APPG shuts down while under investigation over Israeli arms funding

A parliamentary group set up by a former adviser to the defence secretary has closed down while being investigated after taking money from a state-owned Israeli arms company, the Bureau of Investigative Journalism (TBIJ) and Democracy for Sale can reveal.

The all-party parliamentary group (APPG) for defence technology was co-founded in November 2024 by James Clark, who had served as special adviser to Grant Shapps. In July, Declassified UK reported that the APPG’s secretariat had accepted funding from RUK Advanced Systems Limited, a subsidiary of Israeli arms giant Rafael.

The parliamentary standards commissioner then launched an investigation into a potential breach of funding rules. APPGs should not accept the services of a secretariat funded directly or indirectly by a foreign government.

A spokesperson confirmed to TBIJ and Democracy for Sale that the APPG was being disbanded following the investigation.

Its other co-founders were Labour MP Fred Thomas and Conservative MP Neil Shastri-Hurst – the latter of whom also sits on the parliamentary standards committee, which oversees the commissioner investigating the group.

‘Convenient loophole’

TBIJ and Democracy for Sale can also reveal that the APPG for defence tech had already benefited from a loophole in the lobbying rules designed to regulate the “revolving door” between government and industry.

Clark was able to set up the group just six months after leaving the Ministry of Defence (MoD), despite rules that would normally place lobbying restrictions on departing government advisers for at least a year.

The MoD said it did not apply any restrictions to Clark’s role because it considers an APPG to exist within central government rather than outside of it. Yet APPGs have no official status within parliament and they often seek to influence policy. The APPG for defence tech advocated for the interests of major weapons companies.

The group said it aimed to “promote engagement with the UK’s defence tech sector” and ran high-profile events bringing together industry figures and politicians. At its inception it received £60,000 from companies including defence multinationals Lockheed Martin and Leonardo, according to parliamentary records.

The UK subsidiaries of both Lockheed Martin and Leonardo have been awarded contracts worth billions of pounds with the MoD, according to procurement platform Tussell, including for aircraft maintenance, drone operations and radar systems.

An MoD spokesperson said it had carefully considered all relevant factors and sought advice from the government’s Advisory Committee on Business Appointments (Acoba), which told the department that parliamentary roles funded by MPs did not require clearance.

They said: “While James Clark’s APPG role does not fall into this specific category, the principle informed our assessment.”

An APPG is an informal cross-party group that brings together MPs and Lords with representatives from the private sector or civil society. While much of their activity is legitimate, they have also been criticised as a means of sidestepping lobbying rules and exercising undue influence.

To address concerns around APPGs, reforms were introduced in 2023, including requirements for greater disclosure of funding sources and a ban on funding from foreign governments.

However, campaigners say gaps still remain. Steve Goodrich, head of research and investigations at Transparency International said: “This case exposes a glaring inconsistency in the government’s revolving door rules and creates a convenient loophole that undermines the entire purpose of cooling-off periods.

“When an APPG is funded by major defence contractors and explicitly aims to ‘promote engagement’ with the industry, it’s functionally operating as a lobbying vehicle – regardless of its classification.

“Labour promised to strengthen lobbying oversight, but cases like this show we need immediate action to close regulatory loopholes before they become established practice. The defence sector’s substantial public spending means robust conflict-of-interest protections are essential for protecting taxpayer money.”

A different set of rules

As special adviser to Shapps at the MoD, Clark “provided ministers with expert advice on defence policy and strategy” and “delivered the Defence Industrial Strategy”, according to his LinkedIn profile.

He left government in May 2024, around the time of the general election in which he stood as Conservative candidate for Great Yarmouth, where he lost to the local Reform UK candidate. He went on to set up the APPG in November.

Clark was also listed as the public enquiry point on the register of APPGs and is the director of a company called APPG Secretariat Services Limited, which provided administrative support to the group.

Though the MoD decided that Clark’s role with the APPG did not require clearance, it did impose restrictions on another role he took up, as a director at political advisory group Flint Global. The MoD told Clark that he should not draw on any privileged information, or use his government contacts to influence policy or secure funding, for a year after leaving his post. He was also told not to provide any advice to companies that directly related to MoD contracts.

The advice provided to senior civil servants and advisers is tailored to each individual and depends on various factors, including seniority.

New reforms?

The APPG for defence technology had been active in recent months and its first parliamentary reception, held in March, was addressed by veterans minister Alistair Carns and attended by various MPs and peers, according to a post from the APPG’s LinkedIn account.

The group advocates for the interests of defence tech companies such as Anduril, a $30bn US startup whose lobbying efforts were revealed in a recent investigation by TBIJ and Politico. (Anduril has not funded the group.)

Companies such as Anduril stand to benefit significantly from the government’s historic increase in defence spending as well as its recent strategic defence review, which examined the threats faced by Britain and the state of its armed forces.

The review, published in June, emphasised the importance of technology for the future of defence and cited “a shift towards greater use of autonomy and artificial intelligence”.

In July the government announced reforms to the rules that politicians must follow after leaving government, responding to longstanding criticisms of the old regime as “toothless”.

The government will abolish Acoba, the body that currently provides advice to politicians and civil servants leaving office. Its guidance is only advisory, so individuals are effectively free to ignore its decisions. Boris Johnson, for instance, disregarded Acoba advice on two occasions without a sanction, to take up paid roles with the Daily Mail and the Daily Telegraph.

Last month, Acoba was criticised for clearing Shapps, the former defence secretary, to take up the role as chair of defence company Cambridge Aerospace on the condition that he did not work on matters related to defence.

As of October, Acoba will be replaced with an ethics and integrity commission (EIC), which the government says will drive up standards in public life while also introducing financial penalties for ministers who leave office after a serious breach.

Peter Munro, Coalition Policy Manager at the UK Anti-Corruption Coalition, said: “Without substantial reforms, the revolving door between public sector and private interests will keep spinning freely.

“If the government is serious about closing these loopholes, and seeks to fulfil a core manifesto commitment, then it should empower its new ethics and integrity commission to regulate special interest spending and lobbying activity across parliament, and hold those who abuse the system accountable.”