Operation Branchform
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Salmond Ministry
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Operation Branchform is a Police Scotland investigation into possible fundraising fraud in the Scottish National Party (SNP) that was launched in 2021 and is ongoing as of July 2024[update].[1] The investigation concerns allegations that £666,953 raised by the SNP since 2017 specifically to campaign for independence in a proposed second Scottish independence referendum was in part improperly spent on other activities.[2][3] The investigation has expanded to cover allegations of embezzlement, signature forgery, and misreporting of loans made to the party to the Electoral Commission.[4][5][6]
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Health Secretary
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The investigation has seen the arrest of former SNP Treasurer Colin Beattie and former SNP leader and First Minister of Scotland Nicola Sturgeon, both of whom were released pending further investigations, and former SNP chief executive Peter Murrell, who has been charged with embezzlement of funds in relation to the investigation. All three and the SNP as a whole deny any wrongdoing.
As of February 2024, Police Scotland had spent over an estimated £1.3 million on the investigation according to a Freedom of Information release.[7]
History
Background: 2017–2021
Fundraising for a proposed second Scottish independence referendum by the SNP began in 2017 and, after the snap general election of that year, the fundraising effort was closed down,[8] and a Labour Party Member of the Scottish Parliament, James Kelly, asked the Electoral Commission to investigate whether the SNP had spent the money on campaigning in the general election. The SNP denied this, saying the money raised was ring-fenced for a future referendum campaign.[9]
A second fundraiser followed in April 2019.[10] This fundraiser also claimed to be ring-fencing donations for a specific purpose, saying "Our plan is to distribute An Independent Scotland: Household Guide to every household – all 2,460,000 of them! To achieve that, I am asking you to join me in making a donation to this specific project".[11]
In January 2020, the pro-independence blogger Stuart Campbell, through his website Wings Over Scotland, claimed that the SNP's published accounts for 2018 did not contain enough money to cover the ring-fenced sums that were said to have been raised.[12]
In October 2020, the Electoral Commission published the SNP's 2019 accounts. These did not list the referendum campaign funds separately and showed that the money the SNP had to hand, around £97,000, was again much less than the amount that was said to be ring-fenced. The SNP's then treasurer, Colin Beattie, emailed SNP donors regarding allegations that the referendum campaign fund had already been spent. Beattie insisted that there was £593,501 in the "Referendum Appeal Fund" that was ready to be deployed "instantaneously", and that the SNP did not separate restricted funds from the rest of the annual accounts. Beattie claimed that the donations were "woven through" the income figures for that year.[13]
In the 2020 SNP internal elections, Douglas Chapman was elected as SNP National Treasurer, replacing Beattie.
On 20 March 2021, three members of the SNP's Finance and Audit Committee (Cllr Frank Ross, Cynthia Guthrie and Allison Graham) resigned over a lack of access to party accounts.[14] As a result, political activist Sean Clerkin made a complaint to Police Scotland about the allegedly missing funds in March 2021.[15]
In May 2021, Douglas Chapman also resigned as SNP National Treasurer, saying he "had not received the support or financial information required to carry out the fiduciary duties of National Treasurer".[16][17] Nicola Sturgeon, then party leader and wife to Peter Murrell, then the party's chief executive, took over as acting treasurer, with Electoral Commission rules requiring someone to be in the post at all times.[18] MP Joanna Cherry then resigned from the SNP's National Executive Committee later that month, saying on Twitter, "A number of factors have prevented me from fulfilling the mandate party members gave me to improve transparency & scrutiny & to uphold the party’s constitution. I won’t be making any further comment at this stage".[19]
Beattie was re-appointed as Treasurer in June 2021.[20] After a SNP NEC meeting that month, Beattie said £666,953 had been raised through referendum-related fundraisers from 2017 to 2020, and that £51,760 had been spent directly on campaigning for another referendum. He said funds were "earmarked" for that purpose, and "amounts equivalent to the sums raised" would be spent on "the intended purpose".[21]
Early police investigation: 2021–2022
The police investigation was launched in July 2021 following seven complaints.[3][22]
In August 2021, Sturgeon told a meeting of the party's NEC that, "We don’t need to talk about the finances. The finances are absolutely fine".[23]
In 2022, a peer-review of the operation was conducted by the National Crime Agency, which the police described as normal "good practice".[24]
In October 2022, the accountant firm Johnston Carmichael resigned from auditing the SNP's finances, after over a decade working with the party. The news of their departure was kept from the party's NEC and did not become public knowledge until April 2023. The SNP would be without auditors for over six months.[25]
In December 2022, Wings Over Scotland reported that a loan of £107,620 made to the SNP in June 2021 had come from the party's then-CEO Peter Murrell,[26] and that the Electoral Commission had not been informed until over a year later, in August 2022,[26][15] despite this being a breach of the commission's reporting rules.[27] The stated reason for the loan was to assist with the party's cash-flow after the Scottish Parliament election in May 2021, although by April 2023 the majority of the loan had not been repaid, with £60,000 still outstanding.[28]
2023
In February 2023, it was reported that the police planned to speak to key witnesses within the party.[29] Former party treasurer Douglas Chapman, as well as several other former officials from the party's governing body, were subsequently reported to have been contacted by police in the days before Nicola Sturgeon announced her intention to resign as First Minister.[30] In the same period, there were calls for Murrell to stand down because of the investigation into the loan he had made to the SNP.[31]
Peter Murrell arrested
During the 2023 SNP leadership election, a dispute over membership numbers prompted the resignation of Murray Foote as the party's media chief. Foote had previously been reassured by Peter Murrell that reports that the SNP's membership had dropped by 30,000 were false, and had described such allegations as "inaccurate drivel" to the press.[32] Murrell was subsequently blamed by the SNP national executive committee for giving Foote misleading figures, and he resigned as SNP Chief Executive "with immediate effect" on 18 March 2023 ahead of a vote of no-confidence.[33]
On 5 April 2023, Murrell, by this time no longer the SNP's chief executive, was arrested by Police Scotland in connection with the investigation, with the police saying they were conducting searches at a number of addresses. The police searched Murrell and Sturgeon's private residence in Glasgow, including the garden, and also searched and removed documentation from the SNP's headquarters in Edinburgh.[34][35] After questioning, Murrell was released without charge pending further investigation.[36] A Niesmann + Bischoff motorhome, with a sales price of around £110,000, was subsequently seized from the home of Peter Murrell's mother in Fife as part of the investigation.[37][38] Beattie said he did not know about the purchase of the motorhome at the time.[39]
The police's tactics in their search of Sturgeon and Murrell's home, especially the erection of a forensic tent over the front door, were questioned by Scottish Nationalists. Noel Dolan, a former special adviser to Nicola Sturgeon, said: "I believe the police behaviour in the use of tents outside and invading the former First Minister's home has been very heavy handed. It was completely over the top." Dolan called for the issue of police powers to be raised in the Scottish Parliament. His comments were criticised by Calum Steele, general secretary of the Scottish Police Federation, as "based on theory rather than fact". Police Scotland declined to comment on an ongoing investigation.[40] SNP MSP James Dornan accused the police and media of having "some kind of collusion about making sure the media are in attendance when the slightest thing happens", and described the search of the Sturgeon-Murrell home as "like Fred West's house". Police Scotland denied any suggestion that the media was informed of the search ahead of time.[41]
It was announced in early April, after Murrell's arrest, that accountants Johnston Carmichael had resigned from auditing the SNP's finances (both for the central party and the Westminster Parliamentary group), after over a decade working with the party.[42] It later emerged that they had done so "around October" 2022, according to Humza Yousaf, the new leader of the SNP, who also said he was unaware that the party was without auditors until he took office.[43] The news of their departure was kept from the party's NEC.[25] Over £1 million of Short Money, public funds payable to the SNP group in Parliament, was at risk if the SNP did not produce audited accounts for their Westminster Group by 31 May 2023.[44] It was announced on 3 May 2023 that the SNP had appointed new auditors, the AMS Accountants Group in Manchester, over six months after the previous auditors had resigned.[45] The SNP Westminster Group ultimately submitted their audited accounts before the 31 May 2023 deadline.[46]
Legal costs from the investigation were reported to have contributed to the SNP having financial difficulties by April 2023.[47]
Colin Beattie arrested
On 18 April 2023, Colin Beattie was arrested in connection with the investigation.[48] He was released without charge pending further investigation later the same day.[49] He resigned as party treasurer the next day.[50] MP Stuart McDonald was appointed as the new treasurer.[51]
In May 2023, Murray Foote, previously SNP media chief, openly denounced the conduct of the Police Scotland investigation, saying that the possibility that Branchform is a "wild goose chase" should be considered, and warning of "serious consequences for the investigating authorities" should no charges be brought. Foote also denounced the search of Sturgeon and Murrell's home: "The use of forensic tents and a whole platoon of plod at the house turned a routine process into a grotesque circus, compounded by the storming of SNP HQ."[52] Foote also insisted on Peter Murrell's innocence: "First minister Sturgeon and her husband lived under crushingly intense scrutiny. It is inconceivable to me that Peter would so much as consider doing something dodgy lest it rebound and put his wife in jeopardy."[53]
Sir Iain Livingstone, then Chief Constable of Police Scotland, defended the investigation at a meeting of the Scottish Police Authority on 25 May 2023, saying that; "A diligent, thorough and proportionate criminal inquiry is being conducted with integrity. I have previously asserted and will reassert today that I would fiercely resist any attempt to bring political pressure to my decision making or upon any police operation."[54]
Nicola Sturgeon arrested
Sturgeon was arrested on 11 June 2023. Later that day, she was released without charge.[55] Some SNP politicians, including Ash Regan MSP, called for Sturgeon to be suspended from the party, but new leader Humza Yousaf said he would not suspend her as she had not been charged.[56]
By the end of June, the SNP was reported to be ready to submit audited accounts to the Electoral Commission ahead of a deadline of 7 July. However, the party's Manchester-based auditors, AMS Accountants Group, qualified their audit of the accounts owing to missing documentation related to membership, donations, and raffle income for the period of 2021–2022. The SNP insisted that this was due to "administrative processes", and that "there is no suggestion that the accounts do not present an accurate picture of the party’s financial position."[57]
In July, the police said the operation had grown beyond the initial allegation of fraud[58] and would now look at potential embezzlement and the misuse of funds.[4] That month, the outgoing Chief Constable, Sir Iain Livingstone, re-iterated his defence of the investigation, telling the BBC's Today programme that the time taken was proportionate to the allegations of fraud and embezzlement because of the need to obtain information from banks and other financial institutions. Addressing allegations that the search of Sturgeon and Murrell's house was heavy-handed, Livingstone described the search as proportionate to the circumstances, and specifically addressed the forensic tent: "The tent was there, as were all the other measures, to protect the interests of justice and to protect the individuals involved."[59]
In August 2023, Murray Foote was appointed chief executive of the SNP.[60] In view of Foote's previous comments on Operation Branchform, both the Scottish Liberal Democrats and Scottish Conservatives called on the SNP to give new assurance that it would continue to co-operate with the police inquiry.[61] Speaking to the Daily Record, SNP leader and First Minister Humza Yousaf rejected Foote's past comments on the investigation and re-iterated that the party would cooperate fully with the police.[62]
Second police investigation
In late August 2023, Police Scotland confirmed that they were assessing a complaint referred to them by Greater Manchester Police. This complaint alleges that the SNP recorded unregistered cash gifts as money brought in by fundraising to conceal a "cash for seats" operation, whereby donors were prioritised for selection for elected seats.[63]
In November 2023, two former sheriffs, Kevin Drummond KC and Douglas Cusine, of the legal group Quis, warned that the Crown Office and Procurator Fiscal Service raised questions over the "protracted period of time" taken by the investigation. Drummond and Cusine said that; "The Crown is likely to have been kept up to date with the nature of the inquiry. If that is correct it can only be conjectured that either the Crown has instructed further investigation of elements of that report, or the delay is not on the part of the police but on the part of the Crown." They further added that; "In the absence of any explanation by Police Scotland or the Crown Office, the delay in such a high profile case is capable of stimulating perceptions of cover-up. For that reason alone, it can be said that the Crown Office should offer a public explanation for the lack of progress." The Crown Office said that Police Scotland had yet to submit a report to them. Sean Clerkin, who made the original report to the police, claimed that the police were "dragging their heels".[64]
By December 2023, Police Scotland was reported to be investigating over 1,000 alleged instances of fraud as part of Operation Branchform, including the provenance of a Jaguar I-Pace worth up to £95,000 that had been bought by Peter Murrell in 2019. The car was photographed on the driveway of Murrell and Sturgeon's home in March 2021, but was reported to have been sold later that year through the car trading service We Buy Any Car.[65]
2024
In January 2024, it was reported that the SNP had failed to declare to the Electoral Commission two loans worth a total of £15,000 made by Peter Murrell to the party in 2018. The loans were only declared in October 2023. Both loans were for £7,500. One was paid back within two days, while the other was paid back within two weeks. At the time the loans were made, parties were obliged to report donations higher than £7,500. Smaller donations from a single donor which exceed the reporting threshold when taken together also needed to be reported. The SNP accepted that "as both loans were in the same calendar year, they should have been reported". The Electoral Commission said that it would consider enforcement action over the late reporting of the loans, but would not act until the police investigation had concluded.[66] The same month, Police Scotland was investigating claims that signatures were forged on documents related to SNP finances, with the named person denying that they had written the signature, or having any knowledge of the documents.[5]
By the end of February 2024, it was reported that Police Scotland had requested to re-interview SNP staff as part of the investigation, including those who were not in place when the inquiry began. The Times reported that the move was directed by the Crown Office.[67]
On 18 April 2024, Peter Murrell was re-arrested and charged with embezzlement. He was released from custody the same day, and later resigned his membership of the SNP.[68]
On 23 May 2024, the police sent a report on their findings to Scotland's prosecution service.[69] A Crown Office and Procurator Fiscal Service spokesman confirmed that it received a report in relation to Peter Murrell and that an investigation into two other individuals "a man aged 72 and a 53-year-old woman" were still ongoing.[70]
Following the 2024 United Kingdom general election, where the SNP lost 39 Westminster seats and was reduced to the second-largest party in Scotland, former SNP MPs blamed the ongoing police investigation for the scale of the defeat: Tommy Sheppard, who lost his seat to Scottish Labour, remarked; "And then there was the elephant in the room. Operation Branchform. Never mentioned, always there. Hard to fight an election with your former leaders awaiting charges, especially when many of the public perceive little distance between now and then."[71] Mhairi Black, who stepped down as MP for Paisley and Renfrewshire South, described the investigation as reflective of deeper structural issues within the party.[72]
See also
References
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