Northampton Town loan: David Mackintosh's election fund took secret payments

By Julian Sturdy & Matt Precey
BBC Look East

image copyrightTwitter/David Mackintosh
image captionMr Mackintosh, on the left, recently tweeted this picture with Foreign Secretary Boris Johnson

A Conservative MP's general election fund took hidden payments from a developer as a multimillion-pound loan he personally oversaw paid out.

More than £37,000 was channelled to David Mackintosh's 2015 campaign from 1st Land Ltd, while he was leader of Northampton Borough Council.

Most of a £10.25m loan he signed off to redevelop Northampton Town FC has vanished and police are investigating.

Howard Grossman, of 1st Land Ltd, and Mr Mackintosh deny any wrong-doing.

Documents obtained by the BBC show eight people linked to the developer made donations to the Northampton South Conservative Association between April and September 2014.

During this time Mr Mackintosh was the Conservatives' candidate to contest Northampton South at the 2015 general election - a seat he went on to win.

At least four of the donors received money from 1st Land Ltd shortly before making their payments.

Mr Grossman was the sole director of 1st Land Ltd, which received the bulk of the £10.25m loaned by Northampton Borough Council.

image copyrightGetty Images
image captionWork on the East Stand at Northampton's Sixfields Stadium remains incomplete
image captionDavid Mackintosh, the former MP for Northampton South, did not stand for re-election in the 2017 general election

It was during a time when the council was negotiating millions in extra loan money to build a hotel and homes next to the Sixfields stadium.

Two of the donors told the BBC they were Labour supporters and another said they did not vote at the general election. One donation was titled: "David Mack Campaign".

Mr Mackintosh, then leader of Northampton Borough Council, had been given delegated powers, along with senior council officials, to push through a series of loans to the football club.

Only a small percentage of the money passed to Mr Grossman's company made its way to the stadium builders, who walked out over unpaid bills.

The League One club defaulted on the loan and faced a winding up order by HMRC. It almost went under before a takeover in 2015.

A police inquiry into the missing public money is looking into allegations of theft and fraud, bribery, misconduct in public office and electoral offences.

Mr Mackintosh stood down as an MP in June after a campaign to deselect him over his role in the affair.

image captionA hotel and conference centre were also due to be built on land surrounding Sixfields

An audit report into the way the loan was dealt with said it had been rushed because of "political and management pressure" and "fell seriously short" of expected standards.

The payments to Mr Mackintosh's fund were made in the months before planning permission for housing and a hotel by the stadium was granted by the borough council.

The BBC previously revealed Mr Grossman channelled £30,000 in three £10,000 payments to Mr Mackintosh's election campaign fund via three proxy donors using money from 1st Land.

Most of 1st Land's funds came from the loan, although a fraction originated from another source.

One of those donations was initially not declared to the Electoral Commission, which carries out automatic audit checks on payments exceeding £25,000 a year.

When asked about the failure to declare the donation, Mr Mackintosh's office blamed an "admin error".

The BBC has now discovered five more donations where businesses each paid £1,500 to the campaign over a six-month period - the maximum sum which can be donated without being publicly registered.

  • In June 2014, Sharad Bhimjiyani, from Middlesex, a business associate of Mr Grossman who was financial controller at his County Group, donated £1,500 a week after 1st Land Ltd paid £16,500 to his company, NSB Accountancy Ltd. The payment was marked "David Mack Campaign"
  • On the same day, his wife Nutan Bhimjiyani also donated £1,500 through her company RSB Accountancy Ltd
  • Another Middlesex company, Javee Trading Ltd, donated £1,500. One of its directors is linked to Mrs Bhimjiyani via another company
  • Brij Parekh, also from Middlesex, donated £1,500. Companies House and Land Registry records show his company, Aquarius Airfreight Services Ltd, was registered at a property owned by the Bhimjiyani family
  • Another businessman, Nilesh Gosai, also from Middlesex, gave £1,500 in June 2014

Mr Bhimjiyani did not respond to repeated BBC requests.

Mrs Bhimjiyani said: "I don't know anything, I would like to make no comment."

Javee Trading also did not respond and the other donors would not comment on the record when contacted.

One of the other donors told the BBC privately he had "got in over his head" after doing a favour.

image copyrightFACEBOOK
image captionCash given to David Mackintosh's election campaign originated from developer Howard Grossman, pictured with his wife

"I have not done anything wrong, knowingly," he said. "I would not donate money to a political party. I don't even vote. I am not a political person. There is no way I would give money to a political party."

In a statement, Mr Mackintosh said: "To the best of my knowledge, all donations over the legal required amount were accepted, declared and published by Northampton South Conservative Association in accordance with the processes laid out by the Conservative Party and in accordance with the Representation of the People Act.

"I had no reason to question this until I was contacted by the BBC on 23 November 2015 regarding donations made to Northampton South Conservative Association with allegations that a donation had not been properly declared to the Electoral Commission.

"This was the first I was aware of this. I contacted Suresh Patel, the then Chairman of the Association, who confirmed this to be correct. He told me this was due to an admin error. I have no further knowledge of this admin error as the party's rules and processes ensure that candidates are not in a position to process or declare donations but Suresh Patel told me he was taking steps to rectify this with the Electoral Commission."

'Genuine donations'

Mr Patel, Mr Mackintosh's agent at the 2015 general election, said all the donations had been approved by the Conservative Party in London.

"When these donations came in we asked David Mackintosh, who told us these were all genuine donations," he said.

"He has sent us all the names and addresses and we have to submit to Conservative Central Office, which we did to the compliance team and it was all perfectly accepted.

"At that time there was no real concern. They were all accepted by the compliance team."

Since leaving Parliament, Mr Mackintosh has continued in his role as vice president of the Conservative Friends of Bangladesh. He has also been appointed a Franco-British Young Leader.

Kevin McKeever, the defeated Labour candidate at the 2015 general election in Northampton South, said he had run his election campaign on a shoe-string and had been comprehensively out-spent by his Conservative rival in the marginal constituency.

"The fact it wasn't a level playing field in the 12 months up to polling day calls into question the legitimacy of the result," he said.

Northamptonshire Police is following 700 lines of inquiry in an investigation which has so far lasted almost two years.

Ten people have been interviewed under caution and seven arrested.

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