'Potential criminality' at Labour's largest donor, two independent reports find

Two bombshell independent reports into alleged corruption at one of the UK’s largest trade unions are to be handed to the police after “potential criminality” was discovered.

Sky News understands that the two separate probes into Unite The Union – one conducted by a senior lawyer and the other by an accountancy firm – found evidence of “eye-watering” overcharging on large contracts.

“There was pricing and overcharging that would make your eyes bleed”, said a source. “There are such discrepancies in the money that the police may want to take things further.”

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Unite, which is the Labour Party’s biggest donor, is already the subject of a fraud, bribery and money laundering investigation. In April, the union’s London headquarters were raided by police.

This week general secretary Sharon Graham told senior officials that the internal reports will now not be published until police conclude their investigations.

Soon after taking over from Len McCluskey in 2021, Ms Graham commissioned Martin Bowdery KC to investigate her union’s vastly over-budget Birmingham hotel and conference centre development.

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Initial estimates in 2012 suggested the project, which is now complete, would cost around £7m. The final bill is in excess of £100m.

In one instance a contractor quoted around £90,000 for proposed work, but was eventually paid £1.2m, an unexplained increase of more than 1300%.

Insiders concede the gap between the union’s spending on the building and its value is “minimum £31m but could easily be more”.

Earlier valuations of the development suggested £70m of members’ money may have been wasted.

Ms Graham separately instructed accountancy firm Grant Thornton to launch an “external forensic investigation” into Unite’s affiliated service providers.

Accountants discovered one such company had been awarded a contract worth around £100,000 per month for eight years, suggesting a total value of £9.6m.

Last month Sky News reported that the union had severed ties with a long-term supplier due to concerns it may have been involved in criminality.

Unite staff were told that decision was “primarily due to the risk of committing an offence under the Proceeds of Crime Act 2002”.

A spokesperson for Unite told Sky News: “The newly elected general secretary of Unite pledged to find out if there was any wrongdoing in the construction and spending related to the Birmingham Hotel and conference centre. True to her word, after her election, Sharon Graham, commissioned an independent QC (now KC) inquiry into the Birmingham development and later a separate inquiry and external forensic investigation into Unite’s affiliated service providers.

“Due to very serious concerns about potential criminality that have emerged, both these reports are now being shared with the police. The police have requested that Unite does not release the contents of the reports while they are conducting their inquiries. Whilst these are ongoing Unite will not be making any further comment.

“The general secretary is committed to doing all in her power to recoup any monies lost, by all means necessary and holding anyone responsible to account. It is clear this transparency would not have happened without the determination of the general secretary to ‘leave no stone unturned’ to get to the truth”.

Sky News has approached the Labour Party for comment.

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