A “dark money” group that helps bankroll the Conservative Party has in turn taken donations worth six figures from businesses linked to wealthy foreign nationals who are banned from making their own political donations.
Analysis by openDemocracy shows that the Carlton Club – an elite private members’ club in London that has long funded the Tories – has handed out more than £247,000 to the Conservative Party and its MPs since the last election.
But the Carlton Club has itself received well over half that sum from two companies run by wealthy Swiss, German and Russian nationals who are not UK citizens. Under election law, only UK citizens are allowed to make political donations, but loopholes allow their money to be passed via third parties such as these.
It is two years since an independent government advisory group, the Committee on Standards in Public Life, urged then-PM Boris Johnson to close the loophole – something neither he nor his successors have done.
Records show that one of London’s biggest property investment firms, Strandbrook Ltd, has given £150,000 to the Carlton Club and its political committee – which hosts speeches and is closely aligned with the Conservative Party – since the last election.
Strandbrook Ltd’s only directors are tycoon Henning Conle and his daughter Johanna Conle. Both are German nationals, while Henning Conle is also Swiss. According to the Sunday Times Rich List, Henning Conle and his family are worth an estimated £1.1bn.
The company owns Shell Mex House, a Grade II-listed building on the Strand in central London that it bought for £494m. Reports have also linked the Conles to other prestigious addresses in the capital, including the House of Fraser department store in Oxford Street and the London offices of Manchester United.
In 2018, Henning Conle was at the centre of a scandal in Germany after he allegedly made donations totalling €132,000 to the far-right Alternative für Deutschland (AfD) party.
Documents filed with Companies House claim that Strandbrook Ltd does not have any “persons with significant control”, and has signed a statement saying that there is reason to believe “there is no registrable person or registrable relevant legal entity in relation to the company”.
But the company’s own accounts show it is controlled by a German foundation, Cartina Stiftung, via companies registered in Luxembourg and Lichtenstein. Cartina Stiftung does not declare its ultimate ownership, but Henning Conle has been linked to a company in the British Virgin Islands with the name Cartina Kensington. We asked Henning Conle, via the Conle Property Group in Germany, if he was the ultimate beneficial owner of Cartina Stiftung but he did not respond.
Regular
The donations from Strandbrook Ltd to the Carlton have been regular: £50,000 in January 2020, 2022 and 2023.
In turn, the club and its political committee have handed out thousands of pounds to Conservative Party candidates – often in tranches of £5,000 or £15,000 at a time. They include donations to Lee Anderson, the deputy chair of the party, and former defence minister Sarah Atherton.
openDemocracy has previously reported that many top-tier Tory donors give exactly £50,000 a year as it is the required annual donation to get into the Leader’s Group of millionaire supporters who are given regular access to ministers. The membership of the elite group is unknown, after the party stopped publishing a list.
In 2021, the Carlton Club also received a £4,000 donation from Realia EM Ltd, a company run by elite lobbyist Sergey Pechinin.
Pechinin tried to donate £2,400 directly to the Conservatives in 2018, but the money was rejected. Officials said they were unable to prove he was on the UK electoral register and labelled him an “impermissible donor”.
Before becoming a British citizen, he told openDemocracy that his donation was declined “because I have a Russian passport”.
As a lobbyist, Pechinin offers his clients “exclusive access” to UK government ministers and has met with the likes of Boris Johnson, David Cameron, Theresa May and Liz Truss.
Realia EM Ltd and Strandbrook Ltd are the only two donors to the Carlton Club that have been registered with the Electoral Commission since the last election. It is not publicly documented where the rest of the club’s money comes from.
‘Critical vulnerability’
Election experts have long warned about loopholes that can be used by parties to get around the ban on foreign donations.
The Carlton Club is an example of an “unincorporated association”, a type of organisation that is not required to file accounts with Companies House.
The Committee on Standards in Public Life, which was set up by a Tory government in 1994, has said that these groups could be used as “a route for foreign money to influence UK elections”. Its 2021 report ‘Regulating Election Finance’ said that “no transparency” is required when these groups donate to individual MPs, and the people funding them “are not required to be permissible donors”.
The committee presented the government with 47 recommendations to reform election finance, including a clampdown on unincorporated associations. But two years on, none of the reforms have been implemented.
George Havenhand, a senior legal researcher at Spotlight on Corruption, told openDemocracy: “Because unincorporated associations throw a veil of secrecy over donations, they can be used to conceal the identities and activities of donors and disguise vested interests.
“There is also a real risk that they can be used to channel foreign money and proceeds of crime to political parties. They represent a critical vulnerability that is profoundly damaging to the health of our democracy.”
He added: “It’s time for a serious discussion led by the Electoral Commission about prohibiting donations from unincorporated associations altogether to tackle this major loophole in party political finance.”
