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Life after politics can be a daunting prospect. But, for some, after many years in government, possibly as career politicians, entering the private sector also opens-up a host of opportunities, and financial reward that were once, technically, off-limits.
No-one goes into politics in the UK to make money, just ask Boris Johnson. However, the status that comes with having held a position in high-office often attracts significant and lucrative opportunities for those once they leave the corridors of Westminster behind. George Osborne is a notable example, who, among the 10 private sector jobs he undertook after leaving office, secured a £650,000 a year advisory role with BlackRock. Tony Blair in early 2008 joined US investment bank JP Morgan as a ‘senior advisor’, reportedly earning him six-figures for three 90-minute appearances a year.
The Advisory Committee on Business Appointments (Acoba) is the government watchdog that sets the rules for out-going MPs, Ministers and other senior civil servants on what they can and cannot do within the first two years of leaving office. Current guidelines suggest Ministers wait a minimum of three months after leaving government before undertaking a paid private sector role and are required to seek advice by the committee who will assess the merits of the role, and whether, it will be seen as a reward for previous work carried out in office, or whether the former post will give rise to an unfair advantage, at which time, a prospect may be deemed ‘unsuitable’. However, Acoba has no official powers to enforce, and there are several examples where Ministers have chosen to ignore recommendations, including the incumbent Prime minister Boris Johnson, who re-joined the Telegraph immediately after his brief tenure at the helm of the Foreign Office.
Former Prime Minister, David Cameron, has also recently made headlines after his ties to Greensill Capital were exposed. He faces allegations that he exploited his position and his network in order to seek preferential access to state funding for the bank, claims he strongly denies. The now collapsed bank, led by disgraced financier Lex Greensill has left the UK taxpayer with a bill of more than £1 billion.
As an advisor to the bank, he lobbied government heavily and in return, was handsomely rewarded. While no figures have been made public, he admits to having a large economic interest in the bank’s success, telling MPs: “By anyone’s terms, it was a generous salary”.
Appearing in front of the Treasury Select Committee and the Public Accounts Committee last week, Cameron was grilled for four hours over a series of now public messages he sent to Ministers, MP’s and other government officials lobbying on behalf of the bank. Such was his voracity and insistence that Labour MP Angela Eagle accused him of effectively stalking, rather than lobbying, while another MP criticised him for bringing the office of the Prime Minister into disrepute.
Malcolm Rifkind, former Foreign Secretary and Chairman of the Intelligence and Security Committee, is another politician who found himself in hot water, following a ‘cash for access’ scandal in 2015 while still in office. Since choosing to stand down, he has taken on several board positions at various advisory outfits, including 17 Arm, a firm involved in the questionable business of unregulated litigation funding and asset recovery.
Founded by the controversial businessman Paddy Meade, the 8th Earl of Clanwilliam, the Dubai based company is not a member of the Association of Litigation Funders (ALF) and therefore, unlike others in the field, does not operate under any established codes of conduct, nor does it raise capital for cases on the open market through institutional investors like others, leaving a large question mark over the source of its funds.
17 Arm made recent headlines when The Guardian reported they were funding the case bought by Alexander Tugushev against his former associate, Vitaly Orlov, which has been playing out in the British courts since 2018.
Tugushev, himself a former government official in his role as Deputy Chairman of the (then) State Fisheries Committee of the Russian Federation, is a convicted fraudster, who, in 2007, was sentenced to six years in prison in Russia for abusing his position in public office and taking illicit payments and bribes. He is also the subject of several other open criminal investigations in Russia, including an indictment for fraud committed against Mr Orlov that is now procedurally attached to a separate case in which Tugushev is subject to an international arrest warrant on charges related to fraud committed against Mr Alexander Sychev.
It is not clear who is financing 17 Arm regarding this case, with Tugushev going so far as to pay £7.8 million in securities to cover legal costs to avoid identifying his backers, who are alleged to be possible rivals of Orlov’s fishing company Norebo and individuals from the Russian criminal under-world looking to cash in.
The practice of former government officials using their networks and experience to cash-in on lucrative business deals is not new. In fact, why would a firm add a costly former government official to their payroll if not because of the doors they can open? Across every industry almost every outgoing official in recent years, from both sides of the chamber have moved into the private sector.
In most cases, as questionable as these relationships and deals may look from the outside, no rules have apparently been broken, instead the system is simply manipulated to the benefit of individuals like Lex Greensill, and even wanted criminals like Tugushev, who try to gain credibility by riding the tailcoats of these connected and influential individuals.
For the likes of respected figures such as Rifkind and former public prosecutor, Ken Macdonald to be tied to such individuals demonstrates the need for reform and strengthening of Acoba, which has so far proven ineffective in ensuring former officials do not bring into question the integrity of the British political institutions.
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