There is a considerable distance — in miles and ambience — between the London home of the Russian ambassador to the Court of St James’s and the offices in the St Mary’s Centre on Thornbury High Street, near Bristol. The residence overlooks Kensington Palace on the most exclusive street in London’s diplomatic quarter. The Thornbury offices sit above Parsons Bakery in a dull, red-brick postwar shopping centre.
Yet one of the central mysteries in contemporary UK politics unites the two places. Arron Banks, the most generous supporter of the campaign to leave the EU, started his career as an insurance entrepreneur in the St Mary’s Centre, helping to found a small motorcycle insurer in 1998. Mr Banks went on to spend a considerable time with Russian diplomats — including a long lunch at the ambassador’s residence — in the run-up to the 2016 referendum on the UK’s membership of the EU.
A criminal investigation announced last week promises to probe how far Mr Banks’ funding of the Leave.EU referendum campaign stems from his career as an entrepreneur and how far it reflects those foreign links. The National Crime Agency started the investigation after the Electoral Commission, the UK’s election watchdog, said it had found “reasonable grounds to suspect” that Mr Banks was “not the true source” of £8m in donations to the pro-Brexit campaign attributed to him.
It also had grounds to believe that the true source was a “non-qualifying or impermissible company” — Rock Holdings, a company controlled by Mr Banks that is barred from contributing to UK political campaigns because it is incorporated in the Isle of Man.
Mr Banks on Sunday told the BBC that “of course” he was the source of the donations, which he said came from a UK registered company, from cash generated in the UK.
“There was no Russian money and no interference of any type,” he said.
London’s Metropolitan Police continues to investigate whether offences were committed in its jurisdiction, while the UK Information Commissioner’s Office is due to publish an update on Tuesday on its investigation into whether Leave.EU was given unauthorised access to information gathered from customers of Mr Banks’ insurance operations. The Financial Conduct Authority looks set to investigate the management of his insurance operations, given the NCA probe.
There is also the possibility that, given the close ties between Mr Banks, Nigel Farage, the former UK Independence Party leader, and the entourage of Donald Trump, could yet become embroiled in Robert Mueller’s investigation into whether Mr Trump’s presidential election campaign collaborated with Russia.
The criminal investigation into Mr Banks comes at both a crucial moment in the Brexit talks and amid growing support for a second referendum. If the authorities were to uncover evidence of Russian money backing the Leave campaign, it could provide fresh impetus to those calling for a new vote.
Behind the allegations and the new criminal investigation, there is a contest of starkly different narratives about how Mr Banks has behaved and his role in the Brexit political debate.
His supporters portray him as a maverick in business and politics who has ruffled feathers by behaving unconventionally. They insist the allegations against him have been stirred up by a Remain-supporting media and political establishment.
Gawain Towler, former director of communications for the UK Independence party, the anti-EU group that received more than £1m in donations from Mr Banks, insists the businessman attracts controversy solely because he does not abide by accepted conventions. Mr Banks and Andy Wigmore, his key aide, were a “breath of fresh air” when they became involved in Ukip in 2014, he says.
“Of course they’re going to make enemies,” he says. “They make enemies because they don’t play by the rules, because they’ve been written by other people.”
A July report by the House of Commons Department for Culture, Media and Sport select committee, however, advanced the competing narrative. It said Mr Banks seemed to want to hide the extent of his contacts with Russia and raised multiple questions about how he was able to afford his political donations. The committee added it was not satisfied the money for his donations to Leave.EU had come from sources within the UK — the same doubt the Electoral Commission has subsequently raised.
Ian Lucas, a Labour MP and member of the DCMS committee, says that even the limited information the committee was able to obtain suggests there is real cause for concern.
“On the basis of that information, we’ve asked a lot of questions that we think should be investigated by the appropriate authorities,” Mr Lucas says. “I wouldn’t have signed up to that if I didn’t think there was anything there.”
Mr Banks has demonstrated a talent for dividing opinion since his early years. He has been creating controversy at least as far back as the four-and-a-half years he spent, from the age of 13, at Crookham Court, a former boarding school near Thatcham in Berkshire. The school was closed in 1989, five years after Mr Banks left, because of revelations about serious sexual abuse by the staff.
Mr Banks, who says he loved his time at the school, views the institution very differently from the pupils who gave evidence that led to the imprisonment of four teachers, in two separate trials, for sexual offences against boys. Mr Banks appeared as a character witness in defence of Philip Cadman, the school’s headteacher and owner, when he and two other teachers were tried in 1990 for sex offences. Cadman, who has since died, was sentenced to 10 years in prison, reduced to six years on appeal.
In 2013, on a Facebook group for former pupils, Mr Banks lambasted pupils who helped to bring the prosecutions, portraying them as part of a “victim culture” that had made contemporary generations less robust than past ones. “All emotional damage is unfortunate,” Mr Banks wrote in one of a series of confrontational posts. “But in the past whole generations . . . had to endure and at the end [of] the day hand-wrenching, recriminations and going on and on about it helps nobody.”
Mr Banks’ venture into politics has split opinion in the same way. For all the success of the referendum campaign, even some Brexit supporters believe that the more belligerent tone of Mr Banks and Nigel Farage, the former Ukip leader, deterred as many potential voters as they attracted. Mr Banks failed to grasp that the critical point was to win over swing voters, not fire up those who already opposed EU membership, one Eurosceptic politician says.
“You need to tailor your arguments to the swing voters,” he says. “None of these elementary things that one would expect to see in a capable individual in politics struck me as being present in him.”
Matthew Goodwin, a professor of politics at the University of Kent, disagrees, insisting that Leave.EU played an important role in complementing the official Vote Leave campaign, whose figurehead was Conservative MP Boris Johnson.
“Boris Johnson was able to appeal to moderate, conservative, middle-class Britons,” Prof Goodwin says. “Nigel Farage and the more Ukip end of the spectrum were helpful for Leave to appeal to the more working-class areas, Labour areas.”
The pivotal question for Mr Banks remains the apparent discrepancy between the squeeze on his resources in the run-up to the referendum and the very large sums of money he poured into the campaign. That is likely to be a critical issue for the NCA as it examines records in the Isle of Man to understand how Rock Holdings — if the company was indeed the source of the political donations — was itself funded.
There had been “persistent questions over the extent of Mr Banks’ wealth”, said the DCMS committee’s report in July.
Mr Banks’ supporters point out that he was a significant shareholder in Brightside, a publicly listed insurance broker taken private in a deal with AnaCap, a private equity firm, in 2014. Mr Banks was a director of Brightside from 2008 until he was ousted by other directors in 2012. Brightside paid Mr Banks in shares in 2010 when it bought Group Direct, a collection of insurers Mr Banks had founded.
When asked how Mr Banks could have afforded the donations, Peter Hargreaves, co-founder of Hargreaves Lansdown, the asset manager, says Mr Banks is a “very successful businessman”. Mr Hargreaves, who like Mr Banks lives near Bristol, was the second-biggest donor to Leave.EU, donating £3.2m to fund a letter that was mailed to every household in the UK.
“I think he’s one of the best entrepreneurs in the country,” he says.
In June 2017, Mr Banks responded to questions raised in the Financial Times about his resources by saying that he had “founded and sold” a listed insurance company — Brightside — for £145m. Mr Wigmore has separately suggested that the money could have come from the 2014 sale of NewLaw Legal, a solicitors’ firm Mr Banks was involved in founding, in a cash-and-shares deal that valued the company’s equity at £35m.
However, records of Mr Banks’ dealing in Brightside shares show he sold his last significant shareholding in February 2013 for £6.16m, before the AnaCap deal, which valued its equity at £127m. Company announcements back up a calculation by OpenDemocracy, an online campaigning group, that his share sales brought him £22m.
Companies House records for NewLaw Legal, meanwhile, show that Mr Banks disposed of his 5 per cent stake in August 2012, 18 months before the company was sold. Mr Banks has not said what the other four shareholders paid him for his stake, beyond saying he received “a cheque”.
The questions about his wealth have been underlined by signs that parts of his empire have exerted a considerable drain on resources. In 2001, regulators in Gibraltar ruled that Southern Rock, the Gibraltar-based reinsurer he owns that provides services to his other companies, was carrying too little capital. In a subsequent letter to the Gibraltar Chronicle, Mr Banks said he had put “more than £40m” into recapitalising the company. Both Southern Rock and Eldon, his current insurance venture founded in 2007, which trades under brands such as GoSkippy.com, continue to be lossmaking.
One financial services executive with direct experience at Brightside says it is hard to understand Mr Banks’ largesse towards Leave.EU and Ukip given the relatively limited sums Mr Banks made from share sales and the demands of the other businesses.
“He’s had to pour a lot of money into Eldon because Eldon hasn’t made any money yet,” the person says. “They had to recapitalise Southern Rock, so they had to put cash and assets into that business, so I don’t know where [the money for the donations] comes from.”
There has been persistent speculation that the ultimate solution to the puzzle that the NCA and other investigators are trying to complete might lie in foreign funding of the campaign, potentially from Russia. The DCMS committee’s report cites emails it received detailing a number of meetings between Mr Banks and Russian embassy officials. Mr Banks had initially admitted to only one meeting with a Russian diplomat — a “six-hour boozy lunch” at the ambassador’s residence in November 2015.
“The embassy does not comment on the official meetings of the ambassador,” the Russian embassy says.
The DCMS committee report said Mr Banks discussed “business ventures within Russia and beyond, and other financial ventures” in “a series of meetings with Russian embassy staff”.
It added: “Arron Banks and Andy Wigmore have misled the committee on the number of meetings that took place with the Russian Embassy and walked out of the committee’s evidence session to avoid scrutiny of the content of the discussions with the Russian embassy.”
Mr Banks’ supporters dismiss the idea that he would be involved in any form of collusion. Mr Hargreaves insists he would not have countenanced working with Mr Banks if there had been any trace of impropriety.
“I’ve made all my money with no scandal at all,” Mr Hargreaves says.
Like many supporters of leaving the EU, Mr Hargreaves suggests that the focus on Mr Banks reflects the biases of the political and media establishment.
“I think a lot of the problem with this is that the establishment and the media don’t like him because he was Leave and the media . . . were Remain,” he says.
Mr Banks insists he had never received any foreign donations. He has not yet been convicted of or charged with any criminal offence and he has robustly insisted on his innocence. “I am confident that a full and frank investigation will finally put an end to the ludicrous allegations levelled against me and my colleagues,” he said in a statement.
Nevertheless, the start of the NCA investigation shows that concerns about Leave.EU’s funding are shifting from being a political fringe concern to one preoccupying some of the UK’s most senior criminal investigators.
Some of Mr Banks’ opponents have warned that new revelations will follow. In March, Labour MP Ben Bradshaw told a House of Commons debate on the poisoning of Sergei and Julia Skripal in Salisbury that he had been treated as “a bit of an eccentric” when he first raised concerns about possible Russian interference in UK democracy.
Calling for a full investigation of Mr Banks’ links with Russia, Mr Bradshaw said he had received “a great deal of very interesting information”. Only some of it had so far come out, he said. Last week Mr Bradshaw wrote to prime minister Theresa May over claims she blocked a request to investigate Mr Banks in the run-up to the Brexit referendum.
“I have to tell honourable members that a great deal more that is very serious is still to come out,” he warned.
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