Monday 6 July 2020

The Post Office cover up, part 2: They wanted it all to go away

For part 1 of this article, click here.

I think it is essential to know the identities of the people who took one look at the can of worms Second Sight had opened and decided the best course of action was to spend millions trying to bury it.
Chris Aujard
In between Second Sight publishing their interim report in July 2013 and a Post Office board meeting in September 2013 there appears to have been a realisation that the scale of the scandal Second Sight were methodically uncovering had the potential (at the very least) to halt the continuing trajectory of the Post Office and put an end to its aims of becoming profitable.

Up to September 2013 the Post Office General Counsel (also known as the GC - the top company in-house lawyer) was Susan Crichton, who had helped set up August 2013's Complaint and Mediation Scheme.

In September 2013, there was a Post Office board meeting. Ms Crichton left the organisation shortly after that meeting. Ms Crichton has not responded to my request for an interview over what happened.

In October 2013 a new interim general counsel appeared. On his LinkedIn page Chris Aujard describes himself as a "seasoned and commercially focussed GC... comfortable... managing major disputes and litigation."
But what was he at the Post Office to do? Perhaps we can get some kind of idea from a revealing article in General Counsel magazine in the Autumn of 2015. The article does not mention the Post Office, but it was published shortly after Mr Aujard left the organisation.
"The bigger the corporation, the more likely the crisis" hoots the article's anonymous author "what they don’t see is the general counsel busy behind the scenes with the mop and bucket."
Oh, do go on:
"There’s no hard and fast rule as to who takes the lead in a crisis, of course. The clean-up team will depend on the nature of the emergency and company protocols, not to mention the judgement of the CEO. But usually, says veteran general counsel Chris Aujard, ‘at some point, no matter where the crisis enters the organisation, the GC gets involved.’"
In the magazine piece, Aujard comes on strong as the go-to man, especially when the brains of the executives around him are falling apart like wet cake: 
"‘They tend to go down the route of denial" he says, "“This can’t be happening, you’ve got it wrong, everyone’s got it wrong”. They might go through the process of grudging acceptance: “Well, ok, maybe there is something in it.”"
So where next? Aujard again: 
"There’s a skill that general counsel typically have, which is to turn around to the C-suite and say, “look, this is not something that you should push to one side and deal with tomorrow. This is today’s issue and it’s pressingly urgent – and by the way, it could cost some of you your jobs.”
Ah yes. Self-preservation. Always a way to motivate people. But what about the public-facing response to a crisis? How does Aujard recommend addressing that?
"‘You can’t send stuff out saying, “it’s all our fault, terribly sorry, we’ll pay you any compensation you ask for!”’
Of course not. 

Given the period Aujard was at the Post Office almost exactly matches the birth and sad, quiet death of the mediation scheme (Autumn 2013 - Spring 2015), and given what we know about his experience, it seems reasonable to assume one of his jobs was making the growing Horizon scandal go away. 

This he temporarily did, infuriating MPs, prolonging the agony for people whose lives had been ruined and setting things up for a future High Court case which was to shred the Post Office's reputation and cost it more than £100m.

Mr Aujard might be pleased with what he achieved (I've asked him for a comment and have so far received nothing), and it may be that he did lead the way with his mop and bucket, but in terms of executive responsibility he was very much a monkey to the Post Office board's organ-grinder.

In her evidence to the BEIS Select Committee, former Post Office CEO Paula Vennells reveals that:
"Post Office decisions in relation to the [Complaint and Mediation] Scheme were discussed in the first instance by an ad hoc Board sub-committee, consisting of the then Chair (Alice Perkins), myself, and two non-executive directors. Meetings were attended by, among others, the General Counsel and the company secretary."

Alice Perkins, CB
We have already met Mr Aujard, and we know Ms Vennells of old. What of the other characters mentioned in the above statement?

Alice Perkins seems to have ghosted around the upper echelons of the civil service for most of her career. A former underling from the Cabinet Office who got in touch recently described her as "patronising... wooden and inarticulate", complaining she "couldn't connect with people at all... we used to see her about twice a year and she would give speeches that made you numb with boredom."

Ms Perkins was the first to become aware of the parliamentary interest in the Horizon scandal when James Arbuthnot MP buttonholed her at a function in 2011. 

He said that as the new Chair of the Post Office, she really ought to do something. 

To her credit, Ms Perkins set in chain the conversations which let to Second Sight's 2012 investigation, and by all accounts she was very keen to get to the truth. At first. Then she sort of drifted away from things, and left the Post Office in December 2015. 

When I contacted her, she replied: "Thank you for the suggestion you might interview me. I won't be taking up your offer." 

Not at all patronising.
Alwen Lyons, OBE
Alwen Lyons OBE was the company secretary between 2012 and 2018 and a Post Office lifer, starting as a graduate trainee in 1984. Ms Lyons has proved impossible to track down, though several people have left me in no doubt as to where her loyalties lay. I am told by a former Post Office senior insider, that by the summer of 2013, she was highly attuned to the concern at exec level about how much the complaint and mediation scheme could end up costing the Post Office.

Vennells, Aujard, Perkins and Lyons know everything. But it's not just them.

Short arms

The government has always distanced itself from the Post Office's handling of the Horizon scandal, repeating the tedious mantra that although the Post Office is publicly-owned, it: 
"operates as an independent, commercial business within the strategic parameters set by government.”
But that's not all the story. The mask first slipped on 23 May 2019 at the High Court when the Post Office tried to delay paying legal costs to the claimants after losing the first trial. The Post Office QC gave as a reason
"It is a question of arranging the funds...  and talking to our shareholder about it."
This contrast baldly with a government statement statement issued in January this year:
"government did not play a day-to-day role in the litigation or on the contractual and operational matters that were at the heart of it."
Talking to the government about the timing of a litigation payment is precisely a day-to-day operational matter.

When I presented this "arm's length, independent" plop to the senior Post Office insider who helped inform my work on this year's File on 4, Private Eye and Radio 4 series, they nearly spat out their drink with laughter. 

The insider told me that whilst they were there, Post Office staff with varying levels of seniority were running in and out of BIS the whole time. They also told me that culturally, within the Post Office, senior management priorities revolved around what the government wanted. What the government wanted, I was told, to the exclusion of almost anything else, was for the Post Office to become profitable.

The shareholder's eyes and ears

Another thing which gives lie to the government's position is that there has been a government representative sitting on the board of the Post Office as a non-executive director since it split from Royal Mail eight years ago. 

First was Susannah Storey (April 2012 to March 2014), second was Richard Callard (March 2014 to March 2018). The third and current incumbent is Tom Cooper. I met Mr Cooper last year. He told me he was a reader of this blog. Hello Tom.
Susannah Storey and Richard Callard
Although the Business Department (formerly BIS, now BEIS) technically "owns" the Post Office - which means it is the responsibility of the Secretary of State for Business, Storey and Callard came from an outfit called ShEx or SharEx, which was short for Shareholder Executive. 

ShEx was a group of supposed industry titans who were brought in to oversee the government's interest in publicly-owned bodies (eg Highways England, Nuclear Decommissioning Authority), many of which were being run as quasi-autonomous companies.* 

In 2015 ShEx became part of UKGI - United Kingdom Government Investments. UKGI is a company wholly owned by the Treasury, and it is there Mr Cooper comes from.

They wanted it all to go away

Whilst it would be fascinating to if know Storey and/or Callard were on the "ad hoc Board sub-committee" dealing with Second Sight and the complaint and mediation scheme between 2013 to 2015, it doesn't really matter. Vennells' evidence to the BEIS select committee is that this sub-committee only took decisions "in the first instance".

This suggests everything around the mediation scheme - including the Post Office's "duplicitous" reining back on its promises to MPs and Postmasters - was approved by the board, on which sat a government representative. 

Now, thanks to Paula Vennells' evidence, we finally have confirmation of the government's closeness to the Post Office:
"UKGI directors were fully engaged in the discussions and Post Office (including myself and each subsequent Chair) had conversations with their senior line director and the Chief Executive of UKGI too from time to time. The present UKGI incumbent director [Tom Cooper] joined the Board in 2018 with a fresh pair of eyes.... He was fully engaged on the Board, sub-committee and with ministers and lawyers at BEIS."
Tom Cooper
Vennells' statement is clear. She is saying our elected Ministers knew what the Post Office was up to. Government lawyers knew what the Post Office was up to. Civil servants and business experts like Susannah Storey, Richard Callard and Tom Cooper knew what the Post Office was up to. And they, at the very least, let it happen.

Incidentally Vennells' description of Tom Cooper's effect on Post Office thinking contains the single worst sentence of lawyer-approved drivel in the history of writing:

"His questioning was challenging and because of that it was helpful; it did not lead to any different outcomes."

Ms Vennells appears to be suggesting that Mr Cooper was challenging, useful and completely ineffective all at the same time. The genius responsible for this screed ought to take a good look at themselves. 

Vennells' shareholder-knew-everything take contrasts starkly with Business Minister Lord Callanan's recent suggestion that the government was "misled" by the Post Office. According to Ms Vennells, the government knew and knows everything. 

It is no wonder backbench MPs and campaigners are demanding a judge-led inquiry rather than the current proposed "independent review". From Vennells' letter it's obvious responsibility for the Post Office's decisions over the last ten years goes deep into the government machine. The current terms of the independent review would not begin to touch it. 

Shortly after the Panorama on 8 June 2020 I got a call from a senior person within government who wanted to talk about this proposed review. They told me:
"we are limited in what we can do - the terms of the review were kicked between BEIS and No 10 before they finally reached an agreement on what the terms should be and how it should be structured, but the officials [civil servants] weren’t happy with anything. They didn’t want a review, they didn’t want an inquiry or anything. They wanted it all to go away."
That is a wholly irresponsible position for anyone in government to take. It'll be interesting to see if parliament is capable of doing anything about it, or if the existing proposed terms of the review win out. 

I'm off to get a tattoo of "His questioning was challenging and because of that it was helpful; it did not lead to any different outcomes". It's a good epitaph for a journalist.


Part 1 of this article: How and when the cover-up happened


At the time, the Post Office was officially a government-owned Arm's Length Body. Confusingly, responsibility for Arm's Length Bodies lay not at the Treasury, nor the sponsor department (in this case BIS/BEIS), but with the Cabinet Office.

Some time between 2016 and 2019, though no one has explained why, the Post Office ceased to become an official government Arms Length Body and turned into a Public Non-Financial Corporation.

If this sort of thing makes you want to cry with boredom, wait till you start digging into Accounting Officers and Framework Agreements.


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