Our skill was creating bush fires and then putting a big fan on and making the fan blow. We were prepared to and if you could criticise us for anything – and I am sure you would – we picked subjects and topics that we knew would fly.
ARRON BANKS, June 2018
Arron Banks likes to make a splash. On referendum night, 23 June 2016, the brash insurance mogul threw a typically out-sized party on the 29th floor of Millbank Tower. The 400-foot-high skyscraper overlooking the Thames in central London had once housed Labour and Tory election operations. Now, the lofty citadel was being stormed. The self-styled ‘Bad Boys of Brexit’ had arrived.
The Millbank party was to be a celebration for Leave.EU, the insurgent populist campaign that Banks had bankrolled with what was often described as the biggest donation in British political history. The world’s media was there. Free drinks flowed. But at 11 p.m., the atmosphere became despondent. Shortly before the polls had closed, Nigel Farage, by far Leave.EU’s most recognisable face, had told a television journalist that his side had lost.
The mood changed as the results started to trickle in. The vote in Sunderland was expected to be close. Leave won by 22 per cent. The pattern was repeated across England, outside London. Almost every declaration pushed Brexit closer. At two in the morning, the stocky Banks, his rangy press spokesman Andy Wigmore and Farage, wearing a pink tie and grey suit, took the elevator to the ground floor bar to continue watching on a bank of television screens. “The adrenalin and the alcohol were doing their work. Excitement was at fever pitch,” Banks recalled in his campaign diary.1 At 3.44 a.m., Farage announced on Twitter that he could “now dare to dream that the dawn is coming up on an independent United Kingdom”.
Hundreds of miles away, on the outskirts of Bristol, the sun was about to rise over a beautiful Victorian mansion. As Arron Banks was drinking champagne in Millbank, dozens of staff from both Leave.EU and his insurance business were partying in his property at Old Down Manor. The referendum results were shown live on television screens. A DJ played pop music. The majestic Severn Bridge connecting England and Wales twinkled in the distance. Towards the end of the night, when it became apparent that the UK had voted for Brexit, Liz Bilney stood up to make a speech. “You’ve done a great job,” the Leave.EU chief executive told her team. Many were in their early 20s, and had worked for little more than the minimum wage. As Bilney spoke, one of her staff drunkenly sat down on the polished wood floor.
Banks would later claim that his insurance empire was completely separate from Leave.EU. But that was not the case. Eldon Insurance had bootstrapped Banks’s Brexit campaign with staff and data. This was not the only discrepancy in the account of his extravagant referendum spending. Over the course of the three years that followed the Brexit vote, Banks was seldom out of the headlines.
He was slapped with major fines for misusing voters’ personal information and was investigated for breaking electoral law. He made Trumpian attacks on Twitter against the “fake news media” and ran attack campaigns targeting Tory MPs who he deemed insufficiently pro-Brexit. Speculation about the source of Banks’s political donations was rife. He owned African diamond mines and had clandestine meetings with prominent Russian diplomats and businessmen.
Banks was eventually vindicated when a police investigation found that the Brexit donations had in fact come from within his labyrinthine business empire and not from any third party. He has long maintained that “no money came from the men with snow on their boots”. But Banks’s remarkable rise to prominence underscores the weakness and confusion of the laws and rules governing our politics. This isn’t just a story about alleged interference from Moscow. It’s about money and misinformation much closer to home.
*
A biographer would have a difficult time writing the definitive story of Arron Banks’s life. Even in the vérité-fluid world of modern politics, few have mixed fact and fiction so readily. As Banks told a parliamentary committee in June 2018, he likes to lead journalists and politicians “up the country path”.2 If admitting to an inquiry into fake news that he created “bush fires” to get attention on social media fazed Banks, it didn’t show. He walked out of the session, with his right-hand man Andy Wigmore, to go for lunch by the Thames with two senior figures from the Northern Irish Democratic Unionist Party. Afterwards, committee chair Damian Collins complained that it was hard to know what to make of Banks’s and Wigmore’s evidence as “they frequently lie, exaggerate, misspeak and misunderstand”.
Even Banks’s earliest days are obscured by a fog of myth-making and inconsistencies. Banks has said that he “grew up” in South Africa, and on other occasions that he only visited the country on summer holidays, flown in from the family home in Basingstoke like an “army brat” to visit the sugar estates that his father managed.3 Regardless of which version is closest to the truth, Banks certainly did spend some of his formative years in Britain’s former colonies. Many leading Brexiters had similar experiences: Douglas Carswell was raised in Uganda; Vote Leave’s head of media Robert Oxley has strong family ties to Zimbabwe; UKIP’s eccentric and short-lived post-Brexit leader Henry Bolton was born in Kenya.4 As with these other ardent Eurosceptics, Banks’s time in Africa seems to have left him with a distinct sense that Britain needed to regain its former imperial glory.
In his early teens, Banks was sent to Crookham Court, a draughty 19th-century private boarding school in Berkshire previously used for the children of armed forces personnel serving at nearby RAF Greenham Common. Banks was expelled from both Crookham Court and a subsequent school. In an interview, Banks dismissed rumours that he had been caught selling lead stolen from school buildings as “fake news”. “I’ve never nicked anything,” he said. But in his own book, The Bad Boys of Brexit, Banks writes that he was expelled for “pinching lead off the roof and flogging it on the side”.
What is certain is that Crookham Court was shut down after an investigation revealed that its millionaire owner, Philip Cadman, was a paedophile. In 1990, Banks acted as a character witness for Cadman at Cadman’s trial. Banks told the New Yorker that the curious decision “shows my independent streak. He was a decorated war hero. I was asked to say what did I think. I can only say what I thought, which was: I saw nothing.”5 Cadman was found guilty and sentenced to ten years in prison, reduced to six on appeal.
Banks has often spoken approvingly of authoritarian political figures and decried what he views as the ‘snowflake’ generation. In 2013, on a public Facebook group for former Crookham Court students, Banks hit out at those who had assisted in the child abuse prosecutions.6 “Crying over spilt milk doesn’t get you very far,” Banks wrote in response to an appeal from a former teacher, Ian Mucklejohn, for victims of abuse to come forward to pursue compensation.7 Mucklejohn later wrote a book about the scandal in which he says that even students who were not abused had been “brutalised by a regime in which physical abuse and absence of human feeling became the norm”.8
Banks’s education ended with secondary school. Afterwards, he went straight into business. He began by selling things. Paintings, houses, vacuum cleaners. “I was quite good at persuading people to buy things they didn’t want to buy,” he told the New Statesman a few months after the Brexit vote.9 Attracted by Thatcher’s economic policies, Banks joined the Young Conservatives, standing for election to Basingstoke council in the Labour-held ward of Norden in 1987, at the age of 21.
Banks pitched himself as a law-and-order candidate unafraid of political niceties. He distributed leaflets that played up comments made by Labour MP Bernie Grant about a riot on a predominantly black estate in Tottenham that led to the death of a policeman in 1985. Grant, who was born in British Guiana, said that the police deserved “a good hiding”. (Grant said he had been misquoted.)10
Labour activists were incensed that the young Tory was dredging up a divisive issue that had no obvious link to the local area. Banks’s combative campaign was run by Mark Fullbrook,11 who would later go into business with Australian spin doctor Sir Lynton Crosby and become a senior advisor to Boris Johnson. Banks lost. The following year he stood again for the Conservatives in Basingstoke, this time in a neighbouring ward. He finished a distant second behind an independent candidate.
Abandoning electoral politics, Banks moved into insurance. A neighbour found him a junior position at Lloyd’s of London. He was young, recently married and needed a steady income. At Lloyd’s, Banks learned the insurance trade, watching how insurers spread risks and traded assets to cover their positions. After seven years he left the firm and relocated to Bristol, after separating from his first wife, Caroline, with whom he had two daughters.
What Banks did next is not altogether clear. Banks has claimed he led his own sales team at Norwich Union – now part of Aviva. However, Aviva said they have no record of Banks ever having worked for Norwich Union.12 He has also said he worked for Warren Buffet’s prestigious investment outfit Berkshire Hathaway. Buffett, nicknamed the Oracle of Iowa for his market prescience, said that Banks “certainly never worked for me”.13 What we do know is that by the mid-2000s, he had remarried – to a Russian, Ekaterina Paderina, better known as Katya – and was running a successful insurance business called Brightside. He occasionally made small donations to the Conservatives.
Life was not all plain sailing. In 2011, Banks floated Brightside. The following year he was unceremoniously ousted from his role as chief executive by new investors who, Banks claimed, wanted to cash in on the business. Banks tells a story of how, after his sacking, he punched his friend and former partner, John Gannon, in the face: “I hit him as hard as I could and he went over like a bag of cement.”14 Banks kept his shares in Brightside. When the company was sold to a private equity firm in 2014, he received around £12 million. This appears to have been his biggest payday.
Estimates of Banks’s overall wealth vary wildly. The admiring Brexit chronicler Tim Shipman introduces him as “a successful businessman who had made around £100 million from insurance firms”15. In 2017, the influential Sunday Times Rich List put his fortune at £250 million, but this was based primarily on a valuation of Banks’s insurance business that he himself had supplied to newspapers. He was later quietly dropped from the Rich List.16 Bloomberg estimated Banks’s fortune at around £25 million, mostly holdings in insurance, financial services and diamond mines.17 These are not assets that can be quickly and easily transferred into cash.
An analysis by openDemocracy quoted in the New Yorker found that Banks had spent around “half his lifetime earnings” on the campaign to leave the EU – “an amazingly generous amount”.18 After the Financial Times published an investigation into Banks’s business empire, the paper’s editor, Lionel Barber, asked: “How rich is he really?”19 In reply, Banks accused the FT of spreading fake news,20 which by then had become the standard populist response to any inconvenient revelation.
One of the difficulties in ascertaining the size of Banks’s wealth is that his business empire is so complex and opaque. His interests have included a British firm that produces iodine,21 a uranium mining operation in Niger22 and an Isle of Man bank23. He has set up dozens and dozens of companies, primarily centred on insurance. Most are registered at Lysander House, a soulless glass box on the edge of a Bristol industrial estate, and are ultimately owned offshore by entities in Gibraltar, the Isle of Man, Bermuda and the British Virgin Islands.24
Like many British businessmen – and many British political donors – he avails himself of the financial secrecy that offshore holdings give him. Banks, who was named in the Panama Papers leak of sensitive financial information from the law firm Mossack Fonseca in 2016, has said of his offshore interests: “I don’t give a monkey’s. I live in England. I pay tax in England.”25
Some of Banks’s most active holdings have run into financial and regulatory difficulties. After being pushed out of Brightside, Banks concentrated on his best-known business, Eldon Insurance. But by 2013, the jewel in his business empire was in trouble. Authorities in Gibraltar had, for two years, been scrutinising Banks’s insurance underwriter, Southern Rock. They questioned whether it had anywhere near enough capital to meet strict new rules introduced by the European Union, designed to avoid a repeat of the meltdown that followed the financial crisis. Southern Rock’s own accounts warned that the company was “technically insolvent” under the new rules.26 If Eldon suffered a run of claims, Southern Rock could in theory go under leaving hundreds of thousands of British drivers without insurance and Banks’s business in peril.
Gibraltar is not renowned for its officious financial oversight, but the regulator decided to act. Authorities in London became interested, too. Banks voluntarily recused himself from the Financial Conduct Authority register27 and, in 2014, he stepped down as a director of Southern Rock.28
On paper, Banks had barred himself from working in a role where he was in charge of insurance operations, but he remained in effective control of the overall business. Southern Rock, which posted a series of losses, still needed capital to stay afloat. The company addressed the shortfall, in part, through an accountancy sleight of hand. Assets owned by the firm, including shares of future income from insurance renewals, were sold to other firms in the Banks group – a strategy that led City journalists to question both the health of Banks’s businesses and the purpose of some of these transactions.
Even by the standards of the insurance industry, Southern Rock’s bailout was an obscured, convoluted arrangement.29 Banks later said that the Southern Rock deal was simply a case of “money that went from one company I own to another company I own”.30 The insurance business continued to struggle. In 2015, Eldon put 150 of its 500 UK staff on redundancy notice after poor financial results.
When faced with questions about his business, Banks often displayed the combative style that he would later bring to the Leave campaign. When a report by Gibraltar’s Financial Services Commission confirmed Southern Rock’s vulnerability to shocks, Banks claimed that its authors, PricewaterhouseCoopers, had leaned on the regulator. A few months later, in September 2014, Banks took out a full-page advert in the Telegraph featuring a photo of a pie and a cryptic comment about PricewaterhouseCoopers receiving a multimillion-dollar fine from US regulators. The advert was signed “Friends of PWC Gibraltar”. An insurance trade publication described the ad as “how shall we put it, enigmatic”.31 Soon many British political commentators would use similar phrases to describe the man who bankrolled one of the most confrontational and divisive political campaigns in British history.
*
Banks only came to political prominence in October 2014, a month after his bizarre Telegraph advert, when he announced that he was donating £100,000 to UKIP. The Bristol-based businessman said that he was tired of the Conservatives’ milquetoast position on Europe. After meeting Nigel Farage for lunch, he had decided to switch his allegiance to UKIP. “My businesses in this country and overseas, where I own a number of diamond mines, were doing very well. I wanted to give something back, and help the fight to get Britain out of the EU,” Banks writes in The Bad Boys of Brexit.32
The donation was carefully choreographed for maximum effect. Wigmore, a garrulous former aide to Conservative cabinet minister Michael Portillo,33 summoned Britain’s political journalists to a press conference at Old Down Manor, where Banks was hosting a gala for the Belize high commissioner that evening. Banks had taken out a loan of more than £3 million to buy the grand house, previously owned by musician Mike Oldfield. The morning of the UKIP press conference, Conservative Leader of the House of Commons William Hague told a radio interview that Banks was “somebody we haven’t heard of”.
Banks was livid. In retaliation, he increased his donation to £1 million. “Hague called me a nobody,” Banks said. “Now he knows who I am.”34 A former Leave.EU staff member whom I met during months of investigations into Banks’s commercial interests described the move as “classic Arron”. “He was pissed off by the Tories. To make a point he went off and upped the ante massively. That’s how he operates.”
Banks continued to raise the stakes. After David Cameron’s general election victory in May 2015, Banks set his sights on leaving the EU in the near future. The £1 million contribution to UKIP soon started to look like loose change. Over the course of the referendum, he registered donations of at least £8.4 million to various anti-EU causes.35 Exactly how much Banks spent during the referendum is unclear. Much of his support was made up of ‘in kind’ donations – staff, office and other resources – and loans to his Leave.EU campaign that do not seem to have been drawn down. “We probably spent around £3 million in cash in the whole campaign,” Wigmore told me over the phone from Belize.
For British politics, even £3 million is a very significant amount. By comparison, Vote Leave’s largest donor, the hedge fund manager Jeremy Hosking, apparently much richer than Banks, spent just under £1.7 million campaigning for Brexit.36 Banks’s money bought him the political recognition that he had failed to win at the Basingstoke ballot box decades earlier. He was invited on to television debates and radio panels. Newspapers wrote quizzical profiles of the man with pockets deep enough to buy an entire political campaign.
Interest in Banks and his money grew after the Brexit vote, spurred by the fact that he refused to go into detail about how he financed his political spending. “I am an entrepreneur,” he told the New Yorker. “With all due respect to journalists or anybody else, how the hell do they know what investments I’ve got? You know, I might be a good stock market investor. I might own bonds.”37
The questions kept coming. In Parliament, British politicians asked how Banks could have afforded to spend so much on the Brexit campaign. Journalists turned up new information about his complex business arrangements, which did not always reconcile with Banks’s own accounts of his wealth. In November 2018, the National Crime Agency announced that it was investigating Banks and Leave.EU for potential failings under electoral and company law. The Electoral Commission had asked the force to intervene after concluding that there were “reasonable grounds” to suspect that Banks was not the true source of all the political donations made in his name during the EU referendum.38
Banks said he was pleased that the NCA was investigating him. “There is no evidence of any wrongdoing from the companies I own. I am a UK taxpayer and I have never received any foreign donations,” he said.39 But the story of the biggest donor in British political history was about to take a few more twists.
*
Shortly after the National Crime Agency investigation into Banks was announced, I received an email to my secure account. A contact said they had something I might be interested in. A series of emails had been sent between Arron Banks, Cambridge Analytica and former Trump advisor Steve Bannon. The correspondence, from late 2015 and early 2016, confirmed what many had long suspected: the links between some of the key figures in the Brexit saga and Trump’s victory were long-standing, and more extensive than previously realised.
Some of these secrets were hidden in plain sight. In an October 2015 diary entry in The Bad Boys of Brexit, Banks writes that Leave.EU had “hired Cambridge Analytica, an American company that uses ‘big data and advanced psychographics’ to influence people”.40 Cambridge Analytica, which went on to work for the Trump campaign, had a burgeoning reputation as the cutting edge in election black-ops. It was bankrolled by radical libertarian hedge fund billionaire and Trump backer Robert Mercer. His daughter Rebekah sat on the board, alongside Nigel Farage’s friend Steve Bannon.
At the time, Cambridge Analytica was working on Republican presidential hopeful Ted Cruz’s campaign, boasting of using psychological data gleaned from tens of millions of Facebook users.41 This would later be at the centre of the scandal that brought down the company.
Arron Banks looked at Cambridge Analytica and liked what he saw. Banks thought the company could work on Leave.EU’s data operation and help solicit donations from the United States. Accepting political donations from foreign nationals or companies and channelling them through a qualified donor – a company or individual based in the UK – is prohibited under British electoral law.
In late October 2015, Banks wrote an email to a handful of his closest associates including Wigmore, Liz Bilney and businessman Richard Tice saying that he “would like CA to come up with a strategy for fund raising in the states”.42 Steve Bannon was among the email’s recipients.
Banks had hoped to raise money outside Britain before – in Belize. He writes that the idea for Leave.EU was hatched in July 2015 when he did “a runner from reality”43 with Farage and Wigmore to the tiny Central American state. The ‘Bad Boys’ already had ties to Belize, famous for its light-touch regulatory regime. Wigmore was a representative for the Belize High Commission in London, and Banks had been in the country a year earlier attempting, unsuccessfully, to set up a bank. Three weeks before they travelled to Britain’s last colony on the American mainland, Banks was made Belize’s honorary consul to Wales.44
In Belize, the three amigos Banks, Farage and Wigmore stayed at a hotel owned by Francis Ford Coppola and went fishing on a beautiful desert island, before travelling to the fishing town of San Pedro to meet Tory donor Lord Michael Ashcroft. Banks said he asked the Belize-based Eurosceptic peer if he was “going to join the fight, perhaps even put a bit of money into the pot”. Ashcroft demurred.45 (Ashcroft did not fund Leave.EU, but his imprint published The Bad Boys of Brexit, which was ghost-written by his close collaborator Isabel Oakeshott.)
Cambridge Analytica appeared keener to help with US fundraising. On 25 October 2015, the day after Banks had emailed his advisors and Steve Bannon about attracting American donors for his campaign, a Cambridge Analytica employee replied, saying that the firm could develop a proposal that would include “US-based fundraising strategies”.46 (Banks said that this proposal was never followed up.) Leave.EU’s leadership had already met with senior Cambridge Analytica staff to discuss what Banks called a “two stage process” to “get CA on the team”.
Cambridge Analytica also asked Leave.EU to “connect us” to Matthew Goodwin, a political scientist who had conducted extensive research on UKIP voters. “He should have the raw data from that, which will be very helpful for us.”47 Former UKIP party secretary Matthew Richardson responded: “I have already spoken to Matt Goodwin and the data is incoming.” (Goodwin said that to his knowledge the data he collected was never shared.)
Bannon was copied into many of the emails. Andy Wigmore later told journalist Carole Cadwalladr that the Mercers were “happy to help” Leave.EU.48
When Leave.EU went public, Cambridge Analytica was there. At the London press conference to announce the campaign’s launch in November 2015, Cambridge Analytica’s director of business development, Brittany Kaiser, sat on a panel that included Banks, Liz Bilney, Tice and American lobbyist and referendum specialist Gerry Gunster, who was working with Leave.EU. (Gunster later said that he brought Banks “the methodology and the science behind how best to win, based on my experience of running many ballot measure campaigns here in the US”.49)
Banks later told British regulators that after “initial discussions” Leave.EU decided not to work with Cambridge Analytica.50 But the email correspondence I received from my source raised questions about the depth of this account. Banks had told the Information Commissioner that the final meeting with Cambridge Analytica was in early January 2016. But weeks later Matthew Richardson had emailed Cambridge Analytica’s chief operating officer Julian Wheatland saying that Leave.EU “would like to talk about using the service and staging the contract”.51 Another email talked of “micro-targeting” British voters. In early February 2016, Banks tweeted that Cambridge Analytica’s “experts” were working on Leave.EU’s social media. Banks later said he didn’t hire Cambridge Analytica because Leave.EU did not win the lead campaign designation. He also told the New Yorker that he had been concerned about Cambridge Analytica’s techniques. The company, he said, promised to raise “six or seven million pounds for the campaign”, using an algorithm derived from the Facebook data to micro-target donors. Banks said he turned the offer down “because it was illegal”.52
Banks’s account of his dealings with Cambridge Analytica has been contested by former Cambridge Analytica employees. In April 2018, Brittany Kaiser told parliament’s fake news inquiry that Cambridge Analytica had been given UKIP party data to conduct modelling and analysis that would inform Leave.EU’s communications strategy.53 “The fact remains that chargeable work was done by Cambridge Analytica, at the direction of Leave.EU and UKIP executives, despite a contract never being signed,” Kaiser wrote in a letter to chair Damian Collins.54 (Arron Banks denied this.) Kaiser also claimed Cambridge Analytica had sent UKIP an invoice for £41,500, which Banks had given the party money to pay.55 The bill was never settled, Kaiser said, because UKIP decided that “their party was not the beneficiary of the work, but Leave.EU was”. UKIP said it never paid Cambridge Analytica because “we didn’t think it was worth it”.56
Damian Collins told me that “the oddest thing about the inquiry was the relationship between Cambridge Analytica and Leave.EU”. The chair of parliament’s fake news inquiry said it was “very odd, the way people have run away from this relationship”.
Cambridge Analytica was not the only controversy that Banks faced. The National Crime Agency investigation into Banks was the force’s most high-profile inquiry into a British political donor. The move followed months of mounting speculation, especially about his Russian connections.
Banks’s Russophilia was hardly a secret. He had a Russian wife and an admiration for President Vladimir Putin’s muscular foreign policy. Banks had acknowledged meeting Russia’s ambassador to Britain, Alexander Yakovenko, months before the Brexit referendum. Over six hours in November 2015 that ended with shots of vodka from a bottle supposedly produced for Stalin, Banks and Wigmore discussed everything from the war in Syria to Brexit.
“We chose our words carefully, but we didn’t mind telling him we think everyone’s in for a shock,” Banks writes. He said that the introduction to the ambassador was made through “a shady character called Oleg we’d met in Doncaster at UKIP’s conference”.57 ‘Oleg’ was not just any old conference delegate. He was really Alexander Udod, a member of Russia’s foreign intelligence service. Udod was later expelled from Britain after the poisoning of Russian-British double agent Sergei Skripal in 2018.58
Banks maintained that this “one boozy lunch” was his only contact with “the Russians” during the Brexit campaign. But this was not the case. Reports in the Observer and elsewhere revealed that Banks had numerous previously undisclosed meetings with Russian officials and businesspeople around the time of the Brexit referendum.59
He eventually admitted to having three meetings with the Russian ambassador in London. He soon revised that figure to four in a newspaper interview. Other reports suggested as many as eleven meetings between the Leave.EU campaign and Russian embassy officials. Why was Banks so coy about these contacts? Was he just equivocating, leading the media up the country path again? Or was there another reason?
Politics was not the only topic of discussion at the initial alcohol-fuelled meeting at Ambassador Yakovenko’s Kensington Palace Garden residence. The possibility of a potentially lucrative gold deal was also floated. Over tea a few days later, the ambassador introduced Banks to Siman Povarenkin, a Moscow businessman with residency in the UK. Banks was shown a presentation sketching out a plan to merge a mining company owned by Povarenkin with half a dozen rivals to create a giant conglomerate. The proposal featured pictures of shiny gold bars and a Russian flag. The multibillion-dollar deal was ostensibly backed by Sberbank, the powerful Russian state bank by then under sanctions. Povarenkin subsequently offered Banks an opportunity to invest in the partly Russian state-owned Alrosa.60 Two months before the referendum, Banks was presented with a third Russian-backed investment opportunity. This time a London-based Russian businessman with a Belizean passport was selling a gold mine in Guinea.61 Banks acknowledged that these business deals were proposed to him, but he said that he never acted on them. He denied any wrongdoing, noting that his opposition to the European Union long predated his meeting with the Russian ambassador.62
Experts on Russia said that the Kremlin, which had been accused of being pro-Brexit, would have been well aware of the business offers being made to Banks. Sir David Omand, former director of Britain’s surveillance agency GCHQ, said the approach to Banks had the typical characteristics of a Russian influence operation.63 Anne Applebaum, who has written about Putin’s Russia, said the deals presented to Banks were “forms of political bribery”, adding: “Why should someone whose sources of funding are completely unknown be allowed to influence British electoral politics?”64
Banks said that he had never invested in Russia and that his various meetings with the Russians were standard business practice. “As a businessman, you entertain and look at everything,” he said. “You shouldn’t be judged on what you don’t do.”65
Banks certainly developed a firm rapport with Ambassador Yakovenko. The pair often exchanged pally texts and emails,66 and Banks invited the bespectacled Russian diplomat to the Leave.EU referendum party in Millbank Tower. (Commitments in Moscow prevented Yakovenko from attending.67) The two men also met shortly after Banks returned from meeting Donald Trump following his surprise election victory in November 2016.68 Yakovenko asked Banks for phone numbers for the president’s transition team. The ambassador was later reported to be on the radar of Special Counsel Robert Mueller’s probe into Russian interference in the 2016 US presidential election.69
Banks and Wigmore seemed to enjoy the press attention on their Russian links. When parliamentarians on the fake news inquiry asked if Leave.EU was bankrolled by Moscow, Wigmore answered “nyet”.70 So why did they visit the ambassador? It would be “nice”, Wigmore said, for Banks’s wife Katya to meet Yakovenko, because “she has never ever engaged much with the Russian diaspora”. Katya did not accompany her husband to the embassy.
The couple had a turbulent relationship. Banks has told interviewers that he met Katya at a Britney Spears concert in London in 2000.71 For both it was a second marriage. Shortly after arriving in Britain in 1998, Katya struck up a conversation with a retired merchant seaman named Eric Butler while she was sunbathing topless on the waterfront at Portsmouth.72 She asked him to rub sunscreen on her back; it was butter. “I can’t afford the sun cream in your country. I am Russian and I have no money,” she reportedly said.73 The pair were soon wed. Katya was 25; her new husband was 54 and living on benefits of £72 a week in a semi-detached house near Portsmouth’s huge naval base. The marriage did not last long. Butler complained that his new wife soon began staying out most of the night, without explanation. He claimed that Katya was of interest to Special Branch, which deal with British national security and intelligence.74 She was threatened with deportation by authorities who believed her marriage was a sham, but she was allowed to stay after her local MP, Liberal Democrat Mike Hancock, stepped up to defend her. Katya’s name later emerged in the British press during a parliamentary row about suspected spying involving Hancock and a Russian aide with whom he was having an affair.75
Banks liked to play up speculation that his wife was a spy. Famously, she drove a Range Rover with the number plate X MI5 SPY and had an email address with the letters 007.76
Banks’s comic-book villain persona extended to an interest in African diamonds. He had bragged of owning “several old De Beers mines” in southern Africa and a jewellery store in Bristol.77 The success of his diamond business had, he wrote, encouraged him to donate to political campaigns. In 2018, he said that his mines were worth a combined $100 million.78
But those who went looking for Banks’s riches in southern Africa reported finding little more than slag heaps and padlocked gates. The Lesotho mine produced only a handful of stones, with an estimated value of just £28,000. Banks’s colleague James Pryor, who had previously worked for Margaret Thatcher and F. W. de Klerk, said the mines were producing diamonds but “whether it’s massively economical or whether he’s making hundreds of thousands is another story”.79
In South Africa, Banks became embroiled in a bitter legal dispute with a former business partner that led to yet more questions about his Russian links. In an affidavit, Chris Kimber claimed that Banks “had travelled to Russia” to discuss investment opportunities in the South African mines with, among others, the big Russian diamond company Alrosa.80 Banks described the claims as “ludicrous” and a “concoction of nonsense” and said that Kimber had defrauded him out of his share of the diamonds found in their mines.81 In September 2019, Banks put one of the South African mines up for sale for just over half a million pounds. (When I called the South African sales agent a few months later, he said he “didn’t know” if the mine was sold, then hung up on me. He didn’t take my follow-up calls.)
Wigmore told me that he understood why Banks had sparked such extensive interest. “You couldn’t blame people for having a go at it. It was such a delicious story. It had it all. Russia, Trump, Brexit, diamonds, the Panama Papers.” The pair had been “naive” and “possibly a bit arrogant” but “hadn’t done anything wrong”, Wigmore said. “We were victims of our own hyperbole.”
*
In September 2019, the National Crime Agency reported on their investigation into Banks. The agency found “no evidence” of any criminal offences committed by Banks or his associates, or that a third party had funded his Brexit campaign loans. Banks had not acted on behalf of anyone else, the NCA said, adding that: “There have also been media reports alleging that Mr Banks has been involved in other criminality related to business dealings overseas. The NCA neither confirms nor denies that it is investigating these reports.”82
Banks welcomed the decision and said that he intended to sue the Electoral Commission. He claimed that the investigation had cost his business more than £10 million in lost revenue.83 “We knew we hadn’t taken any foreign money, it was ludicrous, but I’m glad it’s over,” Wigmore said of the investigation.
The workings behind the NCA ruling are quite complicated but they are worth taking a moment to unspool because they show – once again – the fragility of British election law. The agency – which specialises in complex financial transactions – found that Banks’s main Brexit campaign vehicle, Better for the Country Ltd, had been funded through another Banks company, called Rock Holdings, based in the Isle of Man. Banks had essentially taken out a loan from his own offshore business to cover the referendum spending. British election law prohibits firms outside the UK or Ireland donating to political campaigns. But because Banks was a British voter, and so a permitted donor, and the beneficial owner of the Isle of Man company, no laws had been broken. The rest was just a complex accountancy wheeze. (Banks had previously denied that his Brexit funding came via the Isle of Man. Asked in 2018 by the BBC’s Andrew Marr whether his donations to Leave.EU were “connected in any way” to Rock Holdings, Banks had said “no, absolutely not”.84)
Banks and his supporters hailed the NCA ruling as a vindication of their Brexit campaign. Others saw it as a tacit acceptance that companies in offshore jurisdictions could underwrite political donations. Foreign interests could set up shell companies in the UK purely to fund politics. The Electoral Commission said that this “apparent weakness in the law” would allow “overseas funds in British politics”. Transparency International’s research manager Steve Goodrich said that the case showed that the rules preventing foreign funding of British politics were “non-existent”.
There was some precedent for donors using foreign companies to contribute to British politics. In 2010, a long-running Electoral Commission investigation found that Michael Ashcroft had donated more than £5 million to the Conservatives through a series of complex transactions involving companies that the businessman controlled.85 Again the chain ended offshore, this time in Belize. (Ashcroft had not broken any electoral laws in making these donations.)
In 2016, the far-right Britain First party created a UK shell company to hide £200,000 worth of donations. Albion Promotions had no website, never filed any accounts and its only director was Britain First’s deputy leader. Bizarrely, the Electoral Commission told Vice that Albion Promotions was a permissible donor, as it was carrying out business in the UK. When asked how the watchdog assessed whether it was doing so, the regulator did not reply. Albion Promotions was dissolved without ever having to reveal the source of the donations it funnelled into the British far right.86
Preventing foreign donations is one of the primary goals of British electoral law, but political parties have shown no compunction about raising millions from donors abroad. A clause exists in British legislation prohibiting anyone not resident in the UK for tax purposes or not domiciled in the UK (so-called ‘non doms’) from giving more than £7,500 to a political party – but this legislation has never been implemented. Successive Conservative administrations claimed that the measure was unworkable as a person’s tax status is confidential. Such concerns, however, have not prevented proposed recipients of knighthoods, peerages and other honours having their tax behaviour assessed. Certainly, closing these loopholes would cost some British parties; the Tories raised at least £5.5 million from Britons living in tax havens in the decade from 2009.87
The vast offshore empire that runs through Britain is tailor-made for secretive donations. Many of the most generous donors in British politics have significant offshore interests. If these companies became conduits for political donations, it would be nigh-on impossible to tell where the money originated. In the US, anonymous super Pacs are already used to funnel vast sums of dark money into the political system.
Many believe that the British electoral system is inadequately equipped to deal with the threat of foreign money. Damian Collins would like to see “a higher level of transparency” applied to large political donors to prevent the kind of questions that dogged Leave.EU and its related referendum campaigns. “You should have to demonstrate that you have the liquid funds and where those funds were generated if you are going to give a major six-, seven-figure donation to a political campaign,” he said.
Arron Banks moved money around his on- and offshore business empire to fund his massive political campaign contributions. This was all technically legal, it turns out. But it was also opaque and almost impossible to decipher, even for the electoral regulator. Yet if Banks’s political financing was difficult to follow, the campaign it bankrolled was anything but.
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On Thursday afternoons, Jo Cox, the Labour MP for Batley and Spen, held a regular constituency surgery in a library on Market Street in the West Yorkshire village of Birstall. Cox was on her way there when, just before 1 p.m. on 16 June 2016, Thomas Mair shot her twice in the head and once in the chest with a sawn-off hunting rifle. He stabbed the MP 15 times, shouting “Britain first” and “keep Britain independent”.88 Cox died shortly afterwards, in the back of an ambulance.
The murder of Jo Cox stunned British politics. She was a vocal supporter of the Remain campaign who had spent the previous day with her husband and two young children on rubber dinghies on the Thames, disrupting Nigel Farage’s flotilla of pro-Brexit fishermen. Now, exactly a week before the EU referendum, Cox was dead, killed by a loner who had links to neo-Nazi groups in the US and UK. Mair was later sentenced to life in prison. In court, when asked to confirm his name, he said, “My name is death to traitors, freedom for Britain.”
In the wake of Cox’s murder, both Vote Leave and Stronger In agreed on a three-day pause in campaigning, as a mark of respect. Publicly, Leave.EU followed suit. The campaign was under pressure. Farage had just unveiled a new poster that consciously stoked fears about immigration. The image featured a long line of refugees beside the slogan “breaking point”. In a diary entry, Banks wrote that the MP’s killing “has shaken us all to the core... Wiggy, [Leave.EU’s Richard] Tice and I talked about how to respond, and all agreed we should suspend campaigning activities immediately”.
Privately, however, the campaign’s reaction was very different. The morning after the killing, Banks emailed Liz Bilney, Leave.EU’s chief executive, and other staff, telling them to “keep pumping” pro-Brexit adverts on Facebook, according to Channel 4 News.89 Banks told Bilney to “press it harder” and “boost it more”. A Leave.EU staffer drafted a press release attacking the media for politicising the MP’s murder. The statement was in the name of Labour Leave, a putatively separate campaign run by Labour Party Eurosceptics that shared office space with Leave.EU in Millbank Tower. Labour Leave subsequently disowned the comments. Leave.EU complained to Ofcom saying that Channel 4 had taken the emails out of context. (The broadcast regulator did not uphold the complaint.)
Leave.EU was created very much in Banks’s image: it was vulgar, confrontational and constantly trolling. Online, the campaign pumped out an almost endless stream of belligerent videos, graphics and text messages, mostly about immigration. In the wake of a deadly terrorist attack at a nightclub in Florida by an American-Afghani in June 2016, Leave.EU posted adverts warning: “Islamist extremism is a real threat to our way of life. Act now before we see an Orlando-style atrocity before too long.”90 An accompanying tweet claimed that “the free movement of Kalashnikovs in Europe helps terrorists”.91
The campaign even created fake videos purporting to show how easy it was for migrants to sneak into Britain from France. This claim was fundamentally false – the whole thing was staged off the coast of Dover92 – but was reported as genuine news by the Mail and the Express. Leave.EU’s unstinting, often distorted, focus on migrants was the crucial factor in the Brexit vote, says Steve Bannon. “It was that billboard that Nigel put up and the immigration issue that brought Brexit to a culmination. Like Trump,” the alt-right éminence grise told me in an interview.
After the EU referendum, I started investigating Leave.EU’s operation. I spent months travelling back and forth to Bristol to meet former campaign staff. Many described an aggressive workplace culture that often verged on bullying. “There was pretty much nothing that we weren’t encouraged to say,” a junior employee told me. Like everyone else, this person asked to remain anonymous.
Many of Leave.EU’s most combative and controversial messages came straight from Banks. On one occasion, a few weeks before the referendum, Banks invited a small group of insurance staff to view an anti-immigration video before it was posted to Leave.EU’s Facebook channel. A young broker said that the short clip lacked concrete information. Banks snapped back: “It isn’t meant to be informative. It’s propaganda.” The campaign later refused to provide details of the adverts it posted on Facebook to Parliament’s fake news inquiry.
Leave.EU can be seen in part as Banks’s reaction to being snubbed by the Conservative political establishment. There was a vicious battle with Vote Leave for the official designation – and to win the right to spend up to £7 million. Farage dismissed his rivals as “toxic Tory toffs from Tufton Street”. Banks described Douglas Carswell as “borderline autistic with mental illness thrown in” when UKIP’s only MP sided with Vote Leave. When a Vote Leave source told The Times that Leave.EU was racist and homophobic and hinted at potential data theft, Banks threatened to sue. After Vote Leave won the designation, Banks threatened to sue the Electoral Commission. In jest, a journalist called Leave.EU “the Provisional wing of the Leave campaign”. Banks liked the description so much that he started using it in press releases.
Throughout this bitter internecine conflict, Leave.EU ran an astonishingly toxic campaign that appealed to voters’ basest instincts. Almost nothing was beyond the pale. Banks might have been a recent arrival on the political scene, but he played the media to maximum effect. He also knew how to use his business empire to support his political interests. And vice versa.
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On paper, Banks was involved in a dizzying number of Brexit campaigns: Leave.EU, Grassroots Out, Go, Better for the Country. In reality, there was little separation between these groups, or between the anti-EU campaign and Banks’s insurance business.
In Parliament, Banks said that his insurance staff did not work on Brexit.93 Around a dozen former employees told me a very different story. “I was supposed to be working on the insurance side, but I was always being asked to work on the political stuff, too. I had to if I wanted to keep my job,” one former Eldon employee said. Another recalled being forced to push hardline anti-immigration messages on social media: “Some of these images were really horrible. The immigrants and refugee stuff. But there were always these urgent requests coming in. You were told to stop everything you were doing and do something for Leave.EU.”
Just how much money Banks spent on Brexit is unclear. As we saw earlier, much of his headline-grabbing multimillion-pound contribution was made up of ‘in kind’ donations and loans that might never have been spent. But Banks’s campaign was spending significant amounts of hard cash, too. A cache of internal communications provided by a source gave me a rare glimpse into the scale of its operations. According to one email, by December 2015 – two months before the date of the poll had been announced – Better for the Country had already spent £1.5 million on the Brexit campaign.94 As none of this spending took place during the ten-week regulated period, it did not have to be declared.
This highlights a wider problem. As politics becomes increasingly voracious of time and occupies more and more space on digital media, the scope for hidden influence through spending outside of the narrow regulated window in the period before a vote is all too obvious. “This is a huge issue,” says political scientist Martin Moore. “Campaigns can effectively spend as much as they want so long as it’s not in this short regulated period.”
Another blind spot is the use of data during the campaign. Banks may not have hired Cambridge Analytica, but he was definitely very interested in the potential of data in politics, and for his business. Two days after the referendum, Banks wrote to a Daily Telegraph journalist saying that his targeted data campaign had delivered the victory: “Using – new to the UK – social-media polling technology developed in the US and dismissed by the established polling companies, the Leave.EU team had at their fingertips the confident ability to understand exactly what was on people’s minds, where they lived and how they would vote.”95 Banks boasted that he was considering starting a new political party leveraging the “huge database” he had built up.
By the end of the referendum, Leave.EU was one of the largest British political sites on social media, with more than 800,000 Facebook followers. A former UKIP data controller later claimed that the Leave.EU campaign had “hijacked” the personal data of UKIP’s entire membership to build its huge online following.96 (Banks said the allegations were “false” and “politically motivated”.)
Banks had access to a frightening amount of information about British voters. Before the referendum, staff in his Lysander House headquarters were under pressure from management to gather the electoral rolls for the whole of Britain.97 These electronic registers, held mainly by local councils, contain valuable information including voters’ names, addresses and postcodes. Staff were never told the purpose of collecting the electoral rolls, but a handful of Leave.EU employees were retained after the referendum to format the electoral data. “There was a level of urgency with it,” recalled someone who worked on the task.98 After formatting, the rolls were sent to a senior Eldon employee.
What happened to all this data is unclear. Electoral rolls are only allowed to be used during campaigns. In September 2016, three months after the referendum, a Leave.EU staff member emailed chief executive Liz Bilney, saying that “the electoral data hasn’t yet been deleted”. A subsequent email reported that the spreadsheets had been destroyed. This message came from a Southern Rock email address. Banks declined to explain why his Gibraltar-based underwriter had authority to speak about control over sensitive data about millions of British voters.
Banks always maintained that there was no data sharing between his insurance business and the Brexit campaign. But in February 2019, Leave.EU and Eldon were collectively fined £120,000 for data protection violations during the EU referendum.99 Leave.EU had sent more than a million emails to subscribers that offered deals on insurance, before and after the referendum. Eldon Insurance customers’ details were unlawfully used to send almost 300,000 political marketing messages. The campaign negligently disobeyed electronic marketing regulations.
The Information Commissioner, Elizabeth Denham, said, “It was deeply concerning that personal data gathered for political purposes was later used for insurance purposes, and vice versa. It should never have happened.” Leave.EU and Eldon appealed against the ICO fine. The case was thrown out of court.100
The Information Commissioner was not the only regulator with whom Banks tangled. In 2017, the Electoral Commission began looking into his campaign spending. The watchdog fined Leave.EU £70,000 for a range of offences including exceeding its £700,000 spending limit by failing to include a fee paid to Banks’s campaign organisation, Better for the Country.* (Unusually, Banks recouped some of his political spending by charging his own campaigns administration fees.)
The Electoral Commission also referred Banks, Liz Bilney, Better for the Country and Leave.EU to the Metropolitan Police. After more than a year and a half, the force announced that no further action would be taken.101
Leave.EU’s legal battles were over. But the campaign was not completely finished.
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Like his bitter rival, Vote Leave’s Matthew Elliott, Banks often looked to the United States for inspiration. He found it in slightly different places and people. In August 2016, Banks and Farage travelled to Jackson, Mississippi, for a Donald Trump fundraiser at the invite of state governor Phil Bryant. The UKIP leader – introduced by Trump as “Mr Brexit” – put in a barn-storming performance. “He got a thunderous standing ovation,” recalled Trump advisor Steve Bannon. “He got more of a standing ovation than any politician besides Donald Trump.”
A few months later, the ‘Bad Boys of Brexit’ were back in the US, this time as the first foreign politicians to meet Trump after his unlikely election victory. In a widely shared photograph, a grinning, bleary-eyed president-elect stands outside a gold elevator in Trump Tower flanked by Farage, Banks, Wigmore, Gerry Gunster and former UKIP advisor Raheem Kassam. Within days Trump was tweeting that Farage would do a “great job” as Britain’s ambassador to the US.102 Downing Street responded by saying that the UK already had an ambassador. The president repeated the suggestion again in 2019 when career diplomat Kim Darroch resigned following a leak of sensitive diplomatic cables highly critical of Trump. That story was broken by Banks’s ghostwriter, Isabel Oakeshott.
Leave.EU was at the vanguard of a populist awakening in British politics that exhibits many of the same traits seen in the rise of Trump in the United States. Banks continued to campaign after the referendum, using the social media muscle he’d built with Leave.EU to push the Conservatives to adopt a hardline interpretation of the Brexit vote. Leave.EU’s hugely influential Facebook page instructed its now almost million-strong following to join the Tory Party as part of an entryist “blue wave”.
As Theresa May’s doomed Brexit deal struggled through Parliament in late 2018, Banks attacked anti-Brexit Tories as “traitors” and “enemies of the people”. Voters in Damian Collins’s Folkestone constituency received a letter from Banks calling the chair of the fake news inquiry a “snake in the grass” who had “never respected the Brexit result”. (Collins voted for May’s deal and never backed a second referendum.)
Leave.EU bought adverts on Facebook against liberal Conservative MPs: of the 29 Tory MPs targeted by Banks, 20 did not stand for the party in the 2019 general election.103 Many reported being subjected to horrific abuse and threats. One man was jailed for sending one-time Tory MP Anna Soubry a letter saying “Cox was first you are next”.104
Arron Banks embodied the increasingly aggressive mood of post-Brexit British politics. Having once courted the media, Banks became increasingly truculent with journalists. Like the incumbent in the White House, he singled out reporters on Twitter for vitriolic personal attack. He posted a spoof video of Guardian journalist Carole Cadwalladr being beaten up and threatened with a gun, as the Russian national anthem played on the soundtrack.105 Banks later brought a libel case against Cadwalladr, who had revealed his meetings with the Russians and much else.
When it was revealed that he had spent £450,000 bankrolling Nigel Farage’s lavish lifestyle after the Brexit referendum, Banks dismissed the story as “a smear”.106 He accused the established media of bias and even set up his own news site, Westmonster, modelled on Steve Bannon’s Breitbart.
Alongside breathless reports on burqas, immigration and crime in London, Westmonster was – like Arron Banks – an early enthusiastic supporter of the Brexit Party. In May 2019, the site’s editor, Michael Heaver, was elected as a Member of the European Parliament for Nigel Farage’s embryonic party. Banks later distanced himself from the Brexit Party ahead of the British general election in December 2019, and hailed Boris Johnson’s triumph as a victory for his own entryist tactics. “We set out to make the Conservative Party conservative again: job done!” he said while appearing as a guest on the BBC’s election night coverage.
Questions still abound about Arron Banks. Is he a strategic mastermind or merely a supreme troll? Or both? Almost from nowhere, Banks became one of the most recognisable faces in British politics. His belligerent, populist tone became a constant on social media and beyond. But Banks’s story tells us something bigger. Time and again statements he presented as fact were proven false. When truth and falsehood become so hard to disaggregate, many voters will decide to believe nothing. Politics becomes reduced to a partisan battle in which anything goes. Most worryingly, the outcome of the National Crime Agency investigation into Banks’s cavalier use of funds underscores just how susceptible British politics now is to the threat of foreign money. While Banks has made clear his funding came from his companies, not elsewhere, the agency’s ruling massively broadens the scope for untraceable dark money. Future political donors will be able to make campaign contributions through secretive companies in the Isle of Man, Gibraltar and other offshore vestiges of empire.
While speculation has swirled about clandestine Russian interference in European elections, evidence of the influence of the American model of dark money has been hiding in plain sight. In July 2019, just as Boris Johnson became prime minister, a string of influential Trump-supporting Republicans met in the New York Athletic Club to hear Nigel Farage launch a new pro-Brexit lobbying outfit. World4Brexit promised to expose the funders of anti-Brexit campaigns, investigate media bias and “use paid research to get our message out”.
The campaign was organized “at the American end” by former Leave.EU Strategist Gerry Gunster, Farage said.107 Supporters included one-time Trump campaign manager Corey Lewandowski and Mississippi governor Phil Bryant. World4Brexit’s chairwoman, Californian Peggy Grande, appeared in the British Press, quoting her former boss Ronald Reagan. Offices were listed in Washington DC and London.
Where the money was coming from was a mystery. Under US legislation, World4Brexit’s funders were mostly anonymous. Its literature said: “We have donors from all across the United States and across the globe” and pledged to “follow the letter of the law in the eyes of the IRS”.
Until recently, anyone could have funnelled dark money into British politics without all that bother. They could have gone to Northern Ireland instead.
* The Electoral Commission fine was later reduced by £4,000 on appeal.