[Robin McAlpine Blog] Things the SNP needs to know

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Things the SNP needs to know

I’m surprised this far into the Murrell Scandal I’m still explaining why the SNP needs to take this more seriously. But it seems I do, so…

Why should the SNP want to ask awkward questions of itself?

It is clear that the SNP’s natural instincts when this scandal broke were to deny and close down, which is of course what got them in trouble in the first place. But there are three simple reasons why this is self-destructive and should end. First, a serious organisation that just got defrauded should desperately want the answer to these questions anyway. That’s how you stop it happening again which is why any serious organisation would do it. It would be deeply suspicious if you didn’t.

So second, at this moment the last thing the SNP wants to come over as is sleeket or secretive. It is very clearly not persuading the wider public (there are currently three people who don’t believe Sturgeon for one who does) and so avoiding what should be a standard urgent review looks… problematic.

But reason three is key – this is going to keep coming back and back. The SNP is probably going to end up in court again over the £650k and definitely over the Salmond affair. There will be more leaks and revelations. You need to tie a bow around what happened, to be able to say credibly that you fixed it.

Constantly looking for hiding places to avoid someone putting their hand up and taking responsibility for something (anything guys, someone must have failed at something here, surely?) is just stoking up even more problems for the future. To quote Carney, this is a rupture, not a transition. You need to act like it.

So here are some of the questions I would want answered if I were you.

Who saw the bank statements?

Sturgeon is desperately trying to confuse you so let me unconfuse you. The Murrell investigation wasn’t ‘complex’, it was ‘complicated’, which is not the same thing. His embezzlement all involved direct use of SNP bank accounts for improper purposes. Much was linked to Amazon, which is in turn linked to the SNP account, the rest to an SNP debit card.

Every one of these transactions will turn up on the bank statements. The reason it was complicated was because there were gazillions of transactions and the police had to work out which ones were legitimate and which ones were not, one transaction at a time. But there were no nested shell companies, no offshore bank accounts, no tax havens. This was simple theft.

This is why Sturgeon is hammering this idea that there was nothing to see in the accounts. Sure, but they don’t specify the transactions. It was not the accounts that the Finance and Audit Committee was asking for but the bank statements. It is this that Murrell (and later Sturgeon) refused to release. Had they handed them over, the embezzlement would have been instantly apparent.

Is the SNP really in a situation where only one person saw the bank statements? That seems impossible. So who else did and when? And why was no concern raised? Sturgeon said the Audit Committee didn’t allege criminal activity, another of her straw man argument. What they alleged was this; that the cover-up of information risked the possibility of criminal activity. Which takes us to…

Did the NEC fulfil its fiduciary duty?

I have been a trustee on a number of small charities and community groups. It is hammered into us that our first duty is fiduciary, to ensure the legal and appropriate financial operation of the organisation. This is a positive duty, not a negative one – it is not that you must act if you see fraud or a risk of insolvency, it’s that you must take action to prevent the possibility of either.

The roles of ‘wife’ and ‘boss’ can’t be separated – that’s why it’s a conflict of interest

The NEC is the ultimate governing body of the SNP. Does it have an adequate induction process? Did everyone understand their fiduciary duty? If so, when warned by the Audit Committee on lack of transparent information, it is my reading that they had no legitimate course of action other than to immediately instruct the Chief Executive to hand over the information.

I do not believe there was any discretion to be invoked. I believe there was a clear and credible warning of a risk of non-compliance with fiduciary duties and at that point you don’t get to debate it, you must ensure that you are compliant again. Why didn’t this happen?

Who had access to the Amazon account and where were the various orders delivered?

This is also important. Simply put, it is highly irregular for an organisation to buy things that get delivered to the home address of a member of staff. But it would have been immediately apparent that something was wrong if these products were being delivered to HQ. All this information ought clearly to have been available to anyone with access to the Amazon account.

Was there no double-signatory required for orders over a certain threshold? What was that threshold? At one point Murrell ordered two watches that came to nearly £10k. Was an officer of the SNP able to spend £10k at his own discretion with no oversight? What spending constraints were in place?

Where were goods delivered? Who else had access to the Amazon account? How did no-one notice the size of the Amazon spend? How did no-one see the volume of goods being delivered to a home address? Are there no checks whatsoever on purchases from the SNP Amazon account? How could this have happened in practical terms?

What mitigation was put in place over spousal conflicts of interest?

If there is something that is driving me up the wall right now it’s the debate over wife/leader in terms of for what it is legitimate to criticise Sturgeon. Let me be clear; if Sturgeon was wife alone, if Murrell worked for and robbed RBS or something, this would be an eyebrow-raiser and no more. A senior politician would usually be grilled over a partner engaging in fraud but it would be inappropriate to imply culpability.

She wasn’t just his wife. The issue here is not ‘wife or boss’ (effectively), but ‘wife and boss’. It is the blurring of roles which creates the conflict of interest and there is simply absolutely no doubt that both aspects of this blurred role therefore become entirely relevant for scrutiny. It meant she was both the person who could have stopped him and also that she benefitted materially and personally from the embezzlement. The roles can’t be separated. That’s why it’s a conflict of interest.

Moreover, there was no shortage of warning about this conflict of interest when it first occurred. Were any mitigations put in place? If not was that not clearly negligent? If so, were they sufficient? And if they were, did they fail, or were they ignored? This is key to understanding what went wrong and how to stop it going wrong again.

Is there a consistent accounting for the referendum donations?

This is another issue with which Sturgeon is playing fast and loose. She says that while the ‘referendum’ donations were not specifically marked as such, they were always ‘there’. First of all, that is itself illegal. Second of all, it isn’t true. It looks like the SNP and/or Sturgeon are going to be sued over this. The party needs to get its account of this situation clear.

I explain this in more detail here but when you take a donation there are only three things you can do with it. First, spend it on the purpose for which it was raised. Note that the guidance attached to the law states that (as a worked example) that if you fundraise for goats for an African village, you cannot spend the money on a well for the same village. It must be precisely what you said it was for.

Pretty well everyone up to and including John Swinney accepts that there have been governance failures, but no-one has explained what they were

The second thing you can do is keep the money intact and accounted for at all times until you do spend it on its original purpose. You cannot spend some of the money and replace it later. You cannot ‘weave it through your accounts’. There is no ‘it wasn’t in one place but it was there’. Those are all illegal. It must be there at every moment, like a chain of custody.

The third thing you can do with it is invest it while you wait to use it for its final purpose – but the rules are strict. You can’t invest it in yourself, your friends or your associates and it must be a recognised, relevant investment vehicle which is interest-bearing at market rates.

This means that unless the SNP is maintaining a secret bank account, it’s bank balance could never drop below £650,000 at any time and be legally compliant, and it cannot spend any monies raised on ‘referendum-like’ activity. The reality is that we know this money was used to repay a loan to Colin Weir in 2017 and that the bank account balance fell well below £650,000 at that point. So barring a secret bank account, it is impossible that the SNP is compliant.

It would be a lot, lot better to get ahead of this issue now.

Did the National Secretary ensure the constitution was followed?

This is really important. There is a key role which is there to ensure the constitution is followed as as central part of ensuring that an organisation is running as it should. In the SNP that role is the National Secretary. Did the person in that role fulfil the duty? Did every meeting happen as constitutionally required? Were all procedures followed? Were all complaints handled as per the rules?

Everyone near the SNP’s democratic processes knows the answer to these questions is no, and that is a serious matter opening people up to legal challenge. This also needs to be accounted for.

What were the governance failures?

Pretty well everyone up to and including John Swinney accepts that there have been governance failures, but no-one has explained what they were. That isn’t an appropriate response and it is alarming the SNP seems not to want to find out.

There are two issues; procedure and culture. The procedure issue itself splits into democracy and administrative compliance. Put really simply, if the SNP wants to de-democratise itself, that is its own (bad) choice, but it is not allowed to weaken procedures that ensure compliance with the law. Did that happen? Were its procedures robust? If so, what went wrong. If not, what was missing?

Culture is simple to understand and complex to analyse, but it has to be done or how do you know your culture has changed? This is important because even though the SNP was badly de-democratised under Sturgeon, I can’t actually see much wrong with their top-level financial governance arrangements (although I suspect their operational-level controls were punk, as per ‘spending cap’ above).

The problem was that to my eyes Sturgeon and Murrell both acted intentionally to overrule those financial governance arrangements. Why did the Audit Committee not suspect something until Colin Beattie was removed as treasurer? Why did anyone allow both Murrell and Sturgeon to countermand the Audit Committee warnings? The problem was cultural, a culture of silence and fear. It needs to be looked at.

Are you an SNP member? Why would you not want these questions answered?

This has clearly stymied any progress on independence for the time being. Would you not rather your party used this time to get itself sorted out? Because it hasn’t been sorted out. It is the same mess as when this happened, with only personnel changed.

That is the one thing that has surprised me a bit – it is most certainly not Sturgeon who has been wronged here but the membership of the party. The harm that has been done is hardly minor. I would be a lot angrier at those who ran my party that way if I was you. Don’t you want answers to these questions? Do you like being robbed? If you don’t want to know what happened and why, is that not an indication of a problem in itself?

Source: Things the SNP needs to know