Evening Standard allegations of GLA and LDA corruption false

11 January 2008

The report has been issued today of the review of allegations of LDA corruption and collusion in improperly awarding funds made by the journalist Andrew Gilligan in the Evening Standard in a series of articles in December 2007.  The report finds these to be unfounded. The charge of a ‘tide of corruption’ made by London Assembly member Richard Barnes in the Evening Standard on 13 December is therefore also false.
 
The review looked at the LDA projects specified by the Evening Standard in December 2007. A separate GLA review looked at issues relating to core GLA funds.
 
The Evening Standard had alleged that LDA contracts and funding were awarded to organisations because of their personal friendships with the Mayor’s advisor Lee Jasper or because of inappropriate interference by Mr Jasper. The review has found that this was not true.
 
The District Auditor was informed of the review and its scope, which was supported by Deloitte, and the report will now be submitted to him.
 
Specifically the report concluded that:
 
1. There was no evidence that Lee Jasper was involved in the award of a contract to Diversity International, contrary to the allegations made in the Evening Standard.
 
2. The Evening Standard alleged that at the instigation of Lee Jasper the LDA agreed to pay Diversity International a further £250,000 and to enter into a consultancy arrangement for £35,000. This allegation is incorrect.
 
3. It found that the allegation in the Evening Standard that Brixton Base, of which Lee Jasper is patron, received £287,000 for premises expenses when it was occupying LDA premises rent-free is incorrect.
 
4. There is no evidence that a Brixton Base staff member threatened LDA staff that its offices would be destroyed by gangs if it refused to renew Brixton Base’s funding, or that the LDA may have been influenced in funding decisions by threats of physical violence, contrary to the allegation in the Evening Standard.
 
5. The allegation by the Evening Standard that the LDA took no action in respect of Brixton Base but instead awarded it a further grant of £390,000 is incorrect.
 
6. The Evening Standard alleged that BEM Community Enterprises (BEMCE), of which Simeon Grosset, an associate of Lee Jasper, is the owner, received LDA funding for insufficient levels of activity. The review has found no evidence that Lee Jasper was involved in the decision to award funding to BEMCE.
 
7. The Evening Standard alleges that two LDA staff members were dismissed because they raised concerns about the payments to Diversity International and that Lee Jasper played a decisive role in ‘at least’ one of the dismissals. The review has found that this allegation is incorrect.
 
8. The Evening Standard alleged that the African Caribbean Business Network (ACBN), of which Yvonne Thompson was president, received LDA funding totalling £990,000 between 2001 and 2007/8 for ‘relatively little’. The review has found substantive assurance regarding the project management and outcomes of this project. The review indicates that the role of Yvonne Thompson as a Board member was conducted appropriately.
 
9. The Evening Standard alleged that despite LDA concerns, the ACBN was awarded £200,000 in each of 2006/7 and 2007/8. The finding on this is the same as with the previous allegation.
 
10. The Evening Standard has alleged that Lee Jasper’s godson, who allegedly worked for the LDA, complained about a member of staff as part of a campaign to oust them. The review has found no evidence to support this allegation. Lee Jasper has stated to the GLA that he has not had any godson working in the LDA. No evidence to contradict this statement has been supplied.
 
11. It is alleged that LDA Board Member (until April 2007) Yvonne Thompson improperly accompanied Lee Jasper on a trip to New York at the LDA’s expense not for legitimate LDA business. The review found Yvonne Thompson went with Lee Jasper to New York as part of legitimate LDA business.
 
Some statements made in the Evening Standard relate to allegations that private individuals appropriated money from organisations to which the LDA had given funds. The LDA has no physical power to investigate such charges as it has no power to sequester bank accounts, force disclosure of emails or accounts, or interrogate individuals etc. In order to remove all ambiguities regarding any remaining charges the LDA has referred these to the police to examine. The LDA will naturally supply the police with any information in its possession and calls on anyone holding any such information to do likewise.

The GLA’s Executive Director Finance and Performance, who is appointed by the London Assembly and not by the Mayor, carried out a separate review into allegations regarding GLA funding of the Black Londoners Forum and the 1990 Trust. This concluded ‘The GLA can demonstrate that it has achieved value for money for the funding it has provided to BLF and the 1990 Trust.’
 
The report of the LDA review may be found at http://www.lda.gov.uk/server/show/ConWebDoc.2368
The report of the GLA’s Executive Director Finance & Performance can be found at http://www.london.gov.uk/

 Notes to Editors

 1. The Review covered allegations about LDA funded projects published in the Evening Standard on 5, 6, 10 and 17 December 2007.
 
 2. London Assembly member Richard Barnes made a similar allegation of an LDA ‘tide of corruption’ (Evening Standard 13 December)
 
 3. The Review was commissioned by the LDA’s Resources and Risk Committee and was led by the LDA’s Statutory Finance Officer, with the support of Deloitte, its internal auditor. It was announced on 11 December 2007.
 
 4. Summary terms of reference of the LDA review:
 The review looked at all stages of the investment cycle for these projects. In particular, the Review will determine:
 • whether LDA procedures prevailing at the time have been followed effectively;
 • whether LDA decisions to award funding were taken appropriately;
 • where any weaknesses are identified, whether subsequent procedural improvements have been implemented;
 • whether funding provided has been used properly in accordance with the terms of the relevant grant agreements;
 • the status of grant recipient companies, and the submission of the required certifications of grant expenditure and the filing of accounts;
 • whether appropriate declaration of interests had been made and whether suitable action to manage potential conflicts has been undertaken.
 
 5. London has the highest business closure rate of any region, averaging 11.6% between 1994 and 2002. Therefore closure of a specific company is not necessarily a sign of impropriety. It would be expected, given this closure rate, for the LDA to be involved with a number of companies that could fail particularly as it is will continue to be engaged in with work with disadvantaged and hard to reach communities.
 
6. The LDA has issued statements in response to the claims made in the Evening Standard on 18 December 2007, 20 December 2007, 21 December 2007 and 7 January 2008.
 
 7. The LDA has sent corrections to the Evening Standard which it has refused to make on its repeated claim that the LDA sent auditors into Brixton Base in October 2007 and that they found at least £190,000 missing. In fact, the LDA informed Brixton Base in October that auditors would be sent in; the auditors went into Brixton Base in December and have yet to report.