00 SPECIAL REPORT 1 On 11 November 2010, a conducted all the investigations pregnant sub-postmaster from he could into the supposedly Surrey was driven out of missing money. Even his pleas for Guildford crown court in a the necessary IT access to prison van to begin a 15-month interrogate his own branch sentence for theft. accounts fell on deaf ears. Seema Misra had been convicted By April 2003, the Post Office of stealing £74,000 in cash from had changed tack slightly, writing the Post Office branch she ran in JUSTICE off the £1,000 – without West Byfleet even though, in the explanation – but telling Bates to trial judge’s summing-up: “There pay for subsequent unexplained is no direct evidence of her taking balances that he had been moving any money… She adamantly into the suspense account and denies stealing. There is no CCTV which now ran to £1,400. He evidence. There are no stood his ground, replying that he fingerprints or marked bank LOST would not accept losses “until notes or anything of that kind. such time as I am able to access There is no evidence of her the data that I am being asked to accumulating cash anywhere else be responsible for”. The Post or spending large sums of money Office refused him any more or paying off debts, no evidence information and that summer, about her bank accounts at all. five years after he and Suzanne Nothing incriminating was found IN THE started their new life, Alan Bates when her home was searched.” had his sub-postmaster contract The only evidence was a shortfall terminated. of cash compared to what the Bates suspected he wasn’t Post Office’s Horizon computer alone in his plight. The Post system said should have been in Office’s correspondence with him the branch. “Do you accept the mentioned a “consistent prosecution case that there is POST approach for all such cases”. Yet ample evidence before you to the body that should have establish that Horizon is a tried How the Post Office wrecked represented him, the National and tested system in use at Federation of Sub-postmasters, thousands of post offices for the lives of its own workers was in the pocket of the Post several years, fundamentally Office and showed no interest. So robust and reliable?” the judge BY RICHARD BROOKS AND NICK WALLIS Bates – who a judge would later asked the jury. It did, and say was “persistent and no doubt pronounced Seema Misra guilty. possesses what might be termed In fact, far from being robust and reliable, the TROUBLE ON THE HORIZON staying power” – took matters into his own Horizon system was full of bugs and glitches. Alan Bates and his partner Suzanne arrived in hands, launching the postofficevictims.org.uk Worse still, the Post Office knew it. A decade Craig-y-Don on the north Wales coast in 1998 website and emblazoning its logo on his later, legal action by 555 sub-postmasters who seeking a new challenge running the Wool Post, shopfront. were prosecuted, sacked or financially ruined has a shop and Post Office branch. Alan, a 44-year- Dozens of other victims began to get in touch, exposed one of the most widespread miscarriages old project manager, had already worked with as incidents across the country mirrored and of justice on record, appalling treatment of software companies installing electronic “point often dwarfed Bates’s own tribulations. At a hundreds of working people and a web of deceit of sale” systems. So when the Horizon system branch in Dungannon, County Tyrone, a that stretched to the top of an historic British arrived at his branch a couple of years later, he £43,000 shortfall appeared in 1999. According institution. This is the story of how it happened... looked forward to streamlining the business in to internal documents later disclosed by IT which he’d invested his £100,000 life savings. company Fujitsu (which had subsumed ICL in ONCEIVED in 1996 as one of the first Just two months after Horizon went live in 1998), the cause was a “missing payments node” private finance initiative (PFI) contracts, Craig-y-Don in 2000, problems began. An following a software update. An “incident of a between the Post Office and the Benefits unexplained “variance” of more than £6,000 very similar nature” threw up a £9,000 Agency on the one hand and computer showed up. Bates thought he had identified the discrepancy in Appleby-in-Westmorland, Ccompany ICL on the other, the Horizon IT source of £5,000 of this: an overnight software Cumbria. At yet another branch, a shortfall way system had an unpromising start. It had been set update that caused a duplication of some Giro beyond any possibility of pilfering, amounting to up to create a swipe card system for payment of deposits. He transferred this figure to a suspense £1.08m, was described by software specialists in pensions and benefits from Post Office branch account, effectively putting off dealing with that July 1999 as “due a known software error which counters. But, as with most mega-IT projects of part of the problem. This still left £1,000, for has no been resolved” (sic). the time, it soon fell victim to over-ambition, which the Post Office immediately began chasing Such obvious malfunctioning failed to management consultancy snake oil and the him. prevent Post Office investigators demanding sub- inability of a PFI contract to deliver a complex Under his standard sub-postmaster contract, postmasters pay for the shortfalls, terminating public service. Bates was liable for any shortfall that involved their contracts and, increasingly, putting them in When, in May 1999, the plug was finally “carelessness or error”. And this, said the Post the dock. Invariably they were falsely told they pulled on what the Commons public accounts Office, was the only possible cause. The lack of were unique in experiencing any problems with committee called “one of the biggest IT failures training on the new system, which had led even Horizon. The enforcers, undeterred by the fact in the public sector”, taxpayers had lost around the relatively skilled Bates to request more, that pre-Horizon discrepancies had rarely £700m. Something had to be salvaged, however. mattered not. Nor did the fact that Bates had reached triple figures, convinced themselves the So, against the better judgement of its IT disclosed everything to the official helpline and new IT system was exposing an epidemic of specialists, the Post Office decided to use the fraud. system to transform its paper-based branch Not all the prosecuted were convicted. A few accounting into an electronic system covering the fortunate enough to have a bullish barrister and full range of Post Office services. The new a sceptical judge saw the paucity of the Post Horizon project became the largest non-military Office’s case collapse before the jury. But even IT contract in Europe. those acquitted, such as Nicki Arch in Stroud in This was some faith to show in ICL, an IT April 2002, faced devastating personal company that had originally been awarded the consequences (see “They stripped my life apart”, PFI contract despite ranking last of three bidders p3). technically (but being judged cheaper) and had since then only lived down to low expectations. ROLL’S VOICE As the Post Office board of directors ominously It was already well known inside Fujitsu and the noted in its minutes that September: “Serious Post Office that Horizon was littered with errors doubts over the reliability of the software and bugs. So why didn’t this knowledge translate remained.” Indefatigable justice campaigner Alan Bates into greater understanding of sub-postmasters’ 00 SPECIAL REPORT 2 accounting troubles and at the very least temper happen”, while running “a constant rolling were plunged into immediate crisis. Informing the persecution of them? The answer was that programme of patches to fix the bugs”. Fujitsu the Post Office helpline elicited denials of any denial suited the priorities of both the Post Office “would basically tell the Post Office what they problems or an insistence that genuine errors and the IT company. wanted to hear”. would be fixed through centrally-issued The former, under chief executive Adam So prolific did Roll’s bug-fixing team become “transaction corrections”. At a time of huge Crozier and chairman Allan Leighton, was it won the company’s President’s Award for stress, the sub-postmasters’ legitimate options desperate to turn around its finances (and in outstanding corporate contribution in 2002. were either to accept the shortfall, making it 2003/04 it managed to halve losses of £200m the And the quick-fix, ask-no-questions approach their personal liability, or to refuse to sign off the previous year). Fujitsu’s UK operations, that suited Fujitsu financially enabled the Post accounts as correct. The former could mean an meanwhile, were losing friends as well as money, Office to hold the line that blame for all branch imminent date in the bankruptcy court; the latter as it fouled up not just Horizon but also a large shortfalls must lie with the sub-postmaster. prevented the Horizon system rolling over to the project codenamed Libra to computerise The Fujitsu insider concluded that errors next day, shutting their branch and putting them magistrates’ courts (Eyes passim). leaving sub-postmasters out of pocket were in breach of contract. For many, either choice A Fujitsu programmer from the time, Richard inevitable. Could that mean hundreds of them? spelt ruin. Roll, who would become a key witness in the “Given there were [about] 20,000 post offices The other possibility was to sign off the sub-postmasters’ high court case against the Post when I was at Fujitsu and the sort of problems books by saying, incorrectly, that the funds did Office in 2019, told the Eye that Horizon was we were dealing with all the time, yeah,” he told match the Horizon number and hope that what one the company’s few profitable contracts. the Eye. “Sounds reasonable.” they felt sure was a computer glitch would Among other private sector deals, it was also correct itself. For people desperately worried lining up a key role in the mother of all CAUGHT IN A TRAP over the loss of their livelihoods, who knew government IT splurges, New Labour’s £12bn In 2005, the conspiracy of silence over Horizon’s they’d done nothing wrong, this didn’t seem like NHS IT project (Eyes passim ad nauseam). flaws went one step further. The Post Office an inherently dishonest move. But it played into Fujitsu could ill-afford either bad publicity or the adjusted the system so that those like Alan Bates the hands of a calculating and draconian Post penalties that came with software faults. “We who disputed discrepancies could no longer park Office prosecution service. would have been fined,” said Roll, who worked them in a suspense account and continue trading. One of the first sub-postmasters to fall into at the company between 2001 and 2004. “So the Dissent became impossible. what became a common trap was Jo Hamilton incentive was to pretend it [software error] didn’t Sub-postmasters with inexplicable shortfalls in South Warnborough, Hampshire. In 2006, she called the Horizon helpline over a £2,000 shortfall, faithfully followed its advice but then PAYING THE PRICE FOR POLITICAL FAILURE watched as the discrepancy doubled rather than disappeared. When she complained, she was told EVER since Charles I granted author of Masters of the Post, shortfalls were never going to she was still liable for the full £4,000. Already the first mail monopoly in Duncan Campbell-Smith, put it: receive a sympathetic hearing. paying for previously reported discrepancies out 1635, followed 19 years “This was not to be confused The balkanisation of the of her sub-postmaster salary, Mrs Hamilton later by Oliver Cromwell’s with the ‘Competitive Overhead Post Office was completed found herself agreeing yet more incorrect establishment of the General Strategic Structure Programme’, in 2013 when a new coalition balances in order to keep trading. When she Post Office, Britain’s mail the ‘Harnessing Technology government pulled off called the Post Office auditors in the hope of system has existed as both Project’ or the ‘Finance the privatisation previous resolving her problems, she received no business and public service. Excellence Programme’. governments hadn’t managed. sympathy. Instead, she was charged with false Misjudging this uncomfortable The mood climaxed with the Lib Dem business secretary accounting and theft – despite Post Office balance has always come toe-curling re-naming of the Vince Cable sold off the investigation documents which later came to at a price: for customers, 350-year-old institution as profitable delivery part as Royal light stating: “There is no evidence of theft.” communities and, now more Consignia in 2001 (which after Mail plc and kept the benighted The theft charge was in reality a tool to than ever, for workers. due ridicule became Royal Mail in public hands. leverage a conviction for false accounting, Sub-post offices grew with a year later). Such was the Sub-postmasters again triggering recovery powers under proceeds of the expansion of the railways, dysfunctional environment into got the shitty end of the crime laws. “At first I was only ever charged with as essential nodes of the which the Horizon IT system stick. Groovy “Big Society” theft and I pleaded not guilty as I hadn’t stolen Victorian mail system collecting was introduced in 1999. aspirations to “mutualise” any money,” Mrs Hamilton told Private Eye. and sorting post outside town Under the lavishly the Post Office – which had “As we neared the trial, the Post Office’s lawyers and city centres. By 1914, 23,000 remunerated team of former sweetened the privatisation said that if I pleaded guilty to false accounting branches had become centres Asda man Allan Leighton part of Cable’s pill - turned and paid back the money they would drop the of local communities, proving (chairman 2002-2009) and ex- into a cost-cutting “network theft charge. My lawyers had struggled to get especially valuable in times Saatchi & Saatchi and Football transformation programme”. any disclosure from them so I was advised to of crisis such as the Second Association boss Adam Crozier Sub-postmasters were asked accept the plea bargain – because they could not World War and remaining (chief executive 2003-2010), to give up basic pay in return prove I hadn’t taken the money even though the the “government shop” for the group’s financial fortunes for a small grant to tart up their Post Office couldn’t prove that I had. I was told I everything from collecting perked up temporarily. But offices; they could make up would be less likely to go to prison for false pensions and benefits to a mid-2000s triple whammy for lost income by selling more accounting and felt I had no choice at all. I was licences and savings accounts. of reduced letter-sending, a financial products (on behalf of terrified of going to prison.” Later governments attached huge pension deficit and the the Bank of Ireland). Meanwhile, Such bargains would be repeated dozens of less value to this service. over-hasty opening up of mail fees from Royal Mail for times over the next few years, illustrating the Growing commercialisation from services to cherry-picking handling post were slashed coercive power of the Post Office prosecution the 1980s translated into cost- competition, floored the and parts of government service. One sub-postmaster, Noel Thomas from cutting and closures. Under- business. Sub-post offices bore such as the DVLA withdrew Anglesey, bet on taking the deal to avoid investment and the extraction of the brunt, 2,500 closing while business. It soon became imprisonment, but was jailed anyway. In cases hundreds of millions of pounds the rest were nobbled by un- clear that cuts in payments to like Jo Hamilton’s, the tactic might even have by the Treasury in the 1990s joined-up government decisions sub-postmasters were funding been unlawful. A later civil trial judge would left the Post Office’s finances such as reducing the payment the Post Office’s return to pre- point out that if the accused had already raised precarious. of pensions through the Post subsidy profitability (in 2016/17), their discrepancies with the Post Office, as she The then New Labour Office. from which its directors were had, they “would not be ‘deliberately rendering’ business secretary Stephen From 2003, the government’s trousering large bonuses. a false account” as required for the offence. It is Byers subjected the Post ownership of the Post Office The “transformation” hasn’t likely that an independent prosecutor, looking at Office to the full tsunami of was managed by a new worked for anybody else. Last the evidence, would often have concluded that management-consultancy- Shareholder Executive (now October, a parliamentary select the false accounting charge didn’t stand up. But driven reorganisation. Under part of UK Government committee found the Post Office the Post Office’s prosecutors were anything but a 1999 McKinsey-inspired Investments). With this outfit network to be “fragile”. A re- independent. programme called “Shaping itself run by ex-bankers think was “urgently required”, As the cases mounted up, so did the gremlins for Competitive Success”, the and consultants setting including on “valuing the sub- in the IT system. By 2006, at least 15 separate Post Office was broken into profit-driven targets for postmasters and Post Office bugs had been found, with names such as 21 separate business units Post Office executives, sub- staff who deliver the services”. “network banking bug”, “data tree build failure operating as an internal market postmasters who now reported History gives little cause for discrepancies” and “phantom transactions”. that nobody understood. As unaccountable financial optimism. The rickety Horizon system was unable to cope with the scale of its job, and the Post Office and SPECIAL REPORT 3 Fujitsu set about replacing the “legacy” system constituencies. In May 2012, two of them, Jo with what became Horizon Online from 2010 Hamilton’s MP James (now Lord) Arbuthnot CASE STUDY (and which would itself prove hardly less and fellow Tory Oliver Letwin MP (then also a infested). Cabinet Office minister), went to the Post Office’s PHIL AND At least Alan Bates’s efforts, now under the Old Street HQ with a raft of concerns. New chief FIONA COWAN Justice for Sub-Postmasters Alliance banner, executive Paula Vennells – a retail veteran A major factor in an were bearing fruit. In 2009, the growing band of looking to protect the Post Office brand – and untimely death dispossessed former sub-postmasters whom he’d chairman Alice Perkins promised to be “open enlisted told their story to Computer Weekly and transparent”. They reassured Arbuthnot PHIL COWAN ran a magazine. Local papers began highlighting some and Letwin that Horizon had been upgraded and number of service stations of the more controversial cases. In 2011, the had the full support of the National Federation in Edinburgh. In 2001, he BBC’s Inside Out South reported Jo Hamilton’s of Sub-postmasters. In fact, even the supine bought a Post Office in and Seema Misra’s stories (while the latter was federation had expressed concerns (privately of Parson’s Green Terrace, still behind bars) and that year the Eye picked up course). As a judge later pointed out, the MPs becoming the sub-postmaster while his wife the story as the latest in a string of government “were entitled to expect accurate information” Fiona managed the branch day-to-day. IT contracts gone wrong. but “did not receive it”. The promise of The couple inherited an experienced The Post Office, preparing for its separation transparency “was not accurate”. member of staff and together became a strong from the Royal Mail under the coalition Misleading parliamentarians was a measure team, sticklers for getting the accounts right. government’s privatisation plans, remained of the arrogance in the Post Office boardroom. Every discrepancy was traced and corrected uncompromising. The Horizon system, it told But the MPs did get Vennells to commission a in branch or by a “transaction correction” sent the BBC, was “absolutely accurate and reliable”. review of the Horizon system from forensic IT by the Post Office. Until, that was, 11 February Its chief operating officer, Mike Young, firm Second Sight. For Arbuthnot it gave hope of 2004, when Phil got a phone call from the responded to the Eye’s first report with an instant getting some answers. For Vennells, who was branch telling him the weekly balance was letter for publication: “We have full confidence preoccupied with the Post Office’s financial showing a shortage of £30,000. The branch had in the Horizon system.” He was in a shrinking bottom line after it split from Royal Mail that been experiencing growing discrepancies for minority. year and its target of financial independence five weeks, but Fiona had expected them to from government by 2020, the review provided a be rectified through “transaction corrections” SECOND SIGHT IS 20/20 handy patch of long grass into which to kick the issued by the Post Office. She had not told her The publicity helped persuade law firm matter. One Post Office insider told the Eye that husband as she didn’t want to worry him. Shoosmiths to take up Alan Bates’s campaign, “meeting the 2020 objective became the Phil immediately called in the area manager, and around 100 sub-postmasters quickly signed relentless focus… Anything that could get in the who suspended him and closed the branch. up to sue the Post Office. The level of interest way of ‘2020’ as it became known, was logged as Interrogated by Post Office investigators, Phil could partly be explained by the pisspoor a risk to be managed and minimised carefully”. suggested the discrepancy might be some kind treatment they had received from their supposed Defying Post Office attempts to frustrate of computer glitch. He was told this was not representatives at the National Federation of them by blocking access to information such as possible: no one else in the entire Post Office Sub-postmasters. error logs, Second Sight’s investigators Ron network had problems with Horizon. MPs’ in-trays were also filling up with Warmington and Ian Henderson soon found Fiona was charged with false accounting. horrifying stories from sub-postmasters in their some real nasties under the stones. An interim Phil’s business was ruined. With the criminal report in the summer of 2013 showed that they charge hanging over her, Fiona was spat at in had diagnosed the two core issues: faulty IT and the street and called a thief. Phil was told not CASE STUDY the victimisation of sub-postmasters. It was now to bother reapplying to manage his service understood even at Post Office HQ that station franchises at the end of their leases. NICKI ARCH prosecuting entirely on IT evidence was unsafe. On 21 January 2009, Fiona overdosed on ‘They stripped my Although the Post Office was not going to admit antidepressants and died aged 47. life apart’ that, it spoke volumes that the number of sub- Years later, Phil found out through a freedom postmaster prosecutions fell from 42 in 2012/13 of information request that all charges against NICKI ARCH successfully to just two in 2013/14 and zero the next year. Fiona had been dropped while she was still managed the Chalford Not that this was much consolation for the 60 alive. No one had bothered to tell either of them. Hill post office in Stroud, sub-postmasters convicted on Horizon evidence, “The horror of that whole Post Office fiasco was Gloucestershire, for of whom 20 were imprisoned. a major factor in her death,” he says. three years before There were two ways Paula Vennells could Horizon arrived in 2000. react to Second Sight’s emerging findings. One After it was installed, she found that pension was to accept them and open the way to justice to the scheme, a mere 12 cases had been payments mysteriously kept duplicating. Post for the sub-postmasters. The other was to feign mediated. The Post Office’s lawyers quibbled Office auditors arrived and declared a £24,000 concern while trying to bury what could be an over anything Second Sight found. Even those discrepancy. Nicki was suspended on the spot expensive problem. Vennells and her executives who did get through the process received no real by Post Office investigators, then sacked. were now earning bumper bonuses by shaving recompense. A dispute resolution specialist “They stripped my life apart,” she says. “I £30m a year off the Post Office’s losses in pursuit brought in gave the game away when he presented every single bit of financial history of the 2020 goal (see ‘The Post Office Hall of remarked that sub-postmasters had “attended from the minute I left university to them. They Shame’, p5). If the commercial partners – with the expectation that they are going into a came to my house to see what was in it. They including banks, energy companies and public compensation process rather than a facilitated didn’t even have a search warrant.” bodies – on which the Post Office’s commercial dialogue…” In 2001, the Post Office charged Nicki plan depended were to be kept onside, the Finances, jobs and reputations were never with fraud, theft and false accounting, but illusion of Horizon’s infallibility could not be going to be restored by “facilitated dialogue”. shortly before trial offered her a deal. The shattered. The financial imperatives duly But that was the point. At the end of 2014, Paula theft and fraud charges would be dropped if trumped fairness for sub-postmasters. Vennells was still remarkably insisting to MP she pleaded guilty to false accounting. Nicki Professing a desire to get to the bottom of the James Arbuthnot in writing that “no fault in the refused. The trial was a farce. After three days affair, Vennells initially agreed to retain Second system has been identified...” His and other of evidence, during which nobody from the Sight to look at individual cases as part of a MPs’ patience was wearing thin. Post Office explained how Nicki was meant mediation scheme under the chairmanship of In Westminster Hall just before Christmas to have stolen any money, the jury took two former appeal court judge Sir Anthony Hooper. 2014, North West Leicestershire Tory MP hours to acquit her. But when sub-postmasters began to ask for more Andrew Bridgen – whose constituent Michael The ordeal led Nicki to suffer a breakdown, than just warm words from the mediation, the Rudkin had “lost his business, his reputation, his for which she was hospitalised. She was tone hardened. Out went the Post Office’s position as a magistrate… and his good name” penniless for years and spent a decade on relatively conciliatory general counsel (ie top – called the mediation a “sham”. Arbuthnot antidepressants. Nicki blames the Post Office lawyer) Susan Crichton, replaced by the more lamented how “the Post Office has built up the for ruining her marriage and her life. commercial Chris Aujard from the City via a hopes of sub-postmasters so the scheme has their “I hate everything about it,” she tells the gold-mining company. support”, only to break its word. The Post Eye. “Even now, I will not go into a post office, Aujard, the sort of lawyer who talked about Office, he said, had been “duplicitous”. I will not use anything to do with the Post “adding value” for his corporate employers, Yorkshire Labour MP Mike Wood revealed that Office. I will drive to somewhere to deliver a took responsibility for the mediation scheme. It the top brass brazenly continued to mislead letter before I’ll post it. I can’t bear it.” quickly proved to be another trap. Within a MPs. He had “met five senior managers of Post couple of years, although 150 people had applied Office Ltd – the chair of the board, the chief SPECIAL REPORT 4 executive, the chief technology officer and two “feudal” Post Office. Yet the minister answering TRIAL AND TERROR others…” All, he recalled, had said that “‘we for a new Tory government, George Freeman The farcical mediation process had at least cannot conceive of there being failings in our MP, continued his predecessors’ tradition of brought forward so many victims that Bates was Horizon system’”. parroting the Post Office line: there was “no able to persuade a new firm of solicitors, Freeths, The mediation scheme also gave a shield to evidence of systemic flaws in the system”. and litigation funders, Therium, that a ministers who were less than determined to help In the Post Office bunker, meanwhile, there blockbuster legal action was viable. In March those in trouble. When Arbuthnot raised the was a creeping sense of downfall. Board minutes 2017, the high court granted a “group litigation scheme’s shortcomings, the Lib Dem with the for July 2016 noted that its IT was “not fit for order” enabling a staggering 555 claimants Post Office brief, Jo Swinson MP, bleated about purpose”. The same month a blog post from gathered together as the Justice for Sub- the “slightly difficult territory, because the campaigner Tim McCormack about a Horizon- Postmasters Alliance to sue the Post Office. [mediation] working group discussions are related conviction prompted Vennells to email The Post Office’s case was creaking from the confidential… I cannot find out what is said in finance director Al Cameron and chief outset. During one procedural hearing leading them”. Her two superior wise monkeys, business information officer Rob Houghton asking for a up to the opening of the class action, the critical secretary Vince Cable (nominally sole report. As before, her message came with the claim that only a sub-postmaster could alter their shareholder of the Post Office) and prime subtext that she’d like the problem to go away. own accounts – which underpinned the notion minister , were equally unhelpful “I want to know we’ve rectified all the issues that all shortfalls must be their fault – was when Arbuthnot confronted them in the raised,” she wrote. Houghton commissioned an exposed as nonsense. “Fujitsu… has the Commons. “urgent review”, but on the same day wrote to capability to inject a new transaction into our In the face of the parliamentary onslaught, all involved instructing (for reasons that were branch accounts,” admitted the Post Office’s however, one woman could no longer lurk in the blocked from disclosure): “Can you stand down counsel, adding that previous statements to the shadows. on this please?” When a judge looked at the contrary were “a matter of enormous regret”. episode three years later, he would remark that These were of course crocodile tears. The COMMITTEE RAGE “the Post Office’s own decision at the highest Post Office took its contempt for the sub- In February 2015 Paula Vennells was summoned level not to investigate certain matters as recently postmasters to new levels by doing all it could to by the Commons business committee, along with as 2016 [was] of great concern”. subvert the judicial process. In late 2018, the Second Sight’s Ian Henderson. To barely The Post Office and the government were Hon Mr Justice Fraser criticised the Post Office’s disguised derision, the Post Office chief executive determined not to face up to a now long-running “undoubtedly aggressive and, literally, claimed to run “a business that genuinely cares injustice, and the mediation process was dead. dismissive” approach. This was typified by about the people who work for us”. If “there Alan Bates’s resolve, by contrast, was not. repeated applications to strike out the claimants’ had been any miscarriages of justice, it would evidence, sometimes before it was even lodged have been really important to me and the Post (showing, Fraser added laconically, Office that we surfaced those… so far we have CASE STUDY “considerable, if not almost supernatural no evidence of that.” And so, misleadingly, on. foresight”). Untroubled by costs now reaching Documents revealed in later legal action MARTIN eight figures, the Post Office was “simply showed that Vennells had demanded defensive GRIFFITHS attempting to restrict evidence for public rather than informative briefing in preparation From Horizon relations purposes”. for the hearing. On the question of whether sub- shortfalls to suicide When the first in a series of scheduled trials postmasters’ accounts could be accessed or began in the high court that November, altered away from a branch – which was crucial BY 2009, Martin Griffiths addressing the contracts and relationships to pinning all responsibility on sub-postmasters had been successfully between sub-postmasters and their paymaster, – she’d instructed her underlings: “I need to say running Hope Farm Road several incriminating documents explained the no, it is not possible and that we are sure of this Post Office in Great Sutton, obstructiveness. Almost everything the Post because of xxx [sic]…” The memo gave an Cheshire, for 14 years. Office had said about the Horizon system proved insight into Post Office culture, from the top He’d swallowed some small but unexplained to be false. The idea that it was “robust” was down. One insider told the Eye of unswerving shortfalls in the past, but now four-figure exploded within days, when emails emerged loyalty at HQ: “If you wanted to belong and fit discrepancies were showing up on his Horizon from 2012 showing the angst over the software in, you had to put the future of the Post Office computer screen. at senior levels. Managers had discussed first. If that meant turning a blind eye – or worse When Martin first declared these to the problems thrown up by Horizon in 2010 that – that’s what people would do.” Post Office, its response was uncompromising. were “impacting circa 40 branches”. They’d Denial dictated Vennells’s response to MPs Horizon was functioning perfectly; he would fretted that admitting as much would have a exasperated by a mediation process that had have to make good his “losses” from personal “potential on the ongoing legal cases”. turned into trench warfare. The Post Office was savings. And – in words that betrayed the Post Office’s refusing to hand over crucial papers to Second Two years later, Martin was visited by Post true priorities – the information could “provide Sight investigators, including all-important Office auditors, who said his balance was now branches with ammunition to blame Horizon for prosecution files, effectively stalling the process. £23,000 out. The Post Office suspended him, future discrepancies”. Another memo, from When Vennells claimed to MPs that she was then reinstated him, but the losses continued to 2009, discussed a branch with balances “in a unaware of this, Second Sight’s Henderson, also escalate. Between January 2012 and October mess” and concluded in bold: “It is Horizon- giving evidence at the hearing, humiliatingly 2013, more than £57,000 went “missing” from related.” corrected her: “It came up at one of the working Hope Farm Road. Now Martin, increasingly The Post Office’s QC, David Cavender, group meetings at which you and I were present.” stressed, had to turn to his parents. They lent sought to stymie any argument on the central The affair had become, Tory committee member him their life savings. issue in the trial: whether the Post Office’s Nadhim Zahawi said, “a shambles”. To make matters worse, in May 2013 armed dealings with sub-postmasters were unfair. For an authoritarian body whose bosses were robbers burst into his branch, smashed his Finding that they were, he claimed, would harm used to getting their own way, such opprobrium hand and told him that if he didn’t hand over the “its ability to control its network throughout the was hard to take. As any bully would, it lashed contents of the safe he would be beaten around UK”. This in turn “would represent an existential out. Second Sight was sacked and ordered to the head. They left with around £54,000 in cash. threat to Post Office’s ability to continue to carry hand over or destroy all the material it had Two months later Martin was told that, having on its business throughout the UK in the way it accumulated. Its final report would not be failed to manage discrepancies and security at presently does”. The point seemed merely to published. To those in the know this wasn’t a his branch, his contract was being terminated. reinforce the view of the Post Office as a “feudal” surprise; an earlier leaked version revealed the He would liable for some of the stolen cash, too. institution and would later be slapped down by investigators’ conclusion that Post Office officials That September, Martin stepped in front of a the judge as “an attempt to put the court in “fail to identify the underlying root cause of bus. He left a note apologising to his family. His terrorem”. (It was a bit rich, too, since in shortfall prior to initiating civil recovery action life support was switched off three weeks later. employment tribunals the Post Office was or criminal proceedings”. And in words that The coroner recorded a verdict of suicide. distancing itself from the idea that it controlled rang painfully true for those caught in the trap The Post Office didn’t tell the incoming sub-postmasters, in order to avoid national that snared Jo Hamilton, “investigators seem to sub-postmaster at Hope Farm Road what had insurance contributions and employment have found that recording admissions of false happened to his predecessor. Within a few obligations like sick pay). accounting was the key to achieving rapid, and months the new man, who had previously run Judge Fraser, a former Royal Marine, was not inexpensive, asset recovery”. The Post Office’s a successful Post Office branch, also found someone who could be easily put in terrorem – ie cynical methods had been rumbled. discrepancies on his Horizon terminal. He was be cowed from doing his duty by threats of As Bridgen remarked that summer in the suspended from his job and told to pay the Post exaggerated consequences. He watched as the Commons chamber: “Second Sight has proven Office tens of thousands of pounds. sub-postmasters’ counsel Patrick Green QC took to be far too independent” for what he called a apart the Post Office’s witnesses, most of whom SPECIAL REPORT 5 arrived programmed with their employer’s false court, the performance of the Fujitsu staff narrative and conspicuous ignorance of the responsible for running the Horizon IT system issues. made the Post Office’s arse-covering and Particularly alarming was the testimony of mendacity in the first trial look open and honest. director Angela Van den Bogerd, a Post Office QC Patrick Green dragged Fujitsu witnesses veteran of 33 years who had been handling through reams of obvious computer errors and complaints about Horizon since 2010 and had glitches going back nearly 20 years and featuring sat on a working group created to deal with the a “bug table” listing 23 serious software faults. scandal from 2014. Confronted with one sub- But still, almost all of them refused to face the postmaster’s shortfall, connected to lottery ticket plain truth that the IT was flawed. sales, she claimed to have “seen this cold”. In It didn’t help that, in line with its strategy of fact she had signed a detailed witness statement evasion, the Post Office didn’t call key Fujitsu about the matter just two days before. Seema Misra, wrongfully convicted in 2010 personnel for fear of what they might be forced In a serious indictment of the Post Office’s to reveal. One absentee was a central figure on culture, when he delivered his judgment on 15 be unenforceable. Thus did 555 men and women the Horizon contract, recently-retired lead March 2019, Mr Justice Fraser criticised half of glimpse justice for the first time in many years. engineer Gareth Jenkins. He had nevertheless its 14 witnesses for being less than honest (under provided vast amounts of information for the oath). Van den Bogerd had “sought to obfuscate HORIZON PANNING written statements of the witnesses who did matters, and mislead me” and, although “a very A week after the judgment in the first trial, appear. He’d also, it turned out, been the clever person”, had an unfortunate “disregard courtroom 26 in the high court’s Rolls Building company’s witness at criminal trials including for factual accuracy”. A senior criminal was already hosting the early skirmishes in the Seema Misra’s nine years earlier. This meant that investigator had given evidence that was second, examining the Horizon system in detail. when the misleading words he had fed more “incapable of belief”, while a more junior official With more of the IT flaws emerging almost junior staff were scrutinised in the courtroom, had been “nervous about giving evidence before hourly, on 21 March Judge Fraser returned from the cover-up began to look dark indeed. me that he thought might be unhelpful to the lunch to announce a show-stopper. Fujitsu IT security analyst Andy Dunks was Post Office”. Dishonesty at the top and fear The Post Office had applied for Fraser to questioned on a particularly tortuous part of his further down appeared to characterise the Post “recuse” himself from the case, ie drop out, on written evidence. He’d claimed that “at all Office. When it came to an “obdurate” refusal to the ground that he was biased – citing 109 material times the system was operating properly, produce “plainly important documents”, Fraser paragraphs of his first trial judgment (which or if not, any respect in which it was not concluded that the Post Office’s stance “would were certainly a measure of how damning it had operating properly, or was out of operation was be a worrying position were it to be adopted by been). It was a clear attempt to derail litigation not such as to effect [sic] the information held any litigant; the Post Office is an organisation that was going from bad to worse. Fraser didn’t within it”. Was this mangled syntax the party responsible for providing a public service, which take long to decide that he wasn’t biased, at line? No, said Dunks; there was no party line. in my judgment makes it even worse”. which point the Post Office took the matter to Green then presented him with Gareth Jenkins’s With the Post Office’s credibility in tatters, the appeal court. Now it was the turn of another evidence in Seema Misra’s trial all those years the ordinary sub-postmasters – who had judge, Lord Justice Coulson, to scour his before, which read word-for-word the same as painstakingly set out their stories of sudden thesaurus for uncomplimentary adjectives. Dunks’s statement. shortfalls and subsequent persecution – won a Arguments advanced by the expensive QC Plainly there was a party line, right down to resounding victory. The Post Office, said Fraser, retained by the Post Office for the exercise, Lord the mis-spelling of “affect”. It was also clearly an was guilty of “oppressive behaviour”. The (Anthony) Grabiner, were “misconceived”, untrue line. Emails revealed in the trial showed contractual relationship was so unfair, for “fatally flawed”, “untenable”, “demonstrably that a senior Fujitsu specialist had said as far example in holding sub-postmasters responsible wrong” and “without substance”. The scoreline back as 2006 about one glitch causing accounting for shortfalls no matter what the cause and was a 109-nil defeat for the Post Office. errors, “this bug has been around for years and peremptorily suspending them without pay, as to When the main event resumed in the high affects a number of sites most weeks”. Four

WHO TO BLAME: THE POST OFFICE HALL OF SHAME

THERE’s standing room only troubling. After the court style. In an interview at chief executive of what in the Post Office IT Hall defeats, she apologised the University of the West was called Royal Mail but of Shame, where greatest not for getting it badly of England in 2018, he said included the Post Office culpability lies with those wrong but merely for being he acted as “guarantor of until 2012, Moya Greene who resisted attempts to “unable to find a solution good behaviour, transparent and her chairman, City get to the bottom of the and a resolution outside of management…” With grandee Donald Brydon, affair and blocked the litigation and for the distress the guarantee evidently focused relentlessly on the sub-postmasters’ pursuit of this caused”. worthless, Parker (who also forthcoming privatisation justice. The man who should called himself a “pro chair”) of mail operations. The Obstructor-in-chief have been holding Vennells may soon be spending even latter’s successor from was Paula Vennells CBE, to account was Tim Parker, a less time at Post Office HQ. 2011, Alice Perkins, a Post Office chief executive private equity veteran known He declined an invitation to career civil servant turned from April 2012 to March as the Prince of Darkness talk to the Eye for this report. serial non-executive, let the 2019. An ordained Anglican for his prolific job-cutting, Vennells and Parker scandal fester in the mire priest, Vennells joined Paula Vennells CBE who became chairman of the followed a procession of of mediation during her the Post Office in 2007 as Post Office in October 2015. directors who had failed to four-year, £100,000-a-year network director after a before, the 2019 new year There is no evidence of his confront Horizon’s failure chairmanship. long career in marketing honours list gave Vennells a questioning the approach or its consequences. As Supposedly “senior with Dixons, Argos and CBE for “services to the Post to the Horizon scandal. independent” directors who Whitbread. She was richly Office and charity”. With a bulging portfolio have also come and gone rewarded in the top job, After resigning in April of chairmanships – now without making a difference her pay reaching £717,500 2019, Vennells acquired featuring the HM Courts include ex-M&S man Neil in 2018/19. Of this, £388,000 two prestigious posts: non- and Tribunals Service, the McCausland (2011-2016) and came in performance executive director at the National Trust, Samsonite former TNT executive Ken bonuses mostly linked to the Cabinet Office (which she luggage company plus McCall (2016-present). Chair company’s strategic plan lost last month); and chair advisory roles at CVC and from 2016 of the audit, risk to “achieve commercial of Imperial Healthcare NHS Monarch Capital private and compliance committee sustainability and Trust, responsible for five equity firms – in early 2018 that should have been on to profitability”. A mere £36,000 large hospitals. Parker cut his commitment to the eight-figure legal costs was deducted from a “short Covering up problems the Post Office by 75 percent racking up and evidence of term” bonus because of “the is exactly what is not (or around a day a week). bad practice, Carla Stent, ongoing postmaster group needed there, which makes Going AWOL in a crisis wasn’t exactly on the ball litigation and its impact on Vennells’ failure to learn doesn’t chime with his either (perhaps she was the business”. Not long from the Horizon affair self-proclaimed leadership Tim Parker too busy with her “frequent SPECIAL REPORT 6 years after that, the “party line” put Seema considering its appeal against the first trial remotely robust” up to 2010, the period in which Misra behind bars. judgment in which the Post Office’s dealings with most shortfalls arose, and “still had a significant The-man-who-wasn’t-there, Gareth Jenkins, sub-postmasters had been found “oppressive”. number of bugs, errors and defects” thereafter. also fed Fujitsu’s central technical witness in the As with the attempt to de-bench Fraser, he had Here was confirmation that the sub-postmasters case, its “chief architect” on the Post Office little difficulty dismissing it. The appeal, he said, had not been mad or mistaken in blaming account Torstein Godeseth. By the time he took had been based “on the idea that the Post Office computer error for their nightmares. Rather, two the stand, Godeseth had twice corrected his was entitled to treat [sub-postmasters] in mighty organisations – one a public body, the written evidence (later described as “wholly capricious or arbitrary ways which would not be other a multinational company – had cheated misleading” by the judge). He’d discovered what unfamiliar to a mid-Victorian factory-owner…” them and lied to them for their own purposes. had really been going on from ex-Fujitsu man Even the Post Office, now with new chief Both received the excoriation they deserved. Richard Roll, who had earlier taken the stand as executive Nick Read, could see the writing on The Post Office’s approach, said Fraser, a witness for the sub-postmasters. But Godeseth the wall. The hitherto little-known businessman boiled down to “bare assertions and denials that was frank in the witness box, admitting what sat down with lawyers for the 555 to hammer ignore what has actually occurred… [and] Fujitsu and the Post Office had long denied: that out a settlement. In front of them was Fraser’s amounts to the 21st century equivalent of the company could alter sub-postmasters’ branch eviscerating judgment in the Horizon trial, to be maintaining that the earth is flat”. He even ruled records remotely from its Bracknell HQ. He also published once they’d shaken hands. that the civil settlement should not stop sub- accepted, when taken through a host of software postmasters pursuing the Post Office for bugs and their consequences for branch accounts, FINISHING POST malicious prosecution. As for the IT company, that the system certainly was not always So it was that, two weeks before Christmas, final the trial had presented such “grave concerns “operating properly” and that the failings victory for the sub-postmasters was declared. regarding the veracity of evidence given by definitelydid affect the figures. The Post Office agreed to pay £58m to settle Fujitsu employees to other courts in previous As Fraser prepared to deliver his judgment on their claims (plus its own costs, which could take proceedings” that Fraser decided to send a file to this farrago towards the end of last year, Lord the total bill for taxpayers towards £100m). the director of public prosecutions. Justice Coulson reappeared to heap some fresh Fraser’s judgment, released a few days later, Meanwhile, the Criminal Cases Review ordure on the Post Office. He had been confirmed what they knew: Horizon was “not Commission has referred 39 sub-postmasters’ convictions to the appeal courts. More will follow. In February, prime minister committed in the House of Commons to an independent inquiry. More victories, then, will come. But at a very heavy price: not just the £46m of the settlement that will go to lawyers and funders – leaving many sub-postmasters with just a few thousand pounds to show for years of turmoil – but also the litany of lost livelihoods, broken relationships, ruined reputations, damaged mental health, stolen liberty and even deaths. While the Post Office stands justly disgraced, there remains one shortfall larger than any thrown up by its IT system: that in accountability for those responsible for the scandal. If the lessons of one of Britain’s worst abuses of official and corporate power are to be learned, it must be Sub-postmasters celebrate their victory at the High Court, 16 December 2019 re-balanced.

speaking on… corporate dates from when guards Office (and kicked out of the who boasts of having made culture”). accompanied royal mail TUC in 2014), the NFSP has Fujitsu the government’s Sharing responsibility carriages to fend off spies long parroted the Post Office no.2 IT supplier at the same are the directors from UK and highwaymen – and line. In 2015, its then general time as the Horizon bugs Government Investments. it still puts protecting the secretary George Thomson secretly proliferated; and his In keeping with its habit crown ahead of justice. told MPs that Horizon equally bungling successors of relying on bankers and Several sub-postmasters “has been fantastically from 2004 to 2008, David beancounters, this outfit told the Eye of bullying and robust... from day one” and Courtley, and from placed ex-Deloitte man underhand tactics such characterised Alan Bates’s 2009–2011, Roger Gilbert Richard Callard (2014-2018) as extracting “evidence” campaign for justice as a (on whose watch a Fujitsu and former Deutsche and without lawyers present. “cottage industry”. employee gave apparently UBS banker Tom Cooper Investigators then Questions will soon be false evidence at the trial of (2018-present) on the handed cases to in-house asked of Fujitsu top brass Seema Misra). Then came Post Office board. Both prosecutors (unlike police too. Uppermost among them Duncan Tait, who until placemen seem to have Jo Swinson investigations, which go are: the company’s UK chief last July led Fujitsu across done little beyond watching to Crown executive from 2000 to 2004 Europe while its senior staff the numbers, in tune with fry and careers that would Prosecution Service). (and then chairman for three gave evidence in court that the wishes of their political not have been helped Second Sight’s forensic years) Richard Christou, was so misleading police masters. by addressing the sub- auditors found prosecutors are now investigating. Tait is These were the postmasters’ grievances: reaching “agreements now a trustee of Business in government ministers George Freeman, Baroness whereby no mention was the Community. who failed to properly (Lucy) Neville-Rolfe, Margot to be made in court, by the Things could also get examine the unfurling James, Andrew Griffithsand defendant, of any criticism uncomfortable for Fujitsu’s public scandal while Kelly Tolhurst. of the Horizon system” and UK chairman and UK chief holding the postal services For two decades these that “decisions to prosecute executive from 2015 to brief. Under the coalition and previous directors and may have been contrary to 2018 (and board member came the uninspiring trio ministers presided over a the [prosecutors’] code…” before then), Michael of Ed Davey (2010-2012), policy of persecution. The Meanwhile, those Keegan (husband of current Norman Lamb (for seven instrument of this was the who should have backed junior education minister months) and Jo Swinson Post Office’s investigation the sub-postmasters, the Gillian). He is now a Crown (2012-2015). They were branch, now the Security National Federation of representative at the followed by a succession and Investigations Service. Sub-postmasters (NFSP), Cabinet Office dealing with of shortlived Tory junior The world’s oldest criminal let them swing in the wind. defence suppliers on behalf ministers with other fish to investigation force, it Entirely funded by the Post Michael Keegan of the taxpayer. No.No. 1388 1519 203 MarchApril – 2 April 2015 23 Apr 2019 £1.80£2.00 XXXXX SUBSCRIBE TO SAVE UP TO 35% ON THE COVER PRICE

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