After a statutory inquiry, the Charity Commission has ordered a military charity that sold "wholly offensive and inappropriate" Nazi and anti-Islamic merchandise to wind up.
The 1st Knight Military Charity came under investigation in November 2016 after undercover footage captured by BBC Scotland showed a trustee making anti-Islamic comments and selling t-shirts and Velcro patches in the charity’s shop in Blackpool, while another trustee looked on.
The charity also offered t-shirts featuring Nazi symbolism on its website and continued to do so after the statutory inquiry opened, the inquiry report, published today, reveals.
"The commission considered this to be wholly offensive and inappropriate," the report says, adding that trustees clearly knew selling the items was inappropriate because they were not publicly displayed in the shop or in the window, but were hidden and brought out only on request.
Trustees told staff that the merchandise had been ordered by mistake, but the commission says no attempt was made to return the items and they had been ordered on more than one occasion.
The reported concludes that this explanation is "not plausible or acceptable" and says selling the offensive merchandise has done "irreparable damage to the reputation of the charity".
The commission’s investigation also identified a conflict of interest at the charity, which offered respite holidays in Spain for former members of the armed services suffering from physical and mental injuries.
The two trustees who were filmed selling the merchandise had signed an agreement to provide bed-and-breakfast services for the respite breaks, signing both as trustees and service providers.
The pair also billed the charity for £2,679 for providing the services, although they said they did not intend to receive the money. The commission said it did not consider this to be plausible.
The commission concluded there had been mismanagement and misconduct at the charity and ordered it to be wound up in February this year.
Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: "The public rightly expect charities to demonstrate the highest standards of integrity and conduct.
"What we saw in this case fell short of that: not only was this charity mismanaged, we also saw evidence of behaviours and attitudes that have no place in charity."
The charity’s remaining funds, just over £2,000, have been transferred to another charity, which will use the money to provide support to wounded veterans and their loved ones.
Third Sector was unable to contact anyone from the charity for comment.