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Johnson Urges Quick Inquiry as Greensill-Cameron Row Grows

Alex Morales and Kitty Donaldson
·4 min read

(Bloomberg) -- Prime Minister Boris Johnson said the results of an inquiry he ordered into how the now insolvent Greensill Capital secured U.K. government contracts should be published “quickly” and presented to Parliament.

Johnson’s government announced the probe on Monday, appointing corporate lawyer Nigel Boardman to examine how Greensill’s supply chain finance contracts work and how its representatives -- including former Tory Prime Minister David Cameron -- engaged with ministers.

Boardman should “have the maximum possible access and that of course will be presented to Parliament in due course,” Johnson said in a pooled interview Tuesday. “People have got questions that need to satisfy themselves on -- including me -- about how this supply chain finance stuff is meant to work.”

U.K.’s Cameron Breaks Silence on Greensill, Defends Lobbying

Johnson is trying to draw a line under a crisis that’s seen ministers come under fire for their interactions with Cameron, and his ruling Conservative Party accused of cronyism. The inquiry is due to report at the end of June.

But it’s also the latest twist in the relationship between Johnson and Cameron that’s had a profound influence on their careers. Both went to the prestigious Eton College and then Oxford University. Speculation about Johnson’s leadership ambitions dogged Cameron’s premiership, and the two men took opposing sides in the Brexit debate -- a decision that helped propel Johnson into Downing Street and Cameron out of office.

Now Cameron’s lobbying threatens to embarrass Johnson’s government.

Lobbying Effort

The probe follows revelations that Cameron directly approached Chancellor of the Exchequer Rishi Sunak, Health Secretary Matt Hancock, and two junior Treasury ministers to lobby on behalf of Greensill as it sought access to government coronavirus aid programs.

The government has said both Sunak and Hancock acted correctly. Cameron, who’s already been cleared of breaking the rules on lobbying, issued a statement Sunday defending his actions while acknowledging there are “important lessons” to be learned. On Monday, a spokesman for the former premier said he “welcomes the inquiry and will be glad to take part.”

Greensill collapsed in March in one of the most spectacular financial blow-ups of recent years. That has put thousands of jobs at risk at U.K. plants owned by Liberty Steel, part of the GFG Alliance, which relied on Greensill for financing.

The opposition Labour Party has ramped up pressure on Johnson’s government, saying it put taxpayers’ money at risk by accrediting Greensill to issue state-backed loans under its Coronavirus Large Business Interruption Loans Scheme. It summoned Sunak to answer questions in Parliament on Tuesday.

Junior Minister

But the government instead sent a junior business minister, Paul Scully, to answer questions, on the basis that the British Business Bank, which he said administers the CLBILS program “independently,” falls under the remit of the Department for Business, Energy and Industrial Strategy.

“Neither BEIS, nor HM Treasury had a role or were involved in the CLBILS accreditation decision for Greensill,” Scully told MPs.

Labour’s Shadow Chancellor Anneliese Dodds said Sunak is running scared of parliamentary scrutiny.

“It was the chancellor who needed to come to the House today,” Dodds said. “Yet the chancellor is frit of putting his name to those loan schemes.”

Earlier on Tuesday, Business Secretary Kwasi Kwarteng told a parliamentary committee he’d “never received a single phone call or WhatsApp” from Cameron and that “as far as I understand,” nor had his ministers or officials.

Treasury Talks

Though the Business Department was responsible for the CLBILS program, records of meetings between Greensill and Treasury officials show that the lender lobbied Sunak’s department to raise the cap on the size of loans it could issue to 200 million pounds ($275 million) from 50 million pounds.

Greensill was one of just three non-bank lenders accredited under the program, Sunak told Dodds in a letter last week. He also said the British Business Bank began investigating Greensill’s compliance with the terms of CLBILS in October, and that government guarantees for the loans it issued are “suspended on a precautionary basis.”

Sunak last week released private texts to Cameron in which he said he’d “pushed” his officials to consider helping Greensill Capital following a request from the former premier.

At the time, Greensill wanted to tap the government’s Covid Corporate Finance Facility program administered by the Bank of England. Its request for terms to be altered to grant it access were ultimately rebuffed after at last half a dozen meetings between senior Treasury officials and company representatives.

Johnson’s spokesman, Max Blain, told reporters on Tuesday the inquiry will not have legal powers but will have the “necessary information.” It won’t have the power to determine whether the ministerial code was breached.

(Updates with comment from Labour’s Dodds, Business Minister Scully from ninth paragraph)

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