While MP Michelle Thomson tries to brazen it out, the SNP and the Law Society are still squirming in the spotlight directed at her property portfolio, writes Dani Garavelli
On Friday morning – shortly after her surgery – Edinburgh West MP Michelle Thomson posed for a photograph in front of the Forth Rail Bridge and then tweeted it. The sky above her is almost cloud-free, the estuary behind her calm and she herself looks cheerful and unruffled. The symbolism of this gesture could be lost on no-one; the image was taken close to the spot in her constituency where – four months earlier – the 56 newly elected SNP MPs gathered round Nicola Sturgeon for an iconic victory shot. Back then, Thomson was in the thick of things, behind and slightly to the right of her party leader. On Friday – having resigned the whip as the police investigate alleged irregularities in property deals carried out on her behalf – she was flanked by just two supporters, but the message was clear: she was still very much in business.
There is something quite brazen about Thomson – until a few days ago, the SNP’s business spokesperson – standing there grinning, at the end of a week in which allegations about the way she conducted herself sent her own party and one of the most powerful institutions in the country into meltdown. Revelations that her former company was at the centre of a Scottish Solicitors Disciplinary Tribunal (SSDT) at which Christopher Hales was struck off for failing to raise the alarm over possible mortgage fraud left the SNP and the Law Society defending their procedures and facing tough questions as to who knew what and when.
The Law Society’s failure to explain why it took more than a year (until July 2015, after the referendum and the general election) to inform the Crown about the risk of criminality exposed by the SSDT raised questions about its competence and fuelled suspicions of a cover-up. Given that Thomson was managing director of pro-independence organisation Business for Scotland, and Sheila Kirkwood, the secretary of the subcommittee responsible for passing on the SSDT report to the Crown, was a member of Lawyers for Yes, there was plenty for conspiracy theorists to get worked up about. (The Law Society insists Kirkwood played no part in the delays). The SNP’s failure to scrutinise Thomson’s past business dealings, alleged to involve buying properties from vulnerable people at knock-down prices, has put their vetting procedures in the spotlight.
More significantly, perhaps, the scandal is said by some to have caused a split in the party, with Sturgeon keen to cut Thomson off and Alex Salmond insisting any such move would be bowing to media pressure. “This is a test of Nicola’s authority over the Westminster contingent,” one insider said. In the midst of all this, Thomson insists she has done nothing wrong, with her lawyer, Aamer Anwar, stressing she is ready to co-operate with the police inquiry and eager to clear her name.
The scandal that is threatening so many reputations emerged last weekend when the Sunday Times carried details of the SSDT judgment on Hales. The previous week, the newspaper revealed Thomson had amassed a buy-to-let property portfolio worth £1.7 million – a large amount for a member of a party that touts itself as a champion of social housing. Now the newspaper had discovered that Thomson, her husband Peter, their business partner Frank Gilbride and company M&F Property Solutions were named in the investigation that led to Hales – partner in the now defunct Grigor Hales in Edinburgh – being struck off.
The SSDT report, which was published with Thomson’s name removed in July 2014, found that, while acting on the behalf of Thomson and the others – Hales had, on 13 separate occasions, failed to report signifiers of possible mortgage fraud, including back-to-back transactions, cashbacks and deposits being provided by a third party. Such actions, though potentially legitimate, must be flagged up to the lender by solicitors under conditions laid down by the Council of Mortgage Lenders. The tribunal judgment was clear-cut. “[Hales] must have been aware that there was a possibility he was facilitating mortgage fraud, whether or not this occurred,” it said.
If this judgment rang alarm bells for the Law Society, they must have been muted. Hales was suspended in 2011, the tribunal was held in May 2014 and the report published in July 2014 – yet the Crown was not “formally” notified until a year later. So what went wrong?
For more than a week, the Law Society has been under pressure to explain the delay; yet its attempts to provide a timeline, and its eagerness to exonerate Kirkwood, who attended Business for Scotland dinners, have merely added to the confusion; days of obfuscation culminated in a car crash of a press conference by CEO Lorna Jack, in which she admitted to not having read the report.
In a series of statements, the Law Society explained the decision as to whether or not an SSDT report should be forwarded to the Crown lay with the Guarantee Funding subcommittee, but “heavy workloads” meant the subcommittee did not receive it until July 2015 (after which it was quickly passed to the Crown Office and Procurator Fiscal Service). The report itself was redacted, but even so, given the case was investigated and prosecuted on behalf of the Law Society, someone must have been aware of the risk and of Thomson’s involvement.
Later, Jack admitted its director of financial compliance, Ian Messer, had known Thomson’s name, although not necessarily who she was, at the time the report was published. He had flagged up the case (but not Thomson’s involvement) during informal meetings with the Crown in December 2014 and again in April 2015, and on both occasions, the Crown had asked for, but not received, the SSDT report. Once the report did land on the Crown’s desk, it took just six days for it to order a police investigation.
Despite this clarification, questions remain. Given the Guarantee Fund subcommittee meets once a month, why didn’t it receive a copy of the report sooner? And who is responsible for drawing up its agenda? Some have found the Law Society’s claim that Kirkwood’s role on the subcommittee involved nothing more than taking minutes unconvincing. “Someone has to prepare the papers, prepare the agenda and implement the decisions of the committee and it’s presumably not the convener, who is a solicitor in practice,” one lawyer said. “The person you expect to do that is the full-time employee of the Law Society, who is the committee secretary.”
James Chalmers, professor of law at Glasgow University, said the Law Society needed to be transparent if conspiracy theories were to be quashed. “I don’t think there’s anything suspicious in the fact the committee secretary is a member of Lawyers for Yes, but in order to protect her, the Law Society has to be able to say: ‘This is what happened when.’ That’s what will make it clear she has done nothing wrong.”
Beyond the issue of a potential cover-up, the delay raises doubts over the Law Society’s efficiency and the importance it places on protecting the public; after all, if Hales was suspected of facilitating mortgage fraud, suspending him would not have prevented those potentially involved from finding another solicitor and carrying on.
Another lawyer, who did not want to be named, pointed out that Hales had been struck off for not reporting the risk of mortgage fraud, yet by failing to notify the Crown, the Law Society was arguably guilty of the same offence. “It looks odd that you impose standards on the profession, but the regulator doesn’t impose those standards on itself,” he said. At the very least, the scandal has exposed bureaucratic problems within the Law Society. “I suspect it’s systemic,” the lawyer said. “I am conscious the people there are run ragged; they are regulating the whole of the profession and they are overstretched.”
Politically too, the fall-out from this scandal has been huge. Even without any criminality, Thomson’s property deals are an embarrassment to a party which has trumpeted its moral superiority, particularly given the way she has presented herself in the past. Critics have been having a field day with an interview she once gave to the Huffington Post. Asked what she wanted to be as a child, she offered this vignette: “When I was ten, I asked the teacher why the Queen had so many houses when other people had none at all. The teacher, for my troubles, took me out and belted me.” Now her Facebook Page contains comments such as: “My 10-year-old asked me: ‘Why does Michelle Thomson have so many houses when others have none?” and the aforementioned photograph has been retweeted with the caption: “Do you want to buy a bridge?”
A Google search reveals the flash website of the agency Sell My Story run by former journalist Gilbride. The masthead on one of its pages features a £1,000 arranged in the shape of a pound sign and includes the come-on: “Do you know a secret about your local MP? Newspapers will pay big money for stories about politicians with a secret past, or those who have been misbehaving.”
In the absence of spin-meister Kevin Pringle, who recently left, the SNP appeared to go into a tailspin as the scandal gathered pace, with no apparent strategy and confusion over whether inquiries were being dealt with by HQ, Holyrood or Westminster.
Sturgeon insists she knew nothing of Thomson’s property deals until they hit the media, but this raises questions about the vetting of candidates and the appointment of Westminster spokespeople. The SNP says the onus is on candidates to speak up when asked if there is anything in their background which could be detrimental to the party. But this relies not only on the honesty of individuals, but on a subjective assessment of what is and isn’t likely to be acceptable. Insiders suggest vetting before the general election was a bit chaotic because of the weight of numbers caused by the SNP surge, but if this is so, how many other MPs could have skeletons in their closets? Further investigation has already revealed several other SNP members of parliament with multiple properties; and while there is no hint of wrongdoing, it doesn’t sit too comfortably with the party’s social justice agenda.
The fact so many high-ranking figures endorsed Thomson’s candidature in ways that implied they were au fait with her business is also embarrassing. In one campaign leaflet, Sturgeon herself said: “Michelle knows what she is doing, knows her area and knows about fairness, equality and prosperity.” Alex Neil and Fiona Hyslop were equally enthusiastic. But if they were prepared to make positive statements with little to base them on, what credibility should be attached to future endorsements?
At First Minister’s Questions last week, Sturgeon came under fire from the leaders of the opposition parties with Labour’s Kezia Dugdale questioning the morality of buying properties from vulnerable people on the cheap. Sturgeon appeared to distance herself from Thomson, saying that – while it would be wrong to prejudge the outcome of the inquiry – if the allegations proved to be correct it would represent behaviour she found “unacceptable”.
In the short-term, Sturgeon has called on anyone with potentially embarrassing secrets to notify SNP HQ and suggested vetting procedures would be reviewed. It is to be hoped the party is carrying out its own checks on MPs and MSP candidates, as its critics are surely already on the case.
When it comes to the Law Society, the individual who has been most bruised by the scandal is Jack, who earns a reputed £183,000 a year. Her inability to take control of the situation has led some to predict her imminent resignation. Jack has accepted the Law Society might have to look “more deeply” into its handling of this case, but Labour has called for an independent inquiry. “Letting them look again at their own mistakes will do nothing to improve public confidence in their abilities to investigate wrongdoing by solicitors,” said Jackie Baillie, Scottish Labour’s public services spokesperson.
As for Thomson, despite the pretence of normality, her position has changed dramatically. She has already been erased from the SNP website and she cannot post online without attracting abuse. If she is eventually implicated in mortgage fraud (and, at present, she is not personally under police investigation) then it is likely she would have to resign and there would be a by-election. But if she is cleared of criminality – as she insists she will be – what then? Will she be welcomed back into the fold or will she remain an independent on the fringes?
It is not unheard of for MPs to be welcomed back after property-related scandals. Peter Mandelson was brought back from Europe to join the Labour cabinet after two such controversies. At the moment, however, when her name is being linked with deals that appear to have preyed on the weak, it is difficult to imagine how Thomson can be regarded as anything other than a liability. «