Cocaine scandal: Former Co-op Bank Chairman suspended by the Labour party

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  By Angela Haggerty

The Labour party has been forced to suspend former Co-operative Bank chairman Paul Flowers for bringing the party into disrepute after claims emerged about his drug use.

An article in the Mail on Sunday revealed images from a video made by an acquaintance of Mr Flowers, Stuart Davies, which apparently showed him spending £300 on cocaine.  Mr Davies said he made the film because he wanted to expose to former bank chairman’s hypocrisy.

The video emerged just days after the 63-year-old gave evidence to the Treasury Select Committee over the near collapse of the Co-operative Bank, which ran up more than £700m in losses in the first half of 2013.  He is said to have bragged at the weekend about getting “wasted” after he was “grilled” by MPs.

Mr Flowers, who previously served as a Labour councillor for Bradford Council for a decade and has been a Methodist preacher for nearly 40 years, has apologised since the article was published, but a Labour spokesman confirmed that he has been suspended from the party.

Flowers was named chairman of Co-op Bank in March 2010 and the appointment took effect the following month.  The appointment was approved by the Financial Services Authority.

As well as his suspension, the Co-operative Group has now launched an inquiry into the controversy surrounding Mr Flowers, who was in receipt of a £132,000 salary until his departure from the Co-op Bank in April this year.

“Given the serious and wide-ranging nature of recent allegations, the new executive management team has started a fact-finding process to look into any inappropriate behaviour at the Co-operative Group or the Co-operative Bank and to take action as necessary,” the Group said in a statement.

“In addition, the board of the Co-operative Group has launched a root and branch review of the democratic structure of the organisation.  We need to modernise to ensure that the interests of all our seven million members are properly and directly represented in the oversight of our business activities.”

Speaking about Mr Flowers, Labour leader Ed Miliband – who appointed Mr Flowers as a member of Labour’s influential finance and industry advisory board in 2010 – was quoted by the BBC as saying: “He was involved in the Co-op and that is no longer the case.  I think we will leave it there.

“You appoint people from a whole range of backgrounds to look at a whole range of issues and we have a range of business people working with us.  The police are looking into the matter and I’m not going to comment on an ongoing investigation.  Suffice to say that group no longer exists.  We should let the police inquiry take its course.”

The scandal is not the first time the Labour party has been hit with revelations about drug use concerning notable party members in recent years.

In 2010, Glasgow City Council leader Stephen Purcell resigned from his position despite being tipped as a future Scottish Labour party leader when it emerged that he had a drug and alcohol problem.

A criminal investigation into allegations of corruption over a £50,000 contract given to an organisation run by his friend, Ruth Black, was eventually dropped by the Crown in Scotland last year because of insufficient evidence.

When he resigned, Mr Purcell, who was 37 at the time, admitted to using cocaine “half a dozen” times while he was the leader of Glasgow City Council.  The then Labour Prime Minister, Gordon Brown, was criticised for failing to investigate claims that Mr Purcell’s suitability for office had been questioned by Labour officials two years before his resignation.