Rummaging around in some of my former work, I had another look at this piece I wrote back in November about the decline and fall of Denis MacShane:
Warsaw was at least more or less normal. When I had arrived as ambassador in Bosnia in 1996 not long after the war ended, the embassy’s finances were in a state of radical improvisation. Everything ran on cash. The embassy had no safe, yet hundreds of thousands of cash Deutschmarks were being spent every week to drive forward British-funded aid projects. Weary project consultants would appear at the embassy to grab another huge pile of money then drive back out into Bosnia’s shattered towns and villages to try to get water and electricity supplies going.
One day my junior embassy colleague and I sat there well past midnight trying to balance the monthly account. We had to count over DM 70,000 by hand(!) as we had no machine to quickly flip through the notes. In the end we ended up with the account adrift by an undefinable DM 70 or so.
The next day I sent a telegram to London saying that in the chaotic conditions in which the Sarajevo embassy was working I did not feel able to certify that the account was in “good order”. We soon got a new safe and a banknote counter machine. I subsequently discovered that my very frankness had led some people in London to think that the police should be called in to see what we were up to.
In other words, after over nearly 30 years in the British public service I can say with complete and unqualified sincerity that I did everything reasonably possible (and sometimes far more than that) to make sure that taxpayers’ money was being spent properly and honestly.
The FCO has a strong if not neurotic internal culture pushing in that direction. In any case, out there in the diplomatic salt mines we all knew that if we were found abusing public funds or even playing fast and loose with the rules, few if any people back in London would have any sympathy. In particular, many MPs would leap to their feet and denounce Foreign Office malfeasance. The usual newspapers would howl against “pampered diplomats”...
I discovered there a comment from Prospero that I had not previously seen:
I applaud Mr Crawford’s diligence as sub-accounting officer on his various postings. What he fails to mention is that, as an Ambassador, he would, until 2004, have had access to “frais”, a wholly unaccountable expense account paid directly into their bank accounts which in some Embassies amounted to tens of thousands of pounds. Indeed, often Ambassadors refused to declare even the amount of frais to other members of their staff, making any serious accounting impossible.
I wonder whether in the interests of transparency Mr Crawford will be asking the FCO to provide further details.
Prospero is in fact wrong, or at least not fully right.
There was this strange phenomenon called Frais that was paid to Ambassadors directly into their bank accounts to enable them to entertain as they saw fit. But latterly it was accountable, not to the Embassy but to London.
Ambassadors had to complete detailed records of their Frais spending during the year and enter them into a special computer accounting package for scrutiny back in HQ. In our own case, Mrs Crawf slaved away to make sure that we had meticulous records of all our entertaining spending, including bulging files of receipts in case anyone did do a full check.
That said, it was never quite clear to me how far anyone seriously checked them when the returns were sent in. However, I know that in the early 2000s one Ambassador had organised an especially fancy end-of-year event seemingly to spend his remaining Frais allowance for that year. HQ disagreed that it was a proper use of public funds and insisted that he pay some of it from his own pocket. So some serious checks and balances were working. It is quite easy in a small organisation like the FCO for word on that sort of reprimand to get around.
More about this Frais business here:
Under pressure from internal unease, some questions in Parliament(!) and the Inland Revenue, the FCO over the years moved to making almost everything accountable and claimable as 'actuals'. No more little profits here and there. But it took a very long time - almost thirty years.
Ambassadors' Frais was an especially tough one to crack, as even to question it was presented as an aspersion on their Excellencies' lofty honour.
First it became fully accountable: you had to spend the money you were given on reasonable entertaining, and, if it was not spent, send the remainder back. In Belgrade and Warsaw Mrs C laboriously entered all our official spending into a clunky computer programme and sent the data to London. But not once in seven years did anyone ever check the entries against our actual spend.
Only in 2007/08 did Frais stop being paid directly into Ambassadors' private bank accounts and become part of a transparent Embassy budget open to easy, reasonable internal and external scrutiny.
So this is how things work in any organisation, with state/government bodies especially prone to be less concerned about the financial bottom line and instead working to laborious 'evolution' and precedent. Transparency is seen as an annoying intrusion, not an opportunity
MPs perch themselves right at the very top of the public policy chain. They have the ultimate power to set the rules and proudly to call to account those anywhere in the system who abuse them. Plus they have all sorts of privileges from being members of that plumply funded parliamentary club with its cheap bars and affable, elegant restaurants.
In these circumstances, those of us who have spent decades living scrupulously by the rules and working late into the night to account for every penny find ourselves with no sympathy to spare for people in high office who sent us orders and demanded scrupulous adherence to the rules, yet time and again personally signed off their own expenses claims that they knew were cutting corners if not explicitly dishonest.
With great power comes great responsibility. And with great abuses of responsibility comes great – and richly deserved – humiliation.