Response to the letter of Paula Vennells to BEIS Select Committee dated 24th June 2020

I have sent the following to the BEIS Select Committee

Response to the letter of Paula Vennells to BEIS Select Committee dated 24th June 2020

As a former subpostmaster, since the proposed inception of the Network Transformation program in 2010, I have been and remain a staunch critic of Post Office Ltd (POL).   I have repeatedly expressed my views to, and made direct contact with, senior management and the board of POL.  In return I have received acknowledgement from them and in some cases their legal team which I understood to be some sort of veiled threat.   In addition I have made many Freedom of Information requests, often using an assumed name to prevent further harassment, the answers to which in some cases have been very revealing but in most cases I have been met with obstinate refusal to release information which should be in the public domain.    I have done all of this out of my desire to return the Post Office network to its proper place in the High Streets and Villages of this land and for it to provide a decent income and prove a worthy investment for the thousands of SPMRs the network depend upon, just as I once was.

I would like to take this opportunity to comment on Ms Vennells recent letter to you and point out some ‘inconsistencies’.   I would also like to point out that it is my opinion that the legal process has not yet been completed and all parties to potential future litigation, Ms Vennells, Post Office Ltd and Fujitsu are clearly taking every opportunity to lay the groundwork for their future defences including these replies to your questions.  I would be very surprised if Ms Vennells’ reply had not been reviewed and amended by her lawyers accordingly.

It should be pointed out that Ms Vennells has chosen in her letter to take the opportunity to elucidate on other points not covered by your questions to her.   It is therefore fit and proper in my opinion to consider the matters that she chose not to cover.  One very important one is the matter of her remuneration during the period of her ‘tenure’ as MD and CEO of POL.   It is now fact that the Profit and Loss Ms Vennells reported on from 2010 to 2019 would have contained the proceeds of repayments from SPMRs that the SPMRs were not liable for.  While these may not yet have been quantified there is a Clawback provision in her employment contract for bonuses received unduly.  At no time has she offered to repay such an amount which I find shocking and disgraceful.

Please see my comments on her letter below.

Kind regards

Tim McCormack

Quotes from Ms Vennells’ letter to you are in italics:

(4) it is contrary to what I believed throughout my time as CEO of Post Office between 2012 and 2019

Let me start by being necessarily pedantic in order to make my point.  I fail to see the difference in responsibilities between Ms Vennells’ role as Managing Director of Post Office Ltd from 2010 to 2012 and her role as CEO up until her dismissal/forced resignation in 2019.  Does her comment infer that from 2010 to 2012 she believed something else to be true?

In her letter to you she uses the terms ‘I believe(d)’ and ‘I understood’ repeatedly to defend her actions or inactions.   It must be pointed out that a significant defence in future prosecutions of any individuals and/or organisations as a result of this scandal will be that they believed the circumstances to be true at the time.

Were her beliefs consistent and unchanging throughout that period?  I doubt very much that is the case.

(6) I wish to state for the record that I do not accept any personal criminal misconduct.

Ms Vennells’ ignores for some reason the fact that she was (and remains because of her current positions) a public officer while in charge at POL.  As such she can be held liable under the Misconduct in Public Office Act.   Failing to report criminal activity within an organisation, failing to account for proceeds of criminal activity and in my opinion in all probability personally benefitting from the proceeds of criminal activity are all possible lines of inquiry the Metropolitan Police will be investigating in due course.  Ignorance of the law can never be used as a defence and as was clearly pointed out to Ms Vennells in a BBC Panorama program, her legal staff deliberately withheld evidence of Horizon errors from Seema Misra while her trial was ongoing.

(4) Before I became managing director, I had no real involvement that I can remember in dealing with complaints about Horizon, and I had no responsibility for investigators or prosecutions

She became MD in October 2010.  The inference from this statement is that from that moment onwards she had involvement in complaints about Horizon and clearly a responsibility for the actions of her investigators and prosecutions.  A very notable admission by Ms Vennells.

(7) The Committee may have the impression from previous evidence that the relationship with Second Sight was wholly negative, but from my perspective that is not right. Second Sight did valuable work in identifying specific areas where there was need for improvement.

Second Sight did indeed indentify specific areas but not just for the need for improvement.  They identified the general suspense accounts as warranting further investigation.   It is notable that the National Audit Office has not audited these,  Second Sight were dismissed when they asked for access to them and a Judge led inquiry is being denied which would almost certainly call for evidence from them.  Also noteworthy is Ms Vennells reply later in her document to specific questions about these accounts.

(10) What I did not know during my tenure as CEO was that many of the problems encountered by sub-postmasters could have been caused by the defects which the Judge in the group litigation found to have existed in the Horizon technology

Ms Vennells is lying.  She was well aware of Horizon errors causing losses to SPMRs.  The most obvious case is one which I brought repeatedly to her attention and one that was highlighted significantly in the litigation, that of the Dalmellington error.  That was in 2015, roughly in the middle of her ‘tenure’.  Mr Kelly has submitted very good documentation of another which was not even mentioned in the trial and could it please be pointed out and noted once and for all that the filename used by Fujitsu and POL, the KNOWN ERRORS LOG infers of course that all the errors contained in it were previously UNKNOWN and that nobody knows how many UNKNOWN errors there are in any computer system!  Justice Fraser did not find a finite number of bugs in Horizon.

  1. I am sorry for the hurt caused to sub-postmasters and colleagues and to their families and I am sorry for the fact that during my tenure as CEO, despite genuinely working hard to resolve the difficulties, Post Office did not identify and address the defects in the Horizon technology. This regret is constantly with me.

Here she reveals she was the CEO of an organisation that failed completely to recognize what Alan Bates first realised nearly 20 years ago.   She was CEO of an organisation that spend £110m defending the indefensible (see her comment in her email to me below).  She is describing the management and staff of the organisation she presided over as being incompetent.  It surely follows that she is as well.

  1. I also believed that the need to carry out their work objectively and courteously was embedded within the investigations team.

Note the use of the term ‘I believed’.   How did she come to that belief and why has she not further defined that period which she allegedly believed this to be true?  Did she believe this to be true up until she left in April this year?

  1. First, I played no role in investigatory or prosecutorial decisions or in the conduct of prosecutions. There was full separation of powers, with the team responsible for prosecutions reporting to the General Counsel. It would have been inappropriate for me to involve myself in operational decisions made on a case by case basis.
  2. Second, I am not a lawyer. Post Office relied on lawyers (both internal and external) for advice in relation to criminal matters, and lawyers held the operational responsibility for investigating and prosecuting criminal misconduct. My main role, and the role of the rest of the Board, was to set policy, informed by legal advice.

First, as I have pointed out above, ignorance of the law is no excuse regardless of what advice you have received from your legal team.  Second, as I have pointed out above, Ms Vennells has inferred quite rightly, that on becoming MD of POL she took on the responsibility of all departments in her organisation including the legal department.

  1. I recall that I first raised the issue of Post Office prosecutions with the then General Counsel shortly after I became CEO because I wanted to understand the rationale for the policy. It was explained to me that the practice was an inheritance from Post Office’s days as a division of the Royal Mail; that it was a long-standing arrangement that had been reviewed by Royal Mail management in the past; that it was practically necessary given the pressure on the CPS budget; and that Post Office approached prosecutions with the same rigour as the CPS, that it is to say that we applied the Police and Criminal Evidence Act 1984 and the Code for Crown Prosecutors. The application of the Code meant, as I understood it, that decisions to prosecute were made by applying two tests: first, whether there was sufficient evidence to provide a realistic prospect of conviction and second, whether a prosecution was required in the public interest.

Ms Vennells was responsible for setting budgets and monitoring these against actual costs throughout her stay at the top of POL.   How could she possibly have justified the costs of this prosecution machine that she inherited against the recovery rate from suspected SPMRs?   The decision to carry on with an internal prosecution department after the split from RMG in 2012 was absurd and either a reflection of her incompetence or the desire to prosecute SPMRs where the evidence was clearly not sufficient for the CPS / Police to be interested in.   Asking the Police and the CPS to investigate and prosecute SPMRs is a free service!

  1. Regarding the question of evidence, first, as I say, it was my understanding from discussions with the in-house legal team and Post Office’s external criminal solicitors that Post Office applied the same procedures and tests as the CPS regarding the collating and consideration of evidence. Secondly, in cases involving technical IT issues, we often obtained input and evidence from Fujitsu (which at the time I believed was acting properly). Thirdly, an additional layer of oversight was provided by the courts and the CCRC. Fourthly, in July 2014, Post Office engaged a senior criminal QC to advise on the response to a letter received from the CCRC regarding convictions relating to Horizon, and also to advise on prosecution related issues. In referring to this advice I do not and do not intend to waive any privilege of Post Office or myself, if any, over the advice the criminal QC gave.

Again the use of ‘I believed’.   As stated above, why did Ms Vennells not offload the significant cost of funding a prosecution department to the Police and CPS?

  1. I should add that Post Office was also mindful of its disclosure obligations in relation to convictions. When we went through the Scheme, Post Office lawyers considered each and every case in the Scheme where there had been a conviction in order to assess whether there was anything that had emerged from the Scheme which Post Office was obliged to disclose.

This is an absolutely appalling response from Ms Vennells.  She watched the BBC Panorama program.  She saw the memo printed out by the Head of her legal services and she was certainly made aware separately by myself and others of the implication of this memo on the trial of Seema Misra.   In my opinion this is a criminal offence of failing to report a crime of conspiracy to pervert the course of justice at the very least as well as misconduct in public office.

  1. If a software fault or defect was reported to the NBSC, a log would have been kept of the call, and Fujitsu should have been alerted. Fujitsu needed to be alerted because the IT technology itself was operated and monitored by Fujitsu in its own operations centres. Fujitsu itself should have maintained logs of all bugs and defects and the measures taken to deal with them (regardless of whether a defect was first reported to Fujitsu by Post Office or a subpostmaster, or identified by Fujitsu). I also understand that, under its contract with Post Office, Fujitsu was obliged to inform Post Office of IT errors, and what had been done to correct them.

Despite repeated requests by myself and others since knowledge of the Known Errors Log became public for details of known errors to be provided to Subpostmasters, POL refuse to do so to this day.  How can SPMRs be expected to investigate discrepancies in their accounts if they are not provided with known deficiencies in the computer system.

  1. It is a truism that all IT systems contain bugs and defects, and I knew that there were or had been bugs in Horizon (because I was told about them). I also believed that bugs and defects were being properly reported, and being dealt with as and when they arose.

In short, I believed that the systems for reporting, investigating, and rectifying defects were working as they should.

Another excruciating use of the ‘I believed’ phrase.   It is essential you realise why she and presumably her lawyers are using this.  Just as importantly you have to question the decision making ability of Ms Vennells who was prepared to spend £43 million in legal fees to defend a system she knew was defective.

 

  1. Whenever I was told about a bug in Horizon, I wanted to know what was being done about it, and to be given confirmation that it had been resolved satisfactorily, both in terms of the technical IT, and also to ensure that any problems the bug or defect had caused at branch level were identified and reversed.

That is a very deep level of interest into bugs.   If you consider the ‘bug’ I raised with Paula in the email attached to this document, that issue was never resolved and could conceivably still exist in the system today.   In a poll I took on Social Media of around 1000 SPMRs some time after Angela van den Bogerd had told Paula not to worry about it, some 70% of respondents said they had encountered such an error.  Ms Vennells in this particular case did not ensure that it had been resolved satisfactorily.

Personally, I visited the operations centre frequently to understand and follow through how we could improve things, partly because of the historic shortcomings,

When did Ms Vennells decide to start visiting the operations centre because of historic shortcomings?   That would be interesting to know because she is admitting to historic shortcomings while even at the end of her employment in 2019 she was engaged in spending millions defending litigation against historic shortcomings.

I believe I helped create a culture that welcomed input and criticism as that is how we learned.

She certainly did not welcome my criticism or that of others that challenged her idiotic NT project.  The network would be in a far better place if she had and learned from what we had to say.

Secondly, it was the view of Post Office that the conduct of prosecutions was outside the scope of the Scheme. Thirdly, Second Sight, as forensic accountants, had no expertise to consider legal matters.

Failing to investigate the prosecutions was a grave mistake.  As will be seen when the Malicious Prosecution trials start the POL legal team were only interested in upholding the integrity of the Horizon system in many of these cases and it will become apparent that they deliberately withheld substantial evidence in order to gain convictions.

  1. Second Sight also told us they suspected that money paid in by sub-postmasters to cover shortfalls may have ended up in Post Office Ltd’s central suspense accounts and ultimately its profit and loss account. Did Post Office Ltd, as they contend, frustrate them in investigating this possibility and did you as CEO look into this. Do you think this could have been a possibility?
  2. I have very little recollection of this issue and I can only tell the Committee what I now recall. I believe that Second Sight raised it with me in conversation. Since it was a technical financial control issue, I asked the CFO to look into it, and I can see from the transcript of the evidence to the Committee on 2 February 2015 that Second Sight had already met with the CFO to discuss the further information they said they required. I cannot remember how this was resolved, but I do not recall any further communication from Second Sight to me on this issue.

There is no better evidence submitted to you than this to support the call for an independent judge led inquiry with full disclosure powers.  In 2015 Second Sight met to discuss this matter.  This is now 2020 and NO ONE has been allowed to investigate these suspense accounts.    This reply from Ms Vennells is pure obfuscation and clearly she knows more than she is letting on.

  1. It is clear with hindsight that the information I was given about remote access was seriously inaccurate. I only became aware of this from the litigation, after I had left the Post Office

She could probably argue in court that the above statement is so ambiguous that at least one interpretation of it could be considered correct.  I suspect the committee will form another opinion though.

 

Addendum

 

Paula Vennells

Wed 10/12/2014 13:47

To:

  • You

Cc:

  • Gavin Lambert;
  • Angela Van-Den-Bogerd;
  • Rod Ismay;
  • Lesley J Sewell;
  • Kevin Gilliland

Tim, hi.

 

If there is one thing you should know about me is that I do listen.

 

But please be careful that you don’t over generalise or conflate different points.

 

We are not defending the indefensible – all systems have issues from time to time.  And they need to be (and are) fixed when they occur.  We have records of when that has happened, of alerting users and then putting in place an appropriate fix.  We operate in a dynamic market and Horizon, like all epos systems is constantly updated.

 

To your challenges.  I listen and I’m therefore concerned at what you say. I’m copying three people who I expect to get to the bottom of it. And who I trust to do so: Gavin Lambert who works directly for me, Angela van den Bogerd, and Rod Ismay. I am also copying Lesley Sewell (CIO) and Kevin Gilliland. I want Lesley and Kevin to be in the loop – they are the directors responsible for ensuring our branches have the appropriate service.

 

Angela will be in touch with you directly.

 

In the meantime, I wish you a happy Christmas when it comes.

 

Paula

 

Ps. If the colleague you mentioned needs support, please let Kevin know.

 

 

 

From: Tim McCormack [mailto:timandagi@outlook.com]
Sent: 10 December 2014 08:00
To: Paula Vennells
Subject: FW: Second Sight – Horizon Errors – Media Coverage

 

Angela …

 

I think you should make sure that Paula gets to read the message below.

 

In an absolutely bizarre coincidence shortly after sending the email  I was made aware that yesterday, as a result of the stress caused by an occurrence of this problem and the subsequent refusal by NBSC to acknowledge that it could happen, a Subpostmaster was rushed to hospital with stress related heart problems.   He had the presence of mind to record details of the incident as proof that it had happened which for the first time gave me an indication of what might be happening to cause it.

 

This could well make the news today or at the weekend as a follow up to yesterday’s events.  Paula should be prepared to answer the obvious questions.

 

Cheers, Tim

 

PS I have never in my life come across such an amazing coincidence – if I was in the least bit religious and knowing of Paula’s faith I would declare it a divine intervention.

You learn more from one criticism than from ten compliments

From: timandagi@outlook.com
To: paula.vennells@postoffice.co.uk
Subject: Second Sight – Horizon Errors – Media Coverage
Date: Wed, 10 Dec 2014 00:04:28 +0000

Dear Paula

 

Yet again today Mark Davies, speaking on behalf of POL, relied on the defence that there are no systemic errors in Horizon and this is proved because we deal with so many customers per day in so many branches.   I think Mark and yourself might like to review the periodic Message to Branches that are sent out via Horizon.   There are a catalogue of systemic errors that arise from time to time and are fixed.   Some involving automatic transaction corrections.

 

Paula, as I keep saying, you are surrounded by people in your office that tell you all is well.  You have no personal knowledge of operating Horizon nor probably any in depth technical knowledge.  What if the people that are telling you all is well have the same attributes?

 

So forget systemic errors for the moment and consider ‘intermittent’ errors which by and large are caused by communication problems.

 

I know of more than one but one in particular:

 

It exists.

 

It occurs at different times in different branches.

 

It is noticed.

 

They are reported to NBSC (I would really like to see the number of times this has been reported to NBSC)

 

It causes a financial loss to the SPMR.

 

They are not fixed BUT the wise SPMR knows how to get his money back so you don’t hear many complaints.   You would from the Audit team if they caught someone doing it though.

 

So why haven’t these intermittent errors been fixed.   To put it simply – because they are intermittent.  There is no known sequence of events that can cause this error to re-occur in any particular branch.  How can you fix something if you don’t know what caused it in the first place?   You have to throw the whole thing out and start all over – the only way.

 

On our ‘chat’ forums, there are documented reports over the years of the same error repeating itself randomly in a wide number of branches, including at Duns and my previous PO.

 

I am pretty sure I can arrange for the error to be replicated though by asking a large sample of offices to repeat the process until the error occurs – and I am also sure that I can obtain transaction logs and associated CCTV coverage of the error manifesting itself.

 

I can show you it happening.  I can explain the financial consequences but neither I nor your best technical team will be closer to fixing the underlying problem.  You cannot make it go away.

 

I would also be happy to stand up in court and declare that Horizon has intermittent faults, probably caused through communication errors, provide clear and undeniable evidence as well as bring along a fair number of your most trusted SPMRs to bear witness that it has happened to them too.

 

I hope you get my point – I can show one error occurring that you can’t fix nor can you explain – if you could explain it then you could probably fix it – so how many other intermittent errors like this are in the system that cause unexplainable financial losses to SPMRs?

 

I am trying to help you but the hole you are digging for yourself is getting deeper by the day.  Please stop trying to defend the indefensible.

 

Cheers, Tim

 

 

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