A Fife-based charity, which was funded by the UK government and attacked politicians such as Jeremy Corbyn, has been condemned by Scotland’s charity regulator for serious breaches of rules.
The Office of the Scottish Charity Regulator (OSCR) investigated the Institute for Statecraft after concerns were raised over the charity’s use of its Twitter account and alleged data breaches.
The Institute for Statecraft has received more than £2 million from the Foreign and Commonwealth Office (FCO) and led a project called the Integrity Initiative, which claims to be a non-partisan project which “defends democracy against disinformation.”
In December 2018, however, the Sunday Mail newspaper reported that the Integrity Initiative twitter account had tweeted critical comments of UK politicians, often over their stance on Russia.
This sparked an accusation from Labour’s shadow foreign secretary, Emily Thornberry MP, that the charity was using state resources “to disseminate articles attacking the integrity of conservative and labour officials, of conservative peers and, repeatedly, of the leader of Her Majesty’s Opposition (Jeremy Corbyn).”
As a result of the furore, OSRC opened an inquiry on the 13 December 2018 and has now published its findings.
Scottish charity at centre of ‘propaganda’ row probed by regulator
The regulator found that the charity’s purposes were “not entirely charitable” and that it had committed serious breaches resulting in “severe reputational damage to the charity”.
The charity has now terminated its involvement with the Integrity Initiative and two trustees are to stand down and resign, although their names have not been disclosed.
The OSCR concluded that the Institute for Statecraft failed the meet the legal test under the Charities and Trustee Investment (Scotland) Act 2005 for continuing registration as a charity in Scotland. This was because “its purposes were not entirely charitable,” OSCR said.
“One of its most significant activities, a project known as the Integrity Initiative, did not provide public benefit in furtherance of the charity’s purposes,” it added. “Private benefit to charity trustees was not incidental to the charity’s activities that advance its charitable purposes.”
The OSCR also concluded that the charity trustees had “breached their trustee duties to act with care and diligence in the interest of the charity, some of them to a serious extent”, adding that there had been a lack of collective decision making and recording of decisions.
“The charity trustees had failed to provide effective oversight of the charity’s Twitter account, resulting in severe reputational damage to the charity,” the OSCR said.
The regulator disclosed it had considered taking formal action but did not consider this to be “necessary or proportionate” in the light of actions taken by the charity.
“The charity trustees of the charity have cooperated with OSCR through the course of the inquiry and have provided information we have requested, where it was available. We met and teleconferenced with the charity trustees as well as corresponding with them,” OSCR continued.
The charity trustees had breached their trustee duties, some of them to a serious extent.
Office of the Scottish Charity Regulator
“In summary, we found that there was evidence both that the charity was failing to meet the charity test set out in the 2005 Act and that the charity trustees had breached their trustee duties, some of them to a serious extent.”
OSCR said it will continue to monitor the charity’s activities and governance.
The Institute for Statecraft was incorporated in Scotland as a company on 28 November 2008 and entered on to the Scottish Charity Register on 24 September 2009.
The charity’s stated purposes include the advancement of education and human rights, conflict resolution or reconciliation, and the promotion of equality and diversity. Its registered address is Gateside Mill, Auchtermuchty, Fife.
In 2018 the charity’s computer systems – as reported by The Ferret – were infiltrated by people claiming to be members of the Anonymous hacker group.
The hackers published stolen documents from the charity online in a series of batches. They claimed to include details of funding proposals to the government, meeting minutes, and the names of key people involved in the project.
Responses to written parliamentary questions revealed that the charity received £296,500 from the FCO to fund the Institute for Statecraft’s Integrity Initiative in financial year 2017-18. Last financial year the FCO was funding the project with a further £1,961,000.
A further parliamentary question revealed that the army had made a single payment of £6,800 to the Institute for Statecraft for “specialist training” in 2017.
The Institute for Statecraft posted a statement on its website in response to the OSCR report. “The trustees and staff of the institute are grateful to the OSCR for bringing this inquiry to a conclusion and would like to express their appreciation for the OSCR’s highly professional, approach in their conduct of the inquiry,” it said.
“We acknowledge the need to improve further in those areas of governance highlighted in the report. The trustees have underlined their commitment to this work and to collaborating closely with the OSCR in this regard as the institute moves forward.”
