would have taken him more than two times over the legal limit.

There were also allegations raised that an important Battlebus visit on election day to South Thanet, up to a dozen promotional videos made for Mr Mackinlay, and a conference room used by a minister to campaign on local issues for the candidate appear never to have been declared.

Tories fight police in court May 2016

A week after these allegations were broadcast, police went to court and were granted extra time to investigate Conservative election spending in South Thanet. This was despite Craig Mackinlay MP and his agent opposing this application. The Conservatives had taken the unprecedented step of trying to oppose the court extension requested by the police.

Conservatives lose battle to block Thanet probe June 2016

District Judge Barron said in his decision: "In my judgment the combination of circumstances before me is wholly exceptional and goes far beyond the usual circumstances that would exist in a typical case where election offences are being investigated."

Booking out a hotel and putting senior Tory staff in it for a long time could not possibly have been national expenditure.’ Nigel Farage, Leader of Ukip

The Battlebus

Stopping Farage was important, but a new tactic known as Battlebus 2015 was at the heart of the Conservatives’ campaign to win the election.

A fleet of coaches was used to parachute volunteer activists into 29 key marginal seats across the country, putting them up in hotels, and visiting one constituency each day, in the final ten days before the vote.

In March, the Daily Mirror newspaper raised serious questions about the Conservative Party's use of buses to transport activists into marginal seats.

But at this stage the Electoral Commission and the police declined to investigate.

Channel 4 News obtained crucial documentary evidence covering the Battlebus tour, building a detailed picture of where the activists were sent, what they did, and how much was spent.

Three regions were targeted: the South West, the Midlands, and the North West.

Q&A: everything you need to know about Battlebus 2015

SOUTH WEST

In the South West it proved devastating. All nine seats visited by the Battlebus 2015 tour were won for the Tories. In all, the Conservatives would take 14 seats in the region, wiping out their Liberal Democrat Coalition partners from the region.

Tories admit failing to declare election campaign spending April 2016

The Conservative Party insists that the Battlebus tour was a national event, with activists promoting the party, and not specific candidates. However, Channel 4 News has obtained material that appears to show the volunteers spent time working for local candidates — handing out their leaflets and even reading from a script that mentions individual candidates by name. A series of social media posts also suggest activists were working for local campaigns.

Tweets from Conservative campaigners in the South West

Under election laws, any costs incurred to promote a candidate, must be declared on local candidate spending returns. It’s a criminal offence to knowingly make a false declaration.

However, the costs for hiring the Battlebus coaches, and wrapping them in branded livery, were declared on the Conservative Party’s national expenses. More than £15,000 spent on hotels, uncovered by Channel 4 News, appears not to have been declared at all. The Conservative Party has said that failure to declare the hotels was an “administrative error”.

In all the nine seats in the South West the Conservative candidates declared they had spent below the legal limit. But Channel 4 News has calculated the cost of the buses, hotels, and staff for the Battlebus tour in the region would work out as £2,460 for each seat it visited. If those costs had been added to candidate spending returns, eight of the nine candidates would have breached legal limits.

Many of the Lib Dems who lost their seats feel it wasn’t a fair fight.

Chart shows the amounts declared by each candidate on their official spending returns, with the addition of the amount calculated by Channel 4 News for each Battlebus visit. This amount is calculated by adding up the costs of hotels in the South West (£15,056.30), the cost of hiring coaches (£4,000), the cost of coach livery wrapping and unwrapping (£6,600), and known staff salary and expenses (£782.39); minus a maximum £50 contribution for each of two sets of an estimated 43 activists (£4,300), and then divided by the nine constituencies visited. The final amount is £2,459.85 for each constituency. The legal spending limits for each constituency during the General Election regulated ‘short period’ are also shown. Constituency limits are based on a formula that takes into account the size and nature of each individual constituency.

But it doesn’t end there. Another person under investigation is the newly-elected Conservative Police and Crime Commissioner for Devon and Cornwall, Alison Hernandez. She was previously the election agent who helped Kevin Foster MP win the Torbay seat for the Conservative Party.

Alison Hernandez sworn in May 2016

Documents obtained by Channel 4 News show she signed off Mr Foster’s spending return, and included costs for leaflets promoting him that were delivered by Battlebus activists. However, costs for the activists, such as the buses or accommodation, were not declared locally.

She is one of the subjects of an investigation by Devon and Cornwall Police. But after her election as PCC - where she has influence over the £275m police budget and the power to hire and fire the chief constable - the force has announced it will call in an outside constabulary to carry out the investigation.

The local Police Federation has called for her to step down from her new post.

…I would say that's worthy of an investigation by the police, and I think most people would.’ Gavin Millar QC, election law expert

Midlands and North West

The Battlebus tour was also used by the Conservative Party to target 20 seats in the Midlands and the North - many key marginals they needed to defend against Labour as part of the Conservative’s 40:40 strategy.

New evidence Tories bankrolled local activists in marginals April 2016

More than £23,000 spent on hotels in these two regions, obtained by Channel 4 News, appears not to have been declared at all - again explained by the Conservative Party as an “administrative error”.

Again, Channel 4 News has obtained social media posts and documents that appear to show the volunteers were working for local candidates, undermining claims by the Conservative Party that Battlebus 2015 was a “national campaign” designed to “promote the Party”.

Tweets from Conservative campaigners in the Midlands

In Sherwood, for instance, Battlebus activists were photographed apparently distributing canvass cards for candidate Mark Spencer, that reference them as his “local team”. In Amber Valley, activists were pictured on a doorsteps and in groups holding canvass cards for Nigel Mills. And in Northampton North activists were briefed on local issues like a new bus station, shops in the town centre and pedestrianised shopping areas.

Here’s how the candidates’ spending looks if you assume that the cost of the buses and hotels in the Midlands should be declared as local expenses - working out as £2,045 for each constituency visited in the Midlands.

Chart shows the amounts declared by each candidate on their official spending returns, with the addition of the amount calculated by Channel 4 News for each Battlebus visit. This amount is calculated by adding up the costs of hotels in the Midlands (£13,653.05), the cost of hiring coaches (£4,000), the cost of coach livery wrapping and unwrapping (£6,600), and known staff salaries (£353.33); minus a maximum £50 contribution for each of two sets of an estimated 43 activists (£4,300), and then divided by the ten constituencies visited. The final amount is £2,044.84 for each constituency. The legal spending limits for each constituency during the General Election regulated ‘short period’ are also shown. Constituency limits are based on a formula that takes into account the size and nature of each individual constituency.

In Morecambe and Lunesdale campaigners were photographed apparently distributing flyers for candidate David Morris.

Here’s how the candidates’ spending looks, if the costs should have been declared, when you add costs calculated by Channel 4 News for the buses and hotels in the North West - working out as £2,154 in the North.

Chart shows the amounts declared by each candidate on their official spending returns, with the addition of the amount calculated by Channel 4 News for each Battlebus visit. This amount is calculated by adding up the costs of hotels in the North West (£9,350), the cost of hiring the two midi coaches (£5,625), the cost of coach livery wrapping and unwrapping (£8,112), and known staff salaries (£353.33); minus a maximum £50 contribution for each of the estimated 38 activists (£1,900), and then divided by the ten constituencies visited. The final amount is £2,154.03 for each constituency. The legal spending limits for each constituency during the General Election regulated ‘short period’ are also shown. Constituency limits are based on a formula that takes into account the size and nature of each individual constituency.

​Channel 4 News repeatedly asked Conservative figures involved in the election campaigns for an interview, but they would only provide a written statement. However, we eventually caught up with Lord Feldman:

With respect to both the by-elections and the South Thanet allegations, the Conservative Party said: "All election spending has been correctly recorded in accordance with the law". They also informed us that the omission to declare hostel costs in national or local returns was due to an “administrative error”.

Regarding the individual candidates, the party said: “All local spending has been correctly declared in line with the requirements of the Representation of the People Act.”

“CCHQ campaigned across the country for the return of a Conservative Government. Such campaigning would be part of the national return, not local return, as the Electoral Commission has said. As is apparent from our National Return, the Party declared expenditure related to our CCHQ-organised Battlebus.”

"However, due to administrative error it omitted to declare the accommodation costs of those using the vehicles. This is something we have already brought to the attention of the Electoral Commission in order to amend the return.”

Grant Shapps said at the start of May that he knew nothing about the Conservative party general election expenses, and that other people were responsible. “I was co-chairman but compliance wasn’t my side of things. The campaigning side was my side, but not the money and the finance.”

Appearing on BBC Radio Cornwall, Prime Minister David Cameron insisted the cost of the Battlebus was correctly declared as national expenses, but admitted the party had made an error in not declaring the cost of the hotels.

He said: “My understanding is that the Battlebus was declared as a national expense in the right way but the party made an error in not declaring accommodation costs of some of people using the bus, and we've alerted the Electoral Commission to that and will be providing a proper return so that it will be done in the proper way.

“I think all parties have had these battle buses over the years and they don't just go round doing nothing. They go round and they campaign across the country and it's a national expense and should be nationally declared, and obviously the party's made an error in its declaration which needs to be put right."

What happens next?

An Electoral Commission investigation into the Conservative Party’s national spending is underway and is expected to take several months. A spokesman said the Commission is “currently conducting an investigation into the Conservative Party’s 2015 General Election spending return and will consider carefully any new allegations that are raised as part of the Channel 4 News programme. In line with the Commission’s Enforcement Policy, the Commission does not comment on on-going investigations, as to do so may hinder the conduct of the investigation.”

In a submission to the court, the Electoral Commission said:

"The investigation has been delayed and hindered by the failure of the [Conservative] Party to provide complete and timely disclosure.

"There is very significant public interest in this matter... the implications of the allegations are that individuals and/or the Conservative Party may have committed deliberate acts intended to circumvent the party and election finance rules... these allegations go to the very heart of our democracy."

Any candidate found guilty of an election offence could face up to one year in prison, and being barred from office for three years.