Starmer's Chief of Staff and £700k 'admin error': Bombshell leaked email shows top Labour lawyer advised PM's aide Morgan McSweeney to describe £700,000 in 'hidden' donations as a 'mistake'
A top Labour lawyer advised Keir Starmer's chief of staff to describe £740,000 in 'hidden' donations as an 'admin error', a leaked email reveals.
The crisis engulfing Morgan McSweeney deepened after the bombshell email shed new light on a notorious episode in which his think-tank was fined in 2021 for 20 breaches of electoral law involving undeclared donations.
The email from the lawyer advised Mr McSweeney to drop his unsubstantiated claim that he had been told donations totalling £739,492 to Labour Together did not have to be declared. It warned him that unless he could back up the claim with evidence, it risked antagonising the Electoral Commission, which was investigating the scandal.
It told him instead to try to pass the episode off as a simple 'admin error'.
The email, seen by the Daily Mail, was published in full on Tuesday night by the Conservatives, who stepped up calls for the police to investigate the affair.
Tory Party chairman Kevin Hollinrake said: 'The evidence is clear – Morgan McSweeney has been caught red-handed hiding hundreds of thousands of pounds which helped install Keir Starmer as Labour leader.
'This latest scandal at the very heart of government is incredibly serious – and potentially criminal – yet Keir Starmer has expressed his full confidence in his chief of staff, once again demonstrating his poor judgment and raising serious questions about his integrity and honesty.
The Prime Minister leaves Downing Street with Morgan McSweeney, who has been engulfed in crisis following the leaked email
'Nothing-to-see-here Keir may think he can ride this one out as he tried to over the Mandelson-Epstein scandal, or perhaps he is too weak to fire a chief of staff who tells him what to think, but the Conservatives will not stop fighting until we get to the truth. That is why we are calling on the Electoral Commission and the police to urgently investigate.'
Mr McSweeney was the mastermind of Labour's election landslide and is Sir Keir's right-hand man, but he is facing growing unrest from Labour MPs over the party's dire poll ratings.
And he has come under fire in recent weeks for his disastrous advice to Sir Keir to appoint Lord Mandelson as US ambassador, despite knowing he had stood by paedophile Jeffrey Epstein after his conviction for child sex offences.
The new revelations threaten to reopen a controversy that Labour has tried to bury.
In September 2021, the Electoral Commission found more than 20 donation law breaches by Labour Together, and fined the think-tank £14,250.
The watchdog had explicitly told Mr McSweeney in 2017 that he must declare donations within a 30-day limit.
However, dozens of donations made to Labour Together between 2018 and July 2020 were not declared until after Mr McSweeney left the organisation that year.
The newly revealed legal advice appears to contradict Labour Together's public claim that the undeclared donations were the result of 'human error and administrative oversight' – and its insistence that it had been as 'open and transparent' as possible.
Mr McSweeney initially did declare donations to the group when he took over as director in 2017. However, early in 2018 he stopped – apart from one disclosure of £12,500 from Trevor Chinn, a Jewish businessman and friend of Tony Blair.
It was only after Mr McSweeney left to work for Sir Keir as the new Labour leader that his replacement, Hannah O'Rourke, found almost three years of donations worth £739,000 had not been declared and filed a series of 'late' declarations to the commission.
The leaked email was sent to Mr McSweeney in February 2021 by lawyer Gerald Shamash, who describes himself as 'solicitor to the Labour Party'.
Mr Shamash writes that the scale of the undeclared donations means there is 'no easy way to explain how Labour Together finds itself in this situation'.
He says he is trying to 'steer' the Electoral Commission towards issuing an administrative penalty which would 'minimise publicity'.
Mr McSweeney appears to have argued that he was advised by the commission in a phone call in early 2018 that his think-tank did not need to declare its donations.
But Mr Shamash warns that neither the watchdog nor Labour Together had any record of the conversation taking place.
He says that unless Mr McSweeney can provide evidence of the call – and explain why he believed previous advice from the commission could now be ignored – Labour Together may have to claim the law breaches were the result of an administrative error.
Mr Shamash says the commission 'have a record of a number of calls with Labour Together but none with you'.
He concludes: 'It may be better if Labour Together cannot deal substantively with questions I pose, then perhaps best to simply base our case as to the non-reporting down as admin error.'
The revelations pile new pressure on Mr McSweeney to explain exactly why he decided to conceal hundreds of thousands of pounds in donations at a time when the think-tank was throwing its weight behind Sir Keir.
A biography of the PM revealed that Mr McSweeney began advising Sir Keir and offering him the use of hundreds of thousands of pounds of polling data, as early as the summer of 2019 – before Labour had lost that year's election. Downing Street has refused to answer questions about Mr McSweeney's time at Labour Together.
But the Prime Minister's official spokesman said Sir Keir had 'full confidence' in his chief of staff despite the growing controversy.
Labour Together has been asked to respond to the revelations.
The commission said it had 'thoroughly investigated' the late reporting in 2021, adding: 'Offences were determined and they were sanctioned accordingly.'
