Former Unite union general secretary Len McCluskey expressly ignored lawyers’ warnings not to push ahead with a costly hotel project, an internal report has found.
Unite today published its report into the development of a multi-million pound hotel and conference project based in Birmingham. The report states that McCluskey received ‘multiple’ warnings from lawyers about potential issues but chose to go ahead with a flawed project structure that allowed massive overcharging to take place.
As far back as April 2017, external firm Slater Heelis had written to Unite advising that ‘many of the prerequisites’ for a building contract of this kind ‘are not in place’. McCluskey signed the contract against this advice and without the lawyers’ suggested amendments included. Slater Heelis recorded that the union ‘rejected most of the proposed amendments, with the predominant reason being that there was sufficient trust between the parties as to render them unnecessary’.
McCluskey later claimed that he signed contracts without reading the lawyers’ letter or even the contracts themselves – he said instead that he relied on his financial director to ensure the agreement was suitable and appropriate.
The tendering went ahead without any competitive process, the report concluded. The union ended up paying at least £110m for the project, eventually valued at £37.5m.
Today’s interim report was redacted due to ongoing police enquiries preventing the full report being published in full.
The investigation analysed emails which showed that directors of the main contractor on the project were ‘good friends’ with McCluskey. The contractor arranged football final tickers and travel by private jet for the general secretary.
An independent governance report by law firm Bark & Co found potential wrongdoing was enabled by an ‘ask no questions’ culture, with loyalty ensure through access to jobs and promotions within the union.
Current general secretary Sharon Graham said it was clear from the investigation that money left the union when it should not have. ‘Creating transparency through the publication of this report is only the start,’ she added. ‘We need to ensure that this can never happen again.’
McCluskey has denied receiving any free travel or free football tickets and denied overruling staff or lawyers.
