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Charity Commission denies political motivation in Atlantic Bridge case

Dr Liam Fox MP
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Charity Commission denies political motivation in Atlantic Bridge case1

Governance | Tania Mason | 6 Jul 2012

Stephen Newton, the blogger whose complaint to the Charity Commission led to the closure of Atlantic Bridge, the charity founded by Dr Liam Fox MP, has described the Commission’s decision not to recover funds from the trustees as a political one.

He said the regulator’s proclaimed justification for not seeking recovery of the misspent funds – that the trustees did not realise they were breaking the law – would never pass muster ordinarily.

“It beggars belief that such senior and experienced politicians were so ignorant of charity law, and in no other sphere would one expect ignorance of the law to be a valid legal defence against prosecution,” Newton said.

At the end of last month, the Commission published a supplementary report on the Atlantic Bridge investigation, in which it explained its decision not to seek recovery of charitable funds from Dr Fox (pictured) and the other trustees, all of whom had strong Conservative links.  

The regulator said that legal proceedings against trustees for recovery of funds lost to the charity in breach of their duties can only be brought with the consent of the Attorney General, currently Dominic Grieve MP, another Conservative minister.

It said that while the trustees did use the charity’s funds for non-charitable activities, they did not do so intentionally.

“The Commission found no evidence that the trustees had acted in bad faith,” the report said. Instead, the trustees believed that they were acting lawfully “and pursuing a correct interpretation of Atlantic Bridge’s objects” – even though the Commission’s investigation concluded that their activities “promoted a particular point of view which was not uncontroversial, and consequently not educational under charity law”.

HMRC recovered £50,000 in unpaid tax

The report also confirms that after the Commission published its regulatory case report in 2010 which found that none of Atlantic Bridge’s activities were charitable, HMRC did take action to recover £50,000 in unpaid tax.  According to the Financial Times, this debt was covered by hedge fund manager and Tory donor Michael Hintze. A surplus of £414 in the charity’s accounts at the time the trustees wound it up was donated to the Winston Churchill’s Britain at War Experience charity.

Responding to the latest report, blogger Stephen Newton said: “That surplus charity money has gone to a harmless tourist attraction rather than another Conservative Party think tank is a small relief.

“However, it remains the case that Atlantic Bridge was established as a charity in order to divert tax relief into the promotion of networking events for senior British Conservative politicians and their US allies.

“It cannot be right that in a case as politically sensitive as this one, which had contributed to a Cabinet minister’s resignation and in which more Cabinet ministers were implicated, the decision to prosecute should be a political one.”

Commission: Our decision was not political

Invited to respond to Newton’s accusation, the Charity Commission denied any political motivation and said the reason the case was not taken further was that the prospect of successful recovery of funds was not strong enough.

A spokeswoman told civilsociety.co.uk: “The Commission's decisions are not political: our role is focused on the conduct of trustees and the exercise of their duties towards their charities.

“We carefully considered the question of whether to take proceedings to seek restitution of the funds the charity lost in breach of duty, ie to non-charitable activity. As explained in the supplementary report published last month, in order to exercise this power, we would need to be able to be clear that the trustees were sufficiently culpable in law and the matter was in the public interest.

“In this case, taking into account all the evidence and facts, we concluded that the prospect of successful recovery of funds was not strong enough.”

Carl Allen
6 Jul 2012

It does seem to open the law for professionals who serve as charity trustees to use this defense for an awful lot of dubious practices

Perhaps it even invites abuse of what is considered reasonable through precedent.

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