Co-op: Flowers In £75k Charity Expenses 'Scam'

Disgraced former Co-op bank boss Paul Flowers claimed £75,000 in false expenses from a drugs charity, it has been alleged.

Mr Flowers, a former Labour councillor, totted up the claims over five years during his time as the chairman of the trustees at the Lifeline Project, according to the charity's chief executive Ian Wardle.

Mr Wardle told Sky News that he had raised questions over Mr Flowers' claims in 2004 and there had been an investigation during which the former Methodist minister was asked to account for his claims item by item.

Mr Flowers, 63, is under investigation by police after being filmed by a newspaper allegedly buying and using illegal drugs, including crystal meth, crack cocaine and ketamine - a horse tranquilliser used as a party drug.

Mr Wardle said that the "total cost of clearing up the mess" left by Mr Flowers during his time at the charity, which helps people with drug and alcohol problems, was £150,000.

Mr Flowers has been accused of incompetence while leading the Co-op Bank

He said: "I developed concerns at the beginning of 2004 about some of the claims which had been made and I spoke to our treasurer at the time and we then involved our solicitor and then to cut a long story short in June 2004 I raised the matter formally, fully and in depth with our trustee body.

"Our trustee body suspended Reverend Flowers and then we investigated the claims and we investigated five years of claims."

Mr Wardle said that after taking advice from a QC  they had sought to keep the matter quiet because they feared it would cause significant damage to the charity's reputation.

He said that he had filed a 70-page report on the matter to the Charity Commission.

The development comes amid the deepening crisis over Mr Flowers appointment to lead the Co-operative Bank, which was sparked by the drugs sting revealed in a newspaper on Sunday.

Len Wardle quit as boss of the beleagured bank on Tuesday

David Cameron on Wednesday announced there would be an inquiry into Mr Flowers' appointment to the bank and its ailing finances.

The Labour leader Ed Miliband has come under increasing pressure over the matter after it emerged that he Mr Flowers had been invited on to Labour's business advisory group and made a £50,000 donation to shadow chancellor Ed Balls.

Questions have also been raised over loans of more than £18m made to Labour at interest rates lower than those charged to ordinary customers.

Mr Miliband has in turn accused the Prime Minister of using the Labour Party's links with the Co-op Bank as part of a "smear" campaign ahead of the General Election run-up.

Mr Flowers managed to secure his £132,000-a-year position at the head of the Co-operative Bank for three years despite a past mired in scandal, it has subsequently emerged.

It has been disclosed that Mr Flowers resigned from his position on Bradford Council after being caught with pornography on his council laptop in 2011. He was also convicted of gross indecency in a public toilet with a man in 1981.

And it also emerged Mr Flowers was caught drink driving after celebrating his 40th birthday in 1990.

Speaking on Wednesday, Mr Cameron said: "Why was Rev Flowers judged suitable to be chairman of a bank? Why weren't alarm bells ringing earlier, particularly by those who knew? I think it will be important in the coming days that if anyone does have information they stand up and provide it to the authorities."

A £1.5bn black hole was discovered in the bank's finances

Len Wardle, the chairman of the Co-operative Group, resigned on Tuesday over his role leading the board that appointed Mr Flowers.

Mr Flowers resigned his post as chairman of the Co-operative Bank in June after a £1.5bn black hole was discovered in its finances, leading to accusations of incompetence.

The bank found a massive gap following the purchase of Britannia Building Society in 2009 and abortive attempts to take on hundreds of Lloyds branches.

During an appearance before the Commons Treasury committee earlier this month, Mr Flowers stumbled over basic facts and figures relating to the bank.

The Methodist Church, which had already suspended Mr Flowers for a three-week period under its rules, has said the suspension was now indefinite and that its disciplinary procedure would be put on hold until after any police investigation.

Mr Flowers has apologised for doing things that were "stupid and wrong" in relation to the drugs claims - but has not elaborated.

His whereabouts remain unknown.

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