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The return of Tory sleaze: a scandal set to haunt Boris Johnson

Toby Helm and Michael Savage
·12-min read

It has been a dreadful few weeks for David Cameron, the former prime minister and golden boy of the Tory party. His reputation – already terribly damaged by losing the 2016 Brexit referendum and his subsequent resignation – has now sunk to depths that once would have seemed unimaginable.

After winning a majority at the 2015 election, and freed of the need for coalition partners, Whitehall civil servants remember Cameron and his chancellor, George Osborne, at their peaks, strutting around Downing Street, radiating extraordinary power and confidence.

“At that time you just couldn’t say no to them. They were completely untouchable. It was incredible to witness that total confidence. It seemed impossible to raise any doubts at all,” said one former high-ranking civil servant.

Six years on, for Cameron at least, the reverse is now the case. It is difficult to imagine how he could fall much further. A Tory MP who used to be a strong supporter said: “The astonishing thing about David now, given where he was, is that he has almost no one coming out to bat for him at all. What could they say?”

Related: The line between public service and private gain is shamefully blurred

The exposure of Cameron’s links to the fallen financier Lex Greensill – made public in drip-drip leaks from, in all probability, people now close to power in the Boris Johnson administration – have dragged a man once regarded as too privileged to think about earning serious money into the cesspit of financial sleaze which he had said he was determined to root out of public life.

But there is, according to his small band of remaining defenders, some limited and perhaps short-term relief for Cameron this weekend, which stems from knowing that the Greensill scandal and wider questions over rules and propriety among current and former holders of public office, are spreading away from him alone, and back to where they almost certainly originated – Downing Street and the heart of government.

Matt Hancock met Greensill and Cameron for a private drink in October 2019 to discuss a payment scheme for NHS staff.
Matt Hancock met Greensill and Cameron for a private drink in October 2019 to discuss a payment scheme for NHS staff. Photograph: Reuters

Last week was a watershed in the whole Greensill-Cameron saga. It became, in a sense, official, and out in the open. Cameron made his first public statement in more than 40 days on his links with Greensill, in effect apologising for using text messages to lobby the chancellor, Rishi Sunak, for public money for the Australian’s company, while insisting he had broken no rules.

Days later, his fellow Old Etonian and rival down the years, Johnson, announced an independent inquiry into the affair to be led by Nigel Boardman, a former partner at lawyers Slaughter and May and a non-executive director at the Department for Business, Energy and Industrial Strategy. The announcement capped an extraordinary reversal in Cameron’s relationship with lobbying. “The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisers for hire, helping big business find the right way to get its way. In this party, we believe in competition, not cronyism,” he told an audience at the University of East London in 2010.

Last year, a decade after that speech, Cameron was photographed cross-legged in a tent next to Greensill during a trip to lobby Saudi Arabia’s crown prince, Mohammed bin Salman. He had, seemingly, completed his transformation into the country’s most prominent lobbyist.

Some in Whitehall were surprised at the wide remit of the Boardman inquiry and the dangers it might pose. It has also been announced that several parliamentary select committees will investigate the affair and summon whoever they want, including Cameron and other ex-prime ministers and ministers, to give evidence. Tory MPs and some in Downing Street are getting nervous. Where will all this lead and where will it end, they ask? If Cameron had been the subject of such damaging leaks, who would be next? Sunak, Treasury officials, Cameron and even Greensill himself are set to give evidence at blockbuster parliamentary inquiry sessions in which more bombshells could well explode.

Rishi Sunak
Rishi Sunak received multiple texts on his personal phone from Cameron asking for Greensill Capital to be included in a government-backed Covid loan scheme. Photograph: Reuters

Even before those investigations get under way, questions are being asked not just about Cameron but some current holders of important offices and posts in or close to government. Allegations that politicians and advisers at the centre of power today may be using public positions – intentionally or unintentionally – to benefit their private interests are surfacing and being trawled over in the media. “Johnson may have made a big mistake here with this big inquiry,” said one Tory MP. “Something this big and wide is the last thing any government needs.”

The dangers for government are becoming clearer by the day. Matt Hancock, the health secretary, who met Cameron and Greensill for a drink during which they lobbied him over a potential contract, came under scrutiny over his shareholding in a family firm approved to bid for NHS contracts. He insists he has broken no rules.

Two of Johnson’s most senior advisers – his deputy chief of staff Simone Finn, and Francis Maude, who has been conducting an unremunerated review of civil service reform for the prime minister – are facing questions over whether their private financial interests are advanced by their public roles.

As well as his unpaid role for government, Lord Maude runs a firm called Francis Maude Associates (FMA), which advises foreign governments on how to become more efficient, in which Lady Finn was a director until she resigned the position recently. But she still has a shareholding in FMA believed to stand at about 35%.

Downing Street says that in the cases of Finn and Maude (as with Hancock) there is no conflict of interest, no breach of rules. But one senior Whitehall figure argued that having positions at the heart of power while holding investments in – and in Maude’s case running – a company like FMA, was the best possible way to win market credibility for their corporate brand. “Their position in the heart of government gives FMA unparalleled credibility when looking for contracts with governments abroad. Look! Our shareholder is the deputy chief of staff at No 10. Look! The boss of this company is doing a civil service review for the British government, having been the Cabinet Office minister. What better way to sell yourself to foreign governments? It may not be breaking the rules, but it looks all wrong.”

Another former permanent secretary weighed in: “I don’t think it is breaking any rules but that is not the whole point. It is the sense that this is somehow not right that can cause as much damage to an administration as actual rule-breaking.”

Cameron’s defenders say he has no interest in taking revenge for the Greensill leaks. But he may not need to. There is already a sense that if those who leaked against him were doing so from inside government, the tactic has misfired. “If they thought it would stop with Cameron then they were plain stupid. This could now end up exploding on their own government,” said a senior figure who has straddled the Cameron, Theresa May and Johnson premierships in Whitehall.

The Tories are worried that the stories could cut through to voters and do for them what it did for John Major’s government before the 1997 general election, which brought Tony Blair to power. Writing in today’s Observer, Sir Bernard Jenkin, the Tory MP who chairs the powerful Commons liaison committee, says faith in government is already being damaged. “There is nothing wrong with a private citizen wanting to make money, but we have a system which has allowed the lines between public service and private gain to become blurred,” he writes.

“This is both shameful, but also unfairly shaming of the majority in public office and in politics who do have good values and attitudes, but who are all tarred by the same brush. Much of the wrongdoing is exaggerated, but the worst instances of people using public positions to enrich themselves are utterly corrosive of public trust in government.”

Having set up Greensill Capital in 2011, the Australian financier was installed as an unpaid adviser in the Cabinet Office in Cameron’s first term.

In early 2012, he was given a series of meetings across Whitehall to promote his model of supply-chain finance to officials. The model would see a bank reimburse a department’s suppliers early in exchange for a fee. The model baffled many insiders, who thought any concerns over suppliers being paid late could be sorted by enforcing existing procurement rules.

A series of senior Whitehall figures told the Observer that they still didn’t understand why Greensill’s plans were so supposedly attractive, but that it was the cabinet secretary at the time, the late Jeremy Heywood, who was most interested in his ideas.

“Jeremy was the driving force. But there wasn’t any special sauce in what [Greensill] was proposing. Jeremy didn’t have any personal axe to grind in it. He was perhaps a bit naive,” said a senior Whitehall contemporary.

In the end, only one supply chain finance scheme, for pharmacies to be paid early, was announced personally by Cameron in 2012. A senior figure in government at the time said: “We saw Greensill early on in time in Downing Street but then he seemed to disappear, not be around so much. He was not very prominent about the place.”

Greensill was, however, later appointed as a Crown representative, one of a group of outside businesspeople brought in to government to ensure suppliers and contracts provide the best value for money, under a scheme devised by Maude, who was Cabinet Office minister at the time.

Several senior Whitehall sources pointed to a wider issue with Crown representatives. One former senior official said: “As far as I can remember, there was quite often not a process for appointing them. Some of them were brilliant and assiduous. Some of them had wacky agendas.”

Whatever Greensill’s precise involvement inside government was during Cameron’s first term, he wielded sufficient influence over the former prime minister to persuade him to go to work for him in 2018, two years after Cameron stepped down from Downing Street. Rumours of Cameron’s extraordinary decision began to surface in March this year, just as Greensill’s company was running into severe financial difficulties.

The murmurs intensified when it emerged Cameron had repeatedly texted Sunak to encourage him to hand Greensill access to a Covid funding programme. Cameron had been in line to make millions from his Greensill shares had the company prospered.

In recent days, other evidence of Greensill’s reach into government, and of the blurring of lines between public and private roles that the scandal has highlighted, have surfaced.

Last week it emerged that Bill Crothers, a senior official in the Cabinet Office who went on to be a Greensill director, had actually started advising Greensill while still employed as the government’s chief commercial officer – and that the arrangement had happened with the approval of the Cabinet Office.

It opened a new front in the row and prompted a snap inquiry by cabinet secretary Simon Case over how many other officials had a similar arrangement.

While allies of Crothers say there have been many inaccuracies in the reports about him, he does appear to have been aware of a possible issue with the overlap of his civil service and Greensill posts. On his now deleted LinkedIn profile, Crothers stated that he left the civil service in September 2015 and then started advising Greensill. In reality, he left the civil service in November and did both jobs for two to three months.

From there, the plot thickens further. A series of insiders also say that Crothers was part of a group of former private sector figures favoured by Maude, who was keen to reform Whitehall and bring in business acumen. After leaving the civil service, Crothers took on freelance work from FMA, Maude’s company.

David Cameron
David Cameron made financier Lex Greensill an unpaid adviser, allowing him to create a policy to help government suppliers get paid quicker. Photograph: Matt Dunham/AP

“There was a gang of people in the Cabinet Office who had originally been appointed externally,” said a senior Whitehall contemporary. “Bill [Crothers], John Manzoni and Stephen Kelly. The three of them were cut from the same cloth. They were all close to Francis Maude.”

Manzoni, a former BP executive, was originally recruited to the civil service in early 2014 as the head of the major projects authority. In that role he was allowed to keep his position as a director of brewer SABMiller, his chairmanship of energy exploration company Leyshon Energy and his advisory role with energy private equity firm Adamant Ventures.

When he took over as civil service chief executive and Cabinet Office permanent secretary, he was initially planning to retain the SABMiller position. However, it was later announced it was to be unpaid and then eventually announced that he would leave the post the following summer. According to the company’s accounts, he had already earned £62,000 that financial year from the role.

Kelly, meanwhile, was appointed chief operating officer for government and head of Maude’s efficiency and reform group in September 2012. Before taking that job, he held three outside positions on top of his civil service position, two of which were unpaid. Kelly left Whitehall in November 2014 to work for software company Sage.

There are now no fewer than seven disparate inquiries into Greensill and wider lobbying issues. Lobbying rules now look certain to be tightened.

Suddenly, as a result of the Greensill-Cameron affair and the fallout from it, the political mood in Westminster has changed. The Tories are reeling while Labour – which had seemed to lack a line of attack since the turn of the year as Conservative fortunes rebounded thanks to the successful vaccine roll-out – has an issue to focus on that it knows could damage Johnson, his government and his party.

“This Greensill scandal is the tip of the iceberg,” the Labour leader Keir Starmer said at prime minister’s questions on Wednesday, his confidence visibly restored. “Dodgy contracts, privileged access, jobs for their mates. This is the return of Tory sleaze.”