Cameron aide broke rules by joining lobbying firm

One of David Cameron's senior Downing Street advisers has broken rules meant to stop former government officials from trading on their inside knowledge of Whitehall and access to ministers, The Independent has learnt.

James O'Shaughnessy, until recently Downing Street's director of policy, failed to inform the Whitehall committee which vets jobs for officials leaving Government that he planned to join the lobbying company Portland as its chief policy adviser. Portland's clients include the governments of Russia and Kazakhstan, Google, McDonald's, Vodafone and the arms company BAE Systems.

Under government rules, senior officials like Mr O'Shaughnessy have to inform the Advisory Committee on Business Appointments of all jobs they plan to accept for two years after leaving office, to prevent them using their former jobs to gain influence and access to ministers for private clients – but he failed to do so.

Last night Sir Alistair Graham, the former chairman of the Committee of Standards in Public Life, said it was a "serious error of judgement".

"This is a very significant oversight on his behalf," Sir Alistair said. "He has been working at the heart of Government and it would be very difficult for the committee to know what conditions to attach to his future employment if they did not know he was going to work for a lobbying firm."

Mr O'Shaughnessy, who was Mr Cameron's director of policy between 2007 and 2011, was a key figure in drafting the last Conservative manifesto. He remains close to Mr Cameron and other senior Downing Street officials.

Portland's managing director Tim Allan says of his appointment: "Nobody has a better understanding of the Coalition Government's policies than James. He will bring unrivalled insight and expertise."

When he left No 10 in October Mr O'Shaughnessy applied to the committee to set up an independent strategy and research consultancy primarily in the education sector.

Permission was granted by the committee but with the stipulation that he should wait three months from his last day of service before considering accepting any commissions with clients in the education sector and he would need permission from the committee for any commissions for 12 months.

He was also banned from undertaking any work which involved "providing advice on the terms of any contract relating directly to the work of the Prime Minister's Office or the Department for Education".

The committee's ruling made clear that "should he [Mr O'Shaughnessy] wish to extend or otherwise alter the nature of his consultancy work, or accept other appointments with any of his clients or other organisations, it will be necessary for him to seek permission to do so." This was never done.

Under the current rules there are no sanctions available against him.

Last night Jon Trickett, the shadow Cabinet Office minister, said there were serious questions to be asked about the appointment. "Mr O'Shaughnessy had a very privileged position at the heart of Government and now he is going off working for a company that makes money lobbying the Government on behalf of its clients without getting permission first."

Tamasin Cave, from the Alliance for Lobbying Transparency, said: "Lobbying has got out of control under this Government. It can't be right that companies that can afford Portland's fees get the inside track, while the public has all but been evicted from political decision-making."

But Mr O'Shaughnessy said he believed he had followed the spirit of the rules. "I sought the committee's advice when I left Government which imposed conditions on the work that I can take on. I accepted that advice and will continue to do so."

Later this month the Government is due to publish its long-delayed proposals to regulate the lobbying industry amid fears they have been significantly watered down in face of lobbying by the lobbyists.

A Cabinet Office spokesman said: "James O'Shaughnessy submitted an application to the Advisory Committee on Business Appointments to set up an independent consultancy. The Committee advised – and James accepted the advice - that any commission relating to Education should be subject to a three month waiting period and for the following nine months he should seek permission for any commissions he wished to accept with clients in the education sector. All work through the consultancy would be subject to a two year lobbying ban.

"Mr O'Shaughnessy's consultancy's acceptance of this commission by Portland was in line with the advice he received from the Committee. The advice on the Acoba website does not accurately reflect what was communicated to Mr O'Shaughnessy - the final paragraph was not included in the advice he received."

A spokesman for Portland said: “We are delighted that James will be providing advice to our company and our clients. We have contracted with James through his independent consultancy and under the conditions set out in the original ACOBA advice. He, like all people working for Portland who have left government, will fully comply with the conditions placed on him."