Greensill Lobbying Scandal Has Ensnared U.K.’s Civil Service
(Bloomberg) -- Revelations that a top U.K. civil servant was able to advise the now insolvent Greensill Capital while still in post shed a damaging light on the revolving door between business and government and points to a phenomenon that may be far more widespread than the public imagines.
Bill Crothers joined Greensill as an adviser to its board in September 2015 while he was the government’s chief commercial officer, and no one raised a red flag at the time. In an April 9 letter, he told the watchdog on ministerial and bureaucratic appointments that his holding two jobs was not “uncommon” in the civil service and “was well known” at the time.
The trove of correspondence published Tuesday raises the prospect of more potential bombshells to come over the Greensill affair, specifically on the nature of lobbying and whether there was cronyism at play. The involvement of the country’s bureaucracy adds another perturbing layer because unlike elected officials, the civil service isn’t accountable to voters.
Facing questions in Parliament, Prime Minister Boris Johnson was on the defensive on what lines may have been crossed.
“I do think it is a good idea in principle that top civil servants should be able to engage with business and to have experience of the private sector,” he said. “When I look at the accounts I’m reading today, it’s not clear that those boundaries have been properly understood.”
The scandal has already embroiled some of his top ministers as well as former Tory premier David Cameron, who took a post with the finance firm after leaving office and has since acknowledged that “communications with the government need to be done through only the most formal of channels.”
Greensill’s collapse in March put thousands of jobs at risk at U.K. plants owned by Liberty Steel, part of the GFG Alliance, which relied on Greensill for financing. The government is also trying to figure out if and how to offer state aid to Liberty while dealing with the spectacular financial fall-out of a company that had close ties with the U.K. political establishment.
The influential House of Commons Treasury Committee said Wednesday it will launch an inquiry focusing on the “regulatory lessons” from Greensill’s collapse and the “appropriateness” of the Treasury’s response to the firm’s lobbying.
The focus now shifts to Eric Pickles, chairman of the Advisory Committee on Business Appointments, who after receiving Crothers’s letter asked the Cabinet Office to publish its conflicts of interest policy and disclose what the approval process was for Crothers taking the Greensill role. He will address a parliamentary committee on Thursday morning.
Both Crothers and the Cabinet Office, which presides over the running of government, told Pickles that the civil servant had sought and obtained internal approval for the appointment. Pickles also asked if there is a register of government staff working for outside organizations, and how sensitive government information was protected.
The government this week announced its own inquiry into how Greensill secured supply chain finance contracts and how they work, and how its representatives -- including Cameron -- engaged with ministers. Johnson said the results should be published “quickly” and presented to Parliament.
The probe is due to report at the end of June.
The risk for Johnson lies in whether more names and examples emerge, and how closely the public links it to his administration. Politically, he’ll want to put this behind him ahead of May local elections that will be a test of whether the controversy has hurt the Tories.
The opposition is seeking to capitalize. “The Greensill scandal is the tip of the iceberg,” said Labour leader Keir Starmer. “Dodgy contracts, privileged access, jobs for their mates. This is the return of Tory sleaze.”
Pressure is mounting after it emerged Cameron directly approached Johnson’s Chancellor of the Exchequer Rishi Sunak, Health Secretary Matt Hancock, and two junior Treasury ministers to lobby on behalf of Greensill as it sought access to government business and coronavirus aid programs.
The government has said both Sunak and Hancock acted correctly. Cameron, who’s been cleared of breaking the rules on lobbying, has said he welcomes the inquiry and that he’s prepared to participate.
On Wednesday, the government avoided a potential hazard when it easily defeated Labour’s attempt to force a Parliament-led inquiry into Greensill that would have had powers to call Cameron, Sunak and Hancock to give evidence.
But no sooner had the government seen off that threat than Parliament’s Treasury Committee announced its own probe, with the full terms of the inquiry to be published next week.
The latest development regarding Crothers is likely to attract further scrutiny, given the prominent role civil servants have in implementing policies. Crothers joined Greensill as an adviser to its board two months before he left the civil service. He was then appointed a director of Greensill in August 2016, a post that would have required him to seek advice under the government’s Business Appointment Rules, according to Pickles.
Crothers said he was told that as he was already working for Greensill, no BAR application needed to be submitted.
“This advisory role was not seen as contentious, and I believe not uncommon,” Crothers said in a letter to Pickles. “I was transparent about the move to Greensill Capital, and it was well known at the time.”
Still, the controversy has already drawn criticism from others of his ilk.
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