UKIP Uncovered
What motivates the leaders of the United Kingdom Independence Party?

Sunday, October 19, 2003 

Misappropriation of Party Funds?

We have acquired a copy of this letter sent to David Lott, UKIP Party Chairman, and all members of the UKIP NEC. It raises the most serious of questions resulting from the recent national advertisement for UKIP in the Daily Mail regarding the way money is raised, accounted for and spent within the party.


Dear David,

I trust you are in good health. Well done on your chairmanship of the conference. Went very smoothly. Unfortunately, there are some graver matters to return to.

Following up on our previous email correspondence regarding the Daily Mail advert and the financial controls relating to it, I have received information from multiple sources that contradicts your own assurance to me - “All ok and well thought out – no worries”. I will now detail the charges made and then list the precise information I require for you to correct or clarify the situation.

Beforehand, I must advise you that I am taking this matter extremely seriously, not because of the advert itself, but because it demonstrates the grave weaknesses in the system of control. As such, your urgent and considered response is required. In addition, I promise to follow-up on this tenaciously – and you will recognise that I have a good track record on this. Be aware that since you expressly stated that you are responsible for the day-to-day management of the Party, you are accountable for any lack of control and abuses of Party resources.

The Charges Made & My Comments

1. The NEC was not advised of the advert prior to its publication.
The fact that an advert for UKIP goes out in a national paper is not a problem.
Neither is it a problem for the leadership to embark on such a project without consulting the National Executive Committee, if and only if:

– The NEC has given prior authorisation for specific individuals to act independently in pursuit of certain objectives and targets, e.g., increasing national membership; and

– The NEC has allocated funds to be used for that purpose in advance; and

– The NEC is satisfied that effective controls are in place to guarantee that both the funds and information obtained as a result of the advert are: (i) accurately and properly recorded, (ii) suitably protected from fraud or theft, (iii) directed to central party accounts/databases in full, and (iv) freely available for scrutiny by the Party Treasurer at any time; and

– The advert does not contain information that breaches law, the UKIP constitution or NEC decisions regarding the policies and administration of the Party currently in force.

Without these in place, the donated funds may not be used according to the needs of the Party, as defined by the NEC as a whole; the advert (and associated back-room operations) may breach agreed policies or administrative procedures; the monies and data obtained may be siphoned off by individuals or those administering the operations, illegally.

2. At least one NEC member asked for information regarding the donation that funded the advert, including details on the size of the donation.
There are no circumstances I can imagine where a NEC member is denied the right to know the source of a donation or its size. Such matters cannot be confidential from the NEC. If such details were confidential, then the following would be possible:

– Donations can be solicited from undesirable sources that could irreparably damage UKIP and bring it into disrepute. E.g., the BNP, far right organisations or unknown foreign sources.

– The amounts donated will not be recorded as required under the terms of PPERA. (The Treasurer must record the size of the donation)

– The donation can be accepted with strings or conditions attached.
The NEC must be able to assess the risk associated with a donation and veto a donation that may undermine the Party’s image or integrity.

3. No information on the monies and data received as a result of the advert has been
forthcoming, despite requests for such information.

Again, a situation where the NEC is unable to obtain data on an operation’s activities and performance is inconsistent with sound governance principles. No board of directors would be refused access to information on activities that managers were undertaking, as directors are obligated to safeguard the organisation. Information on the data and monies received is the most basic data that should be provided. There can be no excuses for delay, as making such data available on a regular basis to the NEC should have been planned beforehand.

Actions Required of the Party Chairman

As a result, I must request that you and the individuals directly responsible for the advert
(their names would be helpful), provide the following as a matter of urgency:

* A dated copy of instructions authorising the Daily Mail advert: including those who expressly authorised the advert and the individuals instructed to execute the advert.

* A document that sets out how the basics regarding how enquiries are handled,
funds received and memberships applications processed, including

– Which individuals are responsible for specific activities in the process, include details on the appropriate segregation of duties to prevent fraud

– How the monies received are recorded

– In which bank account are the monies deposited

– What reconciliation is done to ensure the figures on the accounts tally with the records on advert-related enquiries/applications/donations

– How monies due Central Party funds are recorded and handed over

* A document from the office of the Party Chairman to the NEC stating categorically: (i) the size of the donation; (ii) the person(s) soliciting the donation and when; and (iii) the person(s)/organization making the donation; (iv) a statement of any conditions attached to the donation.

* A document providing up-to-date information on the monies and information received as a direct result of the advert to the NEC and Treasurer, including bank statements and (sales/membership/donation) ledgers

* An agenda item, placed high up, specifically to discuss this issue at the next NEC.

* A resolution that sets the precise time the Chairman will provide the above information to the NEC, which must be acceptable to the NEC as a whole.

If I do not hear that this information has been passed on directly to the NEC members to their satisfaction, then serious action may follow. If other activities surface that indicate a pattern of such behaviour, then an EGM is not unacceptable.

I hope you understand that such a modus operandi, as displayed in this incident, is totally unacceptable, especially under circumstances where the financial situation remains “problematic”.

Kind Regards

posted by Martin |7:32 AM
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