Brent Irish Centre (Hansard, 20 January 1995)

§ Mr. Ken Livingstone (Brent, East)

It gives me no pleasure to raise this subject, because a valuable public resource and a major contribution to the Irish community in London is facing either closure by the Charity Commissioners or, more seriously, the arrest and imprisonment of many of the leading figures who administer the organisation day to day.

Although many of the people to whom I shall be referring are members of the Conservative party in an individual capacity, I do not suggest for one moment that events at the Irish centre in Brent are in any way a general slur on the Conservative party either nationally or locally. One is dealing with individuals who have gone beyond the bounds of acceptable public behaviour in their conduct of financial affairs when in receipt of public money and in dealing with value added tax returns.

I shall not go into detail because police and Customs and Excise investigations are currently under way and the Charity Commissioners are also investigating the matter, but I will try to bring home what has occurred— not that I can do much to aid those investigations, but to flag up out of all the chaos the fact that the centre should be preserved because it has been the recipient of large sums of public money from both Labour and Conservative Administrations and because it makes a valuable contribution and could make an even more valuable one to London and Londoners.

The centre was established in 1983 following a grant from the Greater London council. Until 1991, apart from the occasional rows that normally occur in voluntary organisations, things went fairly well. Problems started in 1990, when Brent had a hung council. A capital grant was proposed for essential works, including access for the disabled and elderly who required a lift, and for a library and facilities for the performing arts. The whole package was costed at £231,000. Brent council agreed to pay £137,000, with £94,000 to come in matching funds from the Irish centre itself.

Brent council then underwent a change of control to a Conservative majority and three Conservative members were appointed to the centre's management committee: Councillors Alan Wall, Jack Sayer and Cormack Moore. There were also management changes. Mr. Brendan Mulkere became company secretary and Mr. Murray, vice-chairman of the local Conservative association, became chair.

The situation began to deteriorate when the council changed its controls on expenditure and waived its conditions on the grant. Instead of a report from the Brent Irish centre to the council and other normal council procedures, it was accepted that in future the council would be happy if there was simply a report to the leader of the council. Anyone with any local government experience will know that it is unusual to bypass the committee system. Sadly, the money did not go to the agreed areas: the lift was never installed, the library never appeared and the changing rooms for the artists were never built. Instead, the organisation—a registered charity— installed a new bar, following the demolition of a brand new fitted kitchen, and removed the existing facilities for the disabled.

984 At this point, one might have assumed that councillor Blackman, the leader of the council, and the three councillors on the committee might have raised a query and drawn the council's attention to the matter. At least one could assume that the money had been spent, but it depends on how one looks at it. Councillor Blackman was told by Mr. Mulkere, the secretary of the association, that £205,575 was spent on the works. That, of course, leaves £25,000 over, 60 per cent. of which would—under normal council procedures— have been returned to Brent council.

Mr. Mulkere never had the £94,000 matching funds in the first place, however, so the work had gone ahead under a false prospectus. The council was never told that, although the three councillors who were on the management committee were, of course, aware of it as they were present when all this was revealed. We need to know whether they reported this to the council.

One might perhaps be happy if one could assume that £205,575 had actually been spent. Sadly, once again it depends on who one talks to. The lowest tender for the works came from Lynch Contracts Ltd. at £134,584. There is a remarkable discrepancy between that figure and the sums which we were told were needed for the work. Instead of accepting the lowest tender, Mr. Mulkere persuaded the committee to have a system in which a site manager would manage the contract on a day-to-clay basis, while employing direct labour and buying materials as required.

I cannot imagine any public authority regarding that as a satisfactory way of overseeing the safe conduct of public money. The limited records and the day-to-day passing back and forth of money open up the prospect of massive VAT fraud and evasion which one would not have to accept if a proper firm had come in and done the jab under a proper contract.

The scheme also gave Mr. Mulkere day-to-day control over the process because of his ability to influence the site agent. In reality, we had a situation where Mr. Mulkere on occasions asked contractors for personal loans, which he subsequently repaid using Brent Irish Cultural and Community Association money and Brent Irish centre cheques. It was remarkable that Mr. Mulkere's day-to-day control gave him a position in which he was able to do that and I do not believe that councillors ever accepted that situation in the first place.

We must now look at what was spent. The architect, John Stokes, and the site agent, Mike Moran, both estimated that the cost of the work was between £130,000 and £140,000. Mr. Mulkere and the three councillors on the committee who were party to all this went on to tell the council that £205,575 had been spent. It seems remarkable that when the architect and site agent both said that £140,000 tops had been spent the council was nevertheless told that more than £200,000 has been spent.

Many of the invoices which exist are not necessarily genuine and the police and Customs and Excise have seized them and are investigating. I hope that their investigations will be carried out as speedily as possible, before the centre closes as a result of all the mismanagement that has gone on.

A particular instance in which Mr. Mulkere got a personal loan from a supplier of material was when he asked the supplier of the wood beam being used for a personal loan. That loan was eventually repaid by a 985 cheque from the Brent Irish centre totalling £8,477.29. The situation trundled on, and there was no report to the council.

On 29 May 1992, the general management committee had a meeting. Mr. Mulkere and the three councillors were present, and an extra £120,000 which was needed for further works was discussed. A month later, on 23 June, when Mr. Mulkere formally approached the council leader, Bob Blackman, the figure had risen to £180,000—a remarkable £60,000 inflation in just four weeks. Did the three councillors notice that? Did they warn Councillor Blackman? Did they alert council officers to the discrepancy? Did anyone object?

Some members of the management committee did indeed object to what was happening— and they were expelled from the committee. On 9 July 1992, the committee voted to expel three members—breaking its own rules under section 7 of its articles of association by failing to give 42 days' notice.

On 30 November 1992, Brendan Mulkere managed to get three new groups added as members and thus added votes on the management committee. On 17 December, a committee member was excluded on the ground that she had been replaced by another delegate from the organisation that she represented. She circulated a letter pointing out that she had joined the committee at the personal invitation of Mr. Mulkere and that, to her knowledge, the organisation that she was alleged to represent did not exist. She is the individual who made the loan to Mr. Mulkere to which I referred.

On 6 March 1993, expelled members wrote to Councillor Blackman raising the question of the financial integrity of the operation. They received no reply from him. On 3 April, Councillor Wall called for an emergency general meeting to deal with "subversive people". John Murray, the chair of the BICCA and vice-chair of the Conservative party said: Those members who have acted against BICCA's interests must be removed. Financial integrity should not have been against the interests of the Brent Irish centre.

On 28 May, Councillor Sayer moved the acceptance of three new organisations and Councillor Moore gave notice of the suspension of four existing organisations, the Irish Mental Health Forum, two Irish language groups and the Irish Interest Group, which has campaigned locally on fares to travel to denominational schools, anti-Irish racism and citizenship issues.

On 1 July 1993, Councillor Moore moved the expulsion of four groups, claiming: democracy will be in action tonight. Five of the new organisations which had been added to support Mr. Mulkere voted for the expulsion, although many of them are not known for their activities in the Irish community. Three councillors—the fact that they are Tories is irrelevant—voted for the expulsion, including the treasurer, who had no right to vote at the meeting.

Brent council's chief executive had now been alerted to the problem by a letter from the National Association of Local Government Officers on 22 April and by former expelled members of the Irish centre. The chief executive asked for an explanation. Brent's quantity surveyor eventually produced a report, which is cause for genuine 986 concern. Brent's auditor, who was answerable within Brent council to the chair of the relevant committee, which was chaired by Councillor Wall, came under tremendous pressure with endless phone calls from the members concerned. He came to the conclusion that he did not need to interview the site agent or the architect and did not need to look into the personal loans that I have mentioned. Needless to say, the report is of little use.

Eventually, on 15 March 1994, the auditor's and quantity surveyor's reports were passed to the director of education. As I have said, the auditor had not fulfilled a role that would have been useful. Two days later, on 17 March, at the St. Patrick's day celebration, Councillor Blackman announced at the Brent Irish centre that he would propose additional grants of £70,000 to the centre, although the applications for the grants had arrived after the closing date determined by Brent council and should automatically have been ruled out of order and left to be considered in subsequent years. The following week, on 22 March, the grants committee agreed the additional grants.

On 27 March, Brendan Mulkere wrote to Bob Blackman, telling him that he wished to vary the purpose for which the grant had been awarded—a pretty rapid change of mind—with £36,000 to be spent on capital building works, many of which were the works which were supposed to have been carried out with the grant made available three years earlier but which had not been done. He said: if building works are to be completed within a month the money must be released immediately. The remaining £34,000 was to be spent along similar lines to the original application, although it would be "a great help" if the funds could be released straight away as well, and not phased in over a year as would be the case for most organisations.

On 30 March, the director of Brent's voluntary sector team wrote to the Irish centre reminding it that the grant awarded cannot be used for any other purpose other than stated in your original application form. On 5 April, the treasurer of the Irish centre wrote to the director of Brent's voluntary sector team, outlining the "revised budget" for the use of the £35,000 revenue grant, with £20,000 now to be spent on building works, £4,000 on refurbishments and the rest on activities and a printer.

On 6 April, Brendan Mulkere wrote to the director of the voluntary sector team, outlining the revised budget for the use of the £35,000 revenue grant, with £20,800 now to be spent on Mulkere's salary and £14,000 for an administrator's salary—although there is no administrator. The original application had included expenditure of £12,000 on "consultancy".

On 7 April, Charles Wood, the chief executive of Brent, received a letter from the Charity Commissioners, informing him that they were making inquiries into the centre and requesting information on grant aid. It was not dealt with. On 18 April, the Charity Commissioners wrote again, saying that they would like the information that they requested to be supplied, but there was no speed on the part of Brent to make that information available.

On 19 April, the director of the voluntary sector team, Mr. Eric Lye—a frequent drinker at the Irish centre—wrote to the people who had complained about misuse of public funds, but did not give the full information that he had available, although Brent's chief executive had said that it could be in the public domain.

987 The position deteriorated when, on 20 April, the director of education wrote to the leader of the council, saying that the management committee of the centre had asked for £20,000 of the grant money to be vired from revenue to capital purposes and for the money to be released in full in one lump sum. The leader was asked to approve that under delegated powers and did so two days later, returning the signed approval for money.

On 26 April, the director of the voluntary sector team wrote to the director of education, requesting approval for his decision not to release the full set of reports into the expenditure of the 1991 grant to the Irish centre. Subsequent letters from the director of education to members of the public who had complained confirmed his decision that the reports would not be made available, although the chief executive had said that they should be in the public domain.

On the same day, the director of education sent a fax to the director of the voluntary sector team, instructing him to release £70,000 immediately. For those people who have the misfortune to live in Brent and who die of old age waiting for a reply to any letter, such speed would be inconceivable.

Four days later, a leaflet was circulated in a marginal ward in Brent, where Councillor Sayers was seeking re-election, slandering the Labour candidate. It is clear that the leaflet had been drafted by Brendan Mulkere. It has all his style. It was, of course, completely illegal—it was not declared on anyone's election expenses—and had an impact on what is the highest concentration of Irish people in the Brent area. The matter was immediately raised with the police, who started an investigation.

Everyone denied that the leaflet had been produced. It is quite clear that it was a pay-off for loyal support. When Brent officers wrote to Mr. Mulkere asking what on earth was going on, he denied that any such leaflets had been issued by Brent Irish centre, but confirmed that he had recently written personally to Councillors Sayer, Wall and Moore, to thank them for their assistance. And well he might: they had supported every one of his moves to manage the finances of the centre, in their imaginative way. They voted to get rid of anybody who complained, and used their position on the council to get a favourable hearing from the leader of the council to the needs of Brendan Mulkere.

On 18 May, the Charity Commissioners wrote to the chief executive of Brent expressing concern that they had had a telephone call from the director of the voluntary sector team, Mr. Lye, in which he had said that he could not see why they needed to continue their investigation into the matters. Three days later, the director of the voluntary sector team—no doubt after an interesting conversation with Brent's chief executive—sent a letter to the Charity Commissioners saying that the telephone call was meant to be helpful and explaining that, in his view, none of the allegations had any substance. If there is no substance to the allegations, a vast amount of police, Customs and Excise and Charities Commission time is being spent investigating them.

I do not have the slightest doubt that Mr. Mulkere is a crook. In the 25 years that I have been an elected representative on various local authorities and subsequently in Parliament, I have never been more certain of any sentence that I have uttered. I have seen copies of some of the witness statements by people 988 involved and I have not the slightest doubt that Mr. Mulkere will be arrested and, if there is any justice, will go to prison.

What is more in doubt is where the issue moves away from Customs and Excise. I especially want to make the point that Customs and Excise should pass the information that it holds to the Government's auditors—perhaps the district auditor who has been doing such sterling work in Westminster—to investigate. Mr. Mulkere could not have got away with his criminal activities without the backing of the three councillors.

I want to make it absolutely clear that those three councillors are not representative of the Tory group, any more than they are representative of Brent as a whole. When I raised a matter relating to another councillor, I was delighted when the Tory group took action to remove him from his post. The vast majority of Brent councillors, Labour and Conservative, are completely honest, but the three to whom I referred clearly are not. Perhaps Mr. Moore was led by the two older and more senior members of the committee. Councillor Blackman, recognising the political importance of the support of the Irish centre in a key marginal ward in a tightly fought election, is perhaps more to blame. The auditors should investigate the matter in exactly the same way that other abuses of power have been investigated. I suspect that the money stolen from the taxpayer through VAT fiddles and the money that I suspect has been stolen from Brent council tax payers has been milling around in a slush fund and may have been used to fund the illegal election leaflet which appeared.

I do not have one moment's doubt that Councillor Wall and Councillor Sayers knew exactly what was going on and covered it up at every stage. Councillor Blackman, as leader of the council, intervened to change the grant arid to do everything possible to assist Mr. Mulkere with a speed and enthusiasm for which I can find no parallel in my experience of local government. It was an unusually close personal relationship and I cannot seriously believe that someone as clever as Mr. Blackman was not aware of what was happening. I believe that he consciously knew that public money was being used to bribe a crook—Mr. Mulkere—to try and influence an election. As a quid pro quo, Brent council would not become involved in exposing the fraud in which Mr. Mulkere was involved.

I repeat that I am not making a general slur on the Tory party. Three or four individuals deserve to go to prison for what they have done, but they no more represent the generality of Conservative councillors than they do the generality of public officials. If we do not deal with them, it will reinforce what half the public already think—that any politician is in it for what he gets out of it.