SNP accused of “moving the poles” on independence campaign funds

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Prior to Scotland’s 2014 independence referendum, David Henry’s interest in politics rarely extended beyond following him on TV.

But the campaign, despite its 45-55% failure, captivated the London-based television production company executive and he became an activist for the Scottish National Party.

“I joined the SNP one day after the 2014 referendum,” said the 58-year-old who grew up in Edinburgh. “It was a great time. . . I found it very invigorating.

He wasn’t alone. Tens of thousands of people joined the party after the vote, turning it into a political behemoth with over 125,000 members at its peak.

But Henry was among seven supporters who complained to the party and then in 2021 to the police over lack of transparency about money SNP he had risen to fight a second independence referendum. The move would trigger a police investigation and the scandal has triggered rifts that threaten the dominance of the party, which has held power in Scotland for 16 years.

The SNP’s long-standing divisions on strategy and governance have exploded into the open this year in a bitter race for replacement Nicholas Sturgeon as leader, and the turmoil escalated last month when police investigating the party’s finances arrested both its former chief executive and treasurer. The allegations left Sturgeon’s successor Humza Yousaf struggling to restore unity and push back Scottish Labour.

The seeds of the crisis date back to 2017, when Sturgeon called on Downing Street to give Scotland the right to hold a second referendum, and the party subsequently launched a campaign fundraiser. At the end of 2021 the SNP said the campaign and another appeal related to the referendum had raised more than £740,000.

Six years after the launch, however, Scotland is no closer to holding another referendum after successive UK prime ministers refused to allow it and the Supreme Court ruled last year that Sturgeon lacked the legal authority to vote unilaterally.

Former supporters, including Henry, who have contributed to fundraisers, said they went to the police after being dissatisfied with the party’s response. They accused the party of diverting the money to other things, instead of limiting it as promised for an independence campaign.

The money does not appear as a separate item in the financial accounts filed by the SNP with the Electoral Commission. Members started raising questions when 2019 SNP filings showed he had less than £100,000 in “cash and cash equivalents” but separately said the independence appeal had raised £600,000.

The party said the proceeds from the fundraisers were included “and reconciled with” the total donations raised from 2017 to 2021.

Data filed with the electoral body showed annual donations more than tripled in 2017 to £1.4m. A further £324,000 was raised in 2018 and £905,000 in 2019.

The latest available accounts, for 2021, show the party has around £145,000 in cash and cash equivalents at its disposal, raising further questions about the whereabouts of independence campaign funds.

In its 2020 and 2021 accounts, the PNS acknowledged growing concern about the lack of separate accounting for referendum funds. But he also argued that being “a party of independence” every penny it spent, “directly or indirectly”, was in support of the cause. He assured members that the money would be used to secure independence.

Critics such as Trish Spencer, a former party member who claimed to have donated at least £25 to the referendum appeal, claimed this was untrue because contributors believed the money would be set aside and only used to fight a campaign for independence.

Furthermore, they argued that since the money was raised by independence supporters, and not just SNP members or voters, it would have been wrong to spend the proceeds on other things.

Spencer, who is not among those who complained to police, said her money was returned to her after she objected. The 61-year-old retired nurse from North Lanarkshire said the SNP was – in the most charitable way – guilty of ‘moving the poles’.

“I donated because they were accurate in saying it was for a referendum campaign,” she said. “At the very least, they should have come back and told people if they were diverting the money to other things.”

The SNP accounts do not shed much light on what the “referendum” money was spent on, and the dispute with the plaintiffs over how literally the claim that it would be spent on a referendum campaign should be taken.

2020 accounts showed the SNP spent nearly £700,000 on office furniture, computers and other equipment. This amount has raised eyebrows among critics, including pro-independence website Wings Over Scotland.

The site, a harsh Sturgeon critic, was the first, in 2022, to report a £107,620 loan made to the SNP in 2021 by Peter Murrell, the party’s former chief executive and Sturgeon’s husband.

News of the loan, which has not been disclosed to electoral authorities for more than a year, has heightened public concern over the running of a party by a small group of insiders close to Sturgeon and her husband.

In the 2021 accounts, released last year, SNP auditors Johnston Carmichael said they assessed two areas – related party transactions and manual journal entries – as having a “higher risk of fraud”. But there was no further explanation and no suggestion that any evidence of fraud had been found.

The company declined to comment on its audit. Last month’s revelations that Johnston Carmichael stopped working with the party around October last year have heightened the sense of crisis over the SNP’s finances.

Murrell has been at the center of controversy over membership numbers and perceived bias during the bitter succession campaign sparked by Sturgeon’s February announcement that she was stepping down. He resigned as chief executive in March after the party admitted it had about 30,000 fewer members than it claimed at the start of the leadership race.

Then, in April, Murrell was arrested as part of a police investigation into party finances. Colin Beattie, then treasurer, was arrested later in the month. Both men were released without charge pending further investigations. Police Scotland declined to comment on the investigation.

Caroline McAllister, a former member of the SNP’s national executive committee, said the controversy raised wider concerns about the management of the Scottish ruling party.

“I know people who contributed to the fund who weren’t SNP members,” McAllister said. “This is a government party and they take money from people and say it’s for a referendum, but then they use it to support the party. This is not acceptable.

The SNP said it “cooperated fully” with the police. “However, it is not appropriate to address these issues publicly while the investigation is ongoing,” he added.

The impact is starting to be felt in the polls. In an Ipsos poll released on Wednesday, Scotland’s support for the SNP in Britain’s Westminster parliamentary elections dropped 10 percentage points to 41 per cent from six months ago. Henry, meanwhile, left the SNP and joined Alba’s separatist party.

Additional reporting by Mure Dickie