Campaigners and opposition MPs have placed mounting pressure on the Conservative Party to respond to allegations connecting HSBC and donations made to the Party spanning over a decade.
The allegations centre around a private holding company called IPGL, whose majority shareholder is Michael Spencer, former Treasurer of the Conservative Party and current Chair of the Conservative Party Foundation.
According to Debt Resistance UK, HSBC awarded a £214m loan [pdf] to IPGL dating from October 2008. At the time there were signs IGPL was in economic duress, with one of its subsidiary companies (a betting firm called City Index) reporting £43m losses, with Spencer himself having to put in £70m of his personal fortune.
Despite this, there is evidence of large, ongoing donations made by IPGL and other subsidiaries controlled by Michael Spencer to the Conservative Party, totalling at least £5.3m, representing a “huge % of annual turnover”. Campaigners allege that such donations wouldn’t have been possible without HSBC’s financial support of IPGL.
Michael Spencer is one of the co-founders and current chair of the Conservative Party Foundation, whose central mission is “to strengthen the financial future of the Conservative Party”, and alongside fellow multi-millionaire Stanley Fink, promised in 2009 to raise an £18m election ‘war chest’ at short notice and £40m by 2010 to “blow them [Labour] out of the water”.
Campaigners highlight that since the £214m loan made to IPGL, HSBC has gained significant concessions from successive Conservative governments, including “escaping investigation for Mexican money laundering and terrorist financing, light treatment for the Panama Papers and Swiss Leaks scandals, as well as successfully lobbying for a roll back on the bank levy in 2015”.
The allegations were raised by Fionn Travers-Smith of Move Your Money at the Annual General Meeting of HSBC Holdings PLC on 28th April. He noted:
“Not only does this raise questions about HSBCs role in public life, the level of influence that you hold over government, and your own refusal to discuss the possibility of corruption and undue influence at last year’s AGM – but it also raises questions over whether you have contravened your own policies on being politically neutral…”
Responding to the allegations, HSBC’s Douglas Flint sidestepped saying “we are politically neutral” and “we’re not going to talk about individual companies at all”. Joel Benjamin from Debt Resistance UK questioned these claims of neutrality given deputy chairman of HSBC Simon Robertson’s £700k donations to George Osborne and the Conservative Party.
Specific questions remain as to whether and to what extent HSBC was aware of IPGL’s political donations and if so, whether IPGL was used to flout the bank’s own anti money-laundering protocols and policy of political neutrality – providing it with a vehicle to make political donations for access, influence and gains.
As Alexander Runswick, Director of Unlock Democracy, notes:
“Despite reporting substantial and consistent losses, IPGL made sizeable donations to the Conservative party over many years. For a company in financial crisis, this was a high-risk strategy. When private companies make big donations to political parties there is usually an expectation that their influence will be extended, and so a question must be raised about what they were expecting to get in return. A question must also be raised about HSBC’s role, and whether they were aware the loan they made may have been used to fund political donations.”
Joel Benjamin from Debt Resistance UK emphasized:
“Cash for Conservatives shows just how easy it is for big banks like HSBC to buy off the Tories, who are already being investigated for electoral fraud. Michael Spencer’s donations were only made possible through an undeclared HSBC loan. Regulators must get a grip on City dirty money corrupting British politics.”
Since Debt Resistance UK and Move Your Money uncovered the links, two opposition MPs have taken an interest. John Mann, Labour MP on the Treasury Select Committee responded to the allegations saying:
“This is a very major regulatory issue and needs assessing for potential criminal behaviour. It’s political games being played in the hope of a weaker approach to bankers fraud.”
Roger Mullins, Treasury Spokesperson for the SNP said:
“This is a very serious and deeply worrying case, suggesting that a major bank and a business customer have been involved in activities serious enough to warrant criminal investigation. I shall be writing to the Electoral Commission, there must an investigation into this and before the General Election of 2017.”
Following up on the call to action, on Tuesday 2nd May Mullins published a letter sent to the Electoral Commission calling an immediate investigation. His specific questions were:
- Did HSBC and IPGL inform the Electoral Commission of all the donations to the Conservative Party during the period IPGL was in receipt of a substantial loan from HSBC?
- What is the Electoral Commission’s policy where bank loans to companies in distress are then laundered to party political donations?
- Will the Electoral Commission launch an immediate investigation into whether electoral law has been broken by HSBC and IPGL since 2008?
- In the Electoral Commission’s view have such loans any implications for full and proper declarations relating to the 2017 General Election?
The silence of large sections of the British media over these serious allegations has mirrored last year’s reluctance to cover fraud allegations surrounding banking giant HSBC. At the time, the Leveller explored concerns over HSBCs ability to manipulate news stories about serious allegations of fraud both in the UK and overseas.
On the same day that the Cash for Conservatives story was breaking there was instead near wall to wall coverage of a mistake made by Diane Abbott during her sixth interview of the day despite clarification later (because misognynoir). Robert Peston of ITV simply tweeted “Worth reading” and throughout the night commenters on the hashtag #ToryDirtyMoney, where much of the conversation has taken place, criticized the lack of coverage.
Beyond these more recent allegations, HSBC is reportedly fighting 37 legal battles. These fresh allegations also join the tens of MPs who are alleged to have overspent in the 2015 General Election, becoming a pincer of serious allegations surrounding the Party. More recently, Theresa May and her husband Philip have reportedly been the subject of an investigation by the Cabinet Office Propriety and Ethics Team into “allegations that the company which employs Philip May… as an investment manager could have potentially made large sums of money from Brexit market movements caused by Theresa May’s decisions”.
On Tuesday, Theresa May also became the subject of a series of live updates from reporters in Cornwall, highlighting the restrictions her press team had placed on them during her visit – they were not allowed to stand outside to see May arrive, were locked in a room, not allowed to film an interview or her responses to questions. Refusing to take part in televised debates, ducking questions, tightly controlled media coverage, repetition of slogans and unwillingness to depart from the same script – what is it that Theresa May is trying to hide? With just five weeks until voters go to the polls, with enough pressure there is hopefully enough time to find out.
Rebecca Mitchell of PR firm Maitland on behalf of IPGL said:
“As IPGL is a private company, it does not have any comment on this”
Ivana Zadro for IPGL said:
“IPGL has provided all relevant information in this regard to the Conservative Party.”
HSBC, Michael Spencer, and the Conservative Party declined to comment.
Image: Gyver Chang