BBC chairman Richard Sharp’s position is in increased peril after MPs found he made “significant errors of judgment” by acting as a go-between for a loan for Boris Johnson.
A cross-party committee was furious that Mr Sharp failed to declare to MPs his role in facilitating the loan when he was applying for the job of BBC chairman and said he should “consider the impact his omissions will have” on trust in the broadcaster.
They said his actions “constitute a breach of the standards expected of individuals” applying for prominent public appointments.
Mr Sharp has insisted that he did not arrange the loan but admitted introducing his friend Sam Blyth, a cousin of Mr Johnson who wanted to help the then-prime minister with his financial troubles, to the Cabinet Office.
A spokesman for Mr Sharp said he “regrets” not telling MPs about his involvement with Mr Blyth “and apologises”.
Mr Sharp was named as the preferred candidate for the BBC job in January 2021 and the Commons Digital, Culture, Media and Sport Committee backed his appointment – but crucially they were not aware of his role in facilitating the £800,000 loan guarantee.
In a strongly-worded report they have now suggested Mr Sharp’s failure to come clean could damage the BBC.
“Richard Sharp’s decisions, firstly to become involved in the facilitation of a loan to the then-prime minister while at the same time applying for a job that was in that same person’s gift, and then to fail to disclose this material relationship, were significant errors of judgment, which undermine confidence in the public appointments process and could deter qualified individuals from applying for such posts,” the MPs said.
The committee concluded: “Mr Sharp should consider the impact his omissions will have on trust in him, the BBC and the public appointments process.”
The MPs were also critical of Rishi Sunak and other senior ministers who had highlighted their 2021 decision to endorse Mr Sharp to defend the appointment since the row over the loan broke, despite the fact they had not been told about the situation.
“The fact that ministers have cited this committee’s original report on Mr Sharp’s appointment as a defence of the process was followed, when we were not in full possession of all the facts that we should have had before us in order to come to our judgment, is highly unsatisfactory,” the MPs said.
The MPs said there was an “unresolved issue” as to why Cabinet Secretary Simon Case believed Mr Sharp had himself been giving financial advice to Mr Johnson and called on the Cabinet Office to “clear up the confusion”.
“Mr Sharp denied that he had ever given financial advice to the then-prime minister but was unable to account for the decision by the Cabinet Office to issue a note to the prime minister advising him not to seek further financial advice from Mr Sharp given his impending appointment as chair of the BBC,” the MPs said.
Mr Sharp was called back to the committee on February 7 this year following Sunday Times’ revelations about his role in facilitating the loan for Mr Johnson.
He said that Mr Blyth’s offer of help for the then-prime minister was made in September 2020 and he had stressed the need for things to be done “by the book”.
Following the launch of the recruitment process for the BBC chairman role, Mr Blyth contacted Mr Sharp to request an introduction to the Cabinet Secretary to ensure due process was followed.
Mr Sharp told the MPs that he met Mr Johnson before going to see Mr Case and informed him that he would be telling the Cabinet Secretary about Mr Blyth’s offer of financial assistance.
Mr Sharp met Mr Case in December 2020, at which point he “agreed no further participation” in relation to the financial support, in order to avoid any conflict of interest or perception of conflict given his application,” the report said.
Mr Sharp told the MPs that as far he was concerned, that meant “the matter had been resolved”.
In their new report the MPs said: “Mr Sharp recognised the need to be open and transparent over facilitating an introduction of the then-prime minister to Mr Blyth regarding the £800,000 loan guarantee and brought this to the attention of the Cabinet Secretary.
“However, he failed to apply the same standards of openness and candour in his decision not to divulge this information during the interview process or to this committee during the pre-appointment hearing.”
Acting chairman of the DCMS Committee Damian Green said: “The public appointments process can only work effectively if everyone is open and transparent, yet Richard Sharp chose not to tell either the appointment panel or our committee about his involvement in the facilitation of a loan to Boris Johnson.
“Such a significant error of judgment meant we were not in the full possession of the facts when we were required to rule on his suitability for the role of BBC chair.”
A spokesman for Mr Sharp said the BBC chairman “appreciates that there was information that the committee felt that it should have been made aware of in his pre-appointment hearing”.
“He regrets this and apologises,” the spokesman said. “It was in seeking at the time to ensure that the rules were followed, and in the belief that this had been achieved, that Mr Sharp acted in good faith in the way he did.
“Mr Sharp believed he had dealt with the issue by proactively briefing the Cabinet Secretary that he was applying for the role of BBC chair, and therefore beyond connecting Mr Blyth with Mr Case, he recused himself from the matter.
“At that meeting, and subsequently, it was not suggested by the Cabinet Office that the act of connecting Mr Blyth with Mr Case was something that should be declared, and it was explicitly agreed that by not being party to the matter going forward he would be excluded from any conflict.”
The spokesman said Mr Sharp was never involved in the arrangement of a loan between Mr Blyth and Mr Johnson and had not offered financial advice to the then prime minister.
“Mr Sharp would like to apologise again to the BBC’s brilliant staff given the distraction it has caused.
“He is proud of the work the board has done driving positive change at the BBC over the last two years, and very much looks forward to continuing that work.”
Mr Sharp is said to be looking forward to the conclusions of the investigation being carried out by Adam Heppinstall KC, ordered by the Commissioner for Public Appointments.
Shadow culture secretary Lucy Powell said: “This is a damming report which makes the BBC chair’s position increasingly untenable because it throws into serious doubt the impartiality and independence that is so fundamental to trust in the BBC.
“The Conservatives’ cronyism is dragging down the BBC when we should be building it up as a cornerstone of our creative economy.”
Deputy Liberal Democrat leader Daisy Cooper said Mr Johnson “must now also face the music and answer questions from an independent inquiry”.
