Tory election expenses: big fines for misreporting, so why no prosecutions?

In March this year the Conservative party was handed a record £70,000 fine after an investigation by the Electoral Commission into its campaign spending returns in recent elections. So why, when the matter was referred to the CPS, did they decide earlier this month not to proceed with a prosecution?

The answer has a lot to do with the sheer complexity of the rules governing election spending, and that the fact that two separate regimes, one civil and one criminal, have to operate alongside each other.

election expenses

Allegations about the Conservative party’s misreporting of its election expenses began emerging early last year, as a result of a long-running investigation by Channel 4 news, whose reporter Michael Crick doggedly pursued the question whether the expenses of party workers, travelling around marginal constituencies in the party’s “Battle Bus” during the 2015 general election had properly been recorded under the relevant legislation.

The matter was taken up by the Electoral Commission, who investigated the party’s campaign spending returns in three 2014 by-elections and the 2014 European parliament elections as well as the 2015 General Election. In March 2017 it issued its report, in which it found serious errors in reporting and record keeping, and imposed a record fine of £70,000. The massive size of the fine was partly due to the party’s “lack of cooperation” with the investigation.

The criminal investigation that followed did not include the 2014 matters because any offences would have been time-barred by statute. But to the surprise of many, the CPS announced earlier this month that it would not be pursuing the vast majority of the allegations, based on evidence provided by 14 different police forces, relating to Conservative Party candidates’ expenditure during the 2015 General Election campaign. (The one exception related to the campaign expenses incurred in respect of the South Thanet constituency in which the Conservatives defeated UKIP candidate and one-time party leader, Nigel Farage. That matter is still under investigation by Kent Police.)

Some commentators expressed surprise at the CPS decision not to prosecute, in view of the Electoral Commission’s clear findings of wrongdoing, inferring there must have been some sort of cover-up. Others (mainly Conservative supporters or members) have suggested that the CPS decision amounts to a verdict of innocence. Neither view is correct.

Two statutes; two regimes 

It’s important to clarify that, in crude terms, when it comes to election spending there are two separate regimes and two separate statutes involved.

The Electoral Commission is a regulator, operating under the Political Parties, Elections and Referendums Act 2000(PPERA), concerned with national party spending. It sets limits on spending and scrutinises returns to see that they have been complied with. It can levy a fine, as it did in this case, but it does not prosecute. However, it can pass information from an investigation (which may have originated with the police) to the CPS, who can then decide whether individual candidates and agents can be prosecuted for criminal offences under the Representation of the People Act 1983 (RPA).

Under the PPERA there are offences for which a party’s treasurer can be prosecuted as an individual, such as knowingly or recklessly making a false declaration under section 83(3), but the commission cannot itself pursue the prosecution. However, it can impose fines for an offence committed under the PPERA, for example, by a party’s treasurer, which is what happened here. The RPA, broadly speaking, targets electoral (mis)conduct at constituency level (as well as other matters, such as voter fraud, etc).

Reasons for the decision

The CPS announcement contained two elements. First, in relation to the offence under section 82(6) of the RPA of “knowingly making a false declaration” on an expenses return, it said:

“In order to bring a charge, it must be proved that a suspect knew the return was inaccurate and acted dishonestly in signing the declaration. Although there is evidence to suggest the returns may have been inaccurate, there is insufficient evidence to prove to the criminal standard that any candidate or agent was dishonest.”

The offence is described as a “corrupt practice” and requires proof of dishonesty, of which the CPS did not think there was enough evidence to proceed. Secondly, in relation to the offence under section 84 RPA of the “illegal practice” of failing to deliver a true return as to election expenses as required by section 81, it said:

“By omitting any ‘Battle Bus’ costs, the returns may have been inaccurate. However, it is clear agents were told by Conservative Party headquarters that the costs were part of the national campaign and it would not be possible to prove any agent acted knowingly or dishonestly. Therefore we have concluded it is not in the public interest to charge anyone referred to us with this offence.”

This part of the decision may have been “charitable” as the Secret Barrister suggests in an excellent explainer, Myth-busting the “Tory election fraud” —  A 10-point guide, or it may simply have been realistic. To run a case only on the lesser offence which looks more like a technicality, rather than on the greater one that looks like wilful deviance, is a hard call at the best of times, and to do so in the midst of or just after another general election might lead to unpredictable consequences. Moreover, CPS decisions are based on all the evidence available to the CPS, whereas popular outrage and criticism of their decisions is usually based only on the often partial or incomplete information that has been publicly reported.

Scope for reform

What the decision reveals, however, is the “extremely complex” and unsatisfactory state of election law in this country, as noted in Joshua Rozenberg’s explainer for Full Fact: Democratic deficit? The rules on election spending. The Law Commission of England and Wales, in a joint project with the Scottish and Northern Ireland Law Commissions, recently considered reforms to the law on election expenses along with other aspects of electoral law, with a view to “rationalising, modernising and improving the fair and effective administration of elections”. Having conducted a public consultation from December 2014 to 31 March 2015, it issued its interim report in February 2016, recommending, among other things,

“that existing electoral offences should be updated and made easier for the electorate, officials and prosecutors to understand, and that the maximum sentence for serious electoral offences be increased to ten years.”

The proposals were welcomed by the Electoral Commission, who have also published a series of reports on issues of electoral law requiring attention; but the government does not appear to have taken the matter forward, no doubt having other more urgent matters to deal with.

As for the CPS announcement, while it may be convenient and a relief to the Conservative party, its timing was not ideal. One of the reasons Theresa May was said to have called the “snap” election  was to avoid the risk of damage to her party’s slender majority in the House of Commons should any of the threatened election expense prosecutions resulted in the loss of a seat. Perhaps she needn’t have worried.

Paul Magrath is head of product development and online content at the Incorporated Council of Law Reporting for England and Wales (ICLR). He tweets as @Maggotlaw.