Democracy for sale: How dark money infiltrated British politics
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In an exclusive extract from his new book, investigative journalist Peter Geoghegan looks at the catastrophic results of undisclosed funding.
A book about the dark money that is warping our politics could begin in many places. Our starting point might be a tour of Westminster, stopping to peer through the windows of the Georgian townhouses where well-heeled political consultants and think tanks plot election-winning strategies. We could stroll around the backstreets of the City of London, searching for insights into the murky world of offshore finance amid the brash, overflowing bars and restaurants. Or head straight to the global capital of undisclosed political influence, the sleek glass and steel sepulchres of Washington DC's corporate lobbying firms.
The genesis of my book took place somewhere less obvious: Seaburn metro station on the outskirts of Sunderland, on June 21, 2016. Two days before the UK voted to leave the European Union, my editor had sent me to report on what voters thought in Sunderland. It was a warm summer's morning and there were only a handful of people on the open-air platform.
I approached a middle-aged man with a soft face who was also waiting for the train to Newcastle.
'How will you vote?' I asked, falling into the only mode of conversation for a reporter in an unfamiliar place before a polling day. He wanted Brexit. He talked about pit closures and disinvestment, deindustrialisation and neglect. It was not hard to see why he felt politically abandoned. He had a particular worry about the EU: that Turkey would soon join. He talked about how millions of Turkish workers could soon be coming to the UK in search of jobs. I asked where he had heard about this. 'Facebook,' he said.
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A minute or two later the train arrived. I thanked my interlocutor for his time and sat down alone in an almost empty carriage. A well-thumbed copy of the free Metro lay on the adjacent seat. The front page was a wraparound advertisement calling on Britons to 'take back control', the slogan of the official Vote Leave campaign.
I turned the paper over. An imprint on the back said that the advert had been 'paid for by the Democratic Unionist Party'. This was very curious. Since its foundation in 1971, the DUP had never run a single candidate outside Northern Ireland. Now it was splashing out on a massive ad campaign promoting Brexit in England. I knew that election spending in the UK is tightly capped. I also knew, having worked as a reporter in Belfast, that political donations to Northern Irish parties were kept secret under anachronistic local laws. Perhaps this was a way around campaign limits? I posted a photograph of the advert on Twitter, wondering aloud what was going on. Only a handful of people responded to my tweet.
Slowly, the suburban train cut through verdant countryside, past relics of former industrial glory. Sunderland was once, it is said, the largest shipbuilding town in the world. I forgot about the advert, opened my laptop and began drafting my report for the next day's paper.
Sunderland was one of the first places to declare on referendum night. Over 60% voted to leave the European Union. It was a result that set the tone for a stunning political upset. Through the night, pollsters struggled to explain a vote that defied their predictive models. The next morning, markets nose-dived. The resignation of the prime minister, David Cameron, was only the third item on many news bulletins. The ensuing years of chaos laid bare the fault lines of modern Britain and have changed Europe forever.
In the months that followed the Brexit vote, my mind kept returning to Seaburn station. How could the Democratic Unionists, a tiny party in the context of British politics, afford to buy hugely expensive ads in northern English newspapers? Why were voters in Sunderland seeing stories on Facebook about Turkey joining the EU? Who was paying for all this? My colleagues and I would spend much of the next three years asking such questions.
We found answers, but rarely those we had expected. The DUP's advertising blitz was bankrolled by the biggest donation in Northern Irish history, routed through a secretive Scottish group linked to a former head of Saudi Arabian intelligence. The Vote Leave campaign – led by its ruthless chief strategist Dominic Cummings – broke electoral laws on overspending when it bought highly targeted Facebook adverts with a Canadian digital company that almost nobody had heard of. Arron Banks, an insurance broker with interests in gold mines and a sprawling business empire registered in tax havens around the world, had become the biggest campaign donor in British electoral history. Banks was eventually investigated – and exonerated – by the National Crime Agency, amid concerns about the sources of his record Brexit contributions.
The trail continued, stretching far beyond Britain's shores – from Cambridge Analytica, Steve Bannon and leading figures in Donald Trump's America to Matteo Salvini, Viktor Orbán and Europe's insurgent far right. There were corporate-funded think tanks and lobbyists with access to the highest levels of government and networks of keyboard warriors in suburban bedrooms churning out hyper-partisan news stories that spread like digital wildfire.
The more we uncovered, the more we became aware of serious concerns about central aspects of how democracy is supposed to function. Some of what we saw was illegal. Even more alarmingly, much of it was not.
Dark money is an American neologism for an increasingly global phenomenon: funds from unknown sources that influence our politics.
This money gets into the political system in an increasing variety of ways, from loopholes in election law and online campaign fundraising through to anonymously funded, agenda-setting pressure groups. In her authoritative book on election finance, Dark Money, American journalist Jane Mayer outlines how US democracy was effectively bought by a cadre of the super-rich and their surrogates, often through faceless political action committees – so-called 'super Pacs' – that can spend limitless amounts of money.
The sums involved in American political funding are enormous. The Koch brothers, David and Charles, co-owners of the second-largest private company in the United States with strong interests in coal and petroleum, spent more than $1.5 billion on Republican political causes until David's death in 2019. The pair bankrolled countless conservative think tanks and politicians.
Trump's biggest backers included hedge fund billionaire Robert Mercer, whose data firm Cambridge Analytica also worked on Trump's presidential campaign. In America, elections involving hundreds of millions of voters have become contests decided, in key constituencies, by a handful of plutocrats.
In Britain, money has long played a determining role in politics. The 'rotten boroughs' of the 18th and 19th centuries were notoriously crooked, and their tiny electorates could be bought by influential patrons. The Reform Act of 1832 did not end corruption.
Bribery was so endemic in an 1880 by-election in Sandwich that the constituency was subsequently abolished. David Lloyd George shamelessly sold peerages to wartime spivs and profiteers to fund his prime ministerial lifestyle.
You have to go back to the 1920s to find the last time a general election candidate was convicted of breaking spending limits, but only the most optimistic would believe that the financial restraints in British constituencies are not frequently exceeded. Money corrodes the political system in other ways, too. In the 1960s, architect and planner John Poulson and building firm Bovis bribed Labour politicians across the north-east to approve major construction projects. Three decades later, lobbyist Ian Greer gave Tory MPs cash in brown envelopes in return for asking parliamentary questions useful to his clients. More recently, former Labour ministers have compared themselves to cabs for hire, their wheels greased by generous daily retainers. When the MP expenses scandal broke in 2009, it revealed that parliamentarians had been claiming for everything from cleaning a moat on their country estate to mortgages on expensive second homes. Public trust in politics has never really recovered since.
British politics is comparatively low-spending, especially when set against the United States, but there is plenty of evidence that the American model of hidden finance and clandestine influence has traversed the pond. Britain, as the London-based American political analyst Anne Applebaum notes, 'has become a place where untransparent money, from unknown sources, is widely accepted with a complacent shrug'. The relatively small sums involved can make it even easier to get access to the top table of British politics.
US donors might be expected to spend hundreds of millions of dollars in a single election cycle. But for 50 grand pretty much anyone can get a seat with the British prime minister at a lavish Conservative Leader's Group dinner where discussions are kept strictly private, even if they touch on government policy.
The dark money playbook is straightforward. Take advantage of shady campaign financing; circumvent electoral rules where you can; and draw on a network of supportive think tanks, a receptive media run by a handful of magnates and hard-line caucuses within the long-established political parties. As we shall see, the same strategies and tactics are increasingly employed in the UK and across much of the world. From Vote Leave playing fast and loose with electoral law to the international influence campaign underpinning the rise of the populist right in Europe, politicians and their surrogates are increasingly willing to push the boundaries as far as they will go, and beyond. Donald Trump was elected US president in 2016 after a campaign marred by disinformation and electoral interference.
Far from being an aberration, dirty politics is the new normal. What's so bad about political campaigns not declaring the source of their funds? Does dark money actually matter? It does, profoundly. Even relatively meagre sums can shift the political needle and generate highly effective lobbying operations. Small purposeful groups are adept at taking control of policy in ways that are very hard to see for those not regularly involved in politics.
In Britain, a nexus of corporate-funded libertarian think tanks and transatlantic media moguls turned a 'no-deal' Brexit from what was in 2016 an outlandish proposal into a more or less explicit government policy option after Boris Johnson became prime minister in the summer of 2019.
These think tanks maintain that corporate donors do not dictate their views. Whether BP or big tobacco is giving them money, they insist, does not change their core commitment to economic freedom and small government. That is of course a reasonable position to take, but it ignores the pernicious way in which undeclared corporate donations buy privileged access to the political system. The amount of space and time in public debate is finite. Slots on crepuscular current affairs television programmes are limited (even if it doesn't always feel that way). Dark money gives these small, unrepresentative groups a marked advantage, pays for slick and articulate reports and polished media appearances, and accentuates the risk of the public sphere being captured by vested interests.
Dark money has gone hand-in-hand with the rise of digital disinformation. It is a truism that politics has been transformed in recent years. But it is not just the outcomes, the election of disruptive authoritarian populists, that have changed. Behind Brexit, Trump and a host of other unforeseen ruptures is a paradigm shift in the nature of political communication. The digital world offers voters the opportunity to live in echo chambers where their political prejudices are confirmed and reinforced daily. We can all choose a tribe now and decide not to hear any voices critical of our choice.
As politics is increasingly mediated through Silicon Valley tech giants, falsehoods and mistruths spread at light speed. So far, few political leaders have been willing to back down in a digital arms race in which every potential advantage is seized upon.
The communications revolution has changed our politics in ways we are still struggling to understand. Nigel Farage's Brexit Party may have ceded most of its power to Boris Johnson in the December 2019 general election, but the remarkable story of its short-lived success tells us a lot. In May of the same year, Britain's first 'digital party' topped the polls in European parliament elections in the UK, less than four months after it was first registered. Inspired by Italy's Five Star Movement, the Brexit Party ran a sophisticated online campaign that tapped into widespread anger that Britain was still in the EU, nearly three years after the country had voted to leave.
This pop-up party was governed by a constitution that gave Farage almost complete control. Rather than members with internal voting rights, its supporters gave money but had no power. Ahead of the European elections, tens of thousands of people donated online through PayPal, with minimal checks. The electoral regulator warned that the Brexit Party's online fundraising could allow donors to evade the rules banning foreign contributions to British politics. But by then the votes had already been counted.
If the problem was just one of laws being broken, there would be a simple solution: tougher enforcement. Increase fines until the pips squeak. Introduce the threat of jail time. Former Trump fixer Michael Cohen was given a three-year prison sentence in 2018 for violating campaign finance laws during the presidential campaign. If British political operatives faced similar risks, then bad behaviours might swiftly change.
But the corruption of democracy is as much about perfectly legal abuse as it is law-breaking malfeasance.
American religious funders have quietly pumped tens of millions of dollars into conservative campaigns across Europe, fuelling a reactionary backlash against women's and minority rights.
Already there are signs that faith in democracy has been badly shaken. Authoritarian attitudes are on the rise. From the election of Jair Bolsonaro in Brazil to Narendra Modi's Hindu nationalist government in India, voters around the world are increasingly turning to 'strongman' leaders. In developed nations, dissatisfaction with democracy is running at record levels. A study by Cambridge University's Centre for the Future of Democracy published in 2020 found that some 58% of people were unhappy with democracy. Discontent was particularly pronounced in two places: Britain and the United States.
The crisis in British democracy has become an increasingly partisan issue. Many prominent figures have been keen to silence any conversation about the flaws in our democratic system. Prime minister Boris Johnson has kicked proposals for electoral reform into the long grass. All the while, democratic norms have been eroded. Judges were branded enemies of the people. The government shut down parliament and attacked the apolitical civil service. As Johnson has shown, repeatedly lying is no barrier to the highest public office.
Against this backdrop of growing anti-democratic sentiment among both the public and politicians, political scientist Martin
Moore warns that our democracy is no longer working as it should. 'There is a genuine crisis of representation,' he says. 'How does democracy actually work in this new era? Right now it's not at all clear that we know.'
Writing about politics in such a tumultuous period comes with obvious challenges. Prime ministers – and policies – have come and gone so readily. But behind the political theatrics, the underlying problems remain. Rules and regulations intended to manage a developed, properly functioning democracy have often been sorely lacking in a far more politically restive age. Ineffective checks and balances have been a boon for lobbyists and political opportunists.
The absence of a truly representative electoral system or a codified constitution has only added to Britain's democratic malaise. Regardless of what the country's post-Brexit future looks like, its broken system needs radical surgery.
But before we open the patient up, we need to understand the disease's aetiology.
• Democracy for Sale: Dark Money and Dirty Politics by Peter Geoghegan is published by Head of Zeus.
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