THE disgraced former chairman of the Co-operative Bank received more than £60,000 in a pay-off after he resigned in June, it can be revealed today.
The Rev Paul Flowers, who is the subject of a West Yorkshire Police inquiry into drug allegations, was given a lump sum which was the equivalent of around six months of his annual pay of £130,000.
The payment was described as a “scandal” by former Leeds MEP Michael McGowan, who is also a member of the Co-operative Group’s area committee for Leeds and Wakefield.
He said the “ill-deserved earnings” represented a reward for the “incompetence and damage he has inflicted on the Co-op Bank” and should be repaid.
The latest revelations surrounding Mr Flowers and the crisis-hit bank emerged as the Government indicated there would be an independent inquiry into how the Methodist minister – who has now been suspended indefinitely by his church – came to be appointed in the first place.
It also emerged today that Mr Paul Flowers left a drug charity after an investigation over his expenses claims.
He was suspended from the Lifeline Project, where he was a trustee on the board of the organisation, the charity said.
He left the charity in 2004, long before he was engulfed in allegations of illegal drug use and gay sex that led to his suspension from the Methodist Church and a growing political row over his appointment to the Co-op Bank and its close ties with the Labour Party.
It also It emerged today that Mr Flowers, 63, was convicted of drink-driving years before his alleged drug- taking was exposed.
He was caught over the limit behind the wheel in Manchester in June 1990.
A spokeswoman for the Methodist Church said they were aware of the drink-drive conviction and a disciplinary hearing was held but he had been allowed to continue his role in the church.
The Yorkshire Post reported earlier that Mr Flowers stepped down as a councillor in Bradford in 2011 after “adult content” was allegedly found on a computer he had used.
He resigned citing pressures of his workload and the information about the adult material was not made public.
Bradford City Council said the information was known only by the then-council leader and the local authority’s chief executive and solicitor.
A Bradford Council spokeswoman said: “The chief executive and the city solicitor knew at the time that Paul Flowers had resigned after it was put to him that inappropriate material had been found on his computer.”
Meanwhile, Labour is facing growing questions over the party’s links to Mr Flowers and the Co-op Bank amid claims of a cover-up about how much was known by the party about his past.
Leader Ed Miliband said his party acted with “utmost integrity” in its dealings with the bank and Mr Flowers.
Mr Miliband spoke out after Prime Minister David Cameron announced an inquiry into the bank’s ailing finances and decision to appoint Mr Flowers.
The Labour leader said: “Paul Flowers was somebody who I met with on one occasion and had meetings with a wider group on a couple of other occasions. He was never my close adviser.”
Since the weekend Mr Flowers, who became chairman of the bank in 2010, has been embroiled in allegations he bought and used illegal drugs including crystal meth, crack cocaine and ketamine.
The revelations emerged little more than a week after Mr Flowers had given a stumbling performance in front of the Treasury Select Committee when he appeared to have little knowledge of the bank’s finances in the face of questioning about its poor performance. The ‘ethical’ bank is currently having to go through a £1.5bn rescue which will see majority control turned over to investors including US hedge funds.
The Co-op Bank declined to comment publicly on Mr Flowers’ pay-off but a well-placed source said the payment represented a notice period up to the end of 2013 and added he had not been paid up to the end of his term of chairman, which was due to run to 2015.
But Mr McGowan said: “It is a scandal that he is being rewarded for his incompetence and the damage he has inflicted on the Co-op Bank. Any money he has been paid out should be returned and any payments he has been promised stopped immediately.
“He should not be paid off for his gross mismanagement and behaviour but required to pay back his ill-deserved earnings.
“The crisis at the bank is not a failure of the co-op model of business but a gross failure of governance for which he could have been sacked. Instead he is now being rewarded with good money for his incompetence.”
Asked whether Mr Flowers would be required to repay any of the money, a Co-operative Bank spokesman said: “There is an internal investigation taking place with regard to Paul Flowers. It would be inappropriate for us to answer that question at this moment in time.”
The Co-operative Group chairman, Len Wardle, resigned with immediate effect on Tuesday after taking responsibility for the Group’s decision to appoint Mr Flowers as chairman of the bank board.
He had been due to retire next May and it is understood no decision has been taken on any further payments Mr Wardle will receive.
In the Commons, David Cameron told MPs that there were “clearly a lot of questions that have to be answered” in relation to the Co-Operative Bank.
“The Chancellor will be discussing with the regulators what is the appropriate form of inquiry to get to the bottom of what went wrong here,” he said. “Why was Rev Flowers judged suitable to be chairman of a bank? Why weren’t alarm bells ringing earlier, particularly by those who knew?
“I think it will be important in the coming days that if anyone does have information they stand up and provide it to the authorities.”
Mr Cameron said that the “first priority” was to safeguard the bank and ensure its customers and bondholders were protected without using taxpayers’ money.
But he also sought to increase pressure on Labour leader Ed Miliband, who is facing growing questions over his party’s links to the former bank chairman.
Tory chairman Grant Shapps has questioned when Mr Miliband and shadow chancellor Ed Balls became aware of why Mr Flowers resigned from Bradford Council.
He has also challenged the Labour leader to explain why Mr Flowers had been brought on to the party’s business advisory group and to return a £50,000 donation to Mr Balls’ office that he had backed.
Mr Miliband sought to avert the attack by reminding Mr Cameron that his own party had taken donations from individuals such as Asil Nadir, who was jailed after going on the run when facing fraud allegations.