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The private German bank Berenberg made the largest unlawful donation to a UK political party when it gave £300,000 to the Conservatives in July, money that was quickly returned.
The Hamburg-headquartered bank’s donation was revealed in Electoral Commission data published this month and is the biggest impermissible donation listed in the watchdog’s records stretching back to 2001.
UK electoral law only allows political donations from domestically registered companies that carry on business in the country. It also restricts donations from individuals to people eligible to vote in the UK.
Berenberg’s donation was made by Joh Berenberg, Gossler & Co KG, the bank’s legal entity incorporated in Germany, on July 3, according to Electoral Commission records. The Tories returned the money on July 7.
“These are not obscure parts of electoral law, it’s a two-minute Google job. Someone at the office has messed up,” said Robert Ford, political science professor at the University of Manchester.
He added: “I don’t think this will have come about entirely unsolicited, so the Conservatives haven’t entirely covered themselves in glory here either. It would have been easy to flag up the relevant law.”
The failed donation “doesn’t reflect well on the governance at Berenberg”, said a former executive of the bank.
A person familiar with the lender said it had “made efforts to contribute more actively to political discourse in the UK” against a backdrop of operational expansion and large investment in British capital markets.
Berenberg engages with a “broad spectrum of political parties and decisions on political donations are taken by the bank’s management board”, they added.
The donation to the Tories was made in “good faith” but rejected on “technical grounds”, the person said.
A Conservative party spokesperson said: “We undertake due diligence on our donations; as the records show, this donation was quickly returned when we became aware the company was technically not permissible despite it being given in good faith.”
They added: “The Conservative party is proud to have the support of leading figures in business.”
Berenberg declined to comment and referred the Financial Times to the party’s statement.
Since 2010, the bank has donated more than €900,000 to major political parties in Germany, mostly to the centre-right Christian Democrats.
Berenberg was founded in the late 16th century by brothers Hans and Paul Berenberg and has €39bn in assets under management. It is largely owned by descendants of the founders and other wealthy German families, with day-to-day decisions taken by three managing partners who are also shareholders.
It is incorporated in Germany but has 400 of its 1,500 employees in its London branch on Threadneedle Street next to the Bank of England. The bank considers the UK a crucial growth market and its London headcount has grown rapidly in recent years, especially in investment banking. The group has a registration with UK Companies House as an overseas entity but no UK-incorporated entities.
Previous large impermissible donations include £100,000 by Bellcave Limited to Reform UK in May this year, a holding company used by private equity group Greybull Capital.
At the time Bellcave’s publicly available accounts showed no trading activity. Reform returned the money and Greybull itself then lawfully donated £100,000.
Although the Conservatives sit third in the polls under Kemi Badenoch, they have continued to raise significant funding from donors, including £3mn this year from video games maker Jeremy Elliott San.
However, Nigel Farage’s Reform UK party has outraised the Tories as of the third quarter thanks to a record £9mn donation from crypto investor Christopher Harborne.