John Poulson - Yorkshire local government contract fraud

[TonyGosling]

The Langton-Poulson affair
Obituary: John Poulson
JOHN CALDER Thursday 4 February 1993
https://www.independent.co.uk/news/people/obituary-john-poulson-147073 5.html

The Independent Online
John Garlick Llewellyn Poulson, architect, born Knottingley Yorkshire 14 April 1910, married Cynthia Sykes (two daughters), died 31 January 1993.
THE LIFE of John Poulson is best understood in terms of his influence, both on the lives and careers of the many people he encountered, many of whom came to ruin and disgrace because of him, and on the course of British politics after his downfall. Much of the change in popular perception of the Labour Party during the Wilson era was due to the growing corruption of safe, large, spending Labour councils, particularly in the north-east of England; this benefited the other major parties because it was from 1970 that many traditional but disillusioned Labour electors changed their votes.

John Poulson was born in 1910 in Knottingley, a small village in the Yorkshire West Riding where his father owned a pottery and some slum property, and was affluent enough to send both his sons to a public school. The Methodist doctrine of self-help and individualism was engrained in Poulson early, the accompanying moral tenets of probity never took. He did badly at school and at Leeds College of Art but nevertheless was articled to a Pontefract firm of architects, Garside and Pennington. He did not last long there, being inept at drawing, but his father, in spite of opposing his chosen profession, backed him to start his own practice. Colonel Hustler, his previous employer, said at the time: 'Have you heard that Poulson's starting on his own? Christ, he couldn't design a brick *.'

Poulson took full advantage of the Thirties depression, paying poorly and working hard himself to make others do the same. A workaholic, he demanded total application from his employees and sacked them when they would not work his way. In 1939 Poulson obtained exemption from military service, which enabled him to extend his practice during the war and he was well-placed for the post-war boom. He also by then knew many politicians of all parties.

He married Cynthia Sykes in 1939 and his wife's desire for social position and wealth was a further incentive to success. Her sister Lorna was married to John King (later Lord King of Wartnaby), who made a success as Managing Director and Chairman of Pollard Ball and Roller Bearing Co.

By 1949 Poulson was well established and using his political contacts to obtain large-scale civic work. He noted that many councillors had substantial financial power but were themselves living on small incomes and he used bribes as his main weapon, being often surprised how much work he could obtain with small inducements accompanied by lavish hospitality. In the Sixties he built a series of public hospitals and grandiose new town centres with public money - including the Arndale Centre, in Leeds. By 1965 the practice was one of the largest in Europe with a turnover of more than pounds 1m and a net profit of pounds 96,000; in 1966 it was pounds 1.16m, with a net profit of pounds 112,500.

In June 1972, pressed for unpaid tax by the Inland Revenue, Poulson made his first appearance at Wakefield County Court, in Yorkshire, to be examined as a bankrupt. At first his debts were estimated at pounds 250,000, but four years later the figure had risen to some pounds 1m. Reginald Maudling, the Conservative MP, who had formerly been chairman of two of Poulson's companies, resigned as Home Secretary.

Poulson was prosecuted for conspiracy the following year. It was the largest case of public corruption brought in Britain this century, but it was played down politically because both major parties were involved and the public had only seen the tip of the iceberg: a fraction of the 27,000 files on the case has been made public and, as the Salmon Committee on Standards in Public Life put it: 'We doubt if Mr Poulson would ever have been prosecuted but for his bankruptcy and his habit of meticulously preserving copies of everything he wrote or that was written to him.'

Poulson's first conviction, for which he was sentenced to five years' imprisonment in February 1974, related to the development of a winter sports centre at Aviemore; during the case he gave evidence for 10 days. A senior civil servant, George Pottinger, seconded to work on the Aviemore project when Under-Secretary at the Scottish Home Department, was convicted of corruption with the same sentence in the same trial, after receiving gifts of money and a car from Poulson.

The following month Poulson received a further sentence of seven years, to run concurrently, on further charges of conspiracy, and a close associate of Poulson's, T. Dan Smith, the former Labour leader of Newcastle upon Tyne City Council and a public-relations consultant to the Labour Party, was imprisoned for six years on charges of corruption.

When Edward Milne, a totally honest politician, became Independent Labour MP for Blyth, in Northumberland, he found himself courted by the Poulson organisation and frozen out when he refused to collaborate. His one-man campaign against the corruption he unearthed led to his expulsion from the party.

In the House of Commons, three former business associates of Poulson's were strongly criticised in a report by an all-party Select Committee on Members' Conduct in July 1977. Maudling and Albert Roberts, Labour MP for Normanton, were deemed to have acted inconsistently with the standards of the House. John Cordle, Conservative MP for Bournemouth, was deemed to have abused his membership of Parliament. He later resigned.

A book on the subject, Nothing to Declare, by Martin Tompkinson and Michael Gillard, suggests that the bankruptcy proceedings instituted in 1972 were much hindered by unusual pressure put on Muir Hunter QC and the rest of the legal team representing the trustee in bankruptcy, and all involved in the case found themselves both lamed and discriminated against in their careers.

The Poulson case was the bankruptcy of the century until the death of Robert Maxwell, but it was more far-reaching. Not only did many towns lose their old civic centres with all their historic period charm for needless and often ugly facelifts purely for the benefit of Poulson and to better the lifestyles of MPs, councillors and civil servants, but the Labour Party, associated until then with idealism and welfare, largely became seen on the grass-roots level as the party of free-spending, public waste and corruption.

Poulson was released from prison in 1977, and lived quietly and in seclusion thereafter. A bluff Yorkshireman on the surface, his talent was salesmanship. He was persuasive, a good judge of character, who believed every man has his price and he could usually assess what it was, but his boundless ambition was certain to go aground on the too obvious greed of others. John Cobb, the QC who prosecuted him, summed it up: 'John Poulson was an ambitious, ruthless and friendless man whose object in life was to get as much money and work as he could by bribery and corruption.'

[TonyGosling]

Stories that shocked Tyneside: The high rise and fall of a leader who got greedy
How the rise of a T Dan Smith in Newcastle eventually became the biggest corruption scandal of the decade
https://www.chroniclelive.co.uk/news/north-east-news/stories-shocked-t yneside-high-rise-7236347

By Adrian Pearson, 9 JUN 2014
T Dan Smith pictured outside the Newcastle Civic Centre in 1977

He called Newcastle “the Athens of the North East,” and in the end his life formed its own Greek tragedy.

Thomas Dan Smith could have given his name to a brave new era in local government but instead he lived out his days as a byword for council corruption.

Anyone picking up a copy of the Evening Chronicle on April 26, 1974, will have been able to see for themselves that the downfall of T Dan Smith was complete.

The former leader of Newcastle Council was handed a six-year sentence, of which he served three years, for his role in the Poulson affair. The corruption scandal had seen the architect pay out for lucrative council building contracts, with everyone but the taxpayer taking their cut.

In page after page of court copy, the city found out how the man who changed the face of Newcastle had been pocketing cash and passing on bribes.

Smith had led the council in the mid-60s at a time when Newcastle was going through much-needed dramatic changes. Slums were demolished, and plans for a city in the sky grew up alongside tower block housing projects and a concrete jungle along John Dobson Street. He cleared the way for the new Eldon Square and helped ensure Newcastle had at least one university in its centre.

At the same time Smith was an increasingly important part of the Poulson empire, working to advise the firm while at the same time ordering major contracts, before stepping down from the council in 1964 to act as consultant and PR man. Armed with a list of contacts, Smith worked his way around town hall offices across the country, doing what he did best and making sure major civic contracts went Poulson’s way.

As Smith’s trial and readers of the Chronicle heard, Smith “set out to make a fortune by attempted corruption of local government officials.”

He recruited what readers were told was a “fifth column of corrupt councillors to work for John Poulson.”

Those payments included cash payouts to Andy Cunningham, the former Durham County Council chairman who was jailed alongside Smith for his part in accepting corrupt payments.

There were further payments to councillors elsewhere across England, but Smith seemed to think he was just part of the system.

The former leader told Leeds Crown Court, where he pleaded guilty, that: “I was corrupt because I condoned things on many occasions. I think I would accept that I was the corrupter, although I was as much corrupted as I corrupted others.”

Poulson received some £800,000 for the firm’s works in the North East, including fees for designing a new police station in Sunderland for Durham Police Authority.

But Smith lined his own pocket as well, with his PR firm typically taking around 1% of the major fees paid to Poulson from the likes of Smith’s own Newcastle.

At the time of his trial it was alleged Smith had taken some £156,000 from Poulson, though his bank accounts showed him to be broke by the time he came to court. Where the money went was never explained, though some point to European trips and the potential for secretive offshore accounts as a starting point.

The corruption would never have come to light if Poulson had not gone bankrupt, meaning his meticulously maintained accounts were open to investigators who had had their suspicions for years.

Smith spent three years behind bars, and eventually ended up living in a Cruddas Park high rise, the type of which would never have come to Newcastle if not for him.

The Smith legacy is everywhere to see in Newcastle, a former council leader says, and the city would be wrong to forget the positives Smith brought to tyneside.

Labour peer Lord Beecham said Smith was “enormously influential,” even if there were allegations around the man from long before his eventual trial.

“When he was brought down, you knew it was a huge story, because of who he was. Some people still had admiration for him, based on what he had done, but for a while it tarnished the entire city.

“He was seen as a dynamic visionary leader at one point. But he was a classic Greek tragedy, he put pride before a fall.”