British Prime Minister David Cameron said on Wednesday that investigators must find out how disgraced former banker Paul Flowers was allowed to hold his position as chairman of Britain’s Co-operative Bank.
Cameron said the bank had been “driven into the wall” by Flowers and questioned why alarm bells hadn’t rung earlier over his behavior.
Flowers, a Methodist preacher with little banking experience, oversaw the bank’s near collapse and has been caught on film allegedly arranging to buy illegal drugs.
“Why was Reverend Flowers judged suitable to be chairman of a bank,” Cameron asked in parliament. “Why weren’t alarm bells rung earlier, particularly by those who knew?”
Finance minister George Osborne will be talking to regulators about the best form of inquiry into the affair in the coming days, he added.
Cameron also said the opposition Labour Party, of which Flowers was a member and a backer, had failed to alert the authorities to Flowers’ past.
“Why did they do nothing to bring to the attention of the authorities this man who’s broken a bank?” Cameron said.
“This bank, driven into the wall by this chairman, has been giving soft loans to the Labour Party … donations to the Labour party, trooped in and out of Downing Street under Labour, ill-advising the leader of the Labour party, and yet now we know all along they knew about his past,” Cameron said.
Flowers, a Methodist minister for 40 years who formerly chaired the drugs charity Lifeline, became chairman of the Co-op bank from 2010 until June this year.
This was a period when it racked up huge losses and faced a 1.5 billion pound ($2.42 billion) capital shortfall. The Co-op Group has since lost its majority stake in the bank to U.S. hedge funds that owned its debt.