Burned

by Sam McBride

  ***********

  While Foster said that Crawford did not pass on to her what he was learning about the RHI problem in this period, he was talking to others in their department about the scheme – and his actions raised eyebrows. Sometime in summer 2015 – seemingly in late July – Crawford spoke to mid-ranking Department of Finance official, Michelle Scott, about the scheme. During a brief phone call, which stuck in her mind, the supply officer said that Crawford ‘asked why [the department] had an issue with the RHI scheme’. She added: ‘To the best of my recollection when Mr Crawford commented that it was fully AME funded, I said we didn’t know that it would be fully AME funded but were looking into the situation.’ The official informed her boss, Emer Morelli, who passed it up the line to her boss, the budget director, Mike Brennan. All three of them described the contact by Crawford as ‘unusual’ because he would normally go through more senior officials.

  Crawford was decidedly uncertain as to whether he had told Foster, the Finance Minister, about what he said he was describing to Cairns as a looming financial ‘tsunami’ involving irregular expenditure in the department they had both just left and involving a scheme they had set up. When asked if he told Foster, Crawford said:

  Well, er, you know, in terms of, the minister was aware I was speaking to Timothy Cairns on the — on an issue to do with the RHI. You know, I think she’s already, you know, it’s already appeared in her evidence that she knew, from a meeting at the end of June, that the RHI was becoming an issue … I can’t say, at this stage —. I can’t say whether I sent her through or made her aware of the problem at this stage.

  He added: ‘It’s something that I should, you know, looking at it now, I should have done. Did I update her verbally on it? I just cannot confirm that one way or the other.’ Foster was more emphatic, telling the inquiry that Crawford had definitely not told her about the issue.

  The overlap between Crawford’s Stormont role and the business activities of his relatives did not stop with passing information to them. The spad told the inquiry of a remarkable coincidence, which brought him into contact with a key RHI beneficiary on 17 July, the day after Crawford received the RHI submission from Cairns. While working in the field adjacent to the construction of his brother’s poultry sheds, Crawford said that he saw a vehicle arrive. The occupant was David Robinson of R&S Biomass, one of the biggest biomass boiler installers, who was at his brother’s farm to install an RHI boiler. The spad approached Robinson, unaware of his identity, he said, and in a 20-minute conversation was told that the industry was aware of the looming subsidy cuts and as a result orders were flying in at such speed that boiler piping was in short supply. He also informed Crawford that there were allegations of the scheme being abused because it was so generous.

  Crawford said that he had then met senior Moy Park managers David Mark and Brian Gibson at his brother’s poultry unit less than two weeks later but this had been ‘unplanned contact’ as they were showing the facility to ‘financiers connected to Moy Park’ and that they did not discuss RHI. Mark agreed that the conversation had been ‘really pleasantries’ and that he had no recollection of discussing RHI. Both Mark and Crawford told the inquiry that they had no discussions about RHI in this period. Intriguingly, however, less than three weeks later Mark emailed a Moy Park colleague to say: ‘Got this from a contact in Government — have removed names just in case we circulate — can fill you in’. Beneath that comment was a paragraph, which said that DETI were moving ‘towards impeding the abuse that has been taking place within the … poultry sector where they are being blamed for running their system night and day even without poultry present’.

  Mark told the inquiry that he could not recall who his ‘contact in government’ had been. However, precisely the same paragraph he forwarded had been sent the previous day to Crawford. It had originated with boiler installer BS Holdings and had been forwarded to the spad by Howard Hastings, a leading hotelier whose role in tourism brought him into contact with Crawford. Confronted with that at the inquiry, Mark admitted that he could ‘see the logic’ of his contact having been Crawford – but insisted ‘I have no record to show that’. When he subsequently appeared before the inquiry, Crawford insisted that ‘I’ve no knowledge of sending it to Moy Park’ but conceded that having been presented with the evidence ‘I can only conclude that it came from myself’.

  On one reading, the encounter on the farm of James Crawford was an extraordinary coincidence – that senior figures from the company benefiting most from RHI should at this precise moment bump into the man who it would later be alleged was at this point attempting to keep the scheme as lucrative as possible for as long as possible. On another reading, it was entirely natural that Crawford – who came from a rural community, whose family were poultry farmers and who had high-level political interaction with senior Moy Park executives – would rub shoulders with such people as he went about other business. The brief encounter may be irrelevant to RHI. But it is worth recording because what was to follow would suggest that Crawford was now moving to advocate for Moy Park – even though doing so would be at the expense of taxpayers.

  CHAPTER 12

  IN THE SHADOWS

  It quickly became apparent to DETI’s senior civil servants that something highly unusual was going on around RHI. The urgent submission to Jonathan Bell had gone on 8 July. A decision had been expected within days but a fortnight later there was no indication of an imminent verdict from their political master – nor any sense of urgency about the money streaming out of the department. On 23 July, DETI Deputy Secretary Chris Stewart spoke to Tim Cairns by phone. The pair had worked together before and had a good relationship so the conversation was relaxed. Stewart was attempting to establish why there was still no decision and rather than finding Cairns apologetic or giving him assurance of a speedy move, the spad was kicking back against the proposals.

  In an email to Wightman that day, Stewart relayed that Cairns was ‘concerned that the adoption of tariff control legislation in October may lead to a further spike in demand, and suggested that it might be delayed (I countered that we already have a spike in demand, and a well-informed industry will keep demand high until controls are in place).’ The spad’s suggestion about a spike was drawing on Crawford’s email three days earlier, which had said there would be a ‘massive spike’. But Cairns’s proposal – keeping the unamended tariff for longer – was nonsensical if he was genuinely attempting to limit expenditure. Wightman replied to Stewart that day to say that ‘the industry knows that tariff changes are likely to happen in the autumn so installations are already being accelerated to beat the deadline. We reckon that between 60–70% of all poultry houses for instance have already switched to biomass. If we delay the tariff changes, the remaining 30–40% might get through at the current (higher) rates.’

  Five days later, Stewart was holding a scheduled update on energy issues with Energy Division Director John Mills when Cairns called in. The spad had been attempting to speak to Stewart about RHI and, seeing that Mills was also there, he spoke to them both. During a detailed discussion about the scheme, Stewart developed the impression that Cairns needed something he could ‘sell’ to other unnamed DUP members ‘as a “do the minimum” approach.’ Stewart’s view of Cairns was that ‘he personally had no objection or was raising no challenge to cost controls … I got the clear impression from Timothy that he wanted to bring this to a conclusion but needed a bit of help’. That help came in the form of an email Mills sent to Cairns two days later in which he pressed home the need for an urgent decision. Mills told the inquiry that although the email ‘looks like a note to him … it was intended for him to hand out to others to say “look, we need to be getting on with this”.’ The message referred to the ‘urgent need to put appropriate measures in place to ensure proper control of budgets’, adding that Cairns had said that it was important to use as much of the available Treasury money as possible and they did not want to ‘over-rea
ct’ to the sudden rise in demand for the scheme – the very points Crawford had been raising. Mills also said in the note that cost controls were ‘an important safeguard against over-use’ and ‘it would be very difficult to justify inaction’.

  Mills told the inquiry: ‘I think by this stage I was starting to think “this is just deliberate delaying” because the gist of the conversation [from Cairns] was “I need something to convince those I need to convince that we need to proceed” and hence the note that he could then use.’ When asked if Cairns told him that was why he needed the note, Mills said: ‘He did … he needed the note to give to others.’ Asked by inquiry chairman Sir Patrick Coghlin who those people were, he said: ‘The party apparatus is what I took it to be, again using the phrase “the party” meaning in the generality, the political process – other special advisers or whatever political setup was in place.’ Mills said that he viewed the intra-DUP machinations as something which was Cairns’s responsibility. With something approaching disdain, he added: ‘That’s a world that I don’t inhabit and don’t want to inhabit’.

  Phone records obtained by the inquiry showed that between the meeting and Mills sending the email Cairns phoned Crawford and they spoke for just under four minutes. Cairns then forwarded Mills’s email to Crawford with the comment: ‘It’s an introduction of tariff controls to stop misuse rather than full reform from 1st Oct. Any thoughts’. Crawford replied the following night. He began by saying: ‘I think that you will need to make changes from the 1st October as the system at the moment has no upper limit to the amount of support.’ Crawford would come to rely on that sentence, arguing that it showed that he told Cairns to proceed with tiering when officials wanted it, rather than attempting to delay the change. But Crawford’s defence is greatly undermined by the rest of that email. He went on to say:

  One thing to consider is increasing the number of hours from moving from the higher to lower tariff. Moy Park houses currently run for approximately 6000 hrs for a 99 kW boiler when in their normal production cycle. The current problem is that it pays producers to heat houses when their houses are empty as the rates are attractive and some use boilers for [more] than 6000 hrs per annum. If a Moy Park producer puts in a 199kw boiler he can expect to run for approximately 3000 hours. From these calculations you can see why Moy Park producers will be in a rush to refit their houses before the 1st October. If you increased the step from 1314 to 3000 there will be no incentive for producers to install before the 1 October.

  At first glance, it is Crawford’s knowledge of the potential for RHI being abused that jumps out of that paragraph. Crawford told the inquiry that by this point ‘I knew there was nothing to stop people, effectively, running boilers 24/7 and getting paid for it’. But the really startling element of the paragraph was actually what preceded that. In essence, Crawford was proposing that although tiering should be introduced when the officials wanted it, it should be done in a way that would not make the scheme a penny less lucrative for Moy Park’s contract farmers. Crawford’s proposal would have seen tiering introduced in name only because many of the heaviest RHI users would have barely, if at all, been worse off even after the scheme was changed in the way he suggested.

  Although it sounded technical, his calculation was very simple. A 99 kW boiler running for 6,000 hours produces virtually the same heat as a 199 kW boiler running for 3,000 hours. DETI’s plan was to belatedly follow the GB scheme where only the first 1,314 hours were paid at a high tariff. Crawford’s plan was a cunning attempt to circumvent that by introducing tiering on paper – but bastardising tiering so that it would do nothing to address the huge sums going to Moy Park’s farmers. It was an audacious proposal and the explicit reference to Moy Park left no doubt as to who he thought should be foremost in the minds of DETI in relation to RHI.

  Energy expert Keith MacLean, the inquiry’s technical assessor, was forensic in deconstructing what he had been attempting to do. MacLean put it to Arlene Foster’s long-standing right-hand man that on the

  basis of fairly simple arithmetic, it seems that what you’re proposing is actually a way of maintaining exactly the same income for the poultry industry that they were having before [because your proposal] would mean that they would all get the higher tariff for all of the 3,000 hours, and therefore maintain exactly the high income that was driving the behaviour that you describe that allows them to heat the houses when they’re empty.

  Crawford argued that ‘by doing that, you would stop the rush of people coming in before the changes were taking place’. An incredulous MacLean replied: ‘Of course you would – by giving them just as much money as before.’

  Crawford then argued that it would at least stop the running of boilers for the entire year. Coghlin said: ‘What this is is a sales pitch for Moy Park.’ Crawford insisted: ‘No, it’s not; I don’t believe so.’ Coghlin then asked him: ‘Why 3,000? Because 3,000 is what Moy Park need. Now, unless you have, Dr Crawford, a really helpful reasoned explanation, that is what you have put, in English, in your email.’ Crawford said: ‘My knowledge at that time, it took the 3,000 hours to heat a house. It’s not to heat it when it’s empty; it’s to heat it when there was a crop in the house.’ Spotting that Crawford was now justifying his perverse proposal because it would be good for Moy Park, Coghlin interjected: ‘Exactly, but that’s what Moy Park need, or want, or told you.’

  Crawford said that the message from Cairns had referred to a huge RHI demand from the poultry sector and so he was attempting to find a means of addressing that. An exasperated Coghin said: ‘What you’re saying here is “there is a special interest here and that is the poultry interest and Moy Park need 3,000 hours”’. As before, Cairns quickly acted as Crawford suggested and enquired about his proposal being implemented. By now officials were suspicious. Their response was rapid and robust. Mills replied on 11 August with a brusque dismissal. He asked what the justification would be for Northern Ireland adopting different tiers to GB and said that ‘we would have no basis for 3000 hours, (or indeed any other figure)’ and warned that it would be in breach of EU state aid law. He then highlighted the most obvious problem for a department urgently seeking to cut expenditure, pointing out that the new tiering mechanism ‘would not address our requirement to bring spending back under control’.

  DETI’s senior civil servants – by now both exasperated and alarmed – escalated the issue significantly. Stewart passed Mills’s dismissal to Cairns. But, lest his colleague’s blunt rejection did not sufficiently convey their thinking, Stewart warned the spad that the proposal would ‘raise an accounting officer issue for Andrew [McCormick]’. That was a barely veiled threat that McCormick would not be able to justify the scheme as a defensible use of public money. In those circumstances, he had the option of asking Bell for a ministerial direction – effectively asking Bell to order him in writing to implement the pro-Moy-Park proposal. It was a nuclear option, which would trigger formal warning bells in both the Department of Finance and the Northern Ireland Audit Office. McCormick later said that one of his greatest regrets about his role in the scandal was that he did not ask for a ministerial direction. Cairns told the inquiry that if such a request had come, he and Bell would have dropped the issue.

  Having received Stewart’s warning, Cairns made no effort to argue for his proposal – reinforcing the sense that he was the messenger and Crawford the decision-maker. He again forwarded the officials’ response to Crawford with the comment: ‘Seems we have no choice but to proceed on the previous sub from early July. Ie. follow GB policy from 1st Oct’. Although there is an element of mystery around what Crawford was doing in this period and why he was doing it, there is no doubt that the impact of his interventions was to delay the scheme being brought under control.

  Mills believed that the pro-Moy-Park proposal was just another stalling tactic to eat up another fortnight of officials’ time – while across Northern Ireland boilers were being installed as fast as installers could operate. He
told the inquiry that it was ‘commonly thought’ within the department in summer 2015 that Crawford was the individual in the shadows ‘pulling the strings’ to delay the scheme being made less lucrative. He said that although he did not have ‘first hand knowledge’ of Crawford’s involvement at the time he suspected he was directing Cairns. Mills said the two civil servants immediately above him – Stewart and McCormick – ‘felt that [Crawford’s] influence was very great in terms of how decisions in DETI [were taken] and that Tim Cairns more or less had to go with Andrew Crawford’s suggestions’.

  Stewart, a serious and understated senior mandarin, told the inquiry that there had been unmistakable ‘resistance’ from the DUP as DETI sought to address the scheme’s overspend. Stewart said his understanding was that Cairns was the conduit for resistance emanating from outside DETI, rather than the source of it, with the suggestions he was communicating as ‘a result of party considerations’. Stewart said it was not uncommon for a minister to disagree with advice and take time to consider what to do, ‘but normally you would know what the concern is’. In this case, he was alarmed because there was ‘a lack of rational argument, or counter-argument, coming back … it seemed to me that what we were getting was not rational or reasoned counter-argument, but resistance … I could see no good reason for that happening and that’s the aspect of it that’s unique’. Expressing bafflement as to what had happened more than two years earlier, Stewart went on: ‘The degree of resistance … to proposals that were thought to be modest and proportionate was surprising. I have not encountered a similar phenomenon at any time during my career, which includes serving ministers from five political parties (local and national).’ Stewart said that he initially