KPMG won’t drop lobby scandal firm

KPMG has refused to drop LLM, the controversial lobbying firm at the centre of the ‘cash for access’ scandal.

Headed by three former Labour party insiders, LLM has been credited with a ‘rebranding’ of KPMG within government circles – to the extent that senior ministers are said to view the firm as ‘onside’ with the government’s approach.

KPMG’s relationship with LLM’s three directors, Neal Lawson (whose alleged claim that he could put clients in touch with chancellor Gordon Brown helped spark the scandal), Ben Lucas and Jon Mendelsohn, began when they worked for another consultancy, Lowe Bell Political. When the three left to set up LLM, KPMG transferred its account to the new firm.

A KPMG spokesman said that since it retained LLM in September of last year, the relationship between the firms had been ‘very fruitful. They have a very good understanding of New Labour and have been very helpful in assessing its aims and objectives,’ the spokesman said.

Lobby group insiders have credited the directors with reshaping KPMG’s outlook to address New Labour expectations. Lawson described LLM’s role at KPMG: ‘We explain what is expected of them, the kind and style of operation and it is up to them to make the most of what we have given. New Labour is a different kind of government with a different set of priorities that people don’t always understand.’

KPMG’s internal communications director Neil Sherlock, a Liberal Democrat supporter, confirmed he had met Lawson in political circles as part of his role in the so-called ‘proximity process’ aimed at bringing Labour and the Liberal Democrats closer together.

Sherlock denied his political activities had created any conflict of interest in dealings with Lawson, who is a former advisor to chancellor Gordon Brown. Sherlock said Ben Lucas looked after the KPMG account rather than Lawson. A KPMG spokesman added: ‘It won’t change the relationship we have with them.’

In an unrelated development, former KPMG tax manager turned Tory MP Nick Gibb called for a police investigation into the use of information allegedly supplied by lobbyists to investment banks. Gibb, MP for Bognor Regis, said: ‘These issues are very serious indeed. Knowing in advance that the government was going to spend 2.75% more in a year is market-sensitive information.’

Related reading