U.K. Government Defends Sunak Over Texts to Cameron on Greensill

(Bloomberg) -- The U.K. government said Chancellor of the Exchequer Rishi Sunak followed the rules in his dealings with David Cameron, after the former prime minister lobbied him to help Greensill Capital access state-run coronavirus assistance programs.

The Treasury late Thursday released two text messages Sunak sent to Cameron last year, in which the chancellor said he “pushed” his officials to consider ways of helping Greensill following the former premier’s request. That led the opposition Labour Party to question whether Sunak had breached the ministerial code, calling for an investigation into the matter.

The furore over Greensill, which has since collapsed, represents a major test of Sunak’s credibility and integrity, and Labour is seeking to ramp up pressure on the chancellor to reveal more details of his interactions with Cameron and with officials in his own department. But Prime Minister Boris Johnson’s government made clear Friday it supports the way Sunak handled Cameron’s request.

“I don’t think there’s any issue here of impropriety at all, he’s followed absolutely to the letter what you should do,” Transport Secretary Grant Shapps told BBC Radio on Friday. “It actually says in the ministerial code if you get contacted like this, what you must do is forward it on and let it be dealt with by the usual channels, which is exactly what happened.”

What is known of Cameron’s lobbying on behalf of Greensill

Cameron contacted Sunak as Greensill was seeking rule changes to the government’s Covid Corporate Finance Facility program run by the Bank of England, so it could access the funding. Its request was ultimately declined.

‘Pushed’

“I have pushed the team to explore an alternative with the Bank that might work,” Sunak replied in one text message to the former prime minister sent on April 23. “No guarantees, but the Bank are currently looking at it.”

Sunak’s texts were released following a Freedom of Information request. The Treasury said in its disclosure that Cameron had also contacted by telephone the junior Treasury ministers John Glen and Jesse Norman. Cameron’s messages to Sunak were not released.

“The text messages raise more questions than they answer,” Angela Eagle, a Labour member of Parliament who sits on the House of Commons Treasury Committee, said in an interview Friday. She questioned why Greensill, which wasn’t a regulated bank, was granted so many meetings with senior officials.

Labour’s Shadow Chancellor Anneliese Dodds said late Thursday Sunak “may have broken the ministerial code.”

‘Accelerated Treatment’

The text messages suggest “Greensill Capital got accelerated treatment and access to officials, and that the chancellor ‘pushed’ officials to consider Greensill’s requests,” she said. “The Chancellor’s decision to open the door to Greensill Capital has put public money at risk.”

Meanwhile the Liberal Democrats said a “stench of cronyism emanates from this government.”

In the April 23 text message, Sunak told Cameron that “Charles should be in touch,” a reference to Charles Roxburgh, a senior civil servant in the Treasury who held at least six calls with Greensill executives between April and June last year.

Previous documents released by the Treasury about those meetings show how Greensill sought rule changes to the CCFF to enable it to access the program’s funds in order to help channel funding to small and medium-sized companies.

Greensill was also an accredited lender under another of the government’s coronavirus loans programs -- the Coronavirus Large Business Interruption Loans Scheme -- and sought to persuade Treasury officials to raise the cap on the loans it could issue under that plan to 200 million pounds ($275 million), from 50 million pounds.

Collapse

Greensill collapsed in March in one of the most spectacular financial blow-ups of recent years, sending shock waves through Swiss banking giant Credit Suisse Group AG and two of Japan’s largest firms.

Lex Greensill’s Dreams of a $7 Billion Empire Unraveled in Days

The company, which specialized in financing invoices, was founded by Lex Greensill, an Australian financier who was given significant access to the U.K. government during Cameron’s premiership. Cameron then became an adviser to the firm and lobbied officials on its behalf. The former premier has already been cleared of unregistered lobbying by the U.K. watchdog.

Also on Thursday, the Treasury published a reply from Sunak to a letter from Dodds calling for a probe into Greensill’s access to the Covid aid programs.

Sunak said Greensill’s requests were “rejected,” but that “it is right that HM Treasury listened to -- and gave due consideration to -- all potential options to support businesses to survive the pandemic.”

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