The decision by the election commission to inspect the books of the Brexit party is a step in the right direction, but it may not be a big enough stride for democracy. Nigel Farage formed the Brexit party in January 2019. He is days away from winning this month’s European elections. We know that western democracies are vulnerable to subversion and that murky offshore wealth can be used to support far-right populists. Mr Farage, who has long peddled extreme views, wants to deliver a hard slap to the body politic. But can he do so while playing by the rules?

The regulator acted after a warning from former prime minister Gordon Brown, who sounded the alarm over the insurgent party’s practice of accepting donations via the online payments service Paypal, which raises questions over their traceability. According to the UK law governing European elections, a donor has to be an “individual registered on the electoral register” or a company “which carries on business in the UK”. Nobody outside the UK can donate, so the question is: why would British people use an untraceable method to support the Brexit party? It is also illegal for a donor to remain anonymous if their donations amount to over £500 in any quarter. Mr Brown’s pointed criticisms were decried as envy. They were not.

It is essential that political parties obtain their funding free of the suspicion that donors will receive favours or improper influence in return. Mr Farage is a disrupter: he uses technology to create political movements and has refused to be embarrassed into accountability.

His vehicle during the Brexit referendum was Leave.EU, founded by businessman Arron Banks. Mr Brown pointed out that the Leave.EU campaign is now the subject of a criminal investigation by the National Crime Agency. There are other investigations by the police and the Information Commissioner’s Office. Mr Banks, Mr Brown also says, secretly funded Mr Farage’s lifestyle to the tune of £450,000 in one year during the time that Mr Farage held public office – which should have led to proper declarations to deal with any potential conflicts of interest. This pattern of behaviour is not reassuring.

Mr Farage says these elections are all about respecting democracy. Yet he will fail to respect democracy if, by being opaque, he undermines trust in its operations. Payments to parties that are not reported or declared avoid necessary explanations. The current system was set up so that breaches of the law would incur reputational damage severe enough to deter future attempts at underhand campaign financing. But deterrence has little effect on ephemeral bodies created to capture a moment such as Leave.EU or the Brexit party, which is little more than a vehicle of Mr Farage’s demagoguery. Fines and investigations are worn as a badge of pride until the game is over and Mr Farage moves on.

The law must be enforced and it must matter. If elections are won by illegal means they will have to be rerun. The act governing byelections has much tougher spending limits: donations of more than £50 have to be recorded. It’s difficult to see how the Brexit party’s statements about funding will meet these requirements in the run-up to June’s Peterborough byelection. It is essential to establish that donations have come only from permissible donors, and are reported publicly if above a certain size. This information ought to be revealed within seven business days as in some Australian states. Democracy costs money. But money must not cost Britain its democracy.