Author: Sonia Gable | Date: January 2008

BNP pot calls the kettle black

Financial sabotage and breaches of accountancy procedures were among the charges against Kenny Smith when he was expelled from the British National Party and sacked from his post as the party’s national administration officer on 9 December. But it is the BNP itself that is guilty of financial irregularities and has been for many years.

The BNP finally published its 2006 accounts days before the fine for their late submission to the Electoral Commission would have doubled to £2,000. The BNP is now blaming the delay on a failure by “Kenny Smith, to provide receipts for expenditure under his direct control”, consisting of £17,000 paid into his account, and bizarrely claims that the auditors refused to sign the accounts until Smith was sacked. When asked about this allegation Frank Hogarth, a partner in Silver & Co, refused to comment.

Yet on 13 August 2007 the BNP said the reason for the lateness was that 15 local party groups and branches had failed to get their accounts to the party treasurer in time. The previous month BNP had claimed that the party’s separate regional accounts, which cover local party units, were late because the independent auditors were not familiar with European auditing requirements, a highly unlikely position for any firm of auditors.

The accounts themselves refer to £14,000 of funds “transferred to the B N Publications account so as to allow the printing department to funding [sic]” and state: “Receipts have been provided for the cash drawn, but no vouchers or accounts have been produced to show how the money was spent”.

Yet the B N Publications account, which Smith runs, is not on the balance sheet. This indicates that it is a separate business outside the party, so why should it have to explain how it spends the fees the BNP pays it for producing the members’ bulletin? The BNP does not ask Dave Hannam, the party’s assistant treasurer, how he spend the money the party pays his company, Great White Records, to “buy CDs at commercial rates” and the fees of £9,618 for “sound assistance at venues”.

The BNP appears to have pulled the wool over its auditors’ eyes over B N Publications, which inspires little confidence in these accounts, for which the auditors had once again “to rely upon assurances and explanations given us by officers of the party”.

It would be interesting to know what explanations the BNP gave the auditors concerning the printing equipment. In 2005 the party claimed to have spent £75,000 on printing equipment, but that year’s accounts only showed expenditure of £51,671. In June 2007 when Chris Jackson challenged Nick Griffin for the party leadership, people starting asking why Mark Collett, the director of publicity until his recent demotion, was always late in producing leaflets for the BNP after all the money spent on printing equipment. The BNP’s reply was that the party had bought four high quality digital duplicators, three folding machines and power guillotine for £70,000 but that after the 2005 general election they were “given to the regions” and no longer kept for head office jobs.

Yet the 2006 accounts show that whatever equipment the party bought in 2005, it still owns. So was the printing equipment ever in the accounts or was it bought for Collett’s own business as some now suspect? Was it flogged to death and is now worthless, as others claim? Was the BNP lying in 2005, in 2007 or both?

Another area of continuing concern is payments to staff. As in previous years, the wages figure is much too low for the number of staff declared, but there is a large sum for “professional fees”. Our conclusion, that some party workers were illegally being paid without accounting for tax and national insurance through the PAYE system, was borne out when Sadie Graham, the expelled group development officer, stated on 22 December that, “for a year I have been contracted by the Party as self-employed so that they can save on paying my tax bill”.

There have also been persistent allegations that individuals have been paid in cash to avoid tax and national insurance, especially some members of the party’s “security department”. And in August 2000 Griffin admitted to the BNP’s Advisory Council that a payment of £1,500 described as reim-bursement of a party printing bill paid by Tony Lecomber, who was then the party’s group development officer, was in reality a means of supplementing his income without affecting his state benefits.

The 2006 accounts show a surplus of nearly £19,000 compared to a deficit of nearly £95,000 in 2005, but it was not enough to take the party out of insolvency. A £35,000 surplus of liabilities over assets at 31 December 2006 was financed partly by running up a debt of nearly £22,000 to the regional accounting unit, although this was paid off in January 2007. The amount owed to HM Revenue and Customs for PAYE and value added tax was half the sum at the start of the year, suggesting that HMRC became less tolerant of the BNP’s excessive borrowing from the taxpayer to finance its deficit.

Perhaps surprisingly the party ended the year with £46,000 in the bank, much of which was used to pay off the debt to the regions. A figure of £67,548 on the balance sheet described as “subscriptions in advance” leads one to the conclusion that the BNP made a big effort to get people to pay their 2007 membership fees early. In other words, much of 2007’s membership income has been spent in 2006.

The accounts state that all donations over £5,000 are reported to the Electoral Commission. That proved not to be the case in 2007 when the BNP’s quarterly return of donations for July to September did not include the £5,315 that Steve Johnson, a recent BNP local election candidate, handed personally to Griffin at a London meeting in September. It was not until mid-December, after Searchlight had exposed the omission, that the BNP corrected the return.

That accusations about financial wrongdoings form part of the present dispute in the BNP is not surprising. The BNP has been here before. John Tyndall, Griffin’s predecessor as leader, was questioned in 1999 at a party meeting about the absence of any audited accounts for the entire party’s history. His response was that he had burnt 16 years of accounts to protect the identity of the party’s funders. The absence of accounts was an issue in Griffin’s successful leadership challenge to Tyndall.

After Griffin took over, it was not long before the new treasurer, Mike Newland, started challenging him over unaccounted payments, something that rapidly turned into a factional dispute. Newland’s persistent questioning eventually led to him being suspended for reasons that included “spreading deliberately misleading and inaccurate accounting records, designed to spread alarm about the party’s financial status”.

Griffin and Lecomber went on to make a vitriolic attack on Newland and his supporters, accusing them of “sabotage” and “an attempt to destabilise then take over the party by responding to a popular clamour (which they would have created)”.

When John Walker took over as treasurer in 2004, he and Hannam went to the home of the former party treasurer John Brayshaw and had various BNP financial documents shredded. The BNP has denied this but Searchlight still has the evidence.

These matters formed part of Searchlight’s report into financial irregularities in the BNP, which Jon Cruddas MP presented to the House of Commons and sent to the police and Electoral Commission last month.

The report also highlighted the BNP’s attempts to raise money in the USA through the front organisation Civil Liberty in contravention of UK electoral law. Before overseas donations were prohibited, the BNP raised money through the American Friends of the BNP, which raised thousands of pounds while operating in breach of the US Foreign Agents Registration Act of 1938.

It is too early to determine how the present dispute will affect the BNP financially. The rebels have called for supporters to delay paying their party membership fees, most of which fall due on 1 January, although to delay too long would lose them their Voting Member status and with it the right to attend the party’s annual conference.

Martin Wingfield, editor of the party’s newspaper Voice of Freedom, made a point of telling readers of his blog how busy the party’s membership office (run by his wife) was last month, which smacks of nothing so much as wishful thinking. And supporters of the rebels, given an ultimatum to return to the Griffin fold by 24 December, were surprised to receive a tatty BNP fundraising leaflet instead of the expected expulsion letters. It followed hot on the heals of a six-page appeal for the party’s “Building to Grow Project”, which presumably had not been very successful. Immediately after Christmas, when few people have much spare cash, is an odd time to appeal for donations – unless one is desperate.

Perhaps too many of the BNP’s donors have transferred to the “Family Defence Appeal” set up by the rebels after Graham and Smith lost their party jobs and therefore their income.

The Building to Grow Project appeal mentioned that the party had already “equipped each BNP region with a laptop”. After allegations by the rebels that the BNP used Graham’s laptop to monitor her communications, potential donors might be concerned about how their money would be used.

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