MPs have urged the Cabinet Office to “clear up the confusion” about why the cabinet secretary believed Boris Johnson had sought Richard Sharp’s financial advice before he was appointed BBC chair.
Sharp – who is under pressure to resign from the BBC role and faces two inquiries over his failure to disclose meetings with Johnson, Simon Case and a distant cousin of the then-PM prior to his appointment – has denied giving financial advice to Johnson.
However, cab sec Case reportedly sent a memo in December 2020 asking Johnson to stop seeking Sharp’s advice about his personal finances, given Sharp's impending appointment to a public role that that is ultimately chosen by the PM.
The Digital, Culture, Media and Sport Committee has now said the Cabinet Office should “clear up the confusion immediately” over the contradictory claims.
In a report on the appointment, the committee also slammed Sharp’s “significant error of judgement” in failing to declare his role in the facilitation of the £800,000 loan arrangement. It said he should “reflect on the potential damage caused to trust” in the BBC.
Sharp, who was appointed as BBC chair in January 2021, has rejected claims he was involved in the arrangement of a loan between Johnson and his distant cousin Sam Blyth ahead of getting the BBC job.
He told the committee he met Blyth in September 2020 at a dinner party, who raised the idea of helping Johnson financially after becoming concerned about press reports that the then-PM was in financial trouble due to divorce and childcare costs and bills for the refurbishment of the Downing Street flat.
Sharp said he told Blyth to seek the advice of the Cabinet Office. They next spoke in late November, after he had applied to be BBC chair, when Blyth asked Sharp to put him in touch with Case, Sharp said.
Sharp then informed Johnson he was going to meet with Case to ask if he could pass on the cabinet secretary’s phone number to Blyth. He also "reminded" the cab sec that he had applied for the BBC job and they both agreed that, to avoid any conflict of interest, Sharp’s involvement in discussions about Johnson's finances should end.
However, according to the Sunday Times, Case sent a memo to Johnson in December 2020 warning him that “given the imminent announcement of Richard Sharp as the new BBC chair, it is important that you no longer ask his advice about your personal financial matters”.
Sharp told the DCMS committee at a scrutiny session last week that he never gave Johnson any financial advice and suggested someone other than case "might have written that memo". Last month, Johnson described claims that he sought financial advice from Sharp as "nonsense".
In its report yesterday, the DCMS committee said: "There remains an unresolved issue about why the cabinet secretary believed Mr Sharp had been giving financial advice to the then-prime minister, which Mr Sharp insists that he had not done.
"The Cabinet Office should clear up the confusion relating to the advice given to the prime minister immediately."
The Cabinet Office said it does not comment on leaked documents or any private discussion between any prime minister and officials.
‘Significant error of judgement’
After speaking with Case, Blyth, a Canadian multimillionaire, arranged to be a guarantor for a loan to Johnson of up to £800,000 in late 2020.
Sharp informed neither the BBC nor the DCMS Committee of his meetings in relation to the loan at any point during the recruitment process for the BBC chair role. He has since apologised for this.
The committee, which approved Sharp’s appointment as BBC chair following a pre-appointment hearing in January 2021, said this ommission had left it “without the full facts to make a judgement on his suitability”.
The MPs said Sharp had recognised the need to be "open and transparent" by raising the potential conflict of interest with the cabinet secretary. However, it said he had "failed to apply the same standards of openness and candour in his decision not to divulge this information during the interview process or to this committee during the pre-appointment hearing” for the BBC role.
"Mr Sharp's failure to disclose his actions to the panel and the committee, although he believed this to be completely proper, constitute a breach of the standards expected of individuals applying for such public appointments," the report said.
Damian Green, the committee’s acting chair, said: “The public appointments process can only work effectively if everyone is open and transparent, yet Richard Sharp chose not to tell either the appointment panel or our committee about his involvement in the facilitation of a loan to Boris Johnson.
“Such a significant error of judgment meant we were not in the full possession of the facts when we were required to rule on his suitability for the role of BBC chair.”
The Cabinet Office has claimed “all the correct recruitment processes were followed" for the BBC chair role. However, the report said ministers had unfarily used the committee’s approval of Sharp’s appointment to justify this claim.
"The fact that ministers have cited this committee's original report on Mr Sharp's appointment as a defence of the process was followed, when we were not in full possession of all the facts that we should have had before us in order to come to our judgement, is highly unsatisfactory," the report said.
The committee has urged the government to ensure future processes “are not clouded by partial disclosure”.
The Commissioner for Public Appointments and the BBC are both currently investigating the recruitment process that led to Sharp being appointed as chair of the corporation.
Sunak today said the commissioner's review would “make sure that everything was followed correctly and all the rules and procedures were adhered to”.
MPs have questioned whether Sharp can continue in his role. SNP MP John Nicolson told BBC show Sunday With Laura Kuenssberg the saga had made Sharp’s position " extremely difficult", while Labour’s Lisa Nandy said his position was becoming "increasingly untenable”.