THE UK Government has been accused of a “total failure of due diligence” after reports that Tory peer Michelle Mone secretly received millions from a firm she helped win lucrative Covid contracts.
According to today’s Guardian, the Glasgow East End baroness and her children received £29m from the profits of PPE firm Medpro.
Lady Mone helped the company secure a place in the “VIP lane” used by the government during the pandemic, where they went on to secure contracts worth more than £200m.
She contacted Michael Gove, who was then a Cabinet Office minister, and Theodore Agnew, then a minister for procurement, using their personal email addresses.
Lady Mone told them large quantities of PPE could be procured via “my team in Hong Kong”.
An internal investigation by HSBC – obtained by the paper – reportedly shows a money trail with Ms Mone’s husband, Doug Barrowman, transferring tens of millions in PPE Medpro profits through a network of offshore entities.
The bank’s investigation noted that “large value inter-account transfers” originating from the firm were being routed through the businessman’s offshore accounts, often crediting and debiting within minutes of each other.
In September 2020, Mr Barrowman was said to have been paid at least £65m from the deal into an Isle of Man trust.
Transfers were then reportedly made to his personal HSBC bank account.
The following month that account is said to have transferred £28.8m to another entity called the Keristal Trust, which was set up by Mr Barrowman along with another individual linked to PPE Medpro and whose beneficiaries were Lady Mone and her children.
Smaller sums were also passed as “gifts” to employees of Mr Barrowman’s financial services firm the Knox Group, it was claimed.
The internal bank report described the money flows as “unusual activity”, noting a concern that Mr Barrowman “may be attempting to conceal the true origins of the funds through multiple layers of transactions creating a distance between the receipt of PPE funds and the final beneficiaries”.
Referring to Lady Mone, it concluded that the transfers “suggest a UK peer in the House of Lords has benefited from a contract with the UK government”.
Both the Baroness and Mr Barrowman have long denied any involvement in PPE Medpro.
The report was raised in the House of Commons on Thursday morning, but Commons Speaker Sir Lindsay Hoyle warned MPs that under parliament’s rules they could not criticise the conduct of Lady Mone.
Labour deputy leader Angela Rayner hit out at a “total failure of due diligence” as she asked about PPE Medpro winning a contract for personal protective equipment and “profits made possible through the company’s personal connections to ministers”.
Asking an urgent question in the Commons, Ms Rayner said: “What due diligence?
“Last night, documents seen by the Guardian revealed that yet another case of taxpayers’ money was wasted, a total failure of due diligence, and a conflict of interest at the heart of Government procurement.
“In May 2020 PPE Medpro was set up and given £203 million in Government contracts after a referral from a Tory peer.
“It now appears that tens of millions of pounds of that money ended up in offshore accounts connected to the individuals involved, profits made possible through the company’s personal connections to ministers and the Tory’s VIP lane that was declared illegal by the High Court.
“Yet ministers are still refusing to publish correspondence relating to the award of the Medpro contract because, they say, the department is engaged in a mediation process.”
Ms Rayner called for the Government to release records relating to the awarding of the contract.
She said: “Can the minister today tell us if that mediation process has reached any outcome and what public funds have been recovered, if any?”
She added: “There are rightly separate investigations into Baroness Mone’s conduct, but the questions this case raises are far wider.
“It took a motion from the opposition to force them to release records over the Randox scandal. Will they agree today to do the same in this case without being forced by the House? And can he say now what due diligence was performed in awarding the Medpro contract?
“Today’s reports concern just one single case, but this Government has written off £10 billion alone in PPE that was deemed unfit for use.
“Ministers appear to have learned no lessons and have no shame. As families struggle to make ends meet, taxpayers will spend £700,000 a day on the storage of inadequate PPE.”
Health minister Neil O’Brien said a “satisfactory agreement” has not been reached with PPE Medpro about its contract.
He told the Commons: “It’s been widely reported that it had an underperforming contract, and let me set out what we do in those cases.
“The first step is to send a letter before action, which outlines a claim for damages. And that is then followed by litigation in the event that a satisfactory agreement has not been reached.
“And as to the honourable lady’s question directly, we haven’t got to the point where a satisfactory agreement has been reached at this stage.”
The SNP’s Brendan O’Hara said: “From the moment we learned about the existence of this VIP lane for the politically connected, it was almost inevitable that it would come to this.
“This get-rich-quick scheme by fast-tracking the cronies, their politically connected pals, and their colleagues was never going to end well.
“And I suspect that today’s revelations, however shocking, are simply the tip of a very large iceberg, an iceberg which could yet sink this ship of fools.“
The MP added: ”Now that we have one Tory politician who has absolutely no background in PPE procurement, personally making millions out of these contracts, can I ask, does the government plan to proactively investigate how many others there are like this in their ranks or are they content to sit there and watch this dripping roast of sleaze, corruption and scandal unfold on its own?”
Mr O’Brien said the government would “take action whenever we find underperforming contracts.”
“I would simply say that all of us were desperate to get PPE for our health and social care workers and everybody responding to the pandemic. And inevitably there were going to be some of those contracts that did not perform.”
He said it was wrong to suggest that there was a “greater sense of success” for companies with a political connection.
Lady Mone has already been placed under investigation by the House of Lords commissioner for standards.
Separately, PPE Medpro has become the subject of a potential fraud investigation by the National Crime Agency.
In April this year, National Crime Agency officers searched several addresses, including Lady Mone and Mr Barrowman’s mansion on the Isle of Man.
David Cameron made Ms Money a peer in 2015, appointing her as his business czar. She has not voted in the Lords since September last year and has not spoken in a debate since 2020.
Downing Street would not be drawn on the allegations around Baroness Mone.
The Prime Minister’s official spokesman said: “The Department of Health are engaged in a mediation process with the company involved so I can’t get into the specifics of the contract or the case.
“On the high-priority lane more broadly, it was set up at a time of significant global competition for PPE.
“Suppliers and individuals were rightly passing on offers of support directly to their local MPs, to healthcare professionals, to civil servants, to ensure we’ve got that PPE to the frontline health care professionals.”
Being referred to the high-priority lane “was emphatically not a guarantee of a contract and indeed, nearly 90% of offers referred through the route were unsuccessful”, the spokesman said.
Lady Mone took to Twitter on Thursday afternoon, sharing a picture with the words: “Don’t believe everything you read or everything you think.”
— Lady (Michelle) Mone OBE (@MichelleMone) November 24, 2022
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