On a spring morning three years ago, more than 60 police officers entered 13 properties across Britain in a co-ordinated raid.
These included the headquarters of Unite the Union in Holborn, central London, where officers from South Wales Police spilled out of two unmarked cars. They left hours later with a computer and bundles of documents.
Other raids took place in south Wales, Merseyside, Cheshire, north Wales, Dyfed-Powys and Northamptonshire.
It was April 6, 2022. The union confirmed an employee was “subject to a criminal investigation by the police”. But his identity — former assistant general secretary Howard Beckett — remained a closely held secret.
It only emerged recently when a tribunal ruled against Beckett in public proceedings for constructive unfair dismissal against Unite.
Those tribunal papers highlight a scandal that has rocked one of Britain’s most powerful trade unions and a major Labour party donor.
Beckett was one of four suspects in the police probe, according to the tribunal. As well as Unite’s London head office, South Wales Police searched Beckett’s flat in London and his home in the Wirral near Liverpool.
Beckett, who stood for Unite’s leadership in 2021, is a Northern Ireland solicitor with outspoken socialist views.
He was close to Len McCluskey, former Unite chief, another avowed anti-capitalist and ally of ex-Labour leader Jeremy Corbyn.
Yet Unite’s own capitalist adventures have led to two distinct scandals.
The first — which prompted the police raid in April 2022 — involves Unite’s “affiliated services” wing, which offers discounts to members on products such as mortgages and legal advice.
South Wales Police — along with HM Revenue & Customs — have looked into Beckett as part of a criminal investigation into allegations of bribery, fraud, money laundering and tax evasion involving several companies. So far no one has been charged. Beckett denies any wrongdoing.
The second involves a Unite-owned hotel and conference centre in Birmingham called Aloft. The venue, completed in 2020, was valued at just £29mn in December 2021 by property agency Fleurets despite costing £112mn to build. Unite says the Serious Fraud Office is investigating the hotel scheme.
The union has not filed accounts for four years but has recently done a reaudit “in light of the Birmingham investigation”.
These long-delayed accounts will this month reveal impairments of about £60mn to Unite’s assets — which had a net book value of £232mn in December 2020.
McCluskey left Unite in August 2021. His successor, Sharon Graham, ordered three probes by external experts, which produced the revelations that have since overwhelmed the union.
Graham, a hard-headed former industrial negotiator, asked forensic accountants at Grant Thornton to look into the “affiliated services” wing and appointed a KC called Martin Bowdery to examine the Birmingham hotel project.
The union also hired an unnamed criminal law KC who produced a further report, which Unite says highlighted “potential corruption”.
Unite passed all the reports to the police.
Beckett was suspended in August 2022 and resigned the following January just before a scheduled disciplinary hearing.
He had joined Unite in 2011 to run its legal department and affiliated services, becoming assistant secretary general in 2016. He became interim finance director after the death of the incumbent Ed Sabisky in March 2020.
When Beckett was first suspended he faced two main allegations, which he denied.
One, according to the tribunal’s judgment, was that he misled Unite’s executive council in January 2021 about the value of the Birmingham hotel.
Beckett’s allies said it was bizarre he was blamed for the spiralling cost of Aloft when it was the brainchild of his predecessor Sabisky.
The other claim against Beckett involved the affiliated services.
In particular, the judgment revealed, it was claimed he signed a contract “without prior authority” with Hardy Evans, a company that ran a 24-hour Welsh call centre which — among other things — successfully persuaded thousands of lapsed members to rejoin Unite.
The Grant Thornton report found no indications of any competitive tendering for the Hardy Evans deal, Unite told the Financial Times.
The report said “it appears that Howard Beckett played a prominent role in both setting up a number of Hardy Evans initiatives and directing Unite business to it”.
Grant Thornton declined to comment on its report for Unite. But the tribunal judgment revealed that the report found many of the service providers appeared “linked directly or indirectly” to Beckett with a “commonality of ownership structures”.
Unite said that it paid Hardy Evans £9mn over eight years from 2013, “of which we have no idea what £2.7mn of it was for”, it told the FT.
The Grant Thornton investigation said many of these payments “appear to have been recurring payments (possibly standing orders), for the same round sum amounts every month”, Unite told the FT.
Beckett has said in response that the service providers — particularly Hardy Evans — generated tens of millions of pounds for the union.
One ally of Beckett said any regular payments that the union is now claiming it cannot reconcile would have been a “commercial reality” to allow the company to meet its regular commitments such as staff wages, which were then “ultimately reconciled against results”.
Unite told the tribunal that Beckett had a “conflict of interest” in giving work to affiliated service providers who had registered offices in buildings he owned.
South Wales Police are still investigating claims Unite’s contracts for services were “awarded on behalf of Unite to companies controlled by other linked persons, in return for personal financial and other rewards”.
Grant Thornton found payments of £1.1mn from Beckett to a company connected to Hardy Evans between 2012 and 2015, the judgment revealed.
Last August Hardy Evans went into administration, according to documents at Companies House.
At the start of 2023, Unite assistant general secretary Gail Cartmail held an internal hearing in Beckett’s absence and said the allegations were “gross misconduct to include serious financial wrongdoings”, according to the ruling. She claimed he had not declared he was “benefiting financially” having “awarded contracts on the basis of nepotism and favouritism and for his own financial gain”, it added.
Beckett said he was brought on board by McCluskey precisely because of his “personal business relationships” to develop them on behalf of Unite, the tribunal judgment said.
A spokesperson for Beckett said: “The income from the affiliates was reported to the executive in written reports, then accepted by a vote, and for over 10 years the affiliates were accepted as being a success for Unite in terms of services provided, income generated and members recruited.”
Claims and counterclaims about the allegations are now playing out in the public domain.
Beckett said at the tribunal he was ousted because as a previous leadership candidate he was “perceived as a threat” to Graham, claiming to be a victim of a “witch-hunt” and a “campaign of politically motivated mistreatment”.
Some colleagues see the allegations through the prism of a power struggle ahead of a fresh leadership race next year. Unite’s ruling executive council of about 60 members is split between a pro-Graham faction and a rival “United Left” group.
“Underhand tactics have been used as part of a long-running campaign to thwart the general secretary’s campaign to clean up the union,” said a Unite spokesman.
Beckett has announced he is appealing against the tribunal’s rejection of his unfair dismissal claim and taking legal action against Unite and Graham personally for alleged breach of privacy.
Unite said it would be “more than happy to defend our position” if necessary.
Meanwhile, Unite says the Serious Fraud Office is investigating how the Aloft hotel cost £112mn but was later valued at just £29mn.
The unremarkable 195-bed hotel and conference centre — operated by hotel chain Marriott — lies near Aston University.
The lead contractor on the project is co-owned by a friend of McCluskey.
Unite’s current leadership said Bowdery, the KC appointed by Graham to investigate, had not found any competitive tendering for Aloft.
McCluskey said he was not involved in choosing the contractor, which had already worked with Unite on eight other projects.
Tony Woodley, McCluskey’s predecessor — and friend of Sabisky — said bigger contractors such as Laing O’Rourke rejected the job because of Unite’s exacting standards. “Did Len McCluskey direct Ed [Sabisky] to employ that particular company? No.”
But Unite said it had emails showing McCluskey’s involvement in the work, if not the original contract.
One person familiar with the situation said: “There is email evidence Len McCluskey was directly involved in extending the precontract and in giving further related contracts to the company.”
McCluskey said that was an “extraordinary” claim: “I had nothing to do with the original contract to give the company the job of building the complex,” he told the FT.
The report by Bowdery found evidence of suspected overcharging, according to Unite.
Bowdery also identified a missing £14mn, which does not feature in the project’s final accounts. His so far unreleased report ascribed the figure to a Unite protocol called “C1232”, which the construction company said was a demand that all workers had to be directly employed union members. But Unite said there was “zero evidence” this had contributed to the “enormous rise in costs”.
One example of alleged overcharging found by the Bowdery report was that the cost for bore holes in blockwork walls was originally estimated at £91,000. However Unite was charged a bill of £1.3mn. “There is zero explanation,” said the union.
The construction company behind Aloft said it did not recognise the £14mn figure and had not seen the report.
It blamed spiralling costs on Unite repeatedly changing the specifications. “These included the change of the hotel from a 5-storey, 3-star budget hotel to a 6-storey, four-star hotel.” It said it kept Unite updated on the rising costs every two weeks.
The construction company said it was taking legal action to recover “substantial amounts” owed by Unite. The union said it was “yet to hear of any legal action”.
Beckett has claimed he was not responsible for cost overruns that occurred under Sabisky. “The idea [Beckett] misled the executive was grossly unfair, it all happened before his time,” said one ally.
In 2022 the head of the firm overseeing health and safety on Aloft was jailed for 14 years in a separate case for his role in a drugs conspiracy.
Allies of Beckett and McCluskey are sceptical about the hotel’s £29mn valuation, believing it too low. “No one has seen the valuation . . . it’s utter nonsense,” said one ally of Beckett.
Some Unite veterans doubt whether the SFO is still investigating the Birmingham project. The SFO has not yet interviewed the current or past management of Unite, nor the construction company.
One ally of Beckett said some inside Unite felt “this is all a convenient narrative for Sharon Graham and it is all about her re-election strategy, it allows her to say ‘I’m cleaning up the union’”.
However, Unite said its legal team had passed on information requested by the SFO: “The SFO have asked us not to comment publicly on their inquiries.”
The SFO said: “In line with long established practice to avoid prejudice to law enforcement activity, we can neither confirm nor deny any involvement in this matter.”
Unite is about to publish a fresh “interim report” into both scandals.
Graham’s spokesperson said she had endured “repeated attacks by those with much to lose since she launched these inquiries”.
According to Unite, in late 2021 she was approached by four other men while walking along a dark street near her London home.
“You shouldn’t be going through the hotel accounts,” said one of them. “You’re better off leaving it alone.”
