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Former UK Prime Minister David Cameron has come under fire, after it emerged that he had lobbied for now-defunct Greensill to gain access to taxpayer funds – just months prior to its collapse. Cameron maintains that he has done nothing illegal – but has acknowledged his mistakes, saying there are important lessons to be learned. The UK government has announced that it will be launching an independent review into the former Prime Minister’s involvement, as well as contracts that were handed to Greensill Capital. – Jarryd Neves
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U.K. to Examine Former Prime Minister David Cameron’s Greensill Role
Inquiry part of a broader investigation into government contracts with the bankrupt financing company
LONDON—The U.K. government on Monday announced an independent review into contracts it handed the now-defunct Greensill Capital and the role played by former Prime Minister David Cameron in lobbying on the company’s behalf for access to taxpayer funds just months before its collapse.
The government said that a review led by lawyer Nigel Boardman would look at the government’s use of supply-chain financing and Greensill, a spokesman for Downing Street said. The review will look at whether the company provided good value for taxpayers and how its contracts were secured.
Greensill’s implosion has spread damage across the world of finance, hitting its financing partner Credit Suisse Group AG and its biggest outside investor, a fund managed by SoftBank Group Corp. 9984 0.80%
Greensill’s tight connections with the world of politics have also raised concerns about its relationships with government actors in the U.K. and elsewhere.
A representative for Greensill, which filed for bankruptcy last month after it lost credit insurance that was crucial to its business, declined to comment. Greensill had a contract to provide supply-chain financing, used by companies to stretch out the time they have to pay their bills, to the government-funded National Health Service.
The government probe comes amid growing questions over the role of Mr. Cameron—Britain’s prime minister between 2010 and 2016—and his ultimately unsuccessful attempt to get Greensill access to state-backed funding as the Covid-19 pandemic took hold last year.
Mr. Cameron, who joined Greensill as an adviser in 2018, has denied doing anything improper.
Mr. Cameron had repeatedly petitioned U.K. Chancellor of the Exchequer Rishi Sunak and junior treasury ministers, according to text messages and other messages that were made public. The former prime minister’s advances have raised questions whether Britain’s rules around government lobbying are strict enough and how easy it is for the well connected to influence government decisions.
The review is aimed at being “completely transparent,” said a spokesman for the British Prime Minister Boris Johnson, adding it would be published promptly. Opposition Labour lawmaker Rachel Reeves said the probe “has all the hallmarks of another coverup by the Conservatives.”
In a statement issued Sunday, Mr. Cameron, who joined Greensill in 2018, said that he had lobbied on behalf of his employer but denied breaking any rules. A government watchdog recently cleared Mr. Cameron of failing to join a lobbying registry as it concluded he was a Greensill employee.
“While I understand the concern about the ability of former ministers—and especially prime ministers—to access government decision makers and the sense, and reality, of ease of access and familiarity, I thought it was right for me to make representations on behalf of a company involved in financing a large number of U.K. firms,” Mr. Cameron said.
Greensill was founded in 2011 by former Morgan Stanley and Citigroup banker Lex Greensill. The firm specialized in supply-chain finance, a form of short-term corporate lending.
Greensill planned to outmaneuver big banks that dominate the industry by using better technology and offering the service to more clients. Many of Greensill’s clients were blue-chip companies, though it also made other, riskier loans that were for longer terms or to borrowers that were more precarious.
In the early years of Greensill Capital, Mr. Greensill had worked as an adviser to the U.K. government under Mr. Cameron and carried a government business card with a Downing Street email address. In 2017, Mr. Greensill was made a Commander of the British Empire for services to business.
At Greensill, Mr. Cameron regularly attended senior-management meetings and contributed questions and advice, according to people familiar with the meetings. He also joined Greensill executives at meetings with potential clients, according to people familiar with those meetings.
Mr. Cameron said Sunday that he wasn’t involved in the day-to-day running of the business and had been hired to work for Greensill 25 days a year. He said his duties included giving geopolitical advice to Greensill executives, helping to win new business and representing the company at events. He also said that part of his pay was in the form of stock options.
Greensill had been planning an initial public offering of shares. In early 2020, investment bankers told Greensill an IPO could value the company at around $40 billion, the Journal has previously reported citing people familiar with the matter.
At Greensill, Mr. Cameron’s role often involved helping the company get access at the top levels of governments around the world.
In January 2020, Mr. Cameron also accompanied Mr. Greensill to a meeting with the Saudi Prince Mohammad bin Salman. Mr. Cameron’s statement said that he was in Saudi Arabia to advise on the country’s forthcoming leadership of the Group of 20 nations, and also noted that the Saudi sovereign-wealth fund, the Public Investment Fund, was a major Greensill backer through its investment in the SoftBank Vision Fund.
“Greensill planned to open a new regional office in Riyadh as part of its international expansion and I wanted to assist in this effort,” he added in the statement.
On April 2, 2019, Mr. Cameron was in a small party of senior Greensill executives that met with representatives of SoftBank Group Corp.’s Vision Fund before the Vision Fund’s decision to acquire a stake in the finance company, according to an internal SoftBank document. The Vision Fund invested $1.5 billion in Greensill in 2019. A SoftBank spokesperson declined to comment.
In late 2020, Mr. Cameron had agreed to work on building out a new business Greensill was developing, according to people familiar with the matter.
Earnd, a platform that allows employees to get paid on a daily basis instead of waiting until payday and so avoid payday loans, was already working with the National Health Service. Mr. Cameron was given the task of writing email communications to the top 200 potential Earnd clients identified by Greensill to recommend that they also start working with the firm, the people said.
As the Covid-19 pandemic hit last spring, Mr. Cameron reached out to U.K. Treasury officials to try to ensure Greensill had access to the Covid Corporate Finance Facility under which the Bank of England purchased short-term debt from large companies to ease cash-flow troubles. The rules stated that finance companies weren’t eligible for the loans.
Mr. Cameron sought to get the rules around eligibility to the facility changed.
The U.K. Treasury recently released two text messages sent last April by Mr. Sunak to Mr. Cameron. In the first, Mr. Sunak said he was stuck in back-to-back meetings but would call Mr. Cameron back.
In the second he said: “I have pushed the team to explore an alternative with the Bank that might work…No guarantees, but the Bank are currently looking at it.” Ultimately, the Bank of England didn’t grant Greensill access to the financing.
Separately, Greensill was also a lender under another of the government’s Covid-19 loan programs—the Coronavirus Large Business Interruption Loans Scheme, which allowed finance companies to make government-backed loans to British companies. In June, Greensill unsuccessfully pushed Treasury officials to raise the cap on the loans it could issue under that plan to GBP200 million, equal to about $275 million, from GBP 50 million, according to documents released by the Treasury.
“Concern has been raised about the nature of my contact, via text message and email. I understand that concern, but context is important: at that time the Government was—quite rightly—making rapid decisions about the best way to support the real economy and welcomed real time information and dialogue,” Mr. Cameron said.
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Appeared in the April 13, 2021, print edition as ‘U.K.’s Cameron Probed For Role at Failed Firm.’
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