When the British National Party told its members in January that it had raised £70,000 as a result of its “Building to Grow” appeal, Searchlight was sceptical. After all, the appeal was launched just as the internal crisis erupted last December. Who in their right mind, we thought, would donate such sums to a party that seemed about to collapse.
We were wrong. A printout of transactions on the BNP’s main bank account, which fell into our hands recently, shows that between 14 and 31 December alone Ged Munns, the BNP’s chief fundraiser, paid in £41,605 described as “appeals”.
During January he paid in a further £30,011.50, making a total of over £70,000 though a long way short of the “well over £80,000” that a report on the BNP website on 14 February claimed the appeal had raised. Why tell the truth when it is so easy to lie to the party’s gullible members?
How strange then than the BNP’s audited accounts for the year to 31 December 2007, released by the Electoral Commission at the end of July, show the total raised from “fundraising activities” during the whole year was £23,433, less even than the £38,970 raised in 2006.
Why would the party not want to highlight the success of the “Building to Grow” appeal, run for Nick Griffin, the BNP leader, by the Belfast-based Midas Consultancy, to which the party paid £6,900 during March and April this year? Midas, owned by the hardline anti-abortion activist James Dowson, also produced the begging letters for the BNP’s recent “truth truck” appeal and arranged the party’s officer training sessions in Spain in spring.
It would be tempting to conclude that the appeal money swiftly found its way out of the BNP coffers and into Griffin’s back pocket, but that would be wrong. The bank account balance of £30,417.58 on the printout for 31 December matches the £30,418 shown on the balance sheet at that date, so all the income must appear in the accounts somewhere.
Has the “Building to Grow” income simply been hidden in donations, a figure that nevertheless fell from nearly £290,000 in 2006 to under £200,000 in 2007? Of this sum £36,000 came from four supporters whose donations were declared individually to the Electoral Commission. Including the “Building to Grow” income in “donations” would mask a huge drop in ordinary donations.
The BNP’s 2007 accounts revealed some other interesting features. Most notable is the opinion of Silver & Co, the party’s regular auditors, that the financial statements do not give a true and fair view of the state of the party’s affairs at 31 December 2007 and of the year’s results.
An adverse auditors’ report is normally devastating for a company, making it almost impossible to obtain credit. A normal political party would find that donors lose confidence that their money will be used properly and income dries up. The BNP no doubt hopes that its donors will not notice or be too stupid to understand.
Griffin tries to skate over the embarrassment by blaming Kenny Smith, who was one of the leaders of last winter’s BNP rebels. “Accurate accounting for this year is problematic owing to the point-blank refusal of the former head of Administration to account for large amounts of expenditure”, he writes in his introduction to the accounts. But mindful of the potential financial implications of a libel claim, he hastens to add that much of the money was undoubtedly properly spent.
Smith was also blamed in the 2006 accounts, both for their lateness and for a qualification to the auditors’ report on the grounds that no vouchers had been produced to show how £14,000 transferred during the year to Smith’s “B N Publications” account had been spent. In fact B N Publications was a separate business run by Smith outside the party so arguably did not need to explain how it spent the fees it received for its services.
The reason why the 2007 accounts were “not a true and fair view” may be the size of the amount involved, especially compared to the party’s gross income, which was considerably lower in 2007 than the previous year.
But there nay be another explanation, contained in a further attempt to cast aspersions on Smith as well as explain the party’s reduced income despite a claimed 56% growth in membership. Griffin writes: “Income was down on the previous year, but given that we never received crucial accounting records from British National Lottery or Excalibur [both then run by Smith], we have estimated that we could have lost nearly £70,000 in unaccounted income”.
Is Griffin saying that Smith extracted £70,000 from the party in addition to failing to account for £32,271 of fees paid to him? How? Even the newly revamped and expanded Excalibur is not expected to make more than £20,000 a year profit from a £40,000 turnover.
The accounts certainly do show a large reduction in income. Alongside the drop in donations, income from commercial activities fell by over £70,000 to £175,000. And nearly half of this income consists of sales of the BNP’s monthly publications Voice of Freedom and Identity to the party’s own local units.
The regional accounts, which bring together the income and expenditure of all the party units, suggest they only recoup a fraction of this from sales to the public. However the truth is unclear.
While some of the local units’ income is properly categorised as “donations”, “commercial activities” etc, more than half – over £147,000 – was not, and appears in the regional accounts as a “petty cash difference”. This failure fully to record income sources suggests that the BNP rebels had a point when they accused Dave Hannam, the regional treasurer, of incompetence. Stating where income comes from is one of the most basic of bookkeeping tasks, though the accounts blame the “volunteers” who keep the local groups’ petty cash books.
Returning to the main accounts, membership income is up, though not by the same proportion as the growth in membership numbers. Presumably some people are joining on the cheap. But the increase is not enough to set off the fall in donations and commercial income. Total income in 2007 was £611,000 compared to £726,000 the previous year.
Although the BNP managed to save on some costs, it ended 2007 with a deficit of over £50,000 compared to a £19,000 surplus in 2006, increasing its insolvency.
No wonder the party needed Dowson to extricate it from bankruptcy. The “Building to Grow” appeal was supposedly intended to expand the party’s capabilities. For example the BNP claimed the new funds enabled it to open its new premises in Deeside with “a vast array of new equipment with a value of well in excess of £35,000”.
In fact it seems that only about £18,000 was spent on buying new equipment, from a company called Twofold Ltd. The rest seems to be leased. Leasing is often commercially sensible but not when you give your members the impression that their donations have been invested in acquiring the equipment the party needs to progress.
The rest of the “Building to Grow” money is being spent on paying the salaries of the party’s officers and meeting its debts, such as the more than £20,000 it still owed to HM Revenue and Customs for value added tax and income tax and national insurance deducted from employees’ salaries.
As well as not paying over the PAYE deductions, the BNP continued to get away with paying half of its staffing bill in the form of “professional fees” to avoid national insurance and income tax. Staff paid gross included Simon Darby the party’s deputy leader, Munns, Hannam, Arthur Kemp who runs the party’s educational and training department, and a number of the BNP rebels who complained about the policy.
The BNP ended 2007 insolvent to the tune of £86,000. It survived because the party was able to borrow nearly £42,000 from its local units. In 2006 it ran up a debt of nearly £22,000 to the local units, but the full amount was repaid in January 2007 as the party was keen to announce.
Such prompt repayment was not repeated after 31 December 2007. The auditors’ report on the regional accounts highlighted the debt, pointing out that the party had “insufficient funds, which places doubt on the ability of the Party to repay this money”. Hannam’s treasurer’s report states: “It is the aim of central office to repay this internal loan with monthly standing orders”, but the party seems in no hurry to get on with it.
One person who is doing well out of the BNP is Mark Collett, the BNP’s former director of publicity who is still responsible for its graphic design. One of the main targets of the BNP rebels, he remains widely unpopular in the party. Between May 2007 and April 2008 his Vanguard Promotions business received nearly £50,000 from the party, most of it after “Building to Grow” started bearing fruit.
If the success of “Building to Grow” was repeated in the Truth Truck appeal, the BNP may now have reversed its financial woes. The election of Richard Barnbrook to the London Assembly in May will also have helped. His £50,000 salary is far higher than any BNP officer receives so he has generously agreed to donate £5,000 a year to party funds. In addition he has been able to employ three assistants at London taxpayers’ expense, one of whom is Darby, saving the BNP the expense of paying him. It is such financial gains multiplied several fold that await the BNP if it succeeds in getting candidates elected to the European Parliament next year.