HUNDREDS of thousands of pounds in donations earmarked for a indyref2 campaign may have been spent on refurbishing the SNP’s headquarters and on legal fees, it has emerged.

Police are investigating allegations surrounding more than £600,000 that was raised after an appeal by the party in 2017. 

Officers are expected to issue warrants shortly to obtain financial material from the SNP as they look into 19 complaints about the fighting fund that it had described as “ring-fenced”.

Police are expected to interview Peter Murrell, the SNP chief executive, who is married to First Minister Nicola Sturgeon, as well as the MSP Colin Beattie, who was reinstated as party treasurer last month.

They are also expected to speak to several former party officials who recently resigned, saying they had not being shown full accounts.

They include the MPs Joanna Cherry and Douglas Chapman, the party’s former treasurer, and three members of the SNP’s finance and audit committee.

The revelations about the possibility that the donations have been spent on the refurbishment of the SNP offices near the Scottish Parliament emerged in the Sunday Times. It has been claimed the work cost £385,000.

An SNP spokesman dismissed the claims.

He told The National: "These claims are nonsense. As we have said before, all sums raised for independence campaigning will be spent on independence campaigning. We will fully cooperate with the police investigation, and will make no further comment.”

According to the Sunday Times the party would not discuss allegations that the money was spent on legal costs for Murrell and his chief operating officer, Sue Ruddick, in relation to a parliamentary inquiry into the handling of harassment claims against Alex Salmond, the former SNP leader and first minister.

It has also been claimed that the party met legal costs incurred by the MP Alyn Smith after he said without evidence that the Brexit party was a “money-laundering front”. The SNP declined to be drawn.

Critics, including the former deputy party leader Jim Sillars, say having Murrell as party chief executive and Sturgeon as leader put too much power in the SNP in the hands of one couple, something that Salmond warned Sturgeon about when she took over in 2014.

One SNP source told the Sunday Times: “There are clearly huge issues with the way the SNP is run, including with the finances and governance of the party and headquarters." 

Although the SNP pledged that the money raised from its £600,000 appeal in 2017 would be kept aside for a future referendum campaign, it has said it does not separate out restricted funds in its annual accounts and that such donations were woven through the overall income figures each year.

After Chapman resigned in May, saying that he had not been given enough information to do the job, Sturgeon said that she was “not concerned” about the SNP’s finances.

“Every penny” raised by the crowdfunder would be spent on a referendum campaign, she said. Internal critics have said that she attended one NEC meeting where concerns about the ring-fenced money were raised more than two years ago, but not properly addressed.

Leadership loyalists have dismissed the row, arguing that everything the party does is in support of delivering a second referendum and independence. 

The SNP has previously said in relation to the Police Scotland probe: “We will co-operate fully with the police investigation and will make no further comment.”
Police are said to have announced the formal investigation into fraud allegations, despite concerns from the Crown Office.

Meanwhile, the Sunday Times reported that a source said that police officers and the Crown Office were “at loggerheads” before the force’s announcement this month that it was opening a formal investigation and that the latter wanted a form of words to suggest it was more of "fact finding mission".

The source said: “Police told the Crown days beforehand. The Crown wanted a change of wording. They wanted a form of words that made it more of a fact-finding mission but the police had already had that and it was because documentation had not been handed over that they wanted to escalate it to an investigation.

“Police were stunned that the Crown was putting them in that position. They were unhappy because if it was about anyone else in this position they would call it an investigation.” The source added that warrants were expected to obtain any material the party has not handed over.

Police Scotland said its enquiries are continuing. The Crown office said: “It would be inappropriate to comment on an ongoing police investigation. It has not been reported to us and we have only provided advice.”

On the issue of whether Lord Advocate Dorothy Bain would recuse herself from the issue, given her appointment was on the recommendation of the SNP government, it added: “As is customary in cases involving politicians, any resulting case reported to us will be handled by the procurator fiscal and independent Crown counsel without the involvement of the law officers.”

Police officers from the economic crime and financial investigation unit of the specialist crime division based at the Scottish crime campus at Gartcosh are running the investigation.

They have already been in contact with current and previous SNP national executive members and party HQ seeking information, documents, minutes and correspondence relating to the financial appeal.

Since May’s elections there have been tensions within the SNP over their referendum strategy, including the resignation of independence taskforce chief Marco Biagi after only six months in post. On his departure he said it was “the worst job” he had ever had.