May 29, 2024
Policy & Regulation

Former UK Chancellor Accused of Breaching Lobbying Rules

Lord Philip Hammond, the former United Kingdom Chancellor of the Exchequer and a prominent crypto advocate, is facing allegations of breaching lobbying rules for former ministers. The accusations stem from his involvement in communications between Treasury officials and crypto firm Copper, as reported by the Financial Times on February 9.

In March 2021, Hammond played a role in facilitating communication between then Economic Secretary for the Treasury, John Glen, unnamed Treasury officials, and Copper’s CEO, Dmitry Tokarev. The claims are based on documents obtained through a Freedom of Information Act request.

According to the report, an internal email from Glen instructed officials to use Hammond as an intermediary for Tokarev. Subsequently, a week after Treasury officials met with Tokarev, Hammond spoke to Glen on the phone, relaying that the Copper CEO was impressed by the meeting and expressing the firm’s concerns about the pace of regulatory changes for crypto companies to the Treasury Secretary.

Interestingly, these interactions occurred before Hammond officially joined Copper as a Senior Adviser in August 2021. Given that he left the Chancellor position in July 2019, regulations require Hammond to seek permission from the Advisory Committee on Business Appointments for any private sector role connected to lobbying efforts involving his former department.

Hammond defended his actions, stating to the Financial Times that he did not view his interactions as lobbying and did not request the Economic Secretary to facilitate any meeting between the Treasury and Copper, deeming it “inappropriate.” He described his phone call to Glen in March 2021 as a “regular, if not particularly frequent” contact with a “close political friend.”

A spokesperson for the U.K. Treasury has also denied any wrongdoing, emphasizing that officials routinely meet with many crypto firms each year to better understand the sector and inform policy development for its proportionality and safety.

Notably, in June 2022, Hammond publicly expressed concerns about the U.K. lagging behind its European Union counterparts in cryptocurrency regulation. He pointed out a potential “bandwidth issue” and a “capacity issue” as contributing factors, indicating a need for greater agility in embracing new technologies.

The allegations against Lord Philip Hammond highlight the complexities and potential conflicts of interest surrounding former ministers’ involvement in the private sector, especially in emerging industries like cryptocurrency. The case is likely to prompt further scrutiny of lobbying rules and practices within the U.K. political landscape.

Image by vectorpouch on Freepik

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