Shadow Northern Ireland Secretary Owen Smith alleged the decision to publish donations from 2017 onward, rather than exercising the power to backdate to 2014, meant the £435,000 donation to the DUP during the 2016 referendum campaign would not be covered by the law change.
Mr Smith levelled the claim in a Westminster committee as opposition MPs failed in a bid to halt the government’s timetable to finally lift the veil of secrecy on political donations in Northern Ireland.
“Unfortunately this affair stinks,” he told members of the Third Delegated Legislation committee.
“It stinks because the government has chosen to come up with a date of July 2017 which deliberately excludes from publication the DUP donation – the largest donation in the history of Northern Ireland politics, the biggest item of political campaigning expenditure in the history of Northern Ireland politics.”
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A total of £435,000 was given to the DUP by the Constitutional Research Council (CRC), a little-known Great Britain-based group of pro-Union business figures, ahead of the EU referendum last year.
It helped pay for a four page pro-Brexit wrap around advert in the Metro newspaper – a publication not distributed in Northern Ireland.
Mr Smith claimed the CRC was “shady” and questioned whether the DUP had been used to channel pro-Brexit money that could not be used by others involved in the Leave campaign due to spending caps.
“There are significant doubts about the source of that money, I think there are real questions about what that money is for and I think there are real questions about where it is come from,” he said.
The DUP’s Sammy Wilson said he was “amazed” at Mr Smith’s claims.
Mr Wilson suggested Labour was motivated by “animosity” for those who voted Leave, rather than concern about the donation issue.
The East Antrim MP noted the Electoral Commission was satisfied with the bona fides of the CRC and with the details provided about its donation to the DUP.
“I find it difficult to see how he describes this money as shady when all of the obligations required under the law were met,” he said.
Mr Wilson said people who had donated in Northern Ireland after 2014 but before July this year had acted on the assumption their identities would continue to be withheld.
“This can’t be done for one particular donation, it has to be done for everyone and that would remove the good faith there was when people made donations since 2014,” he said.
The names of political donors in Northern Ireland have long been kept confidential due to security concerns dating back to the Troubles.
The government is now pushing ahead with legislation that would see the names of individuals or organisations who donate more than £7,500 to political parties after July 1 2017 being made public.
The Northern Ireland Office (NIO) has already faced criticism for declining to exercise its legislative ability to backdate publication of donation details to the start of 2014.
During Tuesday’s committee hearing, NIO minister Chloe Smith accused Labour of playing “fast and loose” with the political situation in Northern Ireland.
“This is not about playing politics, this should be about getting on with something that has been important to parliament,” she said.