A charity bankrolled by Michelle Mone’s husband made undeclared donations to a think tank run by former Tory leader Iain Duncan Smith.
Doug Barrowman is banned from giving money directly to the Conservatives because of where he lives – but it recently emerged that a company linked to him handed over £170,000 to the party.
Now we can reveal his charity, the Barrowman Foundation, has also donated nearly £500,000 to the Centre for Social Justice, which has boasted of its access to “the corridors of power”.
Glaswegian tycoons Barrowman and Baroness Mone are facing ongoing questions over whether they benefited from government contracts worth £203 million that she lobbied ministers to award.
He has also been charged with corporate tax evasion in Spain, where he could face jail if found guilty.
Labour’s deputy leader and Shadow Chancellor Angela Rayner MP said: “There are now serious questions to answer about the complex web of financial arrangements that has seen charity funds channelled to Conservative causes and loans written off at the stroke of a pen.
“Any suggestion that accounting tricks are being used to make backdoor donations raises further questions about the motivations of the individuals involved in these murky transactions.”
Tax consultant Barrowman, 57, tried to donate £2400 to the Conservatives in 2019 but his gift was rejected because he lives outside the UK electoral system on the Isle of Man.
But Lancaster Knox LLP – part of Barrowman’s Knox Group of companies – is registered in London and was able to hand over at least £171,480 to the party between 2017 and 2019.
In February 2017, Barrowman set up a charitable foundation bearing his name which pledged to give cash hand-outs to those striving to alleviate poverty.
Between 2017 and 2021, it made donations of £1.97 million but its accounts didn’t show where the cash was going.
Government rules state charities must publish details of where money has come from and how it is spent.
The books for 2019 and 2020 both claim only that the single “main pledge” was to the Prince’s Trust – set up by King Charles when he was the Prince of Wales.
However, last August, the Charity Commission launched a compliance probe into the Foundation to check whether it had been operating in accordance with the law.
Now the watchdog has published more paperwork given to it by the charity. It shows that, in 2020, the main beneficiary was in fact the Centre for Social Justice – which was given £150,000, nearly half the charity’s turnover.
And, in 2021, a further £220,000 was given to the Tory-led think tank.
Last night, the Foundation said it had also handed the CSJ a further £100,000 in 2019 – bringing the total to £470,000.
The latest accounts also reveal that the Foundation’s bank account – on the Channel island of Guernsey – shut down last August.
And they show its gifts were bankrolled by a personal loan from Barrowman of £1.46 million which, the accounts state, was later “released as charitable donations”.
The Foundation’s three trustees are Barrowman, Baroness Mone and Arthur Lancaster, who is a former business associate of Prince Andrew and a director of Lancaster Knox LLP.
Last August, the Charity Commission opened its compliance case to investigate “concerns” over how it was operating.
But officials stressed there was no implication of wrongdoing and the Foundation insisted it had not breach any rules.
Last night, the Foundation said it had made donations to the CSJ as it “makes a major difference to society and working peoples’ lives through its policy reports and recommendations to government on matters of social justice, poverty, drug abuse, prison reform and women’s rights”.
It said it “also works with a number of grass roots charities and supports them with funding”.
But it disputed its own annual accounts by insisting Barrowman had not in fact written off the £1.46 million loan but had been paid back by the charity. A spokesman said: “To enable the Foundation to carry out its activities, Mr Barrowman proposed that he make any payments required on behalf of the charity.
“These payments were initially treated as loans with the intention that they would be cleared by grants/donations in due course.
“This was done in 2021 and there are no outstanding loans at the present time.
“The Foundation did close its bank account in August 2022 and opened an alternative account. The Foundation remains active and making donations.”
The CSJ was set up in 2004 by Duncan Smith and fellow Tories Tim Montgomerie and Philippa Stroud – who now sits in the House of Lords.
IDS led the Tories between 2001 and 2003 and was knighted in 2020. He also chaired Boris Johnson’s successful bid to become party leader in 2019.
He remains CSJ chairman and also on the board is his former constituency secretary Cara Usher-Smith – though previous members include ex-Labour ministers David Blunkett and Frank Field.
Most recently, it has advocated planning reform to provide affordable homes and called on the Government to help protect the poor from inflation.
In 2021, the think tank made Barrowman the chairman of a new CSJ Foundation, to make grants to other charities.
Guests at its launch event that December at Westminster included Education Secretary Nadhim Zahawi, prisons minister Victoria Atkins and ex-health secretary Matt Hancock.
IDS promised the CSJ Foundation would help bring the work of small charities “way beyond the boundaries of the Westminster bubble, into the corridors of power”.
Barrowman resigned his role with the CSJ last February after questions began to be raised about his business affairs.
He and 51-year-old Tory peer Mone – who made her fortune from her Ultimo bra range – are facing a probe over PPE Medpro, a company awarded £203million of taxpayers’ cash for gowns and masks, after she lobbied Conservative ministers for the firm to be put in a VIP lane for Covid deals.
She denied she had any link to the company which was only set up in 2020.
But leaked paperwork suggests that PPE Medpro later paid Barrowman £70 million, who then handed £29 million of it to a trust set up to benefit Mone and her three children.
In the months that followed, the couple wed and enjoyed a honeymoon in the Maldives and promoted an office complex in Aberdeen in which they planned to invest £18 million.
Barrowman spent millions on a private jet and yacht while Baroness Mone’s children bought properties in Glasgow worth more than £3 million.
Last year, the National Crime Agency raided the couple’s home on the Isle of Man as part of a fraud probe.
She has also stepped down from the Lords to clear her name over allegations she failed to declare links to PPE Medpro.
Last night, the Barrowman Foundation spokesman said: “A full and substantive response was given to the enquiries made by the Charity Commission and no further questions have been raised.”
But the watchdog insisted its probe is “ongoing and we will continue to engage with trustees to assess concerns raised.”
The CSJ was approached for comment.
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