MPs probing the Greensill Capital lobbying scandal have been urged to be exacting in their assessment of evidence connecting the late former cabinet secretary Sir Jeremy Heywood with key decisions that gave financier Lex Greensill access to No.10 and the Cabinet Office.
Whitehall watchers have said Heywood should have been represented in an inquiry into supply-chain finance and the Greensill affair, after former ministers and officials appeared to lay much of the responsibility for key decisions at the former cab sec's feet.
And a letter from Heywood’s widow Suzanne to members of parliament’s Public Administration and Constitutional Affairs Select Committee offers a version of Greensill’s introduction to government that challenges some evidence to date.
Heywood is critical of accounts offered to parliamentary inquiries by former Cabinet Office minister Lord Francis Maude and ex-chief commercial officer Bill Crothers. Her letter also sought to unpack the late cabinet secretary’s motivation for backing Greensill’s introduction to government and stresses the move’s compliance with appointment procedures at the time.
Heywood raised concerns about ministers and officials seeking to “scapegoat” her late husband – who died of cancer in 2018 – to diminish the importance of their own actions in relation to Greensill in a letter to the Financial Times earlier this month.
Heywood's letter comes as the FDA trade union and former Downing Street adviser Dominic Cummings both also urge the probes into Greensill, which also include a Cabinet Office inquiry led by Nigel Boardman, a legal expert and lead non-executive director at the Department of Business, Energy and Industrial Strategy.
In her four-page letter to PACAC, Heywood questioned Lord Maude’s claim not to have understood why the government had an interest in bringing Greensill’s expertise with supply-chain finance in-house.
She said Maude had “incorrectly suggested” that the move had been targeted at cost-cutting, and that it had instead been of interest as a way to make it easier for SMEs to work with government – a benefit she said Maude himself had noted in a 2012 speech to the Procurex Conference.
Heywood said Maude had told the conference: “We will also consider the role of structured finance products, such as supply chain finance, which have the potential to allow tier-2 suppliers to access payments early.”
On Bill Crothers, Heywood said the former chief commercial officer had run the appointment process that resulted in Greensill being hired as a crown representative in 2014 and had described Greensill as having “impressive, relevant experience”.
However she said that Crothers – who notoriously worked simultaneously as a civil servant and for Greensill Capital for a period in 2015 – had sought to “attribute his decision” to recommend Greensill’s appointment as a crown rep to the then-cabinet secretary.
Heywood said her late husband had been committed to finding “new ways of doing things to advance the government’s policy agenda” and would have viewed exploring the use of supply-chain financing in government as part of that brief.
“The government required expertise that was, at that time, not available in the public sector,” she said. “When Mr Greensill was appointed to the Cabinet Office, he brought experience from his years working in supply-chain financing from both Morgan Stanley and Citibank, although he was no longer connected to either bank.”
She added: “Your witnesses testified that at the same time there was a major push to reduce government spending on consultants, so it is likely that he was engaged as an unpaid adviser for this reason.
“Given Mr Greensill’s experience, I am sure that if my late husband were still with us, he would have confirmed and explained in detailed terms his support for the appointment. None of those invited to testify to your committee has been willing to ‘admit to’ agreeing that appointment.”
Heywood added that at the time Greensill was appointed to work in the Cabinet Office, Greensill Capital was a “tiny, Australian start-up company” and that there was no evidence to suggest it intended to do any work within the UK public sector for several more years.
Greensill Capital went into liquidation in March this year. Its lobbying of Treasury ministers and senior officials with the aid of former prime minister David Cameron during the early months of the pandemic last year is a major focus of PACAC and the Treasury Select Committee’s investigations.
In her letter to PACAC, Suzanne Heywood said it was important not to view the introduction of Lex Greensill into the Cabinet Office in 2012 “through the lens of recent events”.
“I hope my late husband’s actions will be judged by the rules in place at the time (which, for example, did not include a requirement for an open competition for unpaid roles),” she wrote. “And that the committee and this inquiry will also bear in mind that those involved could not have foreseen the distant future fate of Greensill Capital.”
The FDA union also urged against the “scapegoating of an official no longer around to defend himself”, and warned the separate government probe on the affair, being led by Sir Nigel Boardman, risked being a denial of natural justice.
In a statement released today, FDA general secretary Dave Penman said: “The Nigel Boardman inquiry was set up to understand the origins of a scandal that ended with a former prime minister pleading for tax payer cash for his employer.
"As the details unfolded, two things became clear. Firstly, that the late Sir Jeremy Heywood would be a central figure in the origins of Greensill’s involvement with government. Secondly, that fingers were very quickly being pointed at the civil service to distract from the inconvenient truth that David Cameron sought, and was granted, privileged access to cabinet ministers.
“Whether Jeremy Heywood was a former cabinet secretary or junior civil servant, the inquiry had a duty to ensure that, as far as was practical, representations could be made on his behalf. This is not only a matter of ensuring ‘natural justice’ for a key figure in the investigation who is sadly unable to represent his own interests. It is also critical to ensure that we have the fullest picture of events of more than a decade ago, including challenging the evidence of other witnesses.
“Nigel Boardman could and should have ensured that someone was appointed to represent Sir Jeremy’s interests, with access to documentation and the civil servants who were involved. The refusal to do so will only serve to undermine the credibility of an inquiry that may well have fair criticisms of Sir Jeremy.
“It will also do nothing to challenge the impression that the scapegoating of an official no longer around to defend himself was just too tempting an opportunity to pass up.”
And in a Twitter post this morning, former No.10 adviser Dominic Cummings also said Heywood should have been represented in the Boardman inquiry. "The [Cabinet Office] stitching up dead [cabinet secretary] to take the blame would be very Yes Minister, & bad," he wrote.