Brown envelopes full of cash, discrete transmissions of funds to an offshore bank account, a late night meeting in a deserted car park.
All dramatic scenes suitable for a Hollywood thriller, but the reality of how people feed at the trough of corruption in Tower Hamlets is far more mundane.
Many payoffs are carried out in plain sight but because of the sheer audacity of the method of operation are never seen.
All of them make the residents of a poor borough even poorer. Our work over the last six years and the missing parts of the corruption jigsaw to be found in the Poplar Papers provides an insight into the mechanics of corruption.
To date we have found no illicit use of anonymous brown envelopes.
Money for nothing
One of the simplest ways for an employee at London Borough of Tower Hamlets council (LBTH) to get some cash is to do nothing. It works like this.
An employee lodges a formal complaint, on completely fictious grounds, with the threat of legal action against LBTH in the wind.
A few months later the employee comes to an agreement with LBTH that, in return for an out of court settlement, the individual will drop their case.
The employee is paid, the job is done. The Non-Disclosure Agreement (NDA) signed as part of the settlement ensures that nobody outside LBTH never knows the reality of what happens or the amount of public money dished out.
It is unclear how often this approach is used, probably not that often, but with some careful analysis it is interesting to see that in just one small group of LBTH employees every one of the legal actions started were dropped. This by no means proof of any criminal intent on behalf of these individuals but it does make you wonder, dunnit?
Settlement agreements for the favoured few
If you need some cash for a new car or that trip to Disney Land you have been promising the kids but the fake legal action approach doesn’t appeal why not get sacked?
The only problem with this is that it seems some council employees in Tower Hamlets are more favoured than others.
It seems some people can do anything short of robbing a bank (we stand to be corrected on this) and they cannot get sacked.
It is almost as if they have some strange aura around them that makes them untouchable – cue spooky music!
Either that or they have friends in high places maybe? And we don’t mean the Canary Wharf window cleaners.
Whatever the real reason these people seem to exist in a different – and very lucrative – dimension. More on this soon.
If for some strange reason somebody does get ‘let go’ by LBTH there is no need to worry as it seems settlement agreements are dished out like cornflakes at breakfast.
A settlement agreement is a legally binding agreement between an employer and an employee that define the terms surrounding the termination of employment. It resolves any disputes between the two parties that could not be resolved as part of internal procedures [what internal procedures?] and also prevents future related claims.
An NDA is almost always a part of the settlement. So nobody can ever talk about it. Consequently the people who stump up the cash – borough residents – will never know details such as who got what and for what reason and certainly not how much cash was dished out.
An NDA is legal (if not right) and is standard practise. Unfortunately it provides a perfect means of paying off someone in complete secrecy.
TaxPayers Alliance local authority settlements data
The TaxPayers Alliance local authority spending on settlement agreements research is interesting if not revelatory reading.
The data shows that in the last financial year LBTH made 79 settlement agreements.
The average number of agreements for a London borough is around 15, but even so the number of agreements is not that interesting.
Ranking all UK local authorities for the same year LBTH does come out top.
|Local Authority||Number||2018-19 Rank|
|Brighton and Hove||43||5|
But then Bury in Greater Manchester runs LBTH a close second. Wonder what goes on there?
Oddly enough LBTH did not seem able or willing to provide The TaxPayers Alliance with the amount the borough paid out in settlement agreements.
And to be honest our experience indicates that you can no more rely on a LBTH Freedom of Information (FOI) request being accurate or truthful than you can rely on a cheap Swiss watch.
So even if the numbers were provided via a FOI response we do not believe they can be taken as being accurate.
The Poplar Papers reveal lots and LOTS of interesting situations whereby people have benefitted from settlement agreements. One of the standout cases is that of Dinar Hossain, who was Head of Youth Service when many of the interesting activities documented in Mark Edmund’s witness statement and accompanying evidence bundle took place.
Here are a couple of extracts from Mr. Edmund’s witness statement.
156 In 2010 an investigation involving the Head of the Youth Service and Deputy Head of Service (Dinar Hossain and Hasan Faruq) was conducted to investigate serious breaches of financial and procurement regulations and code of conduct after a payment of £35,000 was made to an organisation (Shade Consultancy) which was controlled by a former Youth Service employee. I believe that this was prototype on which future money syphoning from the Youth Service and other departments was later based. Neither officer was dismissed despite the disciplinary findings against them (#1789 -1800).”
163 “Despite a briefing note being produced showing serious problems concerning the Youth Service (e.g. procurement irregularities, unauthorised staff payments, circumvention of recruitment and safeguarding procedures) and the management by Dinar Hossain (Head of Service). He was not formally investigated about these matters and exited the organisation on enhanced redundancy terms. A later FOI response confirms that Dinar Hossain’s voluntary redundancy and was approved Andy Bamber and Steve Halsey – but the post was not deleted and subsequently filled by Claire Belgard…. I understand that Dinar Hossain now works advising Local Authorities on Youth Service development matters and lectures on Youth Work on Further Education courses. Since leaving Tower Hamlets he has worked for the London Boroughs of Lewisham (2016), Redbridge (2017) and Brent (2017 to present).”
Lots of issues arise from just these two paragraphs (although Dinar Hossain is frequently mentioned as being a person of interest in other parts of the Poplar Papers) but one stands out.
Individuals are not made redundant, positions are. So how come Dinar Hossain benefited from ‘enhanced redundancy terms’ when the post of Head of Youth Service remained intact and was subsequently filled by Claire Belgard?
According to sources not unfamiliar with the ways of Tower Hamlets council at the time ‘enhanced redundancy terms’ seems to mean that Dinar Hossain was paid his full salary until the end of the financial year as well as his receiving his settlement package.
Length of suspensions on full pay
Those few – and we mean very, very few – LBTH employees who did find themselves under investigation for various misdeeds need not despair as an innovative way for them to benefit was dreamed up by someone.
Like all good plans this was very simple.
Let’s say Cheeky Chappy A was being investigated for fraud. Maybe he had spent his working week dreaming up false organisations which would then apply for very real council grants that would more often than not be successful. A decent sum of cash, say £12,000, would then become available to Cheeky Chappy A via a money mule’s account. (See this story about the AP1 Vouchers for an explanation of how a money mule works.)
Job done. Not quite.
Because somehow, most likely because Cheeky Chappy A was as thick as a very short plank, he got rumbled. And then actually investigated. A rare occurrence it seems but it did happen.
If there was absolutely no way to avoid an investigation (like not having an investigation) and it was likely he would end up having to repay the £12,000 under the Proceeds of Crime Act 2002 then a simple plan would kick in.
Cheeky Chappy A would be suspended subject to the council investigation being concluded. Suspended on full pay.
Here’s the sting. Cheeky Chappy A would be suspended for many months and his take home pay during that time would roughly equate to the sum of money he would have to repay because it was stolen.
And during his prolonged suspension Cheeky Chappy A would get another job so he would not suffer financially.
Far fetched? Have a look at p165 of the Poplar Papers and the case of Liton Tahir (a Youth Worker) “Coincidentally, the amount of additional pay generated in the intervening period almost equated with the monies he owed – which I understand was then recovered from him.”
Another case saw a series of circumstances where it took over a year for LBTH officers to organise a hearing date for a disciplinary case – much longer than the original investigation itself.
Impunity – no consequences
Those lucky few who did get a settlement package from LBTH benefitted in multiple ways.
Firstly they got a nice cash leaving present courtesy of Tower Hamlets residents.
They also had glowing references, essential to ease their way into a new job. The reason they were glowing was because, under the terms of the settlement agreement, they got to write their own references.
Last but not least by going down the settlement package path (no disciplinary action required) there was no referral to the Disclosure Barring Service (DBS).
Earth calling DHCLG, come in DHCLG, over
Maybe the Department of Housing, Communities and Local Government (DHCLG) might find it useful to send its Commissioners back to ask some questions?
Or maybe Tower Hamlets counts for nothing and we will be left in the current situation for a few more years.