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Integrity Initiative: Psywar Institute Defanged, But British Spies' Disinfo War Still Rages

CC BY 2.0 / Steve Harris / Gull flying past the SIS (MI6) building in Vauxhall
Gull flying past the SIS (MI6) building in Vauxhall - Sputnik International
In December 2018, the Office of the Scottish Charity Regulator (OSCR) launched an official inquiry into the Institute for Statecraft, the parent organisation of shadowy and controversial UK Foreign & Commonwealth Office programme Integrity Initiative.
  1. No Public Benefit
  2. We Don't Need No Education?
  3. Get Rich Quick
  4. Long Goodbye

A month earlier, international hacking syndicate Anonymous released a batch of internal files it'd appropriated from the Institute’s servers. The material was explosive and troubling in the absolute extreme, revealing the ‘charity’ - which had received millions in funding from the British state and NATO, among others - to be an international information warfare effort run by military intelligence specialists, which had disrupted the domestic politics of several countries and smeared progressive politicians at home.

Almost immediately, concerned members of the public – myself among them – began filing complaints about the Institute and Initiative to the OSCR. My first was prompted after learning the organisation fraudulently listed a crumbling, derelict building in a remote part of Fife, Scotland as its principal office address, when in reality it’d never operated there.

​The location of the Institute's actual headquarters – Two Temple Place, Central London – was provided to me by former British Ambassador Craig Murray. There was nothing directly linking any of the Institute’s named directors or trustees to the address, and it wasn’t clear who or what was paying the presumably sizeable rental fees or utility bills - Murray told me that based on his diplomatic experience, these were strong indications the building had been provided to the Institute by British intelligence.

So it was I visited the organisation’s covert nerve-centre 11th December 2018. While I was rapidly and aggressively ejected, two days later the OSCR instituted its probe, using powers under section 28 of the Charities and Trustee Investment (Scotland) Act 2005 – and the organisation was figuratively forced to open its doors to the public by law.

No Public Benefit

The OSCR’s findings have now been published, and they make for at-times shocking reading.

Strikingly, it seems the deeper investigators delved into the Institute’s internal workings, the more alarmed they became – an experience I can certainly emphathise with.

​Initially, the inquiry focused on if and how the Institute’s activities, particularly Integrity Initiative, furthered its charitable purposes, whether the organisation was complying with its duties under the 2005 Act, and the publication of “politically biased” material by the Initiative’s Twitter– a reference to the account publishing a number of posts attacking Labour leader Jeremy Corbyn, in direct contravention of state funding rules.

However, as the investigation progressed, “further concerns emerged” - such as whether the Institute’s activities were “entirely charitable”, and if trustees were consciously seeking improper financial benefit from its operation and truly acting in the organisation’s interests “with the appropriate level of care and diligence”.

“We found evidence both the [Institute] was failing to meet the charity test set out in the 2005 Act, and trustees had breached their duties, some of them to a serious extent,” the report summary states.

An organisation can be classified a charity in Scotland if it serves one or more of 16 charitable purposes listed in the 2005 Act, and/or “provides or intends to provide public benefit in Scotland or elsewhere”.

However, the OSCR found the Institute listed “[advancing] national and international security” among its key objectives, which isn’t a charitable purpose as defined in the 2005 Act, implying the organisation was far-removed from being a charitable organisation for all its time of operation prior to the probe.

It’s left unexplained how and why the regulator missed this fundamental failing before the Institute was approved for the Scottish Charity Register in 2006, and neglected to notice, much less request the organisation amend or remove the entry from its governing document, at any point prior to the investigation.

Still, the OSCR also identified “a number of concerns” about Integrity Initiative, chief among them the enterprise’s activities not being “in furtherance of a charitable purpose”.

We Don't Need No Education?

In discussions with OSCR representatives, Institute trustees somewhat astoundingly argued the Initiative promoted the charitable purpose of “[advancing] education in the fields of governance and statecraft, in particular focusing on the leadership, direction, management and administration of public and private institutions, major organisations and other bodies, and the skills needed by those in authority within such institutions, organisations or bodies to enable them to deal effectively with current and future challenges, particularly in respect of security”.

The OSCR was thoroughly unconvinced by the highfalutin, finding the explanation “difficult to reconcile with statements made by the charity in published documents and to third parties”, which consistently describe the Initiative as “being set up to ‘track, expose and counter disinformation and malign influence’”.

Amusingly, while acknowledging increasing understanding of “disinformation, fake news and other areas of influencing by state actors and others” could further charitable purposes, the OSCR ruled the Initiative neither “[increased] learning and knowledge of a subject matter among members of the public” nor furthered the Institute’s charitable purposes, and thus “failed to provide public benefit”.

Moreover, Scottish charity rules state when an organisation provides education on a “controversial issue”, it must do so in a manner allowing those being educated “to make up their own minds” – the OSCR concluded the Initiative “expressed a particular perspective intended to persuade the public to a specific point of view” which was “not sufficiently neutral”.

In other words, the regulator confirms what so many have well-understood ever since the Institute’s internal files first leaked - far from objectively informing citizens in defence of democracy and truth, Integrity Initiative seeks to propagandise and misinform in service of particular financial, political, military and ideological interests.

The OSCR also voiced concern about the Initiative’s assorted international ‘clusters’ - collectives of politicians, businesspeople, military officials, academics and journalists who covertly spread (dis)information via news and social media and can be mobilised to influence policy, among other things – which were likewise and found not to provide public benefit or further educational purposes.

Investigators also concluded the Initiative’s Twitter account neither furthered any charitable purpose nor had prior to the end of 2018 been subject to “sufficient control or oversight”, ruling Institute staff “failed to recognise the risks involved in using social media” to publish “party political comment” – although a cynic might argue they were fully aware of such hazards, but were intensely unconcerned, and published partisan comment as a matter of internal policy.

Get Rich Quick

Under the 2005 Act, any “private benefit” (ie personal enrichment) garnered by a charity’s trustees must be incidental, an inadvertent but necessary by—product of an organisation’s activities, not an end in itself. The OSCR was clearly mortified when it scrutinised this aspect of the Institute’s operations, but precisely why is somewhat unclear. 

“We were concerned at the level of private benefit a number of the [Institute’s] trustees were gaining from the exercise of its functions. There was no clear explanation as to why salaries being paid to trustees were considered reasonable and necessary, and we had concerns about trustees’ decision-making around these payments. We don’t consider this private benefit was incidental to the organisation’s activities [or] advanced its purposes,” the report states.

What this section seemingly implies is trustees specifically sought to make a mint for themselves from the Institute’s activities, and made organisational decisions explicitly and primarily on this basis. If so, that’s hardly surprising – for trustees Chris Donnelly and Dan Lafayeedney, who cofounded and run the Institute, have set up a number of potentially suspect charities and commercial ventures in their time, at least some of which seem to serve little purposes other than siphoning government money. 

Among these ventures are several Scottish Limited Partnerships, vehicles certifiably oft-used for nefarious purposes - in April 2018 the Department for Business, Energy and Industrial Strategy stated there was "growing evidence SLPs have been exploited in complex money laundering schemes” and “abused to carry out all manner of crimes abroad – from foreign money laundering to arms dealing".

While these endeavours aren’t provably dubious or illegal, Lafayeedney’s business dealings have previously been investigated by the Inland Revenue, and landed him in the High Court in 2006. In the latter case's ruling, the presiding judge savagely indicted his “lack of credibility”, and stated “there were certain specific matters…where I am bound to conclude Mr. Lafayeedney was not telling me the truth”.

In any event, other sections of the report are far more opaque in indicting the Institute. Elsewhere, the regulator expresses concern trustees “in a number of areas…failed to act with required levels of care and diligence”, for example in respect of “recording key decisions and actions of trustees”, which investigators found to have been consistently poor, “and at times non-existent”.

​The Institute was unable to produce records of how or when key decisions were taken, with a “lack of formal decision-making” identified throughout its 12-year existence. While the Institute argued this reflected the organisation’s “small scale” and the fact all trustees “worked closely and informally together”, the OSCR are very clear recording of trustee decisions is an obligation for all charities regardless of size.

“Most seriously” though, there was no evidence trustees “as a whole” discussed whether the activities of Integrity Initiative “would advance the charity’s purposes”, or decisions about accepting and seeking funding for the Initiative were ever discussed formally by trustees. Investigators also identified evidence of a “lack of challenge” on the part of some trustees.

Again, readers are left slightly in the dark as to the specific source of the OSCR’s assorted grievances here. Beyond not outlining the specific decisions and “lack of challenge” to which it refers, is the regulator insinuating the Institute deliberately and duplicitously sought to leave no paper-trail, and keep all its activities secret? Or that key Institute’s organisational decisions are exclusively made by certain individuals – Donnelly and Lafayeedney, for instance – without consultation? The latter interpretation would of course suggest many trustees are entirely subservient and merely appointed for show – and perhaps to line their pockets – in order to meet the OSCR’s charity classification requirements.

Tantalisingly, a section at the very end of the report, ‘Learning points for the wider sector’, appears to euphemistically reinforce both interpretations. For one, it reminds all charity trustees they “must take an active part in making decisions in the charity’s interests, and challenge other trustees when they need to”, as “merely deferring to the opinions and decisions of others will make it hard for a trustee to fulfil their duties”. Moreover, trustees “should ensure the decisions they have taken are clearly recorded” and “decisions on paying charity trustees for services to the charity are taken appropriately in the light of OSCR guidance”.

Long Goodbye

The report reaches an exasperating zenith when discussing what the OSCR intends to do about the Institute’s iniquitous litany of highly suspect and dishonest, if not outright illegal, behaviour – for its investigators bafflingly decided it wasn’t “necessary or proportionate” to take any formal action whatsoever. 

The rationale for this negligent passivity is the Institute “taking action to meet the charity test” after the OSCR dispatched a letter in August 2019 setting out its interim findings, and directing trustees to take steps to address the numerous issues identified, on threat of removal from the Scottish Charity Register.

Nonetheless, the changes undertaken by the Institute are fairly seismic. From now on, no trustees will be remunerated, and a certain number of them - as yet unnamed - will stand down as soon as replacements are found. That they can no longer reap salaries from their positions will surely encourage departures. It’s unknown whether the resignations of trustees Harry Hart– a resident of Switzerland, whose father David served as an adviser to Margaret Thatcher in the 1980s – and Philip Matthews – director of PM Homeland Security and former director of Astutus Intelligence – in February and May 2019 respectively is in any way connected to the OSCR probe.

To bring things full circle, the report also notes the Institute’s principal office address has been updated on the Scottish Charity Register – although the listing still doesn’t reflect the organisation’s true location. Rather than Two Temple Place, the entry sites Institute at 1 Rutland Place, Edinburgh – the headquarters of law firm Anderson Strathern.

Intriguingly, Anderson Strathern is listed as a director of Douglas and Angus Estates, one of Scotland’s largest landowners, established by David Douglas-Home. He was until 2013 chairman of Coutts & Co. – the private bank favoured by intelligence firm Hakluyt, which is staffed overwhelmingly by former MI6 officers. Many, including British parliamentarians, have alleged it serves as a deniable front for the activities of UK intelligence services.

It may be pure coincidence Burness LLP, the law firm which established the Institute in 2006, also set up Hakluyt a decade prior – but this admittedly tenuous linkage could be significant, given the Institute has also ceased all activity related to Integrity Initiative, and responsibility for running the endeavour has now been handed to “a non-charitable entity” with “no legal connection” to the Institute.

It’s as yet unclear who and/or what has taken over the reins, and whether it’ll continue to operate under the same, irreparably tarnished name – but the Institute and Initiative alike have former intelligence staff in their ranks, including Institute Chief Operating Officer Guy Spindler, and Harold Elletson, coordinator of the Initiative’s German cluster, both veteran MI6 operatives.

Visitors walk in the glass cupola of the Reichstag building that hosts the German parliament (Bundestag) and look at a German flag in Berlin, Germany, on June 10, 2016. - Sputnik International
Damaging Ties: Why Germany is the Integrity Initiative’s 'Most Important Target'

Whatever the truth of the matter, that the Institute is apparently no longer in charge would seem to confirm my assumption the Initiative is heavily involved in Open Information Partnership. As I exclusively revealed in July, the enterprise - which poses an anti-fake news collective - is in reality a Whitehall-funded “disinformation factory” seeking to influence politics and perceptions “in countries of particular interest to the FCO”.

Clearly then, while the UK government has lost one informational battle, its war on democracy and the public mind not merely at home but worldwide continues apace – and the threat Integrity Initiative posed to democracy and peace hasn’t gone anywhere, merely reorganised and regenerated in other, more insidious and clandestine forms.

It’ll be fascinating to see who steps down from the Institute, and where they go and what they do next – but it’s almost certain that somewhere in a shadowy corner of Britain’s myriad corridors of power, Chris Donnelly and his sinister underlings are currently concocting fresh plans to corrupt the public mind. In fact, with a General Election looming, and the very real prospect of Jeremy Corbyn’s Labour party seizing power, it’s unquestionable.
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