The Telegraph is floating the perennial rumour (it has been going around for years) that Wilf Stevenson, the disgraced former head of the Smith Institute, is to go to Downing Street in a policy role.

A couple of years ago when Guido first started exposing the Smith Institute’s links to Gordon Brown – that it was an illegal slush fund for Gordon Brown’s ambitions, acting as his all-but-in-name campaign HQ – a canny observer of Westminster told Guido that “You don’t realise how much of a favour you have done Gordon. If it weren’t for you Wilf would be in Downing Street and he is a walking disaster”. Now he as at a loose end it is more feasible that Wilf could shift to Downing Street, moving from Brown’s policy engine room to join his captain on the ship before it sinks.

Excellent. Wilf’s time as head of a think tank was distinguished only in that it was mired in controversy, was twiced investigated for breaches of the law, was found by the Charity Commission to have broken the law and is now facing the possibility of a third investigation for other breaches of the law by the Electoral Commission. The Smith Institute was not exactly a font of vote winning policies – if it had been any good Brown would not be reduced to desperately nicking Tory policies. If Wilf does move to Downing Street he will only be formalising his role as adviser Gordon. It is somehow fitting that he will be joining his former Smith Institute deputy Konrad Caulkett in Brown’s Downing Street bunker at the end…

Sir Michael White this morning confirms the accuracy of Guido’s exclusive report yesterday. Through gritted teeth the left-wing journalist reported that “right-wing bloggers celebrated what they see as two Brownite scalps”. Too right.

Comical Wilf told Sir Michael that there is nothing to see here, the savaging that the Institute’s trustees got from the Charity Commission was “brilliant”, he told the Telegraph: “The Commission’s report was excellent in every respect and it is only because it was so good that I am able to step down now at this time” and that he always intended to resign as director, presumably Lord Haskel, donor to Brown’s leadership campaign and chairman of the trustees, always planned to resign as well.

Nothing then to do with the direct criticism of the trustees, finding “evidence of unchallenged party political comments being made at Institute events by politicians and also party political comments made by or on behalf of the Institute… combined with the predominant involvement of Labour Party politicians in the Institute’s activity, compromised the Institute’s independence. Bearing in mind the previous engagement between the Commission and the trustees in 2001/02 on this matter, the Commission concluded that the trustees had not safeguarded or adequately supervised the risks posed to the independence and reputation of the Institute… the trustees had allowed the Institute to become exposed to concerns that is supported Government policy and was involved in party political activity inappropriate for a charity”.

Haskel was damned as “not sufficiently engaged to ensure the proper supervision of the charity”.

Guido doesn’t entirely agree with Iain Dale that the “Institute will cease to be”, it will however cease to be what is was, a slush fund for Gordon Brown. It will become a more normal think-tank, not a partisan vehicle for one politician’s ambitions.

Guido has learnt that following the condemnation by the Charity Commission of the trustees of the Smith Institute, Lord Haskel has resigned as chairman of the trustees, Wilf Stevenson has also resigned as director after the unprecedented criticism of the charity for partisanship.

Paul Hackett, a wonk who has written some pamphlets for the Sith, is the “acting director”. The offices are closed and Guido has confirmed that the Smith Institute will no longer be based at the New Statesman’s offices. The rumour in wonk-land has it that the IPPR has taken pity on them and will be giving them space at their offices.

According to charity sector specialist magazine Third Sector, Andrew Hind, chief executive of the Charity Commission, has said he is “extremely concerned” that the Smith Institute is misrepresenting the contents of the regulator’s report into the think tank.

The commission reprimanded trustees of the think tank this week for failing to protect the charity from claims that it is supporting the Labour Party.

Paul Myners, deputy chair of the institute, responded by saying the commission was asking trustees to ensure that all speakers were politically neutral and that the regulator had “shown a fundamental lack of understanding of the work that all think tanks undertake”.

But Hind responded: “We are not saying we expect trustees to guarantee that no party political statements will be made. What we are saying is that if you want to have politicians at your event, as a think tank charity you have to ensure that there is balance.

“The trustees are disputing some of the clauses of the report and are alleging that the Charity Commission is naive and doesn’t understand how think tanks operate. But we have had extraordinarily in-depth discussions with them over the past few months.”

At the commission’s open board meeting in Liverpool yesterday, Hind again defended the report and said it would be “a reference point for the future” for other think tanks.

He said: “Not only are there some important findings about the Smith Institute, but there are also some important points of principle for all charity think tanks.”

Dame Suzi Leather, chair of the Charity Commission, said the enquiry had produced “an exemplary report from an independent regulator”.

Guido has been pleasantly surprised with the thoroughness of the Charity Commission report – the way the Sith’s trustees have tried to spin it has demonstrated their unsuitability to be a charity. Paul Myners really ought to resign.

If you are new to the Smith Institute story this January 2007 documentary exposé which Iain Dale presented and Guido scripted for broadcast by the old 18 Doughty Street internet TV station gives you the background. This video really did kick off the official Smith Institute investigation. It was whilst filming outside the Charity Commission office that a press officer came out and asked Guido what we were doing. In conversation Guido was told that the reason they hadn’t started an investigation was they had no official complaint! The next day Guido filed his complaint, days later the investigation was announced. It was not too bad an effort for a first time citizen journalist producer…

Some bloke called Crick had a go as well – see here. Hmmm…

Guido has now had time to fully digest yesterday’s report on the Smith Institute. Some comment from the unpopular wing of the blogosphere shows they don’t seem to have grasped that the Sith were found to have operated illegally nor have they understood the full ramifications of the Charity Commission’s investigative findings:

The Institute failed to implement key elements of the 2002 commitments arising from the first investigation.

The “predominant involvement of Labour Party politicians in the Institute’s activities, compromised the Institute’s independence.”

“Due to the amount and nature of party political content in some of the Institute’s events and publications, the Commission concluded that the Institute’s work was not always as sufficiently balanced and neutral as required under charity law”

“The trustees allowed inappropriate party political comments which were made at events, to be reported word for word… without any commentary, editing, qualification or disclaimer in Institute publications and disseminated to a wider audience”

The language used by the Institute at times “constituted a party political statement inappropriate for the charity. This inevitably compromised the Institute’s independence and reputation”

The Institute “took insufficient steps to regulate inappropriate party political” activities by Senior Research Fellow, Robert Shrum.

Directly criticised the trustees, finding “evidence of unchallenged party political comments being made at Institute events by politicians and also party political comments made by or on behalf of the Institute… combined with the predominant involvement of Labour Party politicians in the Institute’s activity, compromised the Institute’s independence. Bearing in mind the previous engagement between the Commission and the trustees in 2001/02 on this matter, the Commission concluded that the trustees had not safeguarded or adequately supervised the risks posed to the independence and reputation of the Institute”

Found that “the trustees had allowed the Institute to become exposed to concerns that is supported Government policy and was involved in party political activity inappropriate for a charity” and that they were “not sufficiently engaged to ensure the proper supervision of the charity”. The trustees were lambasted throughout the report for failing in their statutory duties to oversee the workings of the charity.

Still had ongoing concerns “over the Institute’s frequency of use of 11 Downing Street and over the review and monitoring of the impartiality of its educational programmes”.

Found “a number of instances where the balance and neutrality of the Institute’s work were compromised by a party political association… Sufficient steps had not been taken to identify or manage the perception that the Institute was unacceptably linked to and supported the Labour Party or that it inappropriately promoted Government policy… it is understandable how the perception arose that the Institute was focussed on or was connected to the then Chancellor of the Exchequer”.

This is a good result and Guido feels totally vindicated in making his complaint. The Commission has formally found the Institute in breach of the laws on political neutrality – anyone interested now knows what really went on. The Institute has been forced to restructure, with an audit committee. It has also closed down the subsidiary company S.I. Events Limited, which was used to launder money from corporations seeking regulatory favours and to invoice the Treasury for seminars. A formal oversight structure was ordered to be put in place with tight controls and it has been told to appoint known Tory and LibDem supporters to the board. It is now on probation and must report back on the implementation of the changes as ordered in six months. The Commission will take a second look next year.

Guido doesn’t think we will be hearing any more speeches on how to beat Cameron and the LibDems at Smith Institute events in the future…

The Mail this morning casts Gordon Brown as the Sith Emperor from Star Wars. The dark forces of the Smith Institute are still under investigation…

Guido drew attention yesterday to the Smith Institute giving a platform for Jacqui Smith to sell the 42 days policy. The Smith Institute is, as a tax-exempt charity, restricted from getting involved in politics or in matters not compatible with its charitable objectives. It is currently under investigation for a second time for breaches of the Charities Act.

So what was it doing last night? Any claim that the speech given by Jacqui Smith was non-political and made in her capacity as a government minister should be dismissed. Guido understands that senior civil servants ruled that it was a political speech – hence it was not reported or distributed via the official Government News Network or spun by civil service press officers. Quite correct and proper, she was after all making the case for a politically controversial policy.

So the speech was distributed only by the Labour Party’s press office. Which raises the question – what was the legally non-partisan Smith Institute doing getting involved in this controversial area a few days ahead of a close run vote, which theoretically could turn into a confidence vote for Gordon Brown? Another example of blatantly partisan politicking from the Smith Institute.

Gordon Brown is in a lot of trouble over 42 days, his attachment to this Blairite legacy policy has become a trial of strength. Jacqui Smith is going round selling the policy to sceptical Labour backbenchers and implacable opposition.

Strange that tomorrow evening of all days, in the middle of this effort to sell this most politically controversial security policy, Jacqui Smith is giving a speech on the issue to a Smith Institute invited audience. Haven’t we been here before?

The Smith Institute is supposed to be an independent charitable think tank, set up “to undertake research and education in issues that flow from the changing relationship between social values and economic imperatives”. The Smith Institute during the first (2001) investigation by the Charity Commission undertook to stick to its charitable objectives – education in social and economic issues. The second investigation, now into year two, is yet to report.

How does the Home Secretary pushing government security policy in this controversial government policy area constitute “education”? Her speech is on “How can the state adapt its traditional security approach to manage a new and wider range of threats?” “Lock people up for 42 days without trial” will, Guido suspects, be the answer.

This is not even in the charity’s remit and is completely incompatible with the Smith Institute’s charitable status and stated aims. It is merely a politically convenient platform provided for Jacqui Smith when no respectable think-tank would touch the issue…

The rumour in PR Week that Stephen Carter wants Mark Penn to come over and advise Brown dumbfounds Guido. Penn, a pollster, was supposedly fired in disgrace from the Clinton campaign after he was found to be taking money to lobby against Hillary’s own policies. (It is all a bit of a sham, she doesn’t really believe in the policy, he isn’t really fired). He hasn’t exactly proved to be the wisest of counsels to Clinton has he? Clearly he will be perfect for Brown.

Gordon has fallen out with Bob Shrum, the unrivalled adviser to 8 losing Democratic Party presidential campaigns. Shrum was last seen at Heathrow, fleeing the country after a bollocking from an ungrateful Brown.

Still, the payments he picked up via the Smith Institute during his time as an adviser to Brown will cushion his hurt…