It’s an election year – and that means political donations have ramped up.
And this has been compounded by the alleged comments of Frank Hester, who is reported to have said Labour MP Diane Abbott made him “want to hate all black women”, after giving £10m to the Conservatives.
But what exactly are the rules on donations? Do they change for elections? Who gets the most money? Why do people donate? And can parties give funds back?
Here we explain:
What are the rules on donations?
Politics and money is a rabbit hole that Lewis Carroll would be jealous of, and the UK’s system is no different.
One of the most important things to note is that the figures are on a much smaller scale to those in the US – in the tens of millions rather than billions.
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One key distinction is that donations to MPs are different to political party donations.
Image: Frank Hester has given millions to the Conservatives. Pic: PA
MPs have to declare all their interests on a public register, which can be easily searched using the Sky News Westminster Accounts tool.
This is how we know that Frank Hester’s The Phoenix Partnership donated a £15,900 helicopter flight to Rishi Sunak late last year.
His company gave £5m, and he gave £5m personally to the Conservative Party itself.
The rules for these donations require all contributions over £11,180 to be declared. This was recently increased from a threshold of £7,500.
Money donated to political parties in this fashion goes into their accounts but, according to Professor Justin Fisher, an expert in political finance at Brunel University, it does not need to be “ring-fenced”.
This is why there is no way to see what the money donated by Mr Hester and his company was spent on.
The body responsible for regulating and setting standards for donations and party finances is the Electoral Commission.
The aforementioned increase in the floor for the declaration of donations was done as part of measures to update financial restrictions that had laid untouched for two decades.
The spending limit for parties during elections also increased. For a party contesting all 650 UK seats it went from around £18m to just over £35m.
However, as no party contests every seat, the effective limit is just over £34m.
According to the Electoral Commission, this applies to spending on certain activities in the 365 days before the election.
Confusingly, it is impossible to know the start date of this period, as the government can call an election whenever it wants, so in November 2023 the Electoral Commission encouraged parties to “behave as if you are in a regulated period from now onwards”.
Other changes included how often parties have to report their donations.
In normal times, figures are published quarterly. After an election is called and parliament is dissolved, publication takes place every week.
There are also restrictions on how much money a prospective MP can spend in an election period.
Each constituency has a limit based on the number of people who live there.
And those hoping to get elected have to declare all their spending, as well as any donation the candidate received over £50.
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Why don’t we know when the UK election is?
Who gives the most money – and why?
The biggest donors to political parties can be easily identified through the Sky News Westminster Accounts interface.
It is dominated by individuals, unions, and just a few companies.
At the top of the list sits Lord David Sainsbury, the supermarket heir, who has given more than £13m in donations since the last election – including £5.1m to Labour and £8m to the Liberal Democrats.
He is not to be confused with his cousin, the late Lord John Sainsbury, who gave £10.2m to the Conservatives in the same period.
Next up is the union Unite, which has given £10.7m to Labour, and hundreds of thousands of pounds to Labour MPs.
The GMB union and Unison have both given around £6m to Labour since 2019.
Businessman Graham Edwards gave £5.2m to the Conservatives in this period.
Next on the list is Mr Hester’s The Phoenix Partnership, which has given £5.2m, including the helicopter flight to Mr Sunak.
Mr Hester also donated £5m in a personal capacity to the Conservatives.
Prof Fisher explained that it used to be more common for companies to donate, instead of individuals – but it is harder to justify this now in an era when spending plans have to get past powerful boards.
Instead, companies can benefit from different, less expensive (on a balance sheet) endeavours, like lobbying or hosting events.
Donors tend to hand over cash or gifts because they want to see a party win which will improve their position, or because of a prior affiliation. Or an individual could just be politically aligned with the party in question.
Can parties return money?
Once again, the short answer is yes.
There have been calls for the Conservatives to return the money given to them by Mr Hester or his company.
Political parties can spend their money how they choose – and this could include giving it back or donating it to charity.
It is not the first time there have been calls for money to be returned.
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The Liberal Democrats faced calls to return money donated to them by Michael Brown, who lived in Majorca but gave money through a company based in the UK – something the rules do not allow.
The Electoral Commission investigated but did not take further action. Mr Brown was later convicted of fraud.
The Labour Party faced calls in 2002 to return a donation from publisher Richard Desmond because his publication “titles are demeaning and degrading to women”.
One time when money did get returned was when Labour accepted a £1m donation from Formula 1 chief Bernie Ecclestone shortly before they came to power in 1997.
At the time, the donation was not made public as there was no requirement to do so. Labour did, however, have a policy at the time of declaring donations.
After coming to power, Labour announced it would ban all sports sponsorships from tobacco companies.
But, following talks with Mr Ecclestone, the government proposed exempting Formula 1 from the ban.
The donation then became public, and a political scandal erupted, so the party committed to give the money back.
Image: Labour handed back money given to them by Formula 1 chief Bernie Ecclestone. Pic: Reuters
In March 1998, Mr Ecclestone cashed a cheque which Labour had written to him for the £1m.
This shows money can be returned, if there is a will to do so.
Alex Mashinsky, the founder and former CEO of the now-defunct cryptocurrency lending platform Celsius, faces a 20-year prison sentence as the US Department of Justice (DOJ) is seeking a severe penalty for his fraudulent activity.
The US DOJ on April 28 filed the government’s sentencing memorandum against Mashinsky, recommending a 20-year prison sentence due to his fraudulent actions leading to multibillion-dollar losses by Celsius customers.
The 97-page memo mentioned that Celsius users were unable to access approximately $4.7 billion in crypto assets after the platform halted withdrawals on June 12, 2022.
“The Court should sentence Alexander Mashinsky to twenty years’ imprisonment as just punishment for his years-long campaign of lies and self-dealing that left in its wake billions in losses and thousands of victimized customers,” the DOJ stated.
Mashinsky’s personal benefit was $48 million
In addition to listing massive investor losses resulting from the Celsius fraud, the DOJ mentioned that Mashinsky has personally profited from the fraudulent schemes in his role.
As part of his plea in December 2024, Mashinsky admitted that he was the leader of the criminal activity at Celsius, that his crimes resulted in losses in excess of $550 million, and that he personally benefited more than $48 million, the authority said.
An excerpt from the government’s sentencing memorandum against Celsius founder Alex Mashinsky. Source: CourtListener
The DOJ emphasized that Mashinsky’s guilty plea showed that his crimes were “not the product of negligence, naivete, or bad luck,” but rather the result of “deliberate, calculated decisions to lie, deceive, and steal in pursuit of personal fortune.”
This is a developing story, and further information will be added as it becomes available.
The concept of a Russian ruble stablecoin received special attention at a major local crypto event, the Blockchain Forum in Moscow, with key industry executives reflecting on some of the core features a ruble-backed stablecoin might require.
Sergey Mendeleev, founder of the digital settlement exchange Exved and inactive founder of the sanctioned Garantex exchange, put forward seven key criteria for a potential “replica of Tether” in a keynote at the Blockchain Forum on April 23.
Mendeleev said a potential ruble stablecoin must have untraceable transactions and allow transfers without Know Your Customer (KYC) checks.
However, because one of the criteria also requires the stablecoin to comply with Russian regulations, he expressed skepticism that such a product could emerge soon.
The DAI model praised
Mendeleev proposed that a potential Russian “Tether replica” must be overcollateralized similarly to the Dai (DAI) stablecoin model, a decentralized algorithmic stablecoin that maintains its one-to-one peg with the US dollar using smart contracts.
“So, any person who buys it will understand that the contract is based on the assets that super-securitize it, not somewhere on some unknown accounts, but free to be checked by simple crypto methods,” he said.
Source: Cointelegraph
Another must-have feature should be excess liquidity on both centralized and decentralized exchanges, Mendeleev said, adding that users must be able to exchange the stablecoin at any time they need.
According to Mendeleev, a viable ruble-pegged stablecoin also needs to offer non-KYC transactions, so users are not required to pass their data to start using it.
“The Russian ruble stablecoin should have the opportunity where people use it without disclosing their data,” he stated.
In the meantime, users should be able to earn interest on holding the stablecoin, Mendelev continued, adding that offering this feature is available via smart contracts.
Russia opts for centralization
Mendeleev also suggested that a potential Russian version of Tether’s USDt (USDT) would need to feature untraceable and cheap transactions, while its smart contracts should not enable blocks or freezes.
The final criterion is that a potential ruble stablecoin would have to be regulated in accordance with the Russian legislation, which currently doesn’t look promising, according to Mendeleev.
Sergey Mendeleev at the Blockchain Forum in Moscow. Source: Bits.Media
“Once we put these seven points together […] then it would be a real alternative, which would help us at least compete with the solutions that are currently on the market,” he stated at the conference, adding:
“Unfortunately, from the point of view of regulation, we are currently going in the absolutely opposite direction […] We are going in the direction of absolute centralization, not in the direction of liberalization of laws, but consolidation of prohibitions.”
Possible solutions
While the regulatory side is not looking good, a potential Russian version of USDT is technically feasible, Mendeleev told Cointelegraph.
“Except for anonymous transactions, everything is easy to implement and has already been deployed by several projects, but it’s just not unified in one project yet,” he said.
The crypto advocate specifically referred to interesting opportunities by projects like the ruble-pegged A7A5 stablecoin, unblockable contracts at DAI, and others.
Regulation is necessary but not enough, Mendeleev said, adding that the most difficult part is the trust of users who must see the ruble stablecoin as a viable alternative to major alternatives like USDT.
Elsewhere, the Bank of Russia has continued to progress its central bank digital currency project, the digital ruble. According to Finance Minister Anton Siluanov, the digital ruble is scheduled to be rolled out for commercial banks in the second half of 2025.
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