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14 May 2009

The Fraud Squad

Meet the light-fingered home secretary, the Railway King who robbed his own company . . . plus six o

By Dominic Sandbrook

There is a rather self-serving belief that British politics must, by definition, be the cleanest in the world. But members of parliament and financial corruption have been intimate bedfellows since the dawn of democracy. And what would shock previous parliamentarians would not, I suspect, be the corruption of today’s MPs, but their sheer pettiness. History gives us many instances of our politicians’ venality that make the odd £2.50 Kit Kat appear trivial indeed.

  • Philosopher, scientist, jurist and statesman: Francis Bacon is remembered today as one of the most talented politicians in English history, father of the Baconian scientific method and a genuine Renaissance man. Unfortunately, James I’s lord chancellor ended his political career in the Tower of London, having been accused of corruption on 23 separate counts. Whether Bacon pocketed 100-guinea bribes to influence Chancery cases, as was alleged, has never been proved, but the clouds of doubt never evaporated. After making a partial confession, he was banished from court in 1621, never to return.
  • Even Michael Martin looks a pillar of statesmanship beside Sir John Trevor, commonly regarded as not only the ugliest Commons Speaker of all time, but the most corrupt. His pronounced squint made a mockery of parliamentary procedure: when he selected members to speak, two or more would rise under the impression that he was looking at them. More seriously, he pocketed thousands of guineas in bribes from the Corporation of London in the early 1690s. Bizarrely, it fell to Sir John as Speaker to put the motion for his own conviction. With “quivering lip”, he pulled it off, and the Commons voted to kick him out.
  • George Hudson, the “Railway King”, set standards for financial corruption in the late 1840s that have hardly been bettered since. As the Tory MP for Sunderland and a leading railway entrepreneur, he not only bribed other members to approve his rail projects, but stole his own company’s money to pay his hotel bills. Extraordinarily, he managed to win re-election even after the news had come out, thereby avoiding prosecution, and when he finally did lose his seat he promptly fled to Boulogne.
  • The Marconi affair remains one of British history’s most bewildering financial scandals, but the rough outline is this. In 1912, Herbert Asquith’s Liberal government awarded the Empire Marconi company a huge contract to build radio stations linking Britain to the empire. The solicitor general, Rufus Isaacs, promptly bought 10,000 shares in its sister company American Marconi, and then sold a thousand each to the chancellor, David Lloyd George, and the chief whip, Alexander Murray. Their actions were “difficult to defend”, the prime minister told George V with elegant understatement. Yet they got away with it.
  • The most famous Lloyd George scandal (barring sexual misadventures), however, was the cash-for-honours affair of the early 1920s. There is no doubt that the Goat, now PM, was genuinely corrupt. His political fixer Maundy Gregory even had a price list, with knighthoods at £30,000 and peerages £50,000 and up. It was “the cleanest way of raising money for a political party”, Lloyd George said in private. And somehow, as always, he managed to escape scot-free . . . apart from the considerable stain to his reputation.
  • Mid-20th-century politics was strikingly clean; only one member of Clement Attlee’s Labour government had to resign after a scandal, a modern record. That man was John Belcher, a former railway clerk who took 56 bottles of sherry, Burgundy and whisky – precious commodities in a London afflicted by rationing – from the Glasgow distiller Sir Maurice Bloch in return for “essential” import licences. By many standards, Belcher’s corruption was trifling. But the 1940s were a more unforgiving, perhaps a more honourable, age. When the story broke in 1949, Belcher immediately resigned from the Commons.
  • By contrast, Reginald Maudling turned back the clock to the good old days of the 18th century. The incarnation of One-Nation Toryism and a one-man advert for the affluent society, he took tens of thousands from the corrupt developer John Poulson in the late 1960s, not to mention suits, luggage, a swimming pool and a job for his son Martin. Maudling not only pocketed diamonds in Kuwait and conspired in writing to bribe a Dubai official, he even took a further £3,000 when home secretary under Edward Heath. The Poulson connection led to his having to step down from cabinet, and other revelations about his finances later ended the career of a man once thought destined to be prime minister.
  • The most egregious example of parliamentary corruption, however, concerned not an individual, but the system itself. As late as the railway age, Britain boasted some 57 rotten boroughs – places such as Gatton in Surrey, with 23 houses and seven voters, or Old Sarum in Wiltshire, with three houses and seven voters. Most were controlled by peers who passed the seats to their sons. At one point, almost three-quarters of all Commons seats were chosen by fewer than 500 voters each. They were “the rotten part of the constitution”, said Pitt the Elder in 1766; but not until 1832 were they abolished.
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