The Jeremy Corbyn-supporting group Momentum, an integral part of Labour's surprisingly successful reemergence in the last election, is being investigated by the Electoral Commission over potentially excessive spending during June's election.
An Electoral Commission spokesperson confirmed to BuzzFeed News that the third-party campaign group could not spend more than £38,000 nationwide in support of Labour candidates during a general election, unless it was authorised to do so by the Labour party.
Submitted a return that did not include all invoices for payments of more than £200.
The Electoral Commission said there is a possibility their investigation could also identify other potential rule breaches.
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Bob Posner, the Commission's director of political finance, said: "Questions over their compliance with the campaign finance rules at June's general election risks causing harm to voters' confidence in elections".
He continued that there was "significant public interest" in the Electoral Commission investigating the grassroots group given their high profile.
'Once complete, the Commission will decide whether any breaches have occurred and, if so, what further action may be appropriate, in line with its enforcement policy'.
Spending is limited to £31,980 in England, £3,540 in Scotland, £2,400 in Wales and £1,080 in Northern Ireland for the regulated period, which in this year's case stretched for 12 months before the June 8 ballot. If a party gives permission, the campaign can use extra funds but that will count towards that political party's own legal spending limit.
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The group has become notorious for trying to unseat Labour MPs who disagree with Mr Corbyn, and has recently asked the party's candidates to sign a pledge of loyalty to Momentum's aims in return for election funding.
Momentum has been approached for a comment.
'Our election campaign was delivered on a low budget because it tapped into the energy and enthusiasm of tens of thousands of volunteers across the country.
A spokesman said: "Much of the Electoral Commission investigation refers to a series of administrative errors that can be easily rectified. We have a good working relationship with the Electoral Commission, and will fully comply with the investigation going forward".
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Momentum was founded in 2015 following Corbyn's shock victory in the leadership contest following the resignation of former Labour leader Ed Miliband.