Conservative MP Karl McCartney hid fact he handed £10,000 expenses claim to donor

EXCLUSIVE: Conservative MP Karl McCartney failed to publicly declare £10,000 expenses claim was handed to a donor's firm.
Insider can reveal the company described by McCartney as "A" in his expenses claims is actually Anagallis Communications.
Anagallis is run by Nigel Szembel, who helped fund his first campaign to become an MP.
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A Conservative Member of Parliament claimed nearly £10,000 of Parliamentary expenses for work given to one of his campaign donors while failing to publicly declare who was receiving the money, an investigation by Insider has found.

In May, Insider revealed Karl McCartney had claimed £21,600 of taxpayer money for "administrative services" from Anagallis Communications between January to June of 2020.

Anagallis Communications is operated by Nigel Szembel, who gave McCartney £4,000 towards his first campaign to become a member of parliament.

However, Insider can reveal McCartney claimed for a further £9,600 of spending with Anagallis Communications, while not publicly declaring that the company would receive the money.

Expenses claims published by the Independent Parliamentary Standards Authority (IPSA) show McCartney made claims for "Provision of Professional and Administrative Services" from a company listed simply on the register as "A" in October and November 2020.

McCartney provided no further detail for the public register, as to who or what "A" is. Previous claims had provided the name of the company.

However, two invoices disclosed to Insider following a Freedom of Information request, reveal that "A" is actually Anagallis Communications.

The total of £31,200 spent in bought-in staffing services by McCartney with Anagallis is nearly a third of McCartney's total amount claimed on expenses for bought-in services - £101,290 - in 2020 according to IPSA records.

Insider asked McCartney why the name of the company had not been publicly declared but did not receive a response.

As well as operating Anagallis Communications, Szembel is lead of press relations at Augmentum, a fintech firm. Last June, while McCartney was paying for Szembel's services, McCartney tweeted a story from "Mega Yachts Fan" about technology entrepreneurs, in particular those in fintech.

"Handled correctly, all will share in 'new wealth'", he said in his tweet.

-Karl McCartney (@karlmccartney) June 13, 2020

This piece included a section on three venture capital firms in the fintech world, including Augmentum. This appears to be McCartney's only reported public comment on fintech or mega yachts.

Under parliamentary rules, MPs must adhere to the MPs' Code of Conduct, including the seven principles of public life," including "accountability and "openness."

Opposition politicians questioned why McCartney had not fully declared his expenses.

Anneliese Dodds MP, chair of the Labour Party, told Insider: "Karl McCartney said 'all will share in new wealth' if 'handled correctly'. But when it comes to his expenses, it seems he's sharing the wealth with a former donor who helped him become an MP.

"The public will make their own mind up about whether that counts as handling his expenses correctly, but Mr McCartney should be transparent and upfront about who he's paying to run his office in line with IPSA rules."

IPSA's rules make no requirements for MPs to declare pre-existing links to companies they award work to, aside from restrictions on close family members and partners of MPs.

Tom Brake, a former Liberal Democrat MP and director of Unlock Democracy, told Insider: "MPs, because of the nature of their work and their profiles, have to be extremely careful with public money. They have to go that extra mile.

"In the public's mind, taking money from a donor and awarding the same donor a contract, paid for by the taxpayer, even when there is no breach of the rules, fails the accountability test."

There is no suggestion of wrongdoing by Augmentum.

McCartney and Moonlighting

McCartney's lack of transparency in his Parliamentary records is not limited to expenses claims for work done by his donor.

Further investigation of McCartney's entries on the Register of Members' Interests reveals consistent declarations of links to a company he calls "ML Systems Ltd".

Upon his election in 2010, McCartney disclosed he was director of ML Systems Ltd, an IT management and consultancy firm, and a former employee of the company.

Following his election in 2019, McCartney declared he was an unpaid director of ML Systems Ltd, and that he had a small shareholding in the company below the registrable threshold that generates a dividend. He added to his entry a payment of £3,700 from a firm he had provided advice to prior to the election, with his fee being paid to ML Systems Ltd.

The company registered as ML Systems Limited with Companies House was dissolved in 2015. It had previously, from its incorporation in 2009 to 2013, been known as Rugs R Us Limited. McCartney is not listed as a former director of ML Systems Limited.

However, Insider has established that the ML Systems Ltd referred to is a company primarily owned by McCartney's brother called MoonLighting Systems Ltd. McCartney is registered as a secretary in the company, incorporated in 1998. The most recent list of shareholders shows McCartney has a 3% shareholding in Moonlighting Systems Ltd.

McCartney did not respond to a request for comment.

Have you come across similar spending by other MPs? Contact the reporter of this story with tips at hdyer@insider.com.

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