Greensill scandal

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The scandal revolves around former prime minister David Cameron (pictured in 2016)
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The Greensill scandal[1][2][3][4] is an ongoing British political scandal involving former Prime Minister David Cameron. First reported by the Financial Times and The Sunday Times,[5] the scandal arose from the insolvency of the supply chain financing firm Greensill Capital in March 2021, first reported by The Wall Street Journal. It emerged that Cameron had earlier personally lobbied Rishi Sunak, the Chancellor of the Exchequer, to change the rules to allow Greensill to receive an emergency loan from the government in response to the COVID-19 pandemic.[6][7][8][9] According to Cameron, his lobbying on Greensill's behalf did not break any rule of conduct.[10]

Background[]

During Cameron's 2010–2016 premiership, businessman Lex Greensill was an unpaid senior advisor to the Prime Minister,[3] had access to eleven government departments,[11] and benefited from the expansion of supply chain finance within state contracts, including the National Health Service.[2] In 2018, Cameron became an adviser to Greensill Capital and held share options in the company[12] reportedly worth as much as $60 million as well as being paid over $1 million each year for 25 days work per year.[11][13] In 2019, Cameron arranged for a private meeting with Lex Greensill and Secretary of State for Health and Social Care Matt Hancock; under Hancock, several NHS trusts went on to use Greensill Capital's services.[14]

Events[]

Lobbying by David Cameron[]

In 2020, several months before Greensill Capital collapsed, Cameron lobbied the government to change the rules to allow it to receive COVID Corporate Financing Facility loans.[6][7][8][9] Cameron appealed via several text messages and phone calls to Chancellor of the Exchequer Rishi Sunak, who ultimately declined to help Greensill.[11][15] Cameron also held ten virtual meetings with permanent secretaries Tom Scholar and Charles Roxburgh to try to obtain money for Greensill.[16] In June 2021 it was revealed that the government-owned British Business Bank lent Greensill up to $400m without detailed checks being performed. Greensill in turn lent all the funds to eight different companies linked to the steel magnate Sanjeev Gupta.[17] The National Audit Office warned that the taxpayer could lose all the money that was lent, a potential £335m loss.[18]

A formal investigation was launched in March 2021 by the UK lobbying registrar, to be led by Nigel Boardman, a non-executive board member of the Department for Business, Energy and Industrial Strategy.[19][20] Additionally, Cameron also attempted to lobby the German government on behalf of Greensill. In November 2020, he participated in a virtual call with the German ambassador alongside senior representatives from Greensill to discuss introducing its own products into the German civil service. Afterwards Cameron attempted to meet Jörg Kukies, a State Secretary responsible for financial market policy at the German Federal Ministry of Finance, who declined to take the meeting.[21][22][23]

Implication of other civil servants[]

In addition to David Cameron, the Greensill scandal highlighted the links between some senior civil servants and private companies.

Bill Crothers served as the UK Government's Chief Commercial Officer from 2012 to 2015,[24] receiving a salary of up to £149,000 a year.[25] He became an advisor to Greensill while still a civil servant, before becoming a director of the company in August 2016.[25] He did not declare his association to the civil service ethics watchdog, nor did he obtain permission from the Advisory Committee on Business Appointments (ACOBA) to take up his post-civil service job: ACOBA vets all private sector appointments of former senior civil servants and government ministers.[26]

Then Cabinet Secretary Jeremy Heywood was criticised in the 2021 investigation report into the scandal. Heywood was found to be primarily responsible for Lex Greensill being given a role in government and "extraordinarily privileged" access into 10 Downing Street.[27][28]

Inquiries[]

In 2021, the Treasury Select Committee conducted an inquiry into the scandal.[29]

The Cabinet Office also conducted an inquiry led by specialist finance solicitor Nigel Boardman, producing a 141-page report.[27][28]

References[]

  1. ^ "David Cameron Greensill scandal: Why is there an independent investigation?". The Telegraph. 13 April 2021. ISSN 0307-1235. Retrieved 13 April 2021.
  2. ^ a b Makortoff, Kalyeena; Butler, Ben; Smith, Joseph (13 April 2021). "Greensill scandal: ex-civil servant had $8m stake in lender". The Guardian. Retrieved 13 April 2021.
  3. ^ a b Powell, Rob (12 April 2021). "Greensill: What is the lobbying scandal and why is David Cameron involved?". Sky News. Retrieved 13 April 2021.
  4. ^ "The Sunday Times view on the Greensill lobbying scandal: this should worry us all". The Sunday Times. ISSN 0140-0460. Retrieved 13 April 2021.
  5. ^ "UK opens probe into former PM Cameron's lobbying: Reports". Al Jazeera. 12 April 2021. Retrieved 13 April 2021.
  6. ^ a b Makortoff, Kalyeena; Butler, Ben (16 March 2021). "David Cameron fails to respond over Greensill Capital claims". The Guardian. Retrieved 19 March 2021.
  7. ^ a b "Labour seeks probe over Cameron Greensill lobbying". BBC News. 19 March 2021. Retrieved 19 March 2021.
  8. ^ a b Moon, Louise (18 March 2021). "David Cameron lobbied ex-colleagues for Greensill access to Covid loan scheme". The Telegraph. ISSN 0307-1235. Retrieved 19 March 2021.
  9. ^ a b Makortoff, Kalyeena (19 March 2021). "Cameron lobbied UK government on behalf of Greensill Capital – report". The Guardian. Retrieved 19 March 2021.
  10. ^ Kirka, Danica (12 April 2021). "UK lobbying scandal snares ex-PM Cameron; govt starts probe". Associated Press. Retrieved 13 April 2021.
  11. ^ a b c Swinford, Steven (29 March 2021). "David Cameron 'told friends he would make $60m from Greensill deal'". The Times. ISSN 0140-0460. Retrieved 11 April 2021.
  12. ^ Smith, Robert; Pooler, Michael; Storbeck, Olaf (5 March 2021). "The unravelling of Lex Greensill: a mix of bravado and financial alchemy". Financial Times. Retrieved 11 April 2021.
  13. ^ "David Cameron earned more than $1m a year as Greensill lobbyist". CityAM. 13 July 2021. Retrieved 13 July 2021.
  14. ^ "Matt Hancock 'had private drink' with David Cameron and Lex Greensill". BBC News. 11 April 2021. Retrieved 11 April 2021.
  15. ^ Ebrahimi, Helia (22 March 2021). "David Cameron personally advocated for collapsed firm Greensill with Bank of England". Channel 4 News. Retrieved 23 March 2021.
  16. ^ Makortoff, Kalyeena (21 March 2021). "David Cameron texted Rishi Sunak to get Covid loans for Greensill, says report". The Guardian. Retrieved 22 March 2021.
  17. ^ Smith, Robert; Storbeck, Olaf (23 June 2021). "Greensill sent all loans under government scheme to Gupta-linked companies". Financial Times. Retrieved 10 August 2021.
  18. ^ Syal, Rajeev (6 July 2021). "Greensill given access to Covid loans without detailed checks, watchdog reveals". the Guardian. Retrieved 10 August 2021.
  19. ^ Makortoff, Kalyeena (25 March 2021). "David Cameron faces investigation into possible lobbying law breach". The Guardian. Retrieved 25 March 2021.
  20. ^ "Greensill: Government to investigate Cameron's lobbying". BBC News. 12 April 2021. Retrieved 12 April 2021.
  21. ^ "Cameron pitched Greensill's services to German government official". Financial Times. 16 April 2021. Retrieved 18 April 2021.
  22. ^ "David Cameron lobbied senior German official on behalf of Greensill". The Guardian. 17 April 2021. Retrieved 18 April 2021.
  23. ^ "David Cameron sought to lobby German government on behalf of Greensill". The Independent. 16 April 2021. Retrieved 18 April 2021.
  24. ^ "Bill Crothers". GOV.UK. Retrieved 17 April 2021.
  25. ^ a b Makortoff, Kalyeena; Butler, Ben; Smith, Joseph (13 April 2021). "Greensill scandal: ex-civil servant had $8m stake in lender". The Guardian. Retrieved 17 April 2021.
  26. ^ Wright, Oliver; Aldrick, Philip. "Bill Crothers: Ex-civil servant's Greensill role not vetted". The Times. Retrieved 17 April 2021.
  27. ^ a b Syal, Rajeev (22 July 2021). "Lex Greensill given 'extraordinarily privileged' No 10 access, inquiry finds". The Guardian. Retrieved 22 July 2021.
  28. ^ a b Boardman, Nigel (22 July 2021). "Review into the Development and Use of Supply Chain Finance in Government" (PDF). Cabinet Office. gov.uk. Retrieved 22 July 2021.
  29. ^ "Lessons from Greensill Capital". House of Commons Treasury Committee. UK Parliament. 20 July 2021. HC 151. Retrieved 22 July 2021.
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