David Cameron denies any role in the collapse of Greensill Capital

DAVID CAMERON, Britain’s former Conservative prime minister, went on a camping trip in Saudi Arabia with Lex Greensill, took his private jets on business and personal trips, and assiduously lobbied government officials and ministers on behalf of the failed Australian financier. But, to judge from the evidence he gave a parliamentary committee on May 13th, Mr Cameron was blissfully unaware of Greensill Capital’s problems and was not responsible for any of the major decisions at the firm. Given that his lobbying efforts also resulted in failure, Mr Greensill may be wondering precisely what he was getting in return for Mr Cameron’s generous remuneration.

In the spring of last year, when many firms faced ruin as the government imposed a country-wide lockdown to halt the spread of covid-19, Mr Cameron sent a barrage of texts, WhatsApp messages, emails and phone calls to ministers and senior Treasury officials. He was urging them to tweak pandemic-support programmes for businesses so that Greensill could distribute public loans, as banks did. MPs raised serious questions about Mr Cameron’s judgment and whether he acted in an appropriate manner.

The whole affair has certainly been deeply embarrassing for Mr Cameron. Photographs have been published of him on that camping trip with Mr Greensill, on which they lobbied Crown Prince Muhammad bin Salman for business in Saudi Arabia. His communications with the government, some of them cringeworthy, have also been disclosed as part of the enquiry by the Treasury Select Committee (TSC). Texts to Sir Tom Scholar, the permanent secretary of the Treasury, were signed off “Love Dc”. When the officials declined to change the rules of the Covid Corporate Financing Facility in Greensill’s favour he texted Sir Tom that this was “bonkers”, adding: “Am now calling CX [the chancellor of the exchequer], Gove, everyone” in the manner of a schoolboy threatening to tell the teacher. “Love Dc” was now replaced with “Best wishes. Dc”. Eight minutes later he texted the chancellor. To its credit, the Treasury stood firm. So relentless was Mr Cameron’s effort—on 56 occasions—that Angela Eagle, an opposition Labour MP on the committee, said it was “more like stalking than lobbying”.

Over almost two and a half hours of questioning by MPs, Mr Cameron avoided giving substantive answers on Greensill’s business, the reasons for its collapse and allegations of fraudulent conduct at the firm. He told the TSC that he was not on the credit committee of Greensill, not involved in operational decisions and unaware of many issues. He did acknowledge that he had used the firm’s fleet of private jets for personal as well as business travel, but repeatedly declined to say how much he hoped to make from his shares (reported to be in the tens of millions of pounds). Nor did he reveal what his salary was, except to say it was more than the £150,000-odd a year that he earned as prime minister.

Greensill’s basic business model was straightforward supply-chain finance: it offered firms the money from invoices they issued upfront in return for a fee. It spruced this up by packaging up its loans as bonds it could sell to investors. The problem came when the firm extended too much credit to too few firms. As questions arose over the ability of debtors to settle their bills, investors took fright and withdrew credit lines. Greensill’s failure will have real consequences for the workers at cash-strapped companies which relied upon it for finance and for investors who have taken losses. Greensill’s banking operation is already subject to a criminal probe in Germany. The wider fallout will probably result in tougher regulation of supply-chain finance in Britain. But it is Mr Cameron’s involvement that is attracting the most intense political attention. As the economy collapsed at a record pace in March and April last year because of the pandemic, many firms faced failure. But few had the access that Greensill Capital acquired through hiring Mr Cameron. He put them in what one MP called a “VIP lane”, with access to high-level contacts. Mr Cameron’s lobbying efforts have only emerged at all because of dogged investigative journalism by the Sunday Times and the Financial Times.

Nigel Boardman, a well-regarded lawyer, is conducting an inquiry for the government alongside several parliamentary probes. The result will be a tougher set of rules on political lobbying. More transparency on the dealings between private firms and government can only be a good thing—no matter how embarrassing it proves for those involved.