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Fall of former bank boss grips UK

Flowers

– He was a bank boss, but had no apparent banking experience. He was a Methodist minister, but got busted for allegedly buying cocaine and downloading porn at work.

The spectacular downfall of Paul Flowers, the former chairman of Britain’s Co-operative Bank, was a tale made for the tabloids. His troubles began with the near collapse of the bank he was heading. They came to a head this week when a newspaper released footage that showed him handing cash to a dealer selling drugs including crystal meth and ketamine, a farm animal tranquillizer used recreationally as a hallucinogen.

Flowers, 63, has apologized for his “stupid and wrong behavior,” but his humiliation continues.

He was arrested late Thursday as part of a drug investigation, as more shadowy details are being dug up about his life.

A local government council said this week that he was found with “inappropriate” adult material on his work computer when he was an official there for the opposition Labour Party in 2011. It confirmed he resigned from that office immediately after.

And the Methodist Church in Britain said Flowers was disciplined and briefly suspended after he was convicted of drunken driving and an act of gross indecency years ago.

Those revelations, together with Flowers’ poor leadership of his bank, left many in disbelief: How was a man like him appointed as a bank chairman in the first place?

That was the question asked by Prime Minister David Cameron, who on Wednesday ordered an independent inquiry into the role of Flowers at the Co-op, which he left in June after three years.

“Reverend Flowers has deeply let down the people who entrusted him to be the chair of the bank,” said Ed Miliband, leader of the Labour Party. “Obviously he has deep questions to answer about that.”

Flowers first came under scrutiny in late October, when he failed to answer basic questions about his bank at a parliamentary committee.

He told the committee that Co-op’s total assets were about $4.83 billion – they actually total about $75.7 billion.

The company has since fallen deeper into financial trouble. It has had to plug a $2.4 billion hole in its finances, and recently agreed to a bailout plan by hedge funds.

But it was his personal life that became the subject of scandal this week, when the Mail on Sunday said it had filmed Flowers buying the drugs in a car just days after the committee hearing.

“This year has been incredibly difficult with a death in the family and the pressures of my role with the Co-operative Bank,” Flowers said in a statement afterward. “I am sorry for this, and I am seeking professional help.”

Britain has had a string of bad bank scandals since the 2008 financial crisis, but the Co-op Bank is the last place many people would expect things to go so horribly wrong.

The company behind it, the Co-op Group, has built its image on sound values. As the country’s largest mutual society, it has no shareholders but is owned by its members, and had billed itself as an alternative to the corporate greed that brought down many other banks.

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