SHAMED MACKAY AND THE SCANDAL BANKERS
Probe demands over move by text pest MSP Controversial pair’s links to taxpayer bank
Disgraced Derek Mackay allowed a controversial banker to be appointed chairman of Scotland’s new £2billion investment fund without ethics watchdog approval.
Willie Watt was given the job despite his previous finance firm being hit with a record fine in an international conflict of interests scandal.
Shamed Derek Mackay allowed a controversial banker to be appointed head of a new £ 2billion government fund without ethics watchdog oversight.
The former Finance Minister personally approved an “unregulated” selection process that installed Willie Watt as chair of the Scottish National Investment Bank (SNIB), the Sunday Mail can reveal.
Watt has been appointed despite the firm he previously led being fined £ 8.6million in the UK and America over a conflict of interests scandal.
Benny Higgins meanwhile – the Government’s chief adviser to help set up the taxpayer-funded bank – was eviscerated in 2015 for spending £18,000 on taxis in eight months while CEO of Tesco Bank at a time the supermarket was firing frontline staff.
We have learned Scotland’s dedicated public appointment ombudsman had to stand aside from overseeing Watt’s appointment after Mackay – who was forced to resign after sending hundreds of inappropriate texts to a schoolboy – allowed Higgins to head an unregulated interview panel.
Labour MSP Neil Findlay has demanded an inquiry into the lack of public or parliamentary scrutiny.
He said: “The Scottish National Investment Bank has to start its life with the full confidence of the Scottish people. It shouldn’t repeat the discredited practices of the private banks that took our economy to the brink. I fear we’re seeing it do exactly that.
“The parliament’s committee system needs to scrutinise this organisation that will be responsible for hundreds of millions of public money.”
MSPs passed legislation to set up the SNIB in January and it is expected to be operational by the end of the year.
It will invest in Scottish firms over 10 to 15 years and the Scottish Government has committed to putting £2billion of public funding into the bank over the next decade. Watt was CEO at Martin Currie in 2012 when it was fined £8.6million by US and UK regulators. The Financial Services Authority (FSA) fined the firm £3.5million, the largest amount it had ever imposed in a conflict of interest case. A further £ 5.1million was imposed by the Securities and Exchanges Commission (SEC) in the US which described the incident as “fraudulent”.
It came after the Edinburgh-based firm caused one client to enter into a deal which rescued another of its own clients from financial meltdown. Both funds were focused on investments in China and managed by Martin Currie from its Shanghai office.
SEC documents seen by the Sunday Mail state that at the time Martin Currie portfolio manager Christopher Ruff le had “reported directly to the firm’s chief executive off icer in Edinburgh, bypassing the normal chain of command that applied to all other investment managers”.
The Scottish Government spent £ 40,000 on an executive search company to find candidates for the SNIB chairman role. Mackay – who quit this month – then allowed an “unregulated appointment” selection panel chaired by Higgins to choose Watt as winning candidate.
Documents released through Freedom of Information reveal oversight was requested from the Ethical Standards Commissioner but the ombudsman – tasked with monitoring appointments to public bodies – was forced to refuse because the appointment wasn’t regulated.
The briefing papers, which were prepared for First Minister Nicola Sturgeon, state that a Holyrood committee requested the Ethical Standards Commissioner “take oversight” of the process.
But the document then adds: “The Ethical Standards Commissioner has declined this request due to legislative restrictions which limits their involvement in unregulated appointments.”
Mackay hasn’t been seen in public since being forced to resign the day before delivering Scotland’s budget after it emerged he has hounded a 16-year- old boy with social media messages trying to arrange a meeting.
His judgement has also been in the spotlight over the disastrous Ferguson Marine scandal that has seen the Scottish Government hand a company controlled by billionaire Jim McColl £100million for two ferries that haveave not been delivered.
Higgins meanwhile was heavily criticised in 2015 afterfter leaked receipts revealed he claimedaimed lavish London trips on his expensesxpenses at Tesco Bank as the supermarket permarket was cutting thousandss of jobs.
The f ive- times marrmarried ied banker – who earneded over £ 2million a year at thee time – spent more than £18,000000 on taxis in eight months.
Mass redundancies were being signed of f as he racked up roughly the he amount a typical Tesco co shop worker earns in a year while going to the opera, restaurants, five-star hotels and on trips to the airport for him and his daughters. .
The 56 - yea r - old d multi-millionaire’s bills ls included journeys to the he
Royal Opera House, private vate member s’ c lubs and restaurants including The Ivy, Japanese restaurant Rokaoka and Gordon Ramsay’ss Bread Street Kitchen.
At the time, a Tescoo spokesman
said all ststaff are allowed to claim travel andan other business expenses.
In 1991999, married Higgins began a relatirelationship with Christine, the wife of his associate Martin McArthuMcArthur. They met on a business trip to DDubai during which the banker ddressed as an Arab sheikh.
In 2011, after marrying and then splitting with Christine, Higgins failed in a bid to gag the media while embroiled in a row with her over a £2000-a-monthm reduction in child support fofor his daughter. Christine’s QC told ththe court that Higgins – who earned seseven figures – has little contact withw his child and applied for the ordorder “to protect himself ”.
Higgins was pictured at a birthday party last year for lobbying agency Charlotte Street Partners – a firm run by AndrewAn Wilson, the author of Nicola SSturgeon’s economic blueprintprint for aan independent Scotland.
Last yeyear he told a Scottish ParliameParliament committee there was “no alternalternative” to bankers running the SNIB and warned against its board havinghav to answer directly to a governmgovernment advisory panel.
A Sc o t t ish Gov ernment spokeswospokeswoman said: “Benny Higgins was asked by the First Minister to lead wowork in developing an ImplemenImplementation Plan for the bank in SeptemSeptember 2017. He has brought a wealth of f inancial sector experiencexperience to this project.”
“Mr HiHiggins was subsequently appointed by the First Minister to be her StrategicSt Advisor on the establisestablishment of the bank.
“WiWillie Watt’s appointment as Chair followed the Ethical StandStandards Commissioner’s Code of Practice for Ministerial and PPublic Appointments, and the rrequired f it and proper personperso test was completed.
“ThThe Chair and the Bank will be aaccountable to Scottish MinMinisters as sole shareholders and in turn Parliament.”
SScottish Conservative shashadow finance secretary DoDonald Cameron said: “It’s momore evidence of a morally and pol itical ly bankrupt govegovernment which thinks it can behave how it likes.”
Parliament committee system must scrutinise an organisation responsible for hundreds of millions of public money