Keir Starmer's chief of staff dismissed official warnings that he was required to declare hundreds of thousands of pounds in political donations, the Daily Mail reported.
Documents released by the Electoral Commission reveal Morgan McSweeney received explicit notification in November 2017 that donations to his Labour Together think-tank fell under electoral law and required declaration.
Yet he proceeded not to declare nearly £740,000 in contributions over the subsequent three years. Labour Together later faced fines for more than 20 electoral law violations concerning unreported donations. The news comes as Keir Starmer ripped apart as GB News star delivers blistering five-word verdict.
The disclosure intensifies demands for Mr McSweeney to explain precisely why he concealed substantial sums during Labour Together's campaign to install Sir Keir as Labour leader.
Conservative chairman Kevin Hollinrake has branded Mr McSweeney's actions as "hiding" donations in violation of the law – while calling for the commission to involve police.
Last night, he informed the Daily Mail: "The facts are clear. Morgan McSweeney engaged in a significant cover-up of a secret slush fund that he used to install Keir Starmer as Labour leader.
"No matter what spin Labour try and use, these documents and the leaked legal letters show that there is now nowhere for the Prime Minister's chief of staff to hide, even as Starmer continues to demonstrate his appalling judgment by backing him.
"The Conservatives will not let Labour get away with this."
A leaked email this week disclosed that Mr McSweeney informed Labour lawyers he contacted the commission in "early 2018" and received advice that Labour Together was exempt from donation declarations.
However, senior Labour lawyer Gerald Shamash informed him that neither the watchdog nor Labour Together possessed any record of the conversation taking place.
The magnitude of the unreported donations meant there was "no easy way to explain how Labour Together finds itself in this situation", Mr Shamash stated. He informed Mr McSweeney that the commission "have a record of a number of calls with Labour Together but none with you".
Mr Shamash cautioned that without evidence supporting his claim it risked provoking the commission, which had initiated a major investigation into the matter.
He suggested it might be preferable to characterize the episode as an "admin error" and "not refer to you at all" – a strategy the think-tank ultimately adopted.
While the Electoral Commission lacks records of any 2018 call with Mr McSweeney, it maintains details of a 2017 conversation where he was informed that Labour Together must declare its donations as a "members' association" conducting political activities.
Officials instructed the think-tank's then director to declare all donations immediately and provide written explanation for previous non-compliance.
A call summary states: "Labour Together have not been reporting donations to us. Mr McSweeney was under the impression that Labour Together did not have to report because they do not campaign. However, Labour Together is a registered members' association on our system... I advised him to report the donations to us with a cover letter saying why they had not been reported sooner."
The watchdog followed up the following month, clarifying Labour Together's legal obligation to report all donations exceeding £7,500.
The unambiguous warning raises new questions about why Mr McSweeney persisted in claiming Labour Together was exempt from funding declarations.
Mr McSweeney departed the think-tank in 2020 to serve Sir Keir. Only then did his successor, Hannah O'Rourke, discover almost three years of unreported donations valued at £739,000 and submit multiple "late" declarations to the commission.
The Electoral Commission imposed a £14,250 fine on Labour Together in September 2021.
Conservative MP Alex Burghart claimed the leaked Shamash email "seems to show that Labour Together... deliberately withheld information from the Electoral Commission about donations it had received". He told BBC Radio Four: "This is incredibly serious – it is a criminal offence to deliberately withhold information from the Electoral Commission about money you have received."
However, work and pensions secretary Pat McFadden expressed full confidence in the PM's "very talented" chief of staff and dismissed attacks on him as politically motivated.
Labour Together refused to comment on the latest revelations. A Labour source stated: "This was thoroughly investigated years ago and action was taken. The Tories can sling mud all they like, it doesn't change the facts here."
The commission confirmed it would respond to Conservative requests for a fresh investigation "in due course".
