The ‘accidental lobbyist’ Is now in the eye of a storm
IT was the public humiliation of a former prime minister. The only things missing were the broken tomatoes and the rotten eggs.
David Cameron, who we are told became an accidental lobbyist, admitted his double grilling by MPs over the Greensill affair last week was a “painful day” at Westminster.
Outwardly, he was squirming; inwardly, he was screaming.
The former Tory leader spent four uncomfortable hours in the Commons stocks as he sought to defend, not very convincingly, his role in the collapsed finance firm run by the former Number 10 aide Lex Greensill.
The company operated a so-called “supply-chain financing” operation. Worldwide, the loan payment system is said to be now worth £2.5 trillion.
The idea appears straightforward. The third-party provider settles a company’s bill with a supplier early and in return gets a fee. This enables suppliers to get paid quickly while businesses can smooth out their debt payments over a longer period. Everybody is happy – in theory.
In 2019, Greensill provided an estimated £100 billion of financing to businesses in more than 150 countries.
When Covid struck a year later, causing economic uncertainty, supply-chain financing became a very lucrative market and banks alone were raking in many billions in fees.
But as the pandemic deepened, turbulence hit the global economy and Greensill, the largest non-banking provider of supply-chain finance, collapsed after its insurer refused to renew cover for its business loans.
The fear now is, in this world of creative accounting, early payment loans provided by supply-chain financiers were not only being made for deals done in the past but ones expected to be done in the future.
Indeed, profits have been recorded on the basis of future business, giving the appearance some firms are faring much better than they actually are. This lay behind the collapse of the outsourcing company Carillion.
Allegations
APART from the Government’s own commissioned inquiry and the parliamentary probes into Greensill and lobbying, the Financial Conduct Authority is now focusing its gimlet eye onto the collapsed finance firm and what it alarmingly described as “potentially criminal” allegations. It doesn’t stop there.
We now also learn the Serious Fraud Office is examining the business empire of Liberty Steel owner Sanjeev Gupta over suspected fraudulent trading and money laundering, including its financial arrangements with ... Greensill – said to have had around £3.6bn of exposure to Mr Gupta’s business.
So, Mr Cameron now finds himself in
the eye of an increasingly turbulent storm. Appearing before MPs, the multimillionaire sought to portray himself as, not an ex-premier on the make, but someone who was continuing his role as a sincerely dedicated public servant.
“Lobbying the UK Government was never intended to be part of my role,” insisted Mr Cameron. Yet last spring, as the pandemic struck he lobbied and lobbied away, sending dozens of text messages to, among others, Rishi Sunak, the Chancellor, Michael Gove, the Cabinet Office Minister, Tom Scholar, the head Treasury official, and Sir Jon Cunliffe, the deputy governor of the Bank of England. Some were signed off “love DC”.
Greensill wanted access to the UK Government-backed loans scheme to help small businesses survive the pandemic. The former party leader said he believed its supply-chain financing could help ministers cope with the “economic heart attack” threatening the country. But, when pressed by Mel Stride, chairman of the Commons
Treasury Committee whether his “opportunity to make a large amount of money was under threat” as he sent that “barrage” of e-messages, the 56-year-old ex-politician insisted nothing could be further from the truth.
“I would never put forward something I didn’t believe was in the interests of the public good,” declared Mr Cameron, stressing how, as he lobbied Whitehall, he did not believe there was a “risk of Greensill falling over”.
Generous salary
THE former Conservative chief admitted he was paid a “generous, big salary” by the finance firm, “far more” than the £150,000 a year he received as PM. “I had a big economic investment in the future of Greensill, so I wanted the business to succeed … to grow,” explained Mr Cameron.
But when asked just how much that generous, big salary was, the ex-premier became coy. Dismissing as “completely absurd” suggestions he was in line for
£60 million, he politely declined to disclose his true remuneration, saying it was a “private matter”.
One of the Greensill perks revealed was the use of a private jet, which Mr Cameron took advantage of on several occasions to fly to his “third” holiday home in Cornwall.
With allegations of cronyism levelled against Boris Johnson and his Government, the fellow Old Etonian admitted there were “lessons to learn” and a formal letter rather than a flow of chummy text messages would, in future, be more appropriate.
Stressing how lobbying government was a “necessary and healthy” part of the democratic process, Mr Cameron nonetheless accepted former leaders had to “think differently and act differently” given the continuing influence they enjoyed.
Having an ex-PM engaging on behalf of commercial interests, “no matter how laudable the motives and cause”, could, he admitted, be “open to misinterpretation”.
But his “rather a fool than a knave” approach did not cut any ice with Labour politicians. Rushanara Ali, who represents Bethnal Green and Bow, branded Mr Greensill a “con artist” and told Mr Cameron his own reputation was now “in tatters”.
The problem for the former PM is his humiliating ordeal may not be over. Given all the inquiries, not least the ones looking into suspected criminal activity, the ex-party leader – who made clear during his parliamentary interrogation that he had broken no rules and there had been “absolutely no wrongdoing” on his part – might, nonetheless, find the Greensill story and its potential ramifications reverberating in the Cameron head as tonight it slowly hits
the pillow.
The former Tory leader spent four uncomfortable hours in the Commons stocks