Job threat to Labour chief over scandal

'A man has killed himself and we have got to get to the bottom of what has happened and completely restructure the party, and not just in Renfrewshire.' Jim Stevens, a member of Labour's Scottish executive committee.

McConnell under pressure as Paisley saga takes new twist with missing £320,000

By Jim McBeth and Stephen Breen in the Scotsman 16 th August 1997

The comments came as it emerged that £320,000 is missing from a controversial security firm with links to the Labour Party.

A liquidator's report into FCB Security, wound up amid allegations of a links to drugs, found the money was paid to workers who could not be traced.

A member of the liquidation committee of the Paisley company, which the local MP, Irene Adams, consistently claimed was used as a front for dealing and money laundering, revealed the "scandal" because he "was sickened by inaction".

A Scottish executive source told The Scotsman: "There is a problem with Jack's leadership and it is well known that his job is on the line over Renfrewshire if he doesn't sort this out. He sees himself as a political figurehead but he hasn't got to grips with problems like Renfrewshire until they begin to spread."

Meanwhile Jim Stevens, a member of Labour's Scottish executive committee, insisted that a root-and-branch review of Labour's local party organisation was needed, regardless of any recommendations made by Nick Brown, the chief whip, who is investigating the suicide of Paisley South MP, Gordon McMaster.

"Irrespective of what Nick Brown concludes, it's my feeling that we have got to take a long hard look at Renfrewshire politics and do whatever is necessary," he said. "A man has killed himself and we have got to get to the bottom of what has happened and completely restructure the party, and not just in Renfrewshire."

Charlie McLaughlan, a member of the FCB liquidation committee, said: "The liquidator, has compiled a report that indicates more than £320,000 of public money was squandered to pay people who didn't exist."

The hands of the liquidator, Colin Hastings, are tied by protocol but he confirmed he had sent his report to the Crown Office, which is "not usual" in such cases unless it is felt "warranted."

Mr McLaughlan added: "The Crown Office may sit back, but the public have rights. We did our job. It's time the Crown Office did theirs. The report indicates that an army of ghost workers may have been used to illegally drain money from the firm."

Scottish Conservatives and the SNP said it was proof that Labour's inquiry should be widened and the "full force of the law" brought to bear on "wrongdoing."

Hugh Henry, the Labour leader of Renfrewshire Council, said that, while he believed the McMaster and FCB issues were "separate," swift police action was needed into the "running sore", which the council inherited after reorganisation.

Two Labour councillors, Harry Revie and Olga Clayton, were non-executive directors of FCB, which was created in 1987 to provide community based employment in Ferguslie Park, the gangster heartland of Paisley where a drugs war two years ago left eight men dead.

It was created with almost £200,000 of public money and awarded at least £800,000 in council contracts.

Mr Revie was unavailable for comment, but Ms Clayton, who retired at the last election, said yesterday that she was never aware of impropriety. However, she added: "I had to trust what I was told and make policy judgements based on that. I was not involved day to day."

The ghost worker allegation centres on the casual workers known as "Division Three." Mr McLaughlan said: "Divisions One and Two were the trained people in the operation who were on the payroll. Division Three was untrained, casual workers who were apparently brought in when needed.

"The liquidator's report casts doubt on whether they actually existed. The amount of the money the FCB companies should have expected in profit was almost equal to the total paid to casual staff, a situation described as more than coincidence.

"This was a company in supposed financial difficulties, which had an annual turnover of £1.25 million. It should have been getting a Queen's Award to industry, not being wound up."

A spokesman for the Crown Office confirmed that a police investigation into FCB is continuing.

The Scottish Office said the report of the investigation had not been finalised, but the "outcome would be published."

Bruce McFee, the Renfrewshire SNP councillor, who chaired a cross-party working committee inquiry into FCB, said: "Everything we found during our inquiry lends weight to the liquidator's conclusion. We identified a number of irregularities and concluded this was a company which employed dubious practices and that the old Renfrew District Council were slack in their monitoring of it.

"We found many of the documents relating to the FCB had been destroyed. We saw report sheets from security guards on jobs where the handwriting and signatures were in three distinctively different styles.

"It is clearly time the cesspit was examined by the Labour Party, whose members steadfastly opposed all and every inquiry into the action of this company and those who ran it."