Police probe looms over claim McSweeney hid £700,000 in Labour donations

Downing Street faced the prospect of a police investigation over claims that the Prime Minister's chief of staff Morgan McSweeney hid more than £700,000 of donations intended to bolster Keir Starmer's political career. The Conservative Party said it had obtained private legal advice suggesting a deliberate attempt to mislead the Electoral Commission over money given to Labour Together, the Labour-linked think tank that played a central role in shaping the party's leadership transition and in the broader effort to reposition Starmer at the helm.

Labour Together was found to have breached political finance rules more than 20 times, and was fined £14,250 by the Electoral Commission in September 2021 after the regulator told McSweeney in 2017 that donations must be declared within 30 days. However, dozens of donations made to Labour Together between 2018 and July 2020 were not declared until after McSweeney left the organisation that year, according to public disclosures. McSweeney had initially disclosed donations when he took over as director of Labour Together in 2017, but early in 2018 he stopped reporting donations, apart from a £12,500 disclosure from Trevor Chinn, a businessman associated with Tony Blair.

After McSweeney left Labour Together in 2020 to join Sir Keir Starmer’s leadership team, Labour Together’s new director, Hannah O'Rourke, found almost £739,000 in donations had not been declared and filed a series of late declarations to the Electoral Commission. The Conservatives say private legal advice written in 2021 by Gerald Shamash, which apparently circulated within the Labour Party and then to outside sources, discussed how to handle the Commission and acknowledged it would be difficult to explain Labour Together’s position. They said the advisory notes suggested Labour Together should attribute non-reporting to an administration error, but argued the underlying motive was to protect donors’ identities and avoid disclosure.

The row comes as advance details of The Fraud, a forthcoming book by journalist Paul Holden, depict McSweeney’s role in Labour Together. The disclosures have already prompted the resignation of Paul Ovenden, the prime minister’s director of political strategy, over sexual remarks made about Diane Abbott. A Labour Together spokesman said the organisation had proactively raised concerns about its own reporting in 2020 and that its investigation, completed in 2021, found no concealment of information beyond what was subsequently disclosed.

No 10 has said invitations to high-profile events, including a state banquet associated with the Trump-era visit, are governed by established protocol. McSweeney was reported to have lobbied organizers to secure a place for Rupert Murdoch at the banquet, an effort No 10 sources described as an attempt to curry favour with Murdoch’s British newspapers. Murdoch and his wife Elena Zhukova were seated at the event alongside Prime Minister candidates and other dignitaries. A government spokesman said invitations to the state banquet are a matter for the Royal Household, while a royal source cautioned that lists are drawn up through coordination among the Foreign Office, the Government, and the White House. A News UK source said Murdoch was “delighted and honoured” to be invited.

The Electoral Commission said it had thoroughly investigated Labour Together’s late reporting in 2021 and found that the failures occurred without reasonable excuse. It noted that offences were determined and sanctions issued accordingly. The commission emphasized that the breaches were serious and involved a pattern of non-declaration spanning more than two years.

The allegations amplify ongoing scrutiny of Labour’s fundraising practices and the influence of donors and political-media interests as the party navigates leadership dynamics and prepares for forthcoming disclosures. While the government and Labour officials reiterate that inquiries are ongoing and probe-related processes will proceed, the broader political landscape remains tense as the public receives fresh details about how money flowed into Labour Together and the implications for accountability and transparency in political finance.