When Scotland’s first minister Nicola Sturgeon in March 2017 demanded a second referendum on independence from the UK, her Scottish National party launched an online drive to raise funds for the coming campaign.
Six years later, that fundraising effort — and a police investigation into what happened to the money it brought in — are casting a threatening political cloud over the SNP at a crucial moment for the party and its mission of ending Scotland’s three century-old union with England.
And as Sturgeon prepares to step down as SNP leader and first minister later this month, questions are also being raised over a mysterious £107,620 loan made to the party in 2021 by Peter Murrell, its chief executive and the first minister’s husband.
Many within the SNP have long complained privately about the tight grip on party affairs held by Sturgeon, who became leader in 2014, and Murrell, who has been its chief executive since 1999 and whom she married in 2010. Some party colleagues have publicly raised concerns over its financial affairs.
“I never thought it was healthy to have a husband and wife team running the government and the party,” Joanna Cherry, an SNP member of the UK parliament and party dissident, told the BBC after Sturgeon’s resignation announcement last month. “There is a bit of a smell around the finances.”
Scottish police have since 2021 been investigating the SNP after receiving seven complaints related to donations to the party. Donors claimed hundreds of thousands of pounds given during the 2017 referendum appeal and a subsequent 2019 fundraising effort were spent by the party on other things.
Underlying the complaints is discontent among some independence supporters at what they see as Sturgeon’s failure to deliver another referendum after Scots backed remaining in the UK by 55-45 per cent in a 2014 plebiscite.
In June 2017, the first minister put plans for a second referendum on hold after the SNP lost 21 seats in a UK general election. Since then her attempts to force a second plebiscite have been stymied by the UK government’s refusal to approve another vote.
While the SNP had suggested that more than £600,000 raised through the special appeals was “ringfenced” for a referendum campaign, filings to the Electoral Commission, the independent watchdog, showed that at the end of 2019 the party had less than £100,000 in cash and cash equivalents.
In May 2021, SNP MP Douglas Chapman resigned as party national treasurer, saying that despite a “resounding mandate from members to introduce more transparency into the party’s finances”, he had not “received the support or financial information” to carry out the role.
In its 2021 accounts filed with the Electoral Commission, the party said the special appeals had raised a total of £740,822 and it had “applied” £253,335 in spending “against this income”. The balance was “earmarked” for “independence-related campaigning”, it said, although its accounts reported it held cash and cash equivalents of under £150,000.
“Of course, the SNP is the party of independence and, as such, every action we take — directly or indirectly — is in support of winning independence,” the party said. It added that an amount “equivalent” to the sums raised from the appeals would “go directly to our work to secure a referendum and win independence”.
Sturgeon has dismissed complaints the referendum funds were spent on other things, telling broadcaster STV in 2021 that no money was missing. “We don’t hold separate accounts, we’re under no legal requirement to do that, our accounts are managed on a cash flow basis,” she said.
Alistair Clark, professor of political science at Newcastle University, said that while it was true that under UK electoral law it was up to political parties to decide how to use donations, questions over the handling of the funds could undermine SNP efforts to portray itself as cleaner than UK rivals.
“There is clearly a reputational risk for the SNP around this,” said Clark, whose research centres on electoral integrity and standards in public life.
The question for police will be whether offences might have been committed under other laws such as fraud or embezzlement. Police Scotland, the national force, declined to comment on its investigation, dubbed Operation Branchform, or when it might conclude.
“A report which outlines inquiries already undertaken and seeks further instruction has been submitted to the Crown Office and Procurator Fiscal Service [Scotland’s public prosecution body]”, it said. “We are working closely with COPFS as the investigation continues.”
The SNP declined a request for comment on the concerns about its handling of the funds, as well as on the complaints about lack of transparency and on whether its staff had been interviewed by police, saying only: “We will co-operate fully with the police investigation.”
The party also declined to comment on why Murrell in 2021 made a £107,620 loan to the SNP “for working capital purposes”. The loan was not declared to the Electoral Commission until more than a year later, a breach of election finance rules. News of it was broken by the pro-independence but anti-Sturgeon website Wings Over Scotland.
Asked at a press conference last month when she learned about the loan, Sturgeon said she could not recall and that what her husband did with his resources was “a matter for him”.
Clark said the SNP had a generally good record of financial reporting and there might be a simple explanation for the loan, given parties often experience cash flow peaks and troughs.
But he added that lack of clarity about the loan could create questions in the mind of the public. “The sooner it gets explained the better,” he said.
Party management and finances have become an issue in the contest to elect a new SNP leader. Ash Regan, a former minister and outside candidate in the race to succeed Sturgeon, has promised more transparency if elected, including “actual ringfencing of funds for key electoral tests”.
Frontrunners Humza Yousaf, the health secretary, and Kate Forbes, finance secretary, have both suggested some party reform is needed, but that it will be up to Murrell if he stays as chief executive.
In an interview with the Financial Times, Yousaf said he had a “different leadership approach” from Sturgeon, who worked though an “inner circle”. “I certainly want to see reform of the headquarters and I would have an early discussion with the chief executive to understand what his plans are.”
Some in the SNP believe the financial issues are overblown. One senior party member said the complaints about the referendum funds were “malicious, stupid . . . and without substance” and that SNP governance was open and inclusive. But other colleagues hope for change in how the party is run.
The police investigation had not even been substantively discussed by the party’s national executive committee, said another senior SNP member. “That’s part of the way that we do things and I think it does need to change in terms of transparency,” the member said. “[The NEC] has been a rubber-stamping forum for a long time.”