WHERE'S THE MONEY?
Shifting narratives, contradictory statements and a full-scale fraud squad investigation. Is it any wonder why SNP Treasurer Colin Beattie is refusing to say where the indyref2 money is?
SUNDAY HERALD reporter Hannah Rodgers has written a new article revealing that SNP national Treasurer Colin Beattie MSP has again refused to clarify the whereabouts of the £600,000 'ring fenced' independence referendum fund. But while this does not come as a surprise, it does provide an opportunity to forensically examine the Scottish National Party’s changing story regarding the allegations of fraud.
2017: the origins
The website ‘ScotRef’ is launched in March of 2017. It goes live the same day Nicola Sturgeon announced her push for independence. Despite the website’s general appearance, the only explicit reference revealing that it is operated by the SNP is where a sentence reads ‘Promoted by Peter Murrell on behalf of the Scottish National Party’. But that small print is at the very bottom of the browser page, and most would easily never notice it.
The website launched an appeal for funds to be raised for the promised indyref2, even including an accompanying video featuring Nicola Sturgeon
However on June 8th 2017 the course Nicola Sturgeon expected Scottish politics to travel was disrupted by Theresa May’s snap general election. In that General Election the SNP suffered a 13.1% swing against them and lost 21 MPs. An embarrassed Sturgeon acknowledged talk of ‘indyref2’ had alienated voters, driving many to vote tactically to get the SNP out, coupled with general apathy among some nationalists who did not bother turning out at all.
She announced a ‘pause’ regarding her pledged march to Indyref2. But what, then, about the appeal fundraiser on the ScotRef website?
Initially Labour’s James Kelly accused the SNP of having used the funds raised by that website to provide liquid funds to fight the surprise GE2017. But a furious SNP denied that, proclaiming
“Money raised on ref.scot is ringfenced for the purpose stated on the website - and we haven’t been actively raising money on that website since the election was called in April”1
So, let's remember what that ‘stated purpose’ on the website originally was. In the video on the website the FM explicitly said the donated funds were “to support Scotland's referendum”. Adding "Your contribution will greatly benefit the campaign”2.
So the funds, according to Nicola Sturgeon herself at the time in that video, was to ‘support Scotland’s referendum’ and would ‘greatly benefit’ that indyref2 campaign she had promised.
Later, Scottish Labour’s James Kelly formally requested the Electoral Commission to formally investigate the SNP appeal for money on the ref.scot website. This led the SNP to issue a public statement that said that Kelly had the wrong end of the stick and that the ref.scot fundraiser was ringfenced specifically for any future referendum campaign.
The SNP line closing 2017 was explicit and clear regarding the indyref2 fund:
All the money raised on #ScotRef website is ringfenced to fight a future independence referendum
Now it is also worth noting that during this period the video of Nicola Sturgeon on that website disappeared. Deleted. Removed.
Also, the fundraiser appeal page was active until Friday 9th June 2017, when that page too was deleted. The fundraiser appeal for the ‘indyref2 campaign on ref.Scot website therefore ended immediately after the SNP’s poor general election result on 8th June, 2017.
2020: Beattie’s ‘woven through’ butters nae parsnips
The issue of the ‘ringfenced’ funds went dormant until the SNP’s accounts were published with the Electoral Commission for the year 2019. And those accounts raised serious questions about precisely where this “ringfenced” indyref2 fund was. After all, let me remind you of what the SNP had said back in 2017
“Money raised on ref.scot is ringfenced for the purpose stated on the website”
And the stated purpose was, according to the (now deleted) video of the First Minister?
“to support Scotland’s referendum”
And the SNP in 2017 had promised to do what with the money after the indyref2 push was ‘postponed’ by the First Minister?
All the money raised on #ScotRef website is ringfenced to fight a future independence referendum
So, we should easily see in the SNP’s 2019 party accounts where this safely ‘ringfenced’ money was!
But…nobody could…
The 2019 SNP accounts revealed only £96,854 “cash in hand and at bank” (down from £411,042 in 2018) and £271,916 SNP reserves (down from the £591,077 from 2018). The question was raised: where, precisely, in the SNP 2019 accounts is the “frozen” ring-fenced indyref2 fund?
It was at this point the controversial pro-independence blogger ‘Rev’ Stu Campbell on Wings Over Scotland began regularly demanding to know where the ‘ringfenced’ indyref2 money had went.
This created enough grassroots pressure to force the SNP national treasurer Colin Beattie MSP to issue a statement on the morning of 28th October 2020, attempting to calm everyone down and explain away the controversy:
“I felt it was important for me to get in touch today to quash rumours spreading on social media about one of our fundraising appeals.”3
The only problem is that Mr Beattie’s statement went on to say
“Like all other political parties, the SNP does not separate out restricted funds in annual accounts. Any such donations are woven through the overall income figures each year.”4
First up is the choice of the words ‘woven through’. Given the 2019 accounts revealed only £96,854 as “cash at hand and in the bank” how - precisely - is more than £600,000 ‘woven through’?
This has never been explained by the SNP’s national treasurer directly in public.
Furthermore, Mr Beattie is lying outright where he said in 2020 “the SNP does not separate out restricted funds in annual accounts”. Not least because they used to prior to the indyref of 2014…and guess who was national treasurer when they did it? Yeah, one Colin Beattie…
You can see the 2012 SNP accounts (Colin Beattie was national treasurer then too). And you can see the words ‘restricted reserves’ and listed under it, ‘referendum fund’.
So when Colin Beattie in 2020 said “the SNP does not separate out restricted funds in annual accounts”, he was lying. No other way to read it. He lied, he deliberately misled the public when addressing why in 2019 accounts there was no itemised listing of reserved (i.e. ‘ringfenced’) referendum funds set aside. The fact is, the SNP used to separate out restricted funds in their accounts, and used to when Colin Beattie - himself - was national treasurer.
Naturally, all of these weird lies and misrepresentations totally failed to explain away peoples fears that the SNP had potentially misappropriated the indyref2 funds.
The Herald’s Tom Gordon noted in one of his columns at the time that “the treasurer then was the same Mr Beattie who now gives members a glib brush-off, despite the precedent.” Suddenly eyes were turning to the ‘ringfenced’ indyref2 fund issue, even from the traditionally sleepy-eyed access-journalist Scottish media class.
Furthermore, Colin Beattie’s October 28th 2020 statement explicitly states that the funds
“remain earmarked for the referendum and are ready to be fully deployed at a moment's notice”5
Make a note of this point, it will become very relevant later on. October 28th, 2020 the SNP national treasurer has stated publicly that the ‘ringfenced’ money is on hand, earmarked and fully and completely intact. It has not been spent according to Mr Beattie, it is ready to be “fully deployed at a moment’s notice”.
2021: resignations and changing tunes...
The year of 2021 saw many new moving parts of the ‘ringfenced’ indyref2 fund issue.
First up were a series of resignations in March 20th 2021. Three members of the SNP’s ‘Finance and Audit Committee’ all resigned, en-masse.
Cllr Frank Ross (qualified chartered accountant and Lord Provost of Edinburgh Council), Livingston company director Cynthia Guthrie and the then Mid Scotland & Fife NEC member Allison Graham all resigned.
It was revealed that the three resigned after they demanded full and complete access to the SNP’s accounts, but were bluntly denied access by SNP Chief Executive (and Nicola Sturgeon’s husband) Peter Murrell
The news did not - for whatever reason - at the time make front page news, but there were columns in a few papers, such as the Scottish Daily Mail’s Gareth Rose piece:
So as 2021 opened, three members of the SNP’s Finance & Audit committee resigned as a group because Peter Murrell (Chief Executive and husband to First Minister/SNP leader Nicola Sturgeon) felt disinclined to permit them full access to the party books.
Incredibly, this is only the opening first act of 2021.
On May 29th 2021 the new national treasurer (that SNP members had elected to replace Colin Beattie) suddenly resigned. He stated bluntly that
“I have not received the support or financial information to carry out the fiduciary duties of National Treasurer"…”6
This bombshell was followed by Joanna Cherry resigning from the SNP National Executive Committee (NEC)
“A number of factors have prevented me from fulfilling the mandate party members gave me to improve transparency & scrutiny & to uphold the party’s constitution. I won’t be making any further comment at this stage”7
So between March 20th and May 31st 2021, the SNP saw three members of the finance and audit committee resign, a relatively newly-elected national treasurer resign and an NEC member resign. All of them citing a fundamental, grievous lack of transparency regarding SNP accounting. And it barely made media headlines in Scotland.
But someone else also resigned at this time, albeit for different - but very worth noting - reasons. Marco Biagi had been appointed in 2020 as a consultant big-wig on the SNP’s newly formed ‘independence task force’. But by May 31st 2021 he too announced he was resigning. He explained
“the best job offer I've ever had turn out to be worst job I've ever had and publicly quit it”8
So the bloke Nicola Sturgeon had given the nod to, to fire up preparations for her long delayed indyref2 campaign, resigned. Describing the job as the worst he’d ever had. The SNP fired back, slamming Mr Biagi, accusing him of being
“ineffective” and “had no idea what he was doing”
Naturally this series of events compelled even the otherwise docile Scottish media class to actually probe Ms Sturgeon about the ‘ringfenced’ indyref2 funds. STV finally pressed her about the allegations the money had ‘gone missing’. Her response is extremely interesting (for all the wrong reasons if you’re an SNP supporter)
Ms Sturgeon states that she was not concerned about the allegations, nor was she worried about any risks of future Police Scotland investigations. But none of that is particularly interesting. What is interesting are the two bits where she said “our accounts are independently audited” and “our accounts are managed on a cash-flow basis”9
Now that dear friends, is interesting to me.
I just showed you that on June 3rd, 2021 to STV Nicola Sturgeon explicitly claimed that the SNP’s accounts are managed on a “cash flow basis”. But…this does not appear to be true, and this is not a pedantic point of accounting practice either. It’s actually extremely relevant if we’re trying to trace how ‘ringfenced’ indyref2 money that was ‘woven' through’ accounts might be followed month to month, year to year in the books.
Let me explain.
When Ms Sturgeon said “our accounts are managed on a cash flow basis”, the only logical interpretation to be drawn is the first minister was claiming the SNP use cash rather than accrual accounting.
And this distinction is not pedantic. You see, accrual accounting is for when revenue is earned, and is typically recorded before any money changes hands. Whereas cash basis accounting is reported on the income statement only when cash is received. Accrual accounting in no way tracks cash flow, and as a result might not account for a hypothetical company with a major cash shortage in the short term.
So given the SNP’s accounts are accrual and not cash basis accounting, Nicola Sturgeon has absolutely no basis telling the public – or SNP members – the books are managed on a cash flow basis. This matters even more given ‘ring fenced’ referendum funds of more than £600,000 apparently disappeared from the party accounts in 2019.
So the SNP operate accrual accounting - which in no way tracks cash flow - but Ms Sturgeon is actively lying in public claiming the SNP operate cash basis accounting.
That STV is too gormless and insipidly stupid to figure this discrepancy out is remarkable. But not surprising.
And let me prove to you that the SNP accounts of 2019 - published with the electoral commission - do seem to operate on an accruals basis:
The other bit of what Ms Sturgeon’s STV comments that are interesting was when she boasted that their accounts are “independently audited”. This is a true statement. So let’s take a look at what the SNP’s auditors have said about their accounting practices shall we?
On 26 June, 2020, Johnson Carmichael LLP (SNP’s independent auditors) concluded that the SNP’s statement of cash flows represented a “true and fair view of the state of affairs of the Scottish National Party”.
But if we fast forward to 26 June 2021 the self-same auditors were now writing “we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following area: revenue and recognition”.
Quite the change of tune from the auditors…
Revenue and recognition is an accounting term for when revenue is to be recognised.
Revenue recognition means – and not to simplify too much – a company should only record income when it has been earned, not when the related cash is collected. For example, if a gardener asks for £15 for mowing a lawn, the gardener can “recognise” that £15 in his accounts even if he has not collected the £15 immediately after doing the mowing.
And this is the area the SNP’s independent auditors think is of “greatest potential for fraud”. A view that the auditors either never held previously or as far as I can see never felt a need to publicly disclose in the 2019/2020 SNP financial reviews.
Quite the revelation. And it does not seem to indicate that Nicola Sturgeon should really have been boasting that the fact her books are independently audited must mean things are robust and clean.
Now, 2021 also revealed that the SNP - secretly - were privately admitting on internal documents that they knew their internal procedures were totally inadequate. The Sunday Herald’s reporting revealed the contents of leaked SNP internal governance documents. Those documents reveal the SNP is fully aware of the inadequacy of its internal procedures; admitting
“some processes that have developed in an ad hoc way”10
Or put simply, the SNP have been admitting privately to itself that internal procedures have been made up on the spot in recent years. This rather reinforces the seriousness of the auditors’ warnings about greatest potential for fraud being how revenue is recognised in the accounts.
Re-enter stage left; Colin Beattie, MSP
Colin Beattie is, following the resignation of Chapman reappointed (no elective mandate from SNP membership) as national treasurer by Nicola Sturgeon. Mr Beattie issues a new statement to calm the turbulent waters surrounding the SNP.
On June 20th 2021 Colin Beattie issued a ‘detailed update on the funds’ to be sent to the SNP NEC over that weekend. His update is truly fascinating, not least because he seems to be changing his tune as compared to his previous statement from October 2020.
Now, remember on October 28th 2020 Mr Beattie had told everyone the funds “remain earmarked for the referendum and are ready to be fully deployed at a moment's notice”.
But this is not what he says on June 20th 2021
“Questions have been raised in recent months about funds raised in response to independence-related appeals since 2017 and whether all of the amounts raised will be spent directly on the campaign to win independence”11
‘For the referendum’ has been dropped in favour of ‘on the campaign to win independence’. Now those are not the same thing. A commitment to spend money - that he had promised was fully on hand - on a referendum is specific. Money solicited for the specific purpose to be spent on an independence referendum.
But promising that the money raised will be spent 'on the campaign to win independence’ is…well…incredibly broad and vague. That would be cover to mean anything. It’s almost as if the lawyers have had a word with Mr Beattie and told him the SNP might need in the future to explain away why the money isn’t actually on hand anywhere anymore. ‘The campaign for independence’ could literally provide any amount of cover for invisible ‘weaving’ of ‘ringfenced’ indyref2 funds.
So, between October 2020 and June 2021 the money that was specifically for a future referendum is now being referred to as having the much broader purpose of “independence related campaigning”.
Quite the change of tune Colin Beattie.
Beattie went on in his June 2021 statement to say, “we are taking a very strict approach to ensuring that this income supports expenditure directly related to the campaign for independence”.
But this is in direct contradiction to a statement issued by SNP Corporate Compliance Officer Ian McCann, who is on record saying, “donations are in a ring-fenced fund to fight the next referendum whenever we are in a position to call that”12.
We seem to have a problem here. According to McCann – and indeed Beattie himself back in October 2020– the indyref2 fund was ‘earmarked’ for the purpose of being spent in a future referendum “whenever” they “are in a position to call” one.
How then does this square with Colin Beattie’s June 2021 statement referring to the earmarked funds being spent on “independence related campaigning” in advance of a referendum which might never even happen?
And I ask you to again note the change in his language, he dropped ‘on a referendum’ in favour of ‘independence related campaigning.’
People donated money to a fund and were told it was for a future independence referendum campaign. How else am I to interpret the words of the SNP Compliance Officer? Or Colin Beattie’s own words from October 2020? But as of June 2021 we are being told some (if not all) of the donated money has been spent on undefined pre-referendum spending. Suddenly ‘on a referendum’ is altered to ‘independence related campaigning’.
It raises the obvious question: precisely what pre-referendum activities has the ‘ring-fenced’ money been spent on? And how much did each individual expenditure cost?
I assume that Colin Beattie might argue that this does not represent fraud (soliciting money for one purpose – indyref2 – but using it for another – party business), since he might argue the SNP are constitutionally all about separation (thus party business is indyref2 spending). But this all represents a seriously grey area.
Also note we’re still none-the-wiser as to precisely where in the 2019 accounts the ‘ringfenced’ funds were ‘woven through’. Nor has anyone in the SNP explained how the indyref2 fund can be ‘ringfenced’ (i.e. restricted funds) whilst simultaneously also ‘woven through’ accounts Nicola Sturgeon claims are ‘cash-flow’.
2021-2022 (ongoing): ‘Quick! It’s the fuzz!’
As we enter 2022 we should note the developing interest by Police Scotland in this whole sordid story.
Back in March 2021 Police Scotland received complaints that money donated to the indyref2 fund had been misspent. The Police, duty bound, thus engaged in some routine general enquiries.
Over the course of 2021 Police Scotland made their enquires and, significantly, decided that there were enough unanswered questions to justify the launching of a formal fraud squad investigation.
And on September 12th 2021 Police had a warrant to seize evidence in the £600k fraud inquiry13.
The Mail on Sunday revealed that
“Prosecutors have confirmed that warrants will be issued, allowing police to demand accounts and any other material from Johnston Carmichael, a firm hired by the party.”
Oh. Well now.
Police Scotland have obtained warrants to seize any and all material from the SNP’s ‘independent auditors’. Might that be why those auditors stapled into their SNP financial review of 2021 warnings about risks of fraud in ‘revenue and recognition’?
Is that the sound of auditors hastily covering their professional arses as the Police coming knocking?
But an alarming development is Police Scotland’s hints about questionable antics from the ‘Independent’ (no laughing at the back!) Crown Office. There are stories emerging of a Scottish prosecution service that is dragging its feet, slow to grant warrants desperately wanted by Police Scotland…
“A source close to the inquiry said: ‘Police have waited almost four weeks for the Crown Office to approve this warrant, so there has been a frustrating wait.
‘However, it’s a major step forward. The warrant will be available next week, and officers will go and access the documents then.
‘Depending on what information they get, they could then seek warrants for documents from the party’s lawyers and accountants.’
Last month, the party’s latest accounts revealed that the SNP had spent more than £600,000 on refurbishing offices.”14
What is even more alarming is the news that the Crown Office actually tried to run cover for the SNP, and requested Police Scotland don’t publicly call their investigation an investigation…
Officers had settled on the words "formal investigation" to describe their activities following a number of complaints by people who had given money to the party for a second independence referendum fighting fund.
But it has been reported today that the Crown Office wanted a form of words to suggest it was more of "fact-finding mission".15
Just why is the so-called ‘independent’ Scottish Prosecution service running defence for Nicola Sturgeon and the SNP? And why are so few journalists writing about it? On a side note, I’d like to put on record my utter hatred of access-journalism.
But the antics of the Crown Office (of malicious and wrongful prosecution infamy) goes even deeper. It has been reported by the Sunday Times that only days after the Police had decided to call their investigation…well…an investigation…the Crown Office desperately tried to interfere…
“The Crown wanted a change of wording. They wanted a form of words that made it more of a fact-finding mission but the police had already had that and it was because documentation had not been handed over that they wanted to escalate it to an investigation.
“Police were stunned that the Crown was putting them in that position. They were unhappy because if it was about anyone else in this position they would call it an investigation.”
“The source added that warrants were expected to obtain any material the party has not handed over.”
Reading reports that professional Police Officers are “stunned” in a negative fashion by the behaviour of the Scottish prosecution service is deeply alarming. Especially since the allegedly ‘independent’ Crown Office is headed up by the Lord Advocate…who it just so happens sits in Nicola Sturgeon’s cabinet government.
Oh.
The head of the Scottish ‘independent’ prosecution service sits in Nicola Sturgeon’s government?
No conflict of interest there…
Nah…
Perish the thought…
And guess who appoints the Lord Advocate, who head the independent prosecution service…yeah, one Nicola Sturgeon MSP, FM.
Meanwhile the Police continue to dig dig dig, despite the best efforts it seems of the Crown Office.
And I promise to keep following this story as it advances.
The National, ‘SNP: All the money raised on #ScotRef website is ringfenced to fight a future independence referendum’, Andrew Learmonth, 13th June 2017 | https://www.thenational.scot/news/15344728.snp-all-the-money-raised-on-scotref-website-is-ringfenced-to-fight-a-future-independence-referendum/
The National, ‘SNP: All the money raised on #ScotRef website is ringfenced to fight a future independence referendum’, Andrew Learmonth, 13th June 2017 | https://www.thenational.scot/news/15344728.snp-all-the-money-raised-on-scotref-website-is-ringfenced-to-fight-a-future-independence-referendum/
The National, ‘SNP try to 'quash rumours' independence fighting fund has already been spent’, Andrew Learmonth, 28th October 2020 | https://www.thenational.scot/news/18828133.snp-try-quash-rumours-independence-fighting-fund-already-spent/
The National, ‘SNP try to 'quash rumours' independence fighting fund has already been spent’, Andrew Learmonth, 28th October 2020 | https://www.thenational.scot/news/18828133.snp-try-quash-rumours-independence-fighting-fund-already-spent/
The National, ‘SNP try to 'quash rumours' independence fighting fund has already been spent’, Andrew Learmonth, 28th October 2020 | https://www.thenational.scot/news/18828133.snp-try-quash-rumours-independence-fighting-fund-already-spent/
BBC, ‘SNP finance boss Douglas Chapman quits over 'lack of information', May 30th 2021 | https://www.bbc.co.uk/news/uk-scotland-scotland-politics-57299030
Daily Business Group, ‘Party in dispute: Three resignations leave SNP in turmoil’, May 31st 2021 | https://dailybusinessgroup.co.uk/2021/05/double-resignations-leave-snp-in-turmoil/
The Herald, ‘SNP in turmoil after Indy taskforce chief quits 'worst job ever' and 'malcontent' treasurer resigns’, Hannah Rodger, 31st May 2021 | https://www.heraldscotland.com/news/19339046.snp-turmoil-indy-taskforce-chief-quits-worst-job-ever-malcontent-treasurer-resigns/
STV, ‘Sturgeon rejects claim £600,000 missing from SNP funds’ 3rd June 2021 | https://news.stv.tv/politics/sturgeon-rejects-claim-600000-missing-from-snp-funds
Herald, ‘SNP deputy says party must publish spending plans after £600k fraud probe’, 5th September 2021, Hannah Rodger | https://www.heraldscotland.com/politics/19557178.snp-deputy-says-party-must-publish-spending-plans-600k-fraud-probe/
The National, ‘SNP treasurer pledges £600,000 appeal cash will be spent on indyref2’, Kathleen Nutt, 20th June 2021 | https://www.thenational.scot/news/19385954.snp-treasurer-pledges-600-000-appeal-cash-will-spent-indyref2/
Daily Record, ‘Pressure grows on Nicola Sturgeon over SNP's £600k IndyRef campaign funds row’, 20 June, 2020, John Ferguson | https://www.dailyrecord.co.uk/news/scottish-news/snp-missing-money-row-over-24357134
Scottish Mail on Sunday, ‘Police were a warrant to seize evidence in the £600k fraud inquiry’ September 12th 2021, Gareth Rose | https://www.pressreader.com/uk/the-scottish-mail-on-sunday/20210912/281655373196589
Scottish Mail on Sunday, ‘Police were a warrant to seize evidence in the £600k fraud inquiry’ September 12th 2021, Gareth Rose | https://www.pressreader.com/uk/the-scottish-mail-on-sunday/20210912/281655373196589
The National, ‘Police and Crown Office 'at loggerheads' over wording of SNP probe’, Kathleen Nutt, 25th July 2021 | https://www.thenational.scot/news/19467486.police-crown-office-at-loggerheads-wording-snp-probe/