David Cameron’s Conduct is a Case Study of Shamelessness
Having set out to “detox” the Conservatives and dissociate himself from the shame of many Conservatives in the 1990s, David Cameron increasingly illustrates what he once sought to purge. His recent conduct is a case study of the rapacity and shamelessness he used to condemn.
The Greensill case and the controversies that flow from it are complex. But the theme that runs through every subplot is the abuse of the supposedly noble appeal of public service. There are many unanswered questions and a lot of information that we do not yet know, but the established facts tell a miserable story of public servants tempted by the prospect of private gain and private interests disguised as public service.
Lex Greensill, a wealthy businessman, was invited to government by then Cabinet Secretary Jeremy Heywood, who had worked with Greensill in the city. Mr Greensill promised to solve the problem of the public sector making late payments to suppliers using “reverse factoring”. His company would pay suppliers on behalf of public sector clients early and in full, and recover the cost – along with fees charged to the taxpayer – from those clients later.
Questions remain about Mr. Greensill’s appointment, including the process, who approved it and to whom Mr. Greensill reported. But we do know that a series of conflicts of interest ensued and that a position of so-called public service was abused. Mr Greensill has been given a Cabinet Office, a government phone number and business cards describing him as “Senior Advisor, Prime Minister’s Office”. David Cameron congratulated him at a business conference. Downing Street officials introduced him to White House counterparts. Government departments and utilities were encouraged to participate in its program. Senior officials were allowed to work for his company while they were still employed by the government.
All of these facts are unusual and suspect. Even apart from the special access and favors given to Mr. Greensill, why was his solution to the late payment problem accepted with so few questions? As Iain Martin, a columnist on the financial crisis, pointed out, 85% of bills are now paid by Whitehall within five days and over 97% within 30. The problem that could only be addressed by Mr Greensill was fixed anyway without him.
Ministers and officials should have known that supply chain finance was linked to egregious examples of accounting tricks and alleged fraud. Outsourcing firm Carillion, for example, has used supply chain finance to hide debt and deployed reverse factoring to hold revenue longer, allowing it to report higher cash flows and inflate executive compensation without justification.
In the midst of a big scandal, Carillion went bankrupt and something similar seems to have happened with Greensill. Investigations suggest that the company has not only loaned its customers against guaranteed invoices for work already completed or even contracted, but against “potential receivables” that the company has not yet generated, if not ever could. generate. Lex Greensill used this “creative accounting” to gain the confidence of international investors, buy a bank and operate four private jets.
He also used it, at a still unknown stage, to gain the trust of Mr Cameron, who really should have asked questions, if not about how this young company could support four private planes and then why, in n Any normal scenario, he could earn up to $ 60 million – and make regular personal use of those jets – in exchange for 25 days of work a year.
It is probably unreasonable to expect Mr Cameron to know the details of the most worrying aspects of Greensill’s funding. But it is not unreasonable to think that he should have asked questions and had scruples about his mission. This, before the company began to collapse, was intended to help achieve the unnecessary financialization of various public assets and to make profits from public funds.
Because it wasn’t just supply chain finance at stake. Mr Cameron justified lobbying on behalf of Greensill’s Earnd program because it helped public sector workers access their daily wages, rather than wait for payday. He called it an “antidote to the exploitation of payday loan systems,” but it was just a posh version of the same thing. Participants would not have paid interest on their salary advances, that’s right, but Greensill would have taken a cut from their employer – which could only come from overall payroll or other funded budgets. by the state – and would have converted future payments into bonds. it could sell to banks. When Cameron introduced Earnd to Australian ministers, they rejected him, apparently because it looked too much like a payday loan scheme.
This unnecessary financialization of public goods was allegedly driven by property and public service, but in reality the motive was profit and personal wealth. And that’s the real problem with the Greensill case. Yes, there are questions about the accountability of the public service, about lobbying, the professional roles assumed by former ministers and officials, and the decisions made by ministers and officials when pressured by Mr. Cameron. All these questions must be answered and the questions and problems that arise must be resolved.
But the real scandal concerns the corruption of the public service for private gain. It is about how public servants seem to have made decisions because of the prospect of personal benefit. It is a question of how private interests were admitted to the heart of government when they claimed to be motivated by public service. And it’s about an attitude toward public assets – including even NHS employment data and public sector worker wages – that sees those assets reduced to a commodity that can be bought and sold, at a profit, and not just without public benefit, but at the cost of the taxpayer.
Thanks to this culture, the legacy and reputation of a former prime minister is in tatters. If Boris Johnson is to avoid the same fate, he will need to investigate the Greensill affair without fear or favor, ensure his own ministers, advisers and officials are whiter than white, and remove the specter of corruption from British public life. . There are few more serious things.