Former chairman of the Co-operative Bank Paul Flowers resigned as a councillor in Bradford two years ago after “inappropriate” content was found on his computer, the council has revealed.
Mr Flowers, a Methodist minister who chaired the Co-operative Bank for three years from 2010, was exposed allegedly buying and using illegal drugs in a newspaper sting at the weekend.
He left the council in September 2011, having served on it for almost a decade, citing personal reasons and increased responsibilities at the Co-operative Banking Group.
But a spokesman for Bradford Council said today: “Inappropriate but not illegal adult content was found on a council computer handed in by Councillor Flowers for servicing. This was put to him and he resigned immediately.”
The latest revelations about Mr Flowers will heap further embarrassment on the Co-operative Group, whose long-standing chairman Len Wardle announced today he was resigning with immediate effect after he admitted “serious questions” were raised by the drugs scandal.
Mr Wardle, who has held the position since 2007, announced last month that he was due to leave next May but he said it was now right for him to go straight away, having led the board that appointed Mr Flowers.
Mr Flowers served as a member of Bradford Council’s executive from May 2010 to August 2011, when he stepped down from the post, saying he had “increasing and competing demands” on his time.
The following month he resigned as a Labour councillor for the Great Horton ward, having served on the council since 2001.
At the time, he said in a statement: “It has become clear to me that, over the longer term, I will be unable to sustain the workload associated with performing both roles to the best of my ability.”
Following Mr Flowers’s resignation as councillor, the then-council leader Ian Greenwood, who lost his seat to a Respect Party candidate in May 2012, said: “Paul is a tremendously gifted and committed individual who has made a significant and lasting contribution to the community in Great Horton, to the council and to the Labour group.
“I will be sad to see him go but I fully understand the reasoning behind Paul’s decision.”
The supermarkets-to-funerals Co-operative Group has launched a fact-finding investigation into “any inappropriate behaviour” and a “root-and-branch” review of its structure in the wake of the revelations about Mr Flowers.
Critics have questioned how he could have been appointed given his apparent lack of experience, and Andrew Tyrie, chairman of the Treasury Select Committee, said that, even before the weekend’s revelations, it was clear he was “manifestly unsuitable”.
Mr Flowers now faces a police investigation. He has apologised over the scandal and been suspended by the Methodist Church as well as the Labour Party.
The Co-operative Bank is facing a rescue plan which will see majority control turned over to investors including US hedge funds, after it was left with a £1.5 billion gap in its finances following the takeover of the Britannia Building Society in 2009.
Announcing his resignation today, Mr Wardle said: “The recent revelations about the behaviour of Paul Flowers, the former chair of the Co-operative Bank, have raised a number of serious questions for both the bank and the group.
“I led the board that appointed Paul Flowers to lead the bank board and under those circumstances I feel that it is right that I step down now, ahead of my planned retirement in May next year.
“I have already made it clear that I believe the time is right for real change in our operations and our governance and the board recently started a detailed review of our democracy.
“I hope that the group now takes the chance to put in place a new democratic structure so we can modernise in the interests of all our members.”
Mr Wardle’s departure will see him replaced by his deputy, Ursula Lidbetter, chief executive of the Lincolnshire Co-operative.
The Co-operative Group said: “It is intended that Ursula will chair the group through the current governance review, which will include consideration of how the board is constituted and chaired.”
Ms Lidbetter said: “These are very difficult times for the Co-operative Group and the wider movement, but I believe that we can and will come through this period stronger than ever by facing up to our challenges.
“I look forward to working with the new management team, who have already started on the important work of turning around our businesses.
“In addition, I look forward to working with my fellow board members and the wider membership as we change the way we are organised and governed in the interests of all our seven million members.”
The group, which employs 100,000 people, plunged to £559 million losses in the first half of the year, weighed down by its banking arm.
In July, it appointed former Treasury mandarin Sir Christopher Kelly to head an independent investigation into what went wrong at the bank. He will report back at the mutual’s annual meeting next May.
The fate of the bank has been described as a “tragedy” by former group chief executive Peter Marks.
Mr Tyrie, who heads the Parliamentary Commission on Banking Standards, said regulatory supervision of it had been a “complete disaster”.
He has said that the latest episode, involving Mr Flowers, shows the need to implement regulatory reform for top bankers as recommended by the commission.
It called for the approved persons regime (APR) to be scrapped and replaced. Mr Tyrie said APR had “degenerated into little more than a bureaucratic box-ticking exercise”.
He argues that, instead, there needs to be continuing and “intrusive” supervision of banking bosses.
Regulators have said that Mr Flowers went through the appropriate process when he joined the Co-op’s board as non-executive director. But he did not face further scrutiny when he became the bank’s chairman.