News

Certification Office: Special Report on Corruption in MSF

Unlike the official MSF web site, this site has published, in full, the Certification Officer's report into MSF, which is highly critical of MSF General Secretary Lyons and his ex-Finance chief, Nelson Mendes. The report also considers allegations of corruption against John Gardner, failed businessman, NEC member and Chair of MSF's General Purposes and Finance Committee.

This web site has gone to considerable lengths to ensure that what you read here is extracted directly from the report, from the accountants' report, from the Guardian and the Financial Times . The report says Lyons pushed his expenses claims "to the limit" and "revealed a number of disturbing features" in the way the finances of MSF were administered.

Lyons is accused in the report of appearing "to treat the expenses system of the union and its provision of a chauffeur as one of the perks of office - pushing the claim to have been using them on union business to the limit".

Lyons, commenting on the report, stated he had been the victim "of scurrilous accusations, devoid of evidence". The AEEU engineering union, which is in the process of carrying through a merger with MSF, issued a statement making it clear its executive council would consider the matter further next month. It added there would have to be much tighter financial control in the future. It did not endorse Lyons's comments, and made it clear that Lyons would be opposed if he sought the top job in the merged organisation.

The report reveals that the unions accountants carried out a series of forensic tests on Lyon's £10,000 expense claims in 1997/8. These tests were to see if Lyons drew sufficient cash from his bank to pay for all of the items for which he subsequently claimed on the union. They found that he consistently claimed more in expenses than cash that he had withdrawn from his bank account. Lyons produced a variety of explanations as to where he got the extra cash to meet these expenses. The most significant of these were cash transfers within his family, who provided some corroboration.

Having plotted Lyons' expenses against hypothetical cash flows, modified to take account of his explanations of the alternative sources of cash, the forensic accountants were apparently unable to draw conclusions one way or another.

On Mendes the report is particularly damming: "It is now clear that Mr Mendes' claims for rail expenses to attend meetings around the country were backed by false documents." "Like me, they (the union's accountants) had been deceived." The report reveals that unnamed union officials lied in saying that Mendes was at meetings that "it now seems" he did not attend. According to the Certification Officer, the accountants, HW Fisher "re-examined Mr Mendes expense claims for 1997. In total Mr Mendes claimed £12,089. The claim forms made available to them totalled £4,743 of these they concluded £3,797 (over 80%!) were improper."

The Report also deals with John Gardner, long time head of the powerful General Purposes and Finance Committee. This concerns a company which has ceased to trade called 'Causeway Travel'. The Certification Officer notes that this company "received a considerable amount of business from MSF and Mr Gardner was on its board", although strangely he doesn't find this odd.

In a bizarre section of the report, the Certification Officer addresses the allegation that an invoice for £2,000 was submitted to MSF Whitehall College for work for Causeway Travel in March 1999 but was not paid because the College knew nothing about the commissioning of the work. Subsequently the person who submitted it claims he was told to submit it again to MSF without any mention of it being for Causeway. This he did and the invoice was paid. The Certification Officer apparently was satisfied "that the work concerned was a training programme for one of the union's IT trainees. It was meant to be, but turned out not to be, of use to Causeway, and hence it was appropriate to require an invoice for payment by MSF rather than Causeway."

The Certification Officer concludes "My enquiries have revealed a number of disturbing features in the financial stewardship of this union among full time officials in and around 1997. Mr Lyons received what I consider to have been interest free loans and which H W Fisher and some others in the union believe should have been authorised by lay officers of the union". However the Certification Officer has decided not to use his powers to appoint inspectors to formally investigate the financial affairs of MSF. He has accepted MSF's signalled intention to make the secret second Fisher report available to union members, in a significantly edited form, with a substantial section removed, minus the appendices and "with other small passages blanked out". If this ever happens, LyonsWeb, unlike MSFWeb, MSFWorks or LeonieCooper.com, will publish it for members to judge.

Posted by www.rogerlyons.com on 6th August 2001