Labour: Deutsche Bank past a problem for Boris' top man
Keith Walker
August 5, 2019
Britain's opposition Labour party has challenged PM Boris Johnson's choice of finance minister. It has raised a raft of concerns about Sajid Javid's career with Deutsche Bank in the run-up to the global financial crisis.
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John McDonnell, financial spokesman for the UK's opposition Labour Party, said on Monday that he had written to Boris Johnson requesting that he reconsider Sajid Javid's suitability to serve as Britain's Chancellor of the Exchequer.
McDonnell raised three areas of concern pertaining to Javid's banking career during which he worked at Deutsche Bank:
Deutsche Bank's activities during Javid's employment ahead of the 2008 financial crash
Javid's relationship to the trading of risky debt which was blamed on causing the economic crisis
His role in a scheme which allegedly constituted tax avoidance
The finance minister's post is broadly seen as the second most powerful in the British government; its occupant resides in 11 Downing Street, next to the PM.
The UK's new prime minister, Boris Johnson, has carried out a major overhaul at the top of government. The new premier installed some close allies in the top posts, as he prepares to take Britain out of the EU.
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Sajid Javid — Chancellor of the Exchequer
The son of a Pakistani immigrant bus driver, Javid moves from the role of home secretary to another of the UK's Great Offices of State — Chancellor of the Exchequer. He actually backed Remain in the 2016 referendum. As the UK’s finance minister, the Deutsche Bank veteran replaces Philip Hammond, who quit hours ahead of Johnson's appointment.
Image: Reuters/T. Melville
Dominic Raab — Foreign Secretary
Raab, who resigned from Theresa May's government in opposition to the divorce agreement struck with Brussels while he was Brexit secretary, was named Britain's foreign secretary — one of the most senior roles in government. Raab also takes on the mantle of first secretary of state, meaning he will deputize for Johnson when the prime minister is absent.
Image: picture-alliance/AP Photo/M. Dunham
Priti Patel — Home Secretary
Patel, an arch-Brexiter and former minister, returns to government as home secretary — the title given to the UK's interior minister. She's seen as a hardliner within the party on most matters, not least Europe. Patel, who was fired by May for having secret meetings with the Israeli government, was a staunch opponent of the former prime minister's withdrawal deal.
Image: picture alliance/AP Photo/A. Grant
Matt Hancock – Health Secretary
Hancock was among the initial contenders to replace Theresa May, but he didn’t last long in the race. Although he campaigned for Remain during the referendum, Hancock has said he now believes Britain should leave the EU. He's one of a few former Remainers who gets to stay.
Image: Imago/P. Maclaine
Michael Gove – Cabinet Secretary
The fact that Johnson's former Vote Leave colleague Gove, who moves from the environment brief, finds a place in Cabinet could be seen as a surprise. He was responsible for derailing Johnson's post-referendum leadership bid in 2016, before standing for the leadership himself. The Cabinet Office role means he will be close to Brexit negotiations, and preparations for a no-deal Brexit.
Image: Getty Images/C. J. Ratcliff
Gavin Williamson – Education Secretary
A former chief whip, Williamson was sacked as defense minister in a stinging letter by Theresa May earlier this year. He allegedly leaked details of a government deal involving Chinese company Huawei, but strongly denied this. He now takes over the education portfolio.
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Jacob Rees-Mogg – Leader of the House of Commons
Despite it being his first Cabinet post, Rees-Mogg is one of the most recognizable faces of the pro-Brexit camp in Parliament. As chair of the European Research Group, he actively pressured Theresa May's government to implement Brexit. MP for a rural English constituency, the son of a media baron, a staunch Catholic, and an old Etonian like Johnson, Rees-Mogg's background is in investment banking.
Image: picture-alliance/dpa/D. Mirzeoff
Andrea Leadsom – Business Secretary
A devout Brexiteer, Leadsom was a prominent member of the Leave referendum campaign. She has twice run for Tory leadership and failed — reaching the head-to-head with Theresa May in 2016. An interview gaffe led to her quitting the race before it really began, allowing May to take office unopposed. She was promoted to leader of the House of Commons thereafter, and now takes another step up.
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Ben Wallace – Defense Secretary
Wallace, a lesser known Scottish lawmaker, started his political career as a Member of the Scottish Parliament. Beforehand, he served in the British military for eight years, during which he was deployed to Germany and Northern Ireland, among others. In the run-up to Brexit, he campaigned for the Remain camp. Reportedly, he was Johnson's second choice. Jeremy Hunt is said to have refused the job.
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Amber Rudd – Work and Pensions Secretary
Rudd is one of few survivors from the ancien regime, staying in the same post as Work and Pensions Secretary. In the run-up to the Brexit referendum, she campaigned for the UK to remain. She previously served as home secretary under Theresa May and was seen as a close ally of the former PM. She famously stood in for May, who declined to take part, at an election debate against Jeremy Corbyn.
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Jo Johnson – Minister for Business, Energy and Industrial Strategy
Jo Johnson is an anti-Brexit lawmaker and Boris' younger brother. Jo quit his former Cabinet post in protest at the terms of the proposed deal to leave the EU, and has advocated a second referendum on whether to actually leave. As his brother once was, long ago now, he's seen as a left-leaning, europhile member of the Tories.
Image: picture-alliance/AP Photo/S. Rousseau
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Tax history questioned
In his letter, McDonnell also called for Johnson to investigate Javid's personal tax affairs. The new chancellor, who — according to reports cited by London's Evening Standard newspaper — was paid about £3 million per year (€3.25 million, $3.64 million).
McDonnell said there was evidence that would raise alarm bells over Javid's suitability to look after Britain's finances. He also questioned whether Javid benefited from a tax avoidance scheme while employed at Deutsche Bank.
'Profiting from greed'
Britain's Mail on Sunday newspaper reported in 2014 that Javid opted into a scheme known as “dark blue” that channeled bankers' bonus payments through the Cayman Islands.
McDonnell said: "It critically undermines this government's response to the scourge of tax avoidance for the chancellor to stand accused of this practice."
"Every penny avoided in tax by wealthy large corporations is a penny taken from our desperately underfunded public service."
The Labour spokesman also cited conclusions from a US Senate subcommittee which looked into the bank's activities in the run-up to the financial crisis.
McDonnell said that Javid was a senior office holder at Deutsche Bank around the time that committee concluded it had inflicted "material damage to ordinary people and the wider global economy."
A Conservative spokesman said: "Frankly, Labour might want to use the time better thinking about their own credentials for governing. Not content with anti-Semitism being rife in their party and their totally incoherent Brexit policy, the only threat to the UK economy is them."
Deutsche Bank was one of a series of lenders guilty of selling and pooling toxic financial products in the lead-up to the 2007 and 2008 financial crisis.
The US attorney general at the time, Loretta Lynch, said that "Deutsche Bank did not merely mislead investors: it contributed to an international financial crisis."
