Relics of the Johnson Administration

Boris Johnson’s private behaviour is public again this week, which is almost a pity, as some of the chickens stirred up by his public behaviour as Mayor of London are coming home to roost. For a start there is, or was, Wonga.

Last weekend I was on the tube when I noticed something unusual – a Wonga poster of a new and different design. Wonga advertising was usually as triumphantly vulgar as the name itself, but this was wordy, positively chastened, and couched in conservative blue and light font weightings. It seemed to give more reasons not to borrow money from them than it gave for borrowing from them. Too little, too late. By the afternoon I was back on the Tube and this time I noticed that one in every four posters had gone. Efficient TfL employees had spent the day systematically purging the network.

As well they might. One of the major themes of the Wonga story was its transition from being a niche proposition to a hypergrowth one driven by massive, ubiquitous advertising. The single biggest source for this advertising was TfL. London’s transport system was constantly blanketed with Wonga, and the reason for this was simple – wonga was precisely what they offered Boris Johnson. Johnson promised during his campaign to open the Tube free of charge on New Year’s Eve, and Wonga literally paid for it in exchange for ad space.

Johnson repeatedly wanted to complain about Wonga’s practices and use the name to bash his political enemies, but somehow the cat kept getting his tongue when it came to actually delivering the message. (It may be part of the explanation for his survival that his hypocrisy visibly troubles him. That, at least, is genuine.)

I’m not keen to be promoting… lending that gets people into real trouble,” he answered.

But he kept doing it.

Meanwhile, the London Fire & Emergency Planning Authority under his watch, and under the command of disgraced Brian Coleman, found it urgently necessary to privatise London’s fire engines. This hilariously demented idea – who can say we’ve never wanted to privatise fire engines? – only got worse when the counterparty turned out to be a shell company called Assetco, whose very name gave away that it didn’t really fight fires or maintain fire engines but had been called into existence specifically to buy them off local governments because money was cheap.

The actual point of this exercise was that sometimes the fire brigade goes on strike. Johnson and Coleman wanted to break the next strike, and doing this involved getting the fleet of fire engines out of the ownership and physical custody of the fire brigade. Otherwise the strikers would just refuse to hand over the ignition keys. Assetco provided this and also promised to do various maintenance and to install some new equipment, which was for some reason meant to be cheaper if a group of dodgy accountants from Belfast was involved.

Just how dodgy has now been revealed by the accounting profession’s disciplinary authority, the Financial Reporting Council. The report is here, thanks to David Hencke‘s blog. It is an account of spectacular dishonesty, fraud, and self-dealing. It is well worth reading. One of the conspirators, John Shannon, has set a British record by being banned from practicing as an accountant for 16 years.

I am not sure which is my favourite detail. Is it that the dodgy CFO paid himself a huge amount of money by pretending that it was a pre-payment of rent that would in any case have been a serious conflict of interest had it been real? Is it that the cash was raised from Anglo Irish Bank just before it went bankrupt and immediately used to repay his debts to the equally bankrupt Kaupthing, Singer & Friedlander, in a sort of human centipede of bubble-era peculation? Or that another highly suspicious related-party transaction was set up to pay off his son’s debts, incurred in, you guessed it, a failed property development scheme?

No, I think the one that scoops the pot is the time they just decided to pretend the fire brigade had spent much more on the “Capital Guard” contract – that’s the dish-the-FBU job – than they in fact had, issued a fake invoice, and recognised the supposed revenue many years into the future in the books. Not only hadn’t they received any cash, they hadn’t even sent the LFB a bill. (They couldn’t send them a bill, because no work had actually happened, and even Johnson’s city hall might have spotted that.)

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.