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| Charity Commission to investigate thinktank after 'cash for access' claims | |
| (about 1 hour later) | |
| The Charity Commission has announced an investigation into the Institute of Economic Affairs thinktank after it emerged that it offered potential US donors access to UK government ministers as it raised cash for research to promote free-trade deals demanded by hardline Brexiters. | |
| The commission said it has opened a regulatory compliance case into the IEA on the basis of concerns about its political independence. | |
| On Sunday the Guardian reported that the IEA has been offering potential US donors access to government ministers and civil servants as it raises cash for new research to support its hardline on Brexit. | |
| The IEA’s director, Mark Littlewood, told an undercover investigator posing as a potential US donor it could fund and shape “substantial content” in research reports commissioned by the IEA that would support calls for a free-trade deal between the UK and America. The investigation was carried out by Unearthed, part of the environmental campaign group Greenpeace. | |
| The IEA is established as an educational charity. Charity regulations state that “an organisation will not be charitable if its purposes are political”. | |
| A Charity Commission spokeswoman said the allegations were “of a serious nature” and added: “Educational charities can play an important role in informing the public. The law is clear, however, that they must do so in a balanced and neutral way. There are clear rules for charities regarding political activity that form a key part of both charity law and public expectations.” | |
| The commission has powers to examine the IEA’s internal financial records, legally compel it to provide information and ultimately to disqualify trustees. | |
| The IEA denies it has breached charity law. | |
| “We do not act in donors’ interests, except to the extent that they have an interest in pursuing free trade and free markets,” a spokeswoman said, adding the IEA makes “independent editorial decisions and then seeks funding ... it is surely uncontroversial that the IEA’s principles coincide with the interests of our donors”. | |
| Earlier on Monday Jon Trickett, the shadow Cabinet Office minister, wrote to the regulator claiming the IEA may have breached charity law by acting politically. | |
| Trickett alleged the IEA “engaged in extensive lobbying and controversial political campaign activity in pursuit of specific policy goals, which go well beyond the scope of its objects as an ‘educational’ charity”. | Trickett alleged the IEA “engaged in extensive lobbying and controversial political campaign activity in pursuit of specific policy goals, which go well beyond the scope of its objects as an ‘educational’ charity”. |
| A former board member of the Charity Commission, John Purkis, said the regulator should be worried that the IEA’s director told undercover investigators that the IEA was “in the Brexit influencing game”. | |
| In footage recorded secretly on behalf of Greenpeace, Littlewoodspoke to an undercover reporter posing as a representative of a potential US beef farming donor. | |
| Littlewood said the potential donor could fund and shape “substantial content” in research reports commissioned by the IEA that would support calls for a free-trade deal between the UK and the US. | Littlewood said the potential donor could fund and shape “substantial content” in research reports commissioned by the IEA that would support calls for a free-trade deal between the UK and the US. |
| Littlewood told the would-be donors that a supposedly independent report on the future of agriculture, for which the IEA was seeking £42,500 in funding, would conclude that US beef should be allowed to be sold in the UK. | Littlewood told the would-be donors that a supposedly independent report on the future of agriculture, for which the IEA was seeking £42,500 in funding, would conclude that US beef should be allowed to be sold in the UK. |
| It also exposed how in May the IEA arranged for real US donors with agricultural interests to have a private meeting at its offices with Steve Baker, the then Brexit minister. | It also exposed how in May the IEA arranged for real US donors with agricultural interests to have a private meeting at its offices with Steve Baker, the then Brexit minister. |
| Greenpeace said on Monday it would provide the full transcript of the undercover investigation to the Charity Commission. | Greenpeace said on Monday it would provide the full transcript of the undercover investigation to the Charity Commission. |
| An IEA spokeswoman said it was confident it had acted in accordance with the charity regulations. She said: “We do not act in donors’ interests, except to the extent that they have an interest in pursuing free trade and free markets.” She added it makes “independent editorial decisions and then seeks funding ... it is surely uncontroversial that the IEA’s principles coincide with the interests of our donors”. | An IEA spokeswoman said it was confident it had acted in accordance with the charity regulations. She said: “We do not act in donors’ interests, except to the extent that they have an interest in pursuing free trade and free markets.” She added it makes “independent editorial decisions and then seeks funding ... it is surely uncontroversial that the IEA’s principles coincide with the interests of our donors”. |
| The thinktank said it was “spurious to suggest that the IEA is engaging in any kind of ‘cash for access’ system”. | The thinktank said it was “spurious to suggest that the IEA is engaging in any kind of ‘cash for access’ system”. |
| Speaking on BBC Radio 4’s Today programme on Monday, Littlewood said: “We want politicians to listen to us. I don’t apologise for that.” When asked whether the IEA was sufficiently blind to the interests of its donors, he said: “We have to find people with whom we have synergy. We have to raise money from companies, individuals, foundations.” | Speaking on BBC Radio 4’s Today programme on Monday, Littlewood said: “We want politicians to listen to us. I don’t apologise for that.” When asked whether the IEA was sufficiently blind to the interests of its donors, he said: “We have to find people with whom we have synergy. We have to raise money from companies, individuals, foundations.” |
| The Institute of Economic Affairs was established in 1955 by admirers of the free-market economist Friedrich Hayek. Its mission involves “analysing and expounding the role of markets in solving economic and social problems”. | The Institute of Economic Affairs was established in 1955 by admirers of the free-market economist Friedrich Hayek. Its mission involves “analysing and expounding the role of markets in solving economic and social problems”. |
| In July it launched a £50,000 prize for ideas about harnessing the free market to solve the UK’s housing crisis. It is established as an educational charity and does not have to declare its donors, although it is widely known to have been backed by tobacco, alcohol and oil companies, among others. It publishes reports, and organises conferences and dinners that are often attended by government ministers as well as donors. It has a high media profile, regularly supplying spokespeople to TV news channels. | In July it launched a £50,000 prize for ideas about harnessing the free market to solve the UK’s housing crisis. It is established as an educational charity and does not have to declare its donors, although it is widely known to have been backed by tobacco, alcohol and oil companies, among others. It publishes reports, and organises conferences and dinners that are often attended by government ministers as well as donors. It has a high media profile, regularly supplying spokespeople to TV news channels. |
| Last year it spent £2.3m on its activities, which include distributing a magazine about economics to thousands of A-level students. | Last year it spent £2.3m on its activities, which include distributing a magazine about economics to thousands of A-level students. |
| Its trustees include Patrick Minford, a pro-Brexit economics professor who supported Margaret Thatcher, and the hedge fund billionaire and Conservative party donor Sir Michael Hintze. | Its trustees include Patrick Minford, a pro-Brexit economics professor who supported Margaret Thatcher, and the hedge fund billionaire and Conservative party donor Sir Michael Hintze. |
| The IEA was established in 1955 and is one of the most influential rightwing thinktanks operating in the UK and operates with a annual budget of £2.3m. | The IEA was established in 1955 and is one of the most influential rightwing thinktanks operating in the UK and operates with a annual budget of £2.3m. |
| Purkis said the IEA appeared to be “promoting particular free trade policy prescriptions, which is not compatible with being an educational charity”. | Purkis said the IEA appeared to be “promoting particular free trade policy prescriptions, which is not compatible with being an educational charity”. |
| “To be an educational charity, you must not be promoting a controversial, predetermined position,” Purkis said. “Instead, you should be presenting facts and arguments in a balanced and neutral way, allowing the reader to reach his or her own conclusion.” | “To be an educational charity, you must not be promoting a controversial, predetermined position,” Purkis said. “Instead, you should be presenting facts and arguments in a balanced and neutral way, allowing the reader to reach his or her own conclusion.” |
| Trickett’s letter to Lady Stowell, the chair of the Charity Commission, said that “contrary to assurances the IEA previously gave the regulator that funders could not affect the contents of papers or other research output, it has privately indicated that potential sponsors could influence the content of report, ensuring the report is ‘salient’ to their business concerns”. | Trickett’s letter to Lady Stowell, the chair of the Charity Commission, said that “contrary to assurances the IEA previously gave the regulator that funders could not affect the contents of papers or other research output, it has privately indicated that potential sponsors could influence the content of report, ensuring the report is ‘salient’ to their business concerns”. |
| “The system is clearly not working if a registered charity, supposedly prohibited in law from having a political purpose, uses foreign money to lobby politicians to support its extreme political agenda,” Trickett told the Guardian, which first reported the investigation by Unearthed, Greenpeace’s investigations unit, on Sunday. | “The system is clearly not working if a registered charity, supposedly prohibited in law from having a political purpose, uses foreign money to lobby politicians to support its extreme political agenda,” Trickett told the Guardian, which first reported the investigation by Unearthed, Greenpeace’s investigations unit, on Sunday. |
| During undercover recordings, Littlewood also claimed that the director of the IEA’s trade unit, Shanker Singham, was “writing [Michael] Gove and [Boris] Johnson’s script” on the issue of leaving the customs union, a reference to his allegedly close relationship with the environment secretary and former foreign secretary. | During undercover recordings, Littlewood also claimed that the director of the IEA’s trade unit, Shanker Singham, was “writing [Michael] Gove and [Boris] Johnson’s script” on the issue of leaving the customs union, a reference to his allegedly close relationship with the environment secretary and former foreign secretary. |
| Asked about this, the IEA said Singham was “quite clearly not ‘writing Gove’s script’ given the significant divergence in their opinions” on issues such as leaving the customs union. | Asked about this, the IEA said Singham was “quite clearly not ‘writing Gove’s script’ given the significant divergence in their opinions” on issues such as leaving the customs union. |
| The Charity Commission investigated the IEA in 2016, following an earlier complaint by Purkis. At that time, it concluded that “the only sponsored research IEA accepts is from individuals or trusts who do not have a vested or commercial interest in the topic” and that “the sponsorship only goes as far as suggesting topics, not the contents of the paper”. It also said that the IEA’s trustees assured it that it does not engage in “policy engineering” or “campaigning”. | The Charity Commission investigated the IEA in 2016, following an earlier complaint by Purkis. At that time, it concluded that “the only sponsored research IEA accepts is from individuals or trusts who do not have a vested or commercial interest in the topic” and that “the sponsorship only goes as far as suggesting topics, not the contents of the paper”. It also said that the IEA’s trustees assured it that it does not engage in “policy engineering” or “campaigning”. |
| Responding to the Greenpeace investigation, Purkis said: “Offering donor access to ministers is a practice more closely associated with commercial lobbying/PR companies or raising funds for political parties rather than charities, but charity fundraisers do quite frequently offer donors access to their patrons and celebrity supporters. | Responding to the Greenpeace investigation, Purkis said: “Offering donor access to ministers is a practice more closely associated with commercial lobbying/PR companies or raising funds for political parties rather than charities, but charity fundraisers do quite frequently offer donors access to their patrons and celebrity supporters. |
| “The more serious aspect for the Charity Commission may be the focus on influencing current policymaking in a particular direction, whether directly or via donors with access, which is not what educational charities should be doing. Littlewood talks about the IEA’s ‘ideological position’, which to some may suggest a closed world view that the IEA is trying to promote. Educational charities should not be promoting an ideology.” | “The more serious aspect for the Charity Commission may be the focus on influencing current policymaking in a particular direction, whether directly or via donors with access, which is not what educational charities should be doing. Littlewood talks about the IEA’s ‘ideological position’, which to some may suggest a closed world view that the IEA is trying to promote. Educational charities should not be promoting an ideology.” |
| He continued: “The reference to donors being able to influence ‘substantial content’, though not conclusions, adds to the worries that the public’s trust and confidence in charities as existing solely for the public benefit can be endangered if charity reports are perceived to be ‘substantially influenced’ by big donors – who may represent particular private interests and whose identity, in the case of IEA, is often secret.” | He continued: “The reference to donors being able to influence ‘substantial content’, though not conclusions, adds to the worries that the public’s trust and confidence in charities as existing solely for the public benefit can be endangered if charity reports are perceived to be ‘substantially influenced’ by big donors – who may represent particular private interests and whose identity, in the case of IEA, is often secret.” |
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