Ex-UKIP donor Arron Banks in Rochester by-election expenses row

By John Sweeney, Innes Bowen & Phil Kemp
BBC Newsnight

  • Published
Nigel Farage and Arron BanksImage source, Getty Images
Image caption,
Nigel Farage (right), then leader of UKIP, at a press conference with Arron Banks in October 2014

Ex-UKIP donor Arron Banks paid for 20 of his employees to ferry party voters to the polls at the Rochester 2014 by-election, BBC Newsnight understands.

The expenditure was not registered by UKIP, which could breach electoral law.

UKIP's victory in Rochester ensured the party received more coverage by the BBC and other broadcasters the following year, at the 2015 general election.

Mr Banks denies any wrongdoing and said all expenditure at the by-election was expensed in full and notified to UKIP.

Bigger platform

Mr Banks is the bad boy of Brexit, a car insurance mogul and a failed sexual potency pill entrepreneur - but far from hiding his naughtiness, he flaunts it.

Hollywood is thinking about making a TV drama series about him.

One thing he hasn't flaunted though is paying for around 20 of his car insurance salespeople to help bring out the vote for UKIP in the Rochester by-election in 2014.

Conservative defector Mark Reckless won the by-election for UKIP, meaning that at the 2015 general election, broadcasters - including the BBC - gave UKIP a bigger platform than before.

Newsnight's evidence suggests that at least some of the political energy running up to Brexit appears to have been paid for unlawfully.

Image source, Getty Images
Image caption,
Mark Reckless campaigning in Rochester ahead of the 2014 by-election poll

In his ghost-written book, The Bad Boys of Brexit, Mr Banks tells how when the polls closed in Rochester "I put £7,000 behind the bar and soon the place was heaving".

But his book did not mention that about 20 car insurance salespeople employed by Mr Banks at Catbrain Lane, Bristol - the hub of his Eldon vehicle insurance empire - were paid to travel to Rochester, in Kent.

They then drove elderly UKIP voters to the polls, before staying the night at a Premier Inn and making the return journey the following day.

One ex-employee of Mr Banks' brokerage, Eldon, whose brands include Go Skippy car insurance and Footprint van insurance, told Newsnight: "I was paid to do my job."

He said: "I wasn't specifically paid for doing that [ferrying voters to the polls], but I wasn't deducted any pay for being out of the office.

"I got there early in the morning, whole day there, went out in the evening."

'Not a penny'

One estimate for taxi services by 15 drivers for a day in Rochester is £9,000 - a figure which would have put UKIP above the legal spending limit.

Any election expense should be registered by the candidate and his or her agent to the returning officer, but not a penny of these expenses was.

Mr Reckless told Newsnight: "Neither I nor my agent authorised spending except as was appropriately declared."

Mr Banks told us all expenditure incurred during the by-election was properly expensed in full and notified to UKIP at the time.

But the party's "record-keeping", he said, left something to be desired.

Newsnight asked Gavin Millar QC, an expert in election law, whether this was lawful.

He said: "It's only lawful if you stay within the regulated procedures for spending money for the purposes of the election of a candidate.

"If you go outside of them, it's unlawful."

Image source, Getty Images

But if Mr Banks did not have the authority to spend what he did - what does that mean for him?

Mr Millar said: "It was unlawful on the part of the third party who organised the concerted assistance; Mr Banks in this case.

"If they did it and incurred those costs without the authority of the agent, as it appears they may have done, that's called an illegal practice and it's a criminal offence."

What happened in Rochester appears to be similar to bigger troubles the Conservative Party has had with unregistered election expenses.

It is very unlikely that any action will be taken against UKIP, Mr Reckless, his agent or Mr Banks because a criminal investigation must start within a year of any possible offence.

And the story may yet have political ramifications.

'Highly ambitious'

A few months before the Rochester by-election in 2014, Mr Banks made one of the biggest political donations in British political history.

He donated £1m to UKIP in a press conference outside his Old Down mansion, near Bristol.

Handsome backdrop though it is, he does not live there - but in a smaller farmhouse down the lane, bought for £890,000 in 2013 and with £500,000 outstanding on the mortgage.

He hopes to float the Eldon group for £250m - a valuation that got him on the Sunday Times Rich List.

Mr Banks claims his Eldon group will make £24m profit this year, up from only £300,000 last year.

He says new AI - artificial intelligence - technology is giving Eldon a boost.

Image source, Reuters

Arif Khurshed, professor of finance at Manchester Business School, said: "With a group turnover of £47m and an operating profit of £300,000, an IPO of this size looks highly ambitious."

There's been trouble with Eldon's numbers in the past.

In 2013, its auditors, Baker Tilly, resigned, stating "a breakdown in the relationship has occurred because, by failing to supply accurate information, management is imposing a limitation of scope on our work."

Mr Banks says the auditors resigned because of a conflict of interest.

Some of his other businesses have hit choppy waters.

Mr Banks was, until this month, managing director of African Compass Trading, which sold the Star 150 sexual enhancement pill, a kind of herbal Viagra.

Its slogan was "naturally, every man wants to be a superman in the bedroom."

'Russian spy'

The MHRA, the medicines regulator, said that in 2014, as part of a criminal investigation, it seized Star 150 pills worth around £50,000 from an address in Bristol.

They told us their investigation is closed and, to the best of Newsnight's knowledge, it has not resulted in any criminal charges.

Mr Banks told us he did invest £100,000 in the business but that operations were discontinued within a year due to "stiff competition".

Entirely in keeping with his image, Mr Banks provided a fiery response to Newsnight: "Since the referendum result and my support for Donald Trump, I have been the subject of politically-motivated attacks by the 'mainstream media' and Remain-supporting institutions.

"It comes as no surprise that Newsnight would join the party at this late stage with their own particular type of trashy 'News of the World' journalism."

He concluded that after allegations by some of him being a "Russian spy… part of a worldwide conspiracy to subvert democracy… the only surprise is how long it's taken Newsnight to have a pop at me!

"BBC Fake news is alive and well!"

The Bad Boy of Brexit airs on Newsnight at 22.30 on BBC Two.