in the back
Meals on deals
UK exports, Issue 1451
snout.jpg THE government’s export finance arm’s habit of backing deals won with illicit payments (Eyes passim) shows that it doesn’t ask too many awkward questions. Might this be something to do with how well the companies involved schmooze its officials, led by chief executive Louis Taylor?

Information obtained by the Eye using freedom of information laws shows that in the two years to June, civil servants at UK Export Finance (UKEF is part of Liam Fox’s international trade department) were presented with gifts or hospitality – ranging from mementos of deals to seats at top sporting events - 640 times.

Among the more controversial hosts was Petrofac, the Jersey-registered oil company currently being investigated by the Serious Fraud Office in connection with its use of Monaco-based agency Unaoil, which itself was placed under investigation in July last year. The move followed a leak of emails to The Age newspaper in Australia implying that Unaoil, and Petrofac as one of its main clients, was winning work on the back of bribery (Eye 1448).

Taxpayer support
Yet in December, a few days after UKEF had provided financial support to Petrofac – guaranteeing that UK taxpayers would be good for the company’s money on a £112m loan to fund an equipment drilling purchase – Louis Taylor was taken to lunch by the company. The justification, according to UKEF’s register, was “ongoing business relationship”. In the months leading up to the deal, two unnamed officials were bought a meal at the Dorchester by the bankers involved, Credit Agricole, in pursuit of the “working relationship on Petrofac case”.

Also keen to get on the right side of those doling out taxpayer support was Rolls-Royce, fined £671m earlier this year for corruption going back decades and of the “greatest gravity” in a judge’s words. As Eye 1436 revealed, many of its dodgy deals were backed by UKEF. Last year, with the SFO investigation drawing to a close, the company paid for a number of UKEF officials, including “head of business” Gordon Welsh, to attend a British Export Association lunch, as well as one for an official on a visit to the company “to support Rolls-Royce sales campaign”.

In November the company took Taylor himself out for dinner. UKEF’s latest annual report, published last month, helpfully reports that it is now “satisfied that significant and meaningful reform has taken place in the company” and that it will continue to support Rolls-Royce.

Relationship management – at Twickenham
Another major company providing top troughing was Airbus, formerly known as EADS and currently under investigation after belatedly disclosing that it had being bribing on past deals supported by the taxpayer. Within weeks of Taylor’s arrival at UKEF in autumn 2015, Airbus was taking him out for an introductory lunch. Soon afterwards he was “networking”, according to the register, at the company’s Christmas cocktail party. Meanwhile, a colleague was attending a rugby world cup quarter final match at Twickenham courtesy of Airbus for “relationship management” purposes.

Others were soon at its new year reception at the Cinnamon Club. Now the government reports: “UKEF remains open to applications from any UK exporter, including Airbus, subject to conducting appropriate due diligence”.

Banks including HSBC, JP Morgan and Deutsche Bank, all beneficiaries of UKEF backing their loans to companies, were also keen providers of hospitality. As was Louis Taylor’s old employer, Standard Chartered bank – which boasts to clients of its “access” to public export finance bodies like UKEF - who fed him and colleagues half a dozen times.

Stuffed with ex-bankers
Export finance is rich game for lawyers, too, and they were particularly generous in their efforts. White & Case took a group of officials to an Ashes Test match at Lord’s in 2015; Simmons & Simmons took another to a rugby world cup quarter final, while other firms including Norton Rose Fulbright and Latham Watkins provided drinks aplenty. Allen & Overy gave three UKEF funsters a “darts evening with drinks”. The “ongoing relationship with panel law firm”, as the register has it, doubtless blossomed.

While entertaining of this sort has been curtailed drastically across Whitehall (after the Eye first exposed the extent of it following a long freedom of information battle a decade ago), UKEF – stuffed with ex-bankers – remains a law unto itself. A litany of corruption among its corporate customers, which it should be assessing very sceptically before putting taxpayers’ money on the line for them, suggests here too it may be time for the end of the schmooze.

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Private Eye Issue 1450