Grill looms for David Cameron after MPs press Lex Greensill on collapse

In 2010, when David Cameron was British Prime Minister, he gave a speech criticizing lobbyists. “We all know how it works. The breakfasts, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisers to hire, helping big companies find the right way to get their way.

Eleven years later, Cameron’s relentless lobbying was revealed a treasure trove of private messages sent to senior Conservative government officials.

Messages on WhatsApp, SMS and emails – sent 56 times since the start of the pandemic in 2020 – were posted by the former prime minister at the request of the Treasury select committee, which is investigating the collapse from Greensill Capital, the supply chain finance company where Cameron was an advisor.

Cameron, who is due to testify verbally on Thursday, looked with apprehension at his former employer Lex Greensill grilled by the same 11 deputies Tuesday afternoon.

In three hours of questioning, MPs repeatedly questioned the Australian financier about his company’s failures – at one point, forcing him to deny he was a ‘fraudster’.

MEPs referred to reports that Greensill Capital’s loans to metallurgical conglomerate GFG Alliance were made on the basis of suspicious invoices which raised suspicions of fraud.

“At no time would we or my company be involved in financing debt that we knew to be fraudulent,” Greensill told the committee.

A flurry of messages

The FT first revealed in mid-March that Cameron – whose stock options in Greensill were once worth tens of millions of dollars – had approached figures in the Treasury and Downing Street last year in a quest to government assistance.

The new documents show how Cameron – who signs his “DC” messages – pressured an even wider range of government insiders than previously thought, including his old friend Michael Gove, the Cabinet Minister.

The three-month flurry of messages saw the former prime minister bet on flattery as he sought – unsuccessfully – to change the rules regarding Covid’s debt schemes to the benefit of his client Greensill Capital between March and May of Last year.

In one of 13 messages to Rishi Sunak, Cameron congratulated the Chancellor: “You are doing a great job – keep it up. In a text dated April 29 of last year, he said there had been tremendous progress in the negotiations between Greensill and the Treasury, “for which I thank a lot.” Sunak responded directly to only two of the texts.

‘One final point so I promise I’ll stop boring you’ – David Cameron bombarded ministers and officials with messages on Greensill © Ben Pruchnie / Pool / AFP via Getty

In May, as the Treasury turned down Greensill’s demands, Cameron tried to lean back on Sunak by saying, “I apologize for bothering you again. We should have come to this answer more quickly. “

The documents showed Cameron sending messages to other former colleagues, including Nadhim Zahawi, then minister of affairs. He texted Gove about Greensill’s situation. “I’m talking to Rishi now tomorrow.” If I’m still stuck, can I call you then? Thank you! DC. In another post, he praises the “good job” Gove is doing.

Cameron also wrote to Richard Sharp, a banker who was advising Sunak – and is now chairman of the BBC – to complain about the slow progress. “I’m afraid ministers need to get stuck a bit more,” he complained.

The former Prime Minister sent a message to Tom Scholar, the Permanent Secretary of the Treasury. “Meet up with Rishi for a nudge or a kick.” Love Dc [sic]”he said. In another post, he told Scholar” glad you’re in the driver’s seat. “

In a week in March, while texting Scholar almost daily, he apologized: “One last point so I promise I’ll stop bothering you. When Scholar didn’t sound very positive, he responded the next day by complaining and threatening to call cabinet ministers, “That sounds crazy. I’m now calling CX [Sunak], Gove, everyone.

New Treasury documents show how it consulted with the industry to allow supply chain finance providers access to the Bank of England’s Covid business finance mechanism – to dismiss the idea in June.

Cameron insisted he was only aware of Greensill’s financial difficulties in December of last year.

But Andrew Bailey, Governor of the Bank of England, said in a brief to the Treasury Committee that the BoE first became aware of a “potential weakness” in Greensill in March 2020, around the time that Cameron has started to step up his lobbying activities.

Concentration risk

Lex Greensill told the Treasury committee on Tuesday that the main reason for the group’s failure was Tokio Marine’s decision, its main insurance provider, not to renew its coverage, amid the Covid turmoil.

However, emails released in separate litigation show the insurer fired an underwriter for providing excess coverage to Greensill. The underwriter had been personally approached by Cameron.

The loans granted by Greensill were sold in Credit Suisse funds. Insurers provided coverage against defaults on the underlying debt, which was essential for the process to work.

Greensill said he took “full responsibility” for the collapse of his business and admitted that it presented a “risk of concentration that ultimately wiped out” the business and “over-reliance on it. insurance in general ”.

He insisted his company’s loans were backed by real assets, while admitting that up to 20 percent of the group’s loans last year were based on “future receivables.”

Documents released by the Treasury committee also shed light on how Greensill lobbied the UK’s Financial Conduct Authority, which is currently investigating the company.

The FCA has already addressed issues related to GAM, the Swiss asset manager who invested heavily in Greensill products and was forced to liquidate some of its funds in 2018. He questioned staff and searched through internal emails after a whistleblower raised concerns, the FT reported in 2019.

At the hearing, Lex Greensill declined to answer questions from Labor MP Emma Hardy about whether the FCA investigated Greensill when she was reviewing issues at GAM, saying he was not sure to be allowed to discuss it.

Separately in December 2020, Lex Greensill met with Chris Woolard, who was leading a review for the FCA in the unsecured credit market, to discuss how a Greensill company was running a program to leave NHS staff. cash their paycheck day by day.

Woolard asked “where does this make the money?” and Greensill said it was an “addition” for the NHS “as they are already making a lot from NHS contracts”, according to meeting notes.

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