FRAUD COP PROBE INTO STURGEON'S PUBLISHER STILL ONGOING
Details and updates on financial crimes unit probe into fraud claims of violated rules when Highlands and Islands Enterprise awarded grants and loans to Sturgeon's publisher
I have written previously about the Police Scotland’s Operation Branchform, investigating allegations of possible fundraising fraud by the SNP. But that isn’t the only active fraud squad probe that concerns the SNP where Ms Sturgeon’s government and name pops up.
Although you may have missed it, the Police are also investigating the entirely separate allegations of fraud concerning £295,000 of taxpayers money concerning a book publishing company and a public body. Officers of the financial crimes unit are probing allegations that Sandstone Press - who published a book of Nicola Sturgeon’s speeches - benefited from broken rules relating to Scottish Government public body Highlands and Islands Enterprise (HIE) grant awards.
Sandstone Press is run by ardent nationalist and committed SNP supporter Robert Davidson; and received £120,000 in the 12 months leading up to the publication of Women Hold Up Half the Sky: Selected Speeches of Nicola Sturgeon. A book which contains an introduction by the retiring First Minister’s pal Val McDermid.
Breached ministerial code?
One of the first aspects raising my eyebrows concerns that 12-month timing. Not least as it means the firm was publishing and promoting a book of the outgoing First Minister’s speeches using resources - apparently - entirely derived from HIE and Creative Scotland (CS). What’s more, this occurred on the run-up to the Scottish Parliamentary elections.
Keith Charters of Strident Publishing has highlighted that this represents a potential breach of the ministerial code by HIE, CS and even then Scottish Government Minister Fiona Hyslop
“We consider this a clear breach by HIE of the Civil Service Code. Given Cabinet Secretary Fiona Hyslop’s knowledge of the circumstances in which Sandstone has been funded by CS and HIE, we believe this also constitutes a breach of the Scottish Ministerial Code.”1
The relevant guideline would seem to be the obligation to ‘Ensure that public resources are not used for party political purposes’.
Normally I would not be particularly concerned if Sandstone Press were promoting and publishing the book of Nicola Sturgeon’s speeches if they were using their own resources and just happened to also receive the taxpayer funding in question. However claims have been raised that Sandstone Press was financially non-viable. The firm’s balance sheet was recording £0.5m cumulative trading losses at the time period in question.
Given this reality the allegation can be (and has been) raised that Sandstone was using taxpayer cash given predominantly by HIE to promote a highly political book in the run up to a Scottish election.
Fiddled PERF assessment?
But things become even murkier when we examine further allegations concerning how the taxpayer cash funding was given to Nicola Sturgeon’s publisher. Mr Charters has also raised the allegation that a Pivotal Enterprise Resilience Fund (PERF) worth £70,000 was dished out to Sandstone by HIE using a fiddled assessment of the company.
Judging by what we can plainly see in the image above, there would seem to be a prima facie case to be made suggesting HIE was dolling out taxpayer cash to Sandstone on the basis of a fiddled assessment of the company.
Put simply, the physical geographical location of a company is a matter of objective fact. And it would appear that HIE awarded the Sandstone’s application four times the appropriate points for Geographic Location.
According to the Head of Corporate Affairs Scottish Enterprise (SE) Simon Forrest, the PERF issue in question is really a matter for HIE to address - which is interesting given the question arises as to whether the SE’s CEO was the Accountable Officer.
When asked about the issue by Mr Charters in email communications, he states it was a matter for HIE
So it appears on the face of it that HIE was engaged in a game of pretend, recording Sandstone’s business wrongly as opposed to its actual location. And SE boss Simon Forrest helpfully establishes that HIE is the Scottish Government body owing an explanation. Although the issue of the Accountable Officer remains - for me at least - unclear.
In an email Mr Charters sent to the Cabinet Secretariat in 25 February 2021, he makes the point bluntly about the prima facie fiddling to ensure Sandstone could receive the taxpayer dosh
“Where a company’s business is located is a matter of fact. It seems HIE pretended that the company’s IV2 postcode – the postcode of HIE’s own HQ in Inverness - was not in Inverness but on an island or more than 30 minutes’ drive from Inverness. Those points (4 where 1 was the only possible award) were the difference between the company’s application being approved versus being automatically rejected.”2
We should note that HIE did eventually admit that it awarded 3 points for Geographic Location (v 4) instead of the 1 point to which Sandstone was eligible. So we know that the PERF scoring was wrong, thus allegations could be said to take on a firmer aspect.
Sturgeon aware
We can also establish that outgoing First Minister Nicola Sturgeon was also made aware of the allegations set out in brief above. The Daily Record revealed in a November 2021 article that Keith Charters, managing director of book firm Strident Publishing, wrote to Sturgeon warning of concerns over Sandstone.
So Nicola Sturgeon was in the loop. And what is even more interesting is that it would appear Ms Sturgeon has not replied concerning the issue. So we can again say that on the face of matters, the First Minister was alerted prior to the book’s publication but felt disinclined to act on the allegations at the time. And has also felt disinterested enough to not even reply to Mr Charter’s letters.
Police complaint
Subsequent to all of this, police received an official complaint from Mr Charters and that is how the whole affair has become the subject of an active ongoing investigation.
The Serious & Organised Crime Financial Investigations group is currently exploring these serious allegations of wrongdoing directed at both the publisher and HIE. In particular the fraud squad is probing the £120,000 of grants given in 2020 to Sandstone and £175,000 of loans agreed with the company in 2019.
If we bring into the picture the HIE and CS money, Sturgeon’s publisher managed to secure more than £500,000 of public money over the last 15 years. That’s a lot of taxpayer funding going to a company run by an ardent nationalist and passionate SNP supporter. A situation all the more concerning given the allegations of fiddled company assessments by HIE alongside potential breaches of the ministerial code.
The allegations and circumstances raised by Mr Charters clearly represents enough of a prima facie case that the Police are actively probing matters.
Did the pro-SNP publisher make false statements about the number of people employed?
Did the Scottish Government public body HIE wrongly record the location of the pro-SNP firm to boost eligibility for financial support? (thus ensuring it could promote and publish Ms Sturgeon’s political book going into important parliamentary elections)
Was the ministerial code broken?
These are questions which we the public have every right to know and officers of the law aren’t leaving sleeping dogs to doze peacefully. If these allegations are warranted they will be proven true by the Police financial crimes group’s active and ongoing investigation.
"It is deeply concerning that, when we blew the whistle on how HIE had provided Sandstone with that £120,000 – when we provided the First Minister with detailed evidence of suspected wrongdoing – the response of her officials was to vilify us for daring to challenge on the basis of the evidence.
“That evidence not only indicated that Sandstone had claimed employees it did not have and a non-executive director it did not have but that HIE had scored an application from the Inverness-based company as if it were not located in Inverness.
"In fact, its offices were less than half a mile from HIE’s Inverness headquarters.”
- Keith Charters, Strident Publishing
See FOI/202100249470, Supporting Document 6, pdf page 29/34
ibid
More corruption , sadly not surprised by anything to do with the SNP anymore!