An Inside Job

Thanks to Paul Holden’s meticulous journalism, we now know more about the misuse of funds during the 2017 campaign as well as subsequent conspiracies by Labour insiders aimed at bringing Corbyn down. The Fraud: Keir Starmer, Morgan McSweeney, and the Crisis of British Democracy is a hefty 544-page book, supported by a website with nearly eight hundred additional notes and documents. It tells the story of this sorry saga from that general election to the present day. Some of its findings add to what has already emerged through leaks, court cases, and an internal inquiry chaired by a prominent lawyer, Martin Forde, who refused to be part of a cover-up. Much of it is completely new and is so shocking that the principal architect of the post-2017 subterfuge, Starmer’s chief of staff, Morgan McSweeney, is now coming under pressure to resign.

The Forde Inquiry confirmed leaked evidence that the Ergon House parallel campaign existed, but its condemnation of it was confined to saying it was “a breach of an implied duty of good faith.” This is putting it mildly, considering that the money secretly siphoned off had been donated in response to appeals signed personally by Corbyn and that the party constitution is clear that “all Party election campaigns report to the leader.”

Holden has now discovered that party funds were used clandestinely on a much larger scale than Forde had established. Over and above the Ergon House staffing and spending, he says that “a select group of seventeen MPs were allocated extra funds for a mailer . . . .and for spending on Promote, the party’s system for buying social media advertising” and that this privileged group included Sir Keir Starmer.

The official campaign, meanwhile, was starved of funds. As Holden notes, I was told late in the campaign that only £50,000 was available for Get Out the Vote publicity in Conservative-held seats we considered winnable. This limited me to targeting only twelve. Had some of the misused money been spent to fund publicity for more target seats, it would have made a difference and possibly even allowed us to win enough of them to stop May’s DUP deal — given the average deficit in the seven next most winnable ones was just 451 votes.

While the impact of this subterfuge on the course of history is open to debate, there are questions about its legality that could be answered through a proper investigation. Under UK election rules, a distinction is made between national and local campaign spending, with the latter being subject to low limits that, in 2017, were in the range of £12,000 to £16,000 per constituency. Campaign material that promotes a particular candidate comes under the local limit.

Holden says that he has been able to identify six of the constituencies that “definitely received money from Ergon House” and that this was declared as national spending. If this money was spent on publicity that named the candidate, it should have been declared in the local return. Holden has established that the company Ergon House used to print flyers for these constituencies still holds the proofs for them but the Labour Party, which owns the copyrights, has not responded to repeated requests to release them.

This lack of openness makes a mockery of Starmer’s pledge, on being elected prime minister, to restore trust in politics. It is bad enough that money donated by supporters of the official Corbyn-led campaign was secretly misused, but the party’s failure to be open about exactly how it was spent and declared to the Electoral Commission shows a complete disregard for financial propriety.

Labour Apart

Corbyn’s relative success in 2017 left the saboteurs in disarray and allowed him a brief period of respite from overt internal opposition. Behind the scenes, however, a new plot was being hatched by McSweeney. Though hardly known outside London Labour circles in 2017, McSweeney was, as Holden puts it, “a long-time protégé of Peter Mandelson,” having worked for the now-discredited former British ambassador to Washington on Labour’s 2001 election campaign.

McSweeney instantly saw in the 2017 result what he perceived as a threat: the possibility that Labour under Corbyn could win a general election that might come at any time given the instability inherent in a hung Parliament. Moving fast, he joined forces with Steve Reed, an MP with whom he had worked previously, to reshape a small, seemingly benign, group called Labour Together into a vehicle to bring Corbyn down.

Publicly Labour Together would continue to portray itself as a force for dialogue across the party’s factions. McSweeney even gave a presentation to Corbyn along those lines. Behind the scenes, having raised money from a handful of wealthy donors, Labour Together employed McSweeney and two staff and set about trying to ensure that Labour would not win the next election under Corbyn and preparing for a leadership contest when he was forced to resign.

Labour Together’s primary tactic for undermining Corbyn was to exploit the issue of antisemitism. Holden says that it was directly involved in creating two organizations — the Center for Countering Digital Hate (CCDH) and Stop Funding Fake News — which planted allegations of antisemitism against Corbyn supporters in the media. As well as being the company secretary of Labour Together from July 10, 2017, to April 4, 2020, McSweeney was a CCDH director from October 19, 2018, to April 6, 2020. He resigned both positions immediately after Starmer was elected Labour leader and he became his chief of staff.

While this underhand activity is unsavory, it is not unlawful. However, McSweeney does have some explaining to do about how it was all funded and whether or not he withheld donor information from the Electoral Commission knowing that he should report it. The rules on this are clear in that Labour Together is defined as a “member’s association” within the Labour Party and therefore required to report donations it receives or makes above £7,500 within thirty days.

Holden has established through a freedom of information (FOI) disclosure that an Electoral Commission official told McSweeney this during a telephone conversation on December 6, 2017. However, he did not report donations made between June 2017 and September 2020 worth £739,492, and it was left to his successor, Hannah O’Rourke, to declare them, prompting the Electoral Commission to fine Labour Together £14,250.

It is therefore not in doubt that Starmer’s chief of staff broke electoral law, but why? One explanation — arguably the most likely one — is that the rich donors who gave the money were known to be on the right of the party and revealing their names would have blown a hole in Labour Together’s cover story that it was not anti-Corbyn. This would in turn have tainted Starmer once he was associated with McSweeney.

The link between Labour Together and Starmer was, according to Holden, forged in the summer of 2019 when McSweeney joined private discussions on his possible post-Corbyn leadership bid. By that time, Corbyn’s support base had split over whether to stick to the 2017 policy of accepting the result of the Brexit referendum or to attempt to reverse it through a second vote. When Labour opted for the latter, Boris Johnson — who had taken over from Theresa May as prime minister — shrewdly called a general election knowing that roughly a third of Labour voters favored leaving the European Union.

A crashing defeat was inevitable. When it came on December 12, 2019, Corbyn resigned, and Starmer was first to declare his candidacy to take over, with McSweeney running his campaign. The strategy was simple: Starmer disingenuously presented himself as the continuity candidate and a loyal friend of Corbyn. His policy pledges were almost identical to those made by Rebecca Long-Bailey, the Corbynite candidate. He was deceiving Labour members but was able to get away with it because he had only become an MP in 2015 and did not have the baggage of a long voting record or of being in government in the Blair era.

Today no one has any illusions. During the years since he was elected Labour leader, and particularly his fifteen months as prime minister, Starmer has revealed himself to be cut in the mold of Tony Blair rather than Corbyn. But Labour is paying for his political deceit with a collapse in support. McSweeney, meanwhile, is facing questions about his own integrity and fitness to be in such a powerful Downing Street role.

For anyone who hoped in the years after 2015 that a socialist party could take power in Britain and reverse decades of neoliberalism, The Fraud is a painful read. The problem for the Starmer–McSweeney project is that, having achieved its initial goal, it has now been shown to be an empty vessel with nothing to offer — to use Corbyn’s 2017 campaign slogan — the many, not the few. The issues and ideas that gave rise to “Corbynism” have not gone away. Those of us who want to see radical change, though somewhat dispersed in where we are putting our political energy, have not gone away either. Holden’s book will, over time, serve us well by increasing understanding of the lengths to which our enemies will go to thwart change and the tactics they are prepared to use.