Paul Moore Had His Whistle Silenced, But Now He’s Blowing It Again

Much of yesterday’s Treasury Select Committee meeting was devoted to chat about the FSA, in particular the sacking of HBOS group risk manager Paul Moore, and his replacement with Jo Dawson, a sales manager with no experience in risk management. In true Hollywood style, Moore has stayed silent… until now.

He testified to MPs before the meeting, providing them with a memo that outlines what he sees as the failings of HBOS to assess risk (FT Alphaville has the transcript here). As James Crosby, the man who did the sacking, wasn’t there, Stevenson and Hornby managed to deflect much of the questioning – Stevenson pointed to a nine-month FSA probe into the case falling in favour of HBOS, Hornby denied the charge of “threatening behaviour” made towards Moore’s team.

But now the Tories have spotted the political mileage in all this, don’t expect the issue to go away. They’re now calling for a probe into Crosby, to ascertain what happened and whether he’s fit to be deputy chairman of the FSA and Gordon Brown’s advisor on mortgage risk; George Osbourne has called the charges “exceptionally serious”.

And man, are they serious. Choice cuts from the memo include:

- “I told the Board they ought to slow down but was prevented from having this properly minuted by the CFO.”
-  Saying that the situation was like the “Emperor’s New Clothes”, and that no-one dared speak up about the flaws in HBOS’s overextended model.
- Crosby alone chose to fire him, and alone chose Dawson as his replacement, against the wishes of other Chairmen.
- A section of a report that criticised “over-eager” sales culture cut out of the final version given to execs, with Moore criticised when he attached it as an appendix to another paper.
- Charles Dunstone, a non-executive chairman responsible for risk control at Halifax, saying he was friendly and sociable with Andy Hornby, the very man he should have a professional distance from and willingness to challenge. Moore also says: “Dunstone himself admitted to me and my colleague one day words to the effect that he had no real idea how to be the Chairman of the Retail Risk Control Committee!”
- Added to this, he said on Newsnight last night that the FSA wanted “a quiet life” and ignored his whistle-blowing.

Moore says he was subject to a gagging order after he settled with HBOS over unfair dismissal, but says that now the matter is of such public interest he’s broken it – I wonder how much money was involved there, and whether HBOS would have a legal case against him? Well, it’s all out in the open now, and we can expect every little bit to be picked over.

The whistleblower silenced, the crooked CEO determined to build his company bigger and bigger – it’s clear that “HBOS: The Movie” would be awesome. The potential for “YOU CAN’T HANDLE THE TRUTH!” is massive. Maybe get William Fichtner to play Andy Hornby?

UPDATE, 11.59: The FT reports that Crosby has seen the fast-massing anger against him, fallen onto his sword and stepped down as FSA deputy chair. That was easy!

Posted by Ben Beaumont-Thomas in Hot Money | February 11, 2009 11:52AM |