PIE, the Daily Mail, and Downing Street child porn: a coincidence too many?

It may be that you are wondering why when a close associate and long time friend of the Prime Minister who works as an aide at No10 Downing Street is arrested for child pornography offences, the only comment by the Labour Party you can find comes from the otherwise nondescript John Mann MP, member for Bassetlaw and a member of the Treasury Select Committee whose concern is solely to be sure there are 'no policy implications'.

All very strange, although it is possibly not unconnected to the allegations surrounding Labour MPs Jack Dromey, Harriet Harman and Patricia Hewitt and their links to the Paedophile Information Exchange organisation while they were working for the National Council for Civil Liberties in the 1970's and 80's. That particular story has been rumbling around for many years now without getting a wider airing until the Daily Mail ran with it last December before going rather quiet on it.

Meanwhile, Patrick Horn - the adviser in question at Number 10 - was informed by Downing Street officials of the likelihood of his arrest on the 12th February, and was arrested in the small hours of the 13th February. It would appear that Downing Street was informed in advance of the arrest, and indeed warned Horn, which gave him an opportunity to resign his position before the arrest occurred. What else it may have given him an opportunity to do is a matter for speculation.

What interests me in all of this is the timing. If Horn was arrested in the small hours of the 13th, he was presumably interviewed that day, and very possibly the following day as well. Newspaper reports state that the police 'subsequently examined computers and offices used in Downing Street by Rock, who was the deputy director of No 10's policy unit'

'Subsequently' in this sense would appear to mean in the days following, ie either on Friday the 14th, or Monday the 17th.

How strange then that on Wednesday the 19th February, the Daily Mail - a Tory supporting newspaper - resurrected it's 13th December story about Labour links to PIE, and ran it on the front page not just that day, but for several days afterwards. I recall that when I read the first and following stories, I was slightly puzzled about several things.

• Why now, when there was no 'new' evidence?
• When new evidence began to appear, where did it come from? There was little to nothing by way of attribution accompanying the articles
• Who was their source for this new information?

Now, perhaps I just worked at Westminster for too long, but I'm a bit cynical about the timing. The Harman/Dromey/Hewitt story continues to rumble on, but all of a sudden the timings look a bit too convenient to be entirely coincidental.

It is certainly strange indeed to discover that despite the arrest of a close ally of the Prime Minister which entailed the search of government computers for child pornography in Downing Street, the best Labour can muster is a statement from an obscure back-bencher and a few words from Tom Watson, who'd make a speech at the opening of an envelope if he thought it would get his picture in the Guardian.

So what did happen? I'm flying a bit of a kite here, but I suspect that someone in Downing Street had a brilliant idea. Say nothing about Horn until asked, but in the meantime get the Daily Mail to resurrect their story from December about Labour front benchers and PIE in the 70's and push it for all it was worth. Need more information to sustain a week's worth of front pages? No problem, we're the government, what do you need?

Now, nobody could think that the Horn situation could be hidden forever - it was only a matter of a couple of weeks, if not less, before someone noticed that he was no longer in Downing Street. But that, of course, doesn't matter. By then, the Labour leadership would - with luck - be embroiled in their own paedophile related crisis, and would be keen to not rock the boat on subjects related to senior officials and child pornography.

I can imagine the assessment when - and indeed if - such a scheme was dreamed up. In the short term, it would cause embarrassment to the Labour front bench while they dealt with the PIE allegations. By the time the Horn story came to light, Labour would not be keen to shout 'senior Tory paedophile' because they would be accused of hypocrisy, having vacillated over Harman et al. This is why the only Labour MPs sticking their heads above the parapet were publicity hungry backbenchers. In the long term, the genius at Downing Street would realise that the two stories would coalesce in the public imagination, party lines would be lost, and the 'they're all the same' mentality of the general public would take over leaving few memories of the specifics. Politicians are already held in such low esteem that that would make no difference, but it would prevent a political advantage - and political capital - being made by the Labour Party.

So, perhaps I am too cynical. Perhaps it was indeed a coincidence that the Daily Mail began pushing this story days after Horn's arrest, digging out new evidence regarding PIE from the 70's and 80's, and felt it was genuinely in the public interest. And perhaps the timing of the Horn arrest and the subsequent admission by Downing Street was motivated by good intentions. But my experience of Westminster is that such coincidences rarely happen.

Labour links of 'non-political' residents featured in UKIP leaflet

A row erupted in the Manchester Evening News today over the inclusion of three local residents in a photograph used in a UKIP publication. The three residents - Bernard Caine, Irene Lawrence and her daughter Rachel - claimed that the photograph was used without their permission. The article says,

"Mr Caine, who says he has no party political affiliation but on this occasion has picked Labour candidate Mike Kane via postal vote, added: “It is diabolical.”

Irene, 67, said she only went to the meeting because her housing association asked her to go."

That Mr Caine should vote for Labour candidate Mike Kane is not entirely a surprise as they were both directors of the Parkway Green Housing Trust back in 2006/7 and worked closely together. There are a host of other organisations which Mr Caine has occupied senior positions and in which he would have worked closely with Kane.

As for Mrs Lawrence, she is far from a stranger to Mr Kane either. She was a director (for 11 years) and chairman of the Willow Park Housing Trust, and also worked closely with Kane for many years, most recently over the building of a skate park on the estate in 2010 - as featured in the Manchester Evening News which ran the story about their 'lack of political affiliations' while relegating the story about vandalism and theft from the UKIP office to a side bar.

It is not of course just Mike Kane that Bernard Caine has worked with. He was also a fellow director of the Manchester Tenants & Residents Federation Ltd with Labour councillor David Royle.

Now, it may well be true that neither Bernard Caine nor Irene Lawrence belong to the Labour Party, although I have my doubts about their innocence in that regard. Be that as it may, what is undoubtedly clear is that in an area where the Labour Party vote is weighed rather than counted it would be almost impossible to reach the chairmanship of a Housing Trust without having the whole-hearted support of the local Labour administration. Such support would hardly be forthcoming unless it was reciprocated, and they wholeheartedly supported the Labour administration.

It may also go some way to explaining why certain Labour activists were telling those who displayed UKIP posters in the windows of their social housing that they were 'their' houses, and they couldn't display UKIP posters their. Are the housing trusts as corrupt as the Labour administration? We couldn't possibly comment.
 STOP PRESS! :D

Have a look at these two pictures. Is that Bernard Caine - 'local non-political' resident - on the right at a meeting with Mike Kane and Harriet Harman at the beginning of the  by-election campaign? The second picture is definitely of Mr Caine, taken at the funeral of Paul Goggins, the former MP where he was widely quoted, not least by the BBC - "Bernard Caine said Mr Goggins was always there for his constituents" - in a strictly non-political sense.

Union postal vote applications go straight onto Labour's computer system

I was taking a look at 'Unions Together' earlier on this morning. In case you weren't aware, that is the operating name of TULO, the Trades Unions and Labour Party Liaison Organisation. They are currently taking part in the Wythenshawe & Sale East by-election despite not being registered with the Electoral Commission, but that is another matter. TULO is located - according to their website - at 1 Brewer's Green, London SW1H 0RH, which is also - coincidentally - the registered address of the Labour Party.

On their website, they feature a section called 'Make your voice heard' to make sure that you are registered to vote, and which allows you to apply for a postal vote. For voter registration, it helpfully encourages people to hold voter registration drives, and supplies materials including voter registration posters in Polish. No, really.

Of more interest is the postal vote application. When you follow the link, it invites you to select your union and download a postal voting form. The unions features are ASLEF, Community, CWU, GMB, TSSA, UCATT, Unison, UNITE and Unity. Clicking on the union link will bring up a pdf document with a postal voting application and a pre-printed address label. All of the forms have the appropriate union's logo displayed in the top right hand corner, but otherwise are pretty standard. Except for one thing. In the bottom left corner is a data protection disclaimer permitting the union to use the details you have supplied to contact you in the future.

So, having filled out the form in blissful ignorance of this, you then send it to the address on the pre-printed reply label:

Nothing particularly controversial there, you might think. Except that if you Google that address, you find that the National Communications Centre is actually the National Communications Centre for the Labour Party.

So what does this mean? It means that every single postal vote gathered by the unions ends up on the database of the Labour Party even before it is submitted to the Electoral Registration Officer in the constituency concerned. As the form also asks for phone numbers and e-mail addresses this is undoubtedly quite useful for another organisation which operates from the same address, the Labour Party Contact Creator software team, which promises:

Of course, they suggest that it will 'allow the Labour Party to meet the challenges of the 21st Century'. Others might suggest that it will 'allow the Labour Party to circumvent the Data Protection Act while breaching the spirit of electoral legislation and the Electoral Commission's guidelines on the handling of postal votes'.

TULO and Unions Together is noted as being promoted by Byron Taylor at the Brewer's Green address above. Byron Taylor is also a Labour councillor and Deputy Leader of the Labour Group on Basildon Council who is 'committed to Basildon' just two years after being Labour's candidate in Stoke on Trent at the general election.

Needless to say, the Unions Together website is hosted - outside the UK, of course! - by Blue State Digital, who are also responsible for Labour's online presence and help Hope not Hate evade VAT, as discussed previously.

'Charity' evades £70k in VAT on political campaigning

A supposedly charitable organisation which has received over £150,000 of government funds for fighting racism in deprived areas has been defrauding the government of tens of thousands of pounds after misusing its charitable status to escape paying VAT.

Hope not Hate Ltd receive most of their funding from large Unions and enjoy the support of many Labour MPs including jailed expenses fraudster Denis MacShane, but a significant percentage comes from the Department for Communities and Local Government which is funnelled through its charitable arm, Hope not Hate Educational Ltd.  Hope not Hate Educational Ltd was previously called the Searchlight Educational Trust. Since 2010 it has received over £150,000, getting over £63,000 in 2012 alone.

Hope not Hate Ltd, the non-charitable arm, was originally formed as a campaign within the Searchlight group and dedicated to anti-racism and anti-fascism. The group campaigned for many years against the National Front and the BNP, with Hope not Hate first being set up as a separate campaign under campaign director Nick Lowles in 2009. Following internal arguments between Lowles and Searchlight founders Gerry & Sonia Gable, Hope not Hate was separated from Searchlight and incorporated as a limited company under Lowles ownership, and with him as sole director. General Secretary of both Hope not Hate Ltd and Hope not Hate Educational Ltd is Labour Party activist and failed NEC & parliamentary candidate Ruth Smeeth. Having lost the safe Labour seat of Burton & Uttoxeter in 2010, she is currently working to lose Stoke on Trent and Kidsgrove in 2015.

Since 2010, it has been very much refocused as an anti-UKIP party as UKIP continue to make considerable gains in the polls. At one stage, Hope not Hate worked with UKIP to keep members of the far-right out, but it ceased co-operation with the anti-EU party when Lowles took control. Lowles background is within the hard left, having formerly been associated with both the Communist Party and the Socialist Worker's Party before fronting the Hope not Hate campaign from which he now makes a tidy living. 

 In the 2010 General Election, Hope not Hate Ltd filed total expenses of over £319,000 with the Electoral Commission, of which £310,000 was spent in England, with the rest split between Wales and Scotland. Most of this spend was directed against the BNP. Amongst Hope not Hate's biggest suppliers was Blue State Digital Inc, or BSD. BSD sprang from the activists surrounding Howard Dean's run for the US presidency, and morphed into an international political fund raising/consultancy business before being purchased by Sir Martin Sorrell's WPP Group in 2011.

Hope not Hate spent heavily with BSD. In total the invoices amount to £ 71,050. Of these invoices, £31,500 worth were from BSD UK, while a the remainder were invoiced from the US. Of the £39,500 invoiced by BSD US, all were for a 'monthly technology fee' and a 'monthly strategy fee'. Being invoiced by a US based company, VAT would not be included on the invoice, but should have been declared and paid by Hope not Hate as they are VATable services, and the additional expenditure should have appeared on their ElComm declaration.  There is no record of this VAT relating to the controlled period having been paid.

Of the remaining £31,500, all of it was invoiced by BSD UK, and for exactly the same services with one exception - there is a single invoice for 'Advertising' for £1,000, which includes VAT of £175. The remaining £ 30,500 has been invoiced free of VAT. On the total of £71,500, Searchlight paid only £175 of VAT, and appear to have evaded VAT which amounts to £12,258.75 at the then prevailing rate of 17.5%.

An accident? Not likely. As far back as 2002, the Charities Commission warned Hope not Hate's predecessor Searchlight about conducting political activities which were not concomitant with its charitable status and stated in its report that " A charity must not issue material that supports or opposes a particular political party or the government or seek to persuade members of the public to vote for or against a candidate or for or against a political party". It also warned that it should not  mix its charitable activities with its political ones and should establish a clear separation between the two bodies.

So why were they not charged VAT on what were clearly VAT-able invoices? There are two alternatives. The first is that BSD - now a part of Sir Martin Sorrell's WPP Group - either 'forgot' to charge or deliberately undertook to defraud HM Customs & Excise by not including VAT. The second is that as a charity, Searchlight/Hope not Hate Educational Ltd is not liable for VAT, and can apply for an exemption certificate which when given to suppliers permits them to not charge VAT on invoices.

Which is more likely? It's a 50:50 choice, really. Would a multi-national company have accidentally forgotten to invoice VAT? And if they deliberately didn't invoice VAT, why not? The only reason would be the production of an exemption certificate, and yet the services supplied would not fall within the permitted use of such a certificate. The question - if this is the case - must be whether BSD were aware that the services they were providing fell outside the scope of such a certificate. For links between senior BSD managers and directors and the Labour Party, see below and make your own judgement.

If most likely assumption is that Hope not Hate Ltd evaded VAT by supplying BSD with Hope not Hate Educational Ltd's VAT exemption certificate, and then used it to benefit from VAT evasion on work which was subsequently submitted to the Electoral Commission as expenses of Hope not Hate Ltd. By the time they ceased supplying invoices to ElComm, they had evaded over £12,000 in VAT. This is what is directly provable. BSD still act on Hope not Hate's behalf, and it is not unreasonable to assume that their bill has not got smaller than the £6,300/month they were previously billing. Since the 2010 General Election, 45 months have passed which would represent at current rates over £ 56,000 of VAT illegally evaded by Hope not Hate, bringing their total VAT evasion to almost £ 70,000.

Would BSD have been aware of this? It is difficult to imagine they would not. BSD ultimate owner Sir Martin Sorrell is trenchantly pro-European, calling only last week for the Conservative Party to adopt a more pro-European position, and he is a frequent collaborative letter writer to national newspapers calling for 'more Europe', along with other tycoons such as Sir Richard Branson. As BSD are charging for 'monthly strategy fees', it is difficult to imagine that they do not have at least some input into the anti-UKIP stance Hope not Hate have increasingly adopted.

This is probably assisted by the close links between the Labour Party and BSD. BSD were contracted last year to run Labour's on-line campaigning ahead of the 2015 general election, while BSD Political Director Gregor Poynton - husband of Labour MP Gemma Doyle - was the Labour leadership's preferred candidate for the Falkirk West seat currently held by former Labour MP Eric Joyce. BSD themselves operate Scottish Labour's website and host it on non-UK based servers.

Sample Blue State Digital invoice from Electoral
Commission - note the lack of VAT

Elsewhere, there are close links between BSD and Hope not Hate which probably help in the turning of a blind eye to misuse of charitable status. Matthew McGregor, MD of BSD UK, is a former Hope not Hate activist who previously worked for John Cruddas and Ken Livingstone, while Fabian Society staffer Richard Speight previously worked for BSD. Whether BSD knew or not, it is the responsibility of the seller to ensure that they are charging the correct amount of VAT, and with the close links between the Labour Party, Hope not Hate, the unions - many of whom BSD also represents - and BSD, it is inconceivable that there was not an awareness that HnH were campaigning politically rather than on a social ills.

At the time of writing, it is believed that formal complaints will shortly be made to HM Customs & Excise, the Electoral Commission, the Charity Commission and the police.