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Zygote Files - Fraud and Embezzlement at the WDA

Zygote Files - Fraud and Embezzlement at the WDA

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Published by Zurich Files
Zygote Files - Fraud and Embezzlement at the WDA -- remember a government report, from the Commons Public Accounts Committee, about 'boyos-run-amok'?
Zygote Files - Fraud and Embezzlement at the WDA -- remember a government report, from the Commons Public Accounts Committee, about 'boyos-run-amok'?

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Published by: Zurich Files on Nov 03, 2012
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 Zygote Files - Fraud and Embezzlement at the WDA How clean was my valley?
by Andy Beckett, 1994-Aug-28.
For more than five years,a seemingly inexhaustible stream of scandal has been seeping from thequangos of Wales. Some believe that there is more to come. Others say thatthe revelations and allegations are just an English ploy to keep power inthe principality out of Welsh hands.*
The tallest building in Cardiff is a thick, grey tower, stained by rain andstubbled with aerials, its office windows lit late into the night. You can see it fromthe hillside suburbs to the North and the flat docklands to the South, rising fromthe centre of the city. There the tower looms, over the National Museum of Wales,the University College of Wales and the Welsh National War Memorial, proud intheir civic oblong of lawns and trees. It looks like an intelligence headquarters, andit's about as open. Although it intervenes daily in Welsh life, no Citizen's Chartercovers the work done in the tower, and there are no public meetings, or minutes,or policy papers.The tower houses the Welsh Development Agency, Wales's largest quango.Set up in 1976 to rescue its rusting economy, the WDA has loomed over Wales eversince, inviting foreign investors, cajoling Welsh commerce, making deals whiledreams of political devolution died. And it has changed the economic life of Wales:Bosch and Toyota factories now hum where mines and steelworks once clanked,then sank. Thatcher-endorsed free enterprise now seems to flourish in a socialiststronghold. The red dragon logo of the WDA guards new business parks fromPontypool to Porthmadog, and this year Welsh unemployment -- a crushingsymptom of national failure since the 1920s -- is threatening to drop below the restof Britain's. The WDA has become Wales's most important institution. And its most disgraced. Since last summer, a cascade of scandals has pouredfrom the WDA, released by the publication of a report from a shocked CommonsPublic Accounts Committee. The all-party committee became concerned about theWDA in 1992, when the Auditor General, Sir John Bourn, discovered a mass of irregularities during his annual examination of the Agency's accounts. In October1992 he informed the committee; in December it called the WDA's top executivesin for questioning; the following June it published its findings. Suddenly, all Walesfound out what went on inside the tower.The WDA is a government-appointed body, currently authorised to spendpounds 70m of government money a year. The PAC report showed that, for much of the last decade, it has been operating quite out of government control. The reportlisted in detail, the excesses that resulted:
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The WDA gave itself perks against regulations: free cars (and fuel) for freeprivate motoring to top executives between 1984 and 1992; pounds 1.4m of extra'redundancy' payments to staff between 1989 and 1992; pounds 228,000 to buy thesilence of a dissident executive, Mike Price, whom it sacked after a bitter Agencycivil war in 1991. And it let one of its chairmen, Dr Gwyn Jones, 'interpret' WDA rules in his own favour. In 1988 he obtained a pounds 16,895 WDA ruraldevelopment grant for one purpose, used it for another without informing the Agency (as required?), and wasn't made to pay it back when a WDA inspectorfound out.Meanwhile, the WDA made several disastrous hirings. In 1989, Jones flew toBaltimore to appoint an American representative, Neil Carignan, who knew littleabout Wales. Carignan was then sacked for poor performance, and took pounds53,288 of WDA office furniture and computers with him. Then Jones recruited aconman, Neil Smith, as marketing director, without a check of his fraudulent CV.Smith spent pounds 3,300 on models for 'promotional work' at exhibitions andhotels -- work that was investigated by police. Sacked after a year, he went toprison for deception and theft. Meanwhile, the WDA considered privatising itself ina management buyout. In 1988-1989 it spent pounds 308,000 on a feasibility study,then hid the cost in its accounts.These were just the initial, headline scandals revealed by the PAC report.This May, BBC Wales's 'Week In Week Out' suggested two more: a questionableland deal at Aberdare in South Wales, where the WDA allegedly secretly favouredone developer over another -- breaking the Agency's own rules -- so wrecking anoffer that had taken years to put together; and an illegal WDA grant to politicallymarginal Mid-Wales. Cardiff Central MP Jon Owens-Jones accused the WDA of buying votes for the Conservatives by continuing aid to an area that lost its right tohardship grants in 1982. The appointment of John Redwood as Welsh Secretarylast year to clean up the mess hasn't stopped the embarrassments. The WDA'schairman, Dr Gwyn Jones, and chief executive, Philip Head, resigned only to getother quango jobs. Redwood appointed a new chairman, David Rowe-Beddoe, freshfrom a stint as head of Monte Carlo Conservatives Abroad at the last election. Inthe uproar that followed, Redwood said he had not seen Rowe-Beddoe's CV.Redwood admits: "I can never be sure that we've found all the things that wentawry in that period."Nor have the scandals been confined to the WDA. In February, the chief executive of Health Promotion Wales, John Catford, resigned after an affair with acolleague on a taxpayer-funded trip to Brazil. A district auditor's report found lastmonth that the trip had been undertaken "for purely personal reasons". The reportalso concluded that Catford had made several other HPW trips overseas without aclear purpose, on three occasions being paid by other organisations as well, andthat he was only one of 14 staff who had used their positions to engage in 'non-HPW' business. Another HPW officer, Gordon MacDonald, has also beendisciplined. In May the chairman of the Development Board for Rural Wales, GlynDavies, also stood down, after the Public Accounts Committee discovered that theBoard had been secretly giving its executives free houses.Wales looks bad. There have been scandals in quangos elsewhere in Britain --from Wessex Health Authority to the National Rivers Authority -- but Wales's havebeen more numerous, seem more systemic. Some of the main institutions of 
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modern Wales, which have helped revive its economy, have been disgraced. Howdid this happen?English prejudice might attribute these scandals to some kind of intrinsicWelsh laxness, dismissing them as just 'boyos-run-amok'. But this misses a biggerpoint. The WDA may run the Welsh economy, but the Welsh Office is still the maininstrument of government for a country which only has the status of a principality,whatever civic Cardiff tries to suggest to the contrary, and which, unlike mostWestern European regions -- let alone nations -- has no parliament of its own.The Welsh Office is first and foremost an outpost of London. Before Labourestablished the Welsh Office in 1964, Wales was simply administered by branchesof Whitehall; since then, the Welsh Secretary, appointed by the Prime Minister andhis office, have ruled. The latter is a small, young department of state (the ScottishOffice is more than three times older), and not a popular or prestigious posting (it'sknown as 'Siberia'). Much of its work in areas like education or transport consistsof implementing central government policies rather than developing its own.The will of Whitehall, in other words, has long shaped Welsh political life,often in the background but usually decisive. Under the current ConservativeGovernment, however, that 'will' has become so profoundly unpopular as to bebarely legitimate at all. This paradox has distorted the principality's politics, sothat the scandals at the WDA and other Welsh quangos are not dramaticaberrations, but typical examples of how Wales has been functioning since 1979.The Tories have only six out of the 38 MPs in Wales, fewer county councillors(31) than Plaid Cymru, Labour, or the Liberal Democrats, and just one city council(Monmouth), huddling close to the English border. They have been weak in Walessince the Reform Act of 1867. There is virtually no Welsh aristocracy, and theestablishment is generally hostile: "I don't know any Tories," says KennethO'Morgan, vice-chancellor of the University of Wales and the most prominenthistorian of Wales.The same small professional elite (once Liberal, now Labour) has dominatedthe principality from Cardiff since the mid-19th century. Welsh professionalpractice emphasises partnership -- between businesses and unions, for example --rather than competition. "Wales is something of a political village," says ProfessorKevin Morgan of the College of Cardiff. "Politicians of different persuasions aremore familiar with each other than they care to admit, the key power brokers arewell-known, it is difficult to keep secrets, and information travels fast through aseries of interlocking old-boy networks."To maintain influence in Cardiff, the Welsh Office has had to rely increasinglyon quangos, whose budgets it controls and whose members it appoints from thetiny pool of prominent Welsh Tories, the names who reappear in Private Eye's 'JobsFor The Boyos' column. In 1979 there were 40 quangos in Wales, many of them,like the WDA and the Development Board for Rural Wales, Labour creations. Nowthere are more than double that number. They spend 34 per cent of the WelshOffice budget, as much as the elected local authorities do.In theory, the Welsh Office keeps these quangos under tight rein. The WelshSecretary appoints their chairmen and boards, meets with them regularly, reads
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