‘Privileged few’ have disproportionate access to top government figures, Greensill lobbying report finds

Finance boss had ‘sometimes extraordinarily privileged’ relationship with government

Complaints that a “privileged few” have disproportionate access to those at the top of government are “justified”, a report into lobbying by David Cameron on behalf of failed finance firm Greensill has found.

The report commissioned by Boris Johnson from lawyer Nigel Boardman found that financier Lex Greensill enjoyed “a privileged – and sometimes extraordinarily privileged – relationship with government”.

And Mr Boardman wrote: “Recent scrutiny of government’s processes for managing lobbying, especially in the context of the engagement between government and those acting on behalf of Greensill Capital, has focused on a number of issues with the current system.

“In particular, it has been argued that the government’s processes for managing lobbying are insufficiently transparent, that external organisations are able to exploit certain loopholes to land their messages more effectively, and that a privileged few have a disproportionate level of access to decision makers in government.

“I think some of these observations are justified.”

However, the report found that, despite “strong” lobbying from Mr Cameron and Greensill director Bill Crothers – a former senior civil servant – the system “worked well”, as “ministers and civil servants made the proper analysis of the products being offered to them and did not allow their judgment to be influenced”.

Labour’s deputy leader Angela Rayner demanded a radical and immediate reform of lobbying rules. She said: “The Greensill scandal proves beyond all doubt that the rules that are supposed to regulate lobbying are completely unfit for purpose and require radical and immediate overhaul.

“This report was set up as a classic Boris Johnson cover-up and whitewash to protect the government – a government non-executive director whose firm worked with the Treasury on corporate financing and had previously campaigned against lobbying reforms was appointed to lead a review, with the terms of reference specifically limited to avoid a wider investigation of lobbying, privileged access and the revolving door between Whitehall and business.”

The 141-page report covers the circumstances under which Greensill Capital gained access to senior Whitehall officials and ministers and secured government contracts for its supply chain finance services, as well as Mr Cameron’s lobbying for assistance under coronavirus business support schemes.

The report covers stage one of the inquiry, setting out the facts of the affair. The more controversial part two – including conclusions and recommendations – is expected later in the year.

Mr Greensill himself had a desk and security pass within the Cabinet Office under Mr Cameron’s administration, despite being neither a civil servant nor a special adviser, leading to questions about the degree of his access.

Today’s report found that Mr Greensill was introduced to the Treasury and proposed for a CBE by then cabinet secretary Jeremy Heywood, who had worked with him at merchant bank Morgan Stanley while on a sabbatical from government.

It was clear that Lord Heywood, who died in 2018, “respected Mr Greensill’s capabilities” and had a “high regard for his integrity”, found Mr Boardman. A memo to Mr Cameron in2012 made clear that Heywood was “ the person primarily responsible for Mr Greensill being given a role in government”.

The report found that his appointment for an initial three-month stint as unpaid adviser was “properly made”, although potential conflicts of interest, particularly relating to his links with Citibank “should have been considered more fully” and there was no explanation for why he was allowed to start work before receiving security clearance.

But a later extension which kept him inside government “raises significantly more questions”.

Lord Heywood described suggestions that the financier’s appointment should go to an approvals board as “bureaucracy gone mad”, and no minutes were available to show whether ministerial approval was sought or obtained.

Greensill was provided with official IT and security access to the Cabinet Office and 10 Downing Street before completion of the usual vetting process.

And his letter of appointment continued a provision drafted by Mr Greensill himself which “created ambiguity about the potential for conflicts of interest”.

The report questioned whether there was any need for Greensill to have been provided with a government post, which he was able to leverage to gain clients for his private company.

“For the most part, the use of direct appointments by ministers appears rightly to be limited to situations where a discrete project is proposed, and there is a clear need to appoint specialist expertise, often at pace,” Mr Boardman wrote. “This was clearly not the case with Mr Greensill.”

The Treasury was “institutionally sceptical” about the value of supply chain finance in government, and the arguments made for it were “not valid”, he found.

“During this period, Mr Greensill was not only given access through Lord Heywood’s introductions to several departments in Whitehall, but he was also able to leverage his position, using the facilities of No 10, to hold meetings with major companies” including Vodafone and Carillon, which he took on as customers of his business, found Mr Boardman.

“Mr Greensill’s role in government had the consequence of providing him with a marketing platform for Greensill Capital’s business with the private sector,” found the report.

“This enabled Mr Greensill to promote a product which did not, in fact, provide material benefits to government (except possibly in relation to the pharmacy supply chain finance programme, although even here the benefits are disputed), although it could have been of benefit to his incipient business and was of immediate benefit to his former employer, Citibank.”

The report added: “At the time that Mr Greensill cleared the Vodafone conflict through Lord Heywood in 2015 it should have been apparent to Lord Heywood and others involved that Mr Greensill was building a supply chain business in the UK and should have considered the issue of conflicts of interest.

“It is unclear why Mr Greensill was permitted to remain an adviser to government on supply chain finance under these circumstances.”