Clive Adamson’s FCA departure is costing how much?

As they say, it is always the cover up that causes the problem.

Bob Woodward, one of the now very famous journalists that uncovered what was going on in the great political Watergate/ Nixon scandalof 1972 said “The fact of the Watergate cover-up is not nearly as interesting as the step into making the cover-up. And when you understand the step…….?”

Clive Adamson, the FCA’s director of supervision, told the TSC last December that he had previously considered resigning before the end of his term of office in 2016, but says he decided that “I didn’t want to become part of the story,” and so resigned days before the FCA report into the March 2014 events that led to £6bn being wiped off the stock market value of insurance companies was published. This was the ‘outcome’ (yes that word again) of him being quoted as saying that the FCA was planning to review some 30m policies going back decades and was considering scrapping policy exit fees.

Whilst the resignation reasons were clear, some may say very honourable, what is not so clear is at what cost to the regulator and in turn the industry who has to pay for the regulators activities and pay off’s?

Given that any pay-off from public office these days is coming under severe scrutiny from both the public and politicians (the next parliament could see legislation to cap what is currently seen as excessive public sector pay offs for failure based resignations and redundancies) we thought this could be a smoke and mirror exercise in damage limitation by way of money changing hands.

An exercise designed to ensure that the individuals go with as little fuss as possible is bound to have some element of a ‘sweetheart deal’ about it.

Resignations of a senior nature at the FSA, now the FCA always mean large sums of money being paid to those departing heads. In light of ‘form’ in this area we felt that a Freedom of Information Act 2000 request for the following information would be in order to find out what these latest departures will cost the industry for failures in office:

I read that “FCA director of supervision Clive Adamson and director of communications Zitah McMillan are to leave the regulator as part of a restructure” and that “The FCA says Adamson and McMillan’s departures are not related to its closed book review”.

 I would be grateful if you could confirm what lump sum redundancy/ severance payments were/ are to be made to the above individuals, if any, stating how much and any special terms attaching?”

After some four weeks we got a January reply, it reads:

Your request has now been considered and I confirm that we hold information regarding the basis upon which Clive Adamson and Zitah McMillan will be leaving the FCA. However, we are not able to disclose this information to you as it constitutes their personal data and to do so would breach the Principles of the Data Protection Act 1998 (DPA). Therefore, we consider that section 40 (Personal Information) of the Freedom of InformationAct applies. For a more detailed explanation as to why this exemption applies please refer to annex A, attached.

However, you may be interested to know that Clive Adamson’s remuneration details (along with all other FCA Board Members details) will be published in the FCA’s Annual Report for 2014/15; we expect this to be published on our website by the end of July 2015. We are therefore not obliged to provide you with the remuneration details now because section 22 (Information Intended for Future Publication) of the Act applies.  For a more detailed explanation as to why this exemption applies please also refer to annex A, attached.

If you have any questions or queries please let me know.

To the extent that the information that we hold contains personal data about an individual, section 40(2)(b) of the Act provides that “Any information to which a request for information relates is also exempt information if … either the first or second condition below (see sections 40(3) and 40(4) of the Act) is satisfied”. 

We have applied this exemption because the first condition (as stated in section 40(3) of the Act) is satisfied as the information requested comprises the personal data of individuals other than yourself, which if disclosed would breach the Principles in the DPA.  It would be a breach of Principle 1 to disclose such information, as it would not be fair to the individuals concerned.  As is usual in such cases, in the public as well as the private sector, the basis on which Mr Adamson and Ms McMillan will be leaving the FCA has been incorporated into a legal agreement, which contains mutual confidentiality obligations.  The individuals’  reasonable expectation is that their personal information will be protected and to breach this expectation would not be ‘fair’ (as noted in the first principle).  The individuals concerned have not given their consent for this personal data to be made public and the release of such information may be detrimental or distressing to the individuals themselves.

 Section 22 (Information Intended for Future Publication)

Section 22 of the Act provides that information is exempt if it is held with a view to its future publication at some future date.  Section 22 is a qualified exemption and is subject to the public interest test.  As such we have considered the factors for and against disclosure as follows.

For disclosure

Disclosure would increase public awareness of the FCA’s processes around senior staff departure.

Against disclosure

We do not consider it to be in the public interest to release this information in advance of publication, considering it is due to be published in the future together with other information about Board members’ remuneration and the FCA’s income and expenditure generally. Disclosure of financial information about Mr Adamson at that time will allow the information to be seen in context, which would not happen if there was separate, early publication.

Overall, we consider that the public interest lies against disclosure for the reasons above, and we do not consider it to be in the public interest to release the information in advance of the anticipated date.

I get a little concerned with some of the highlighted Data Protection Act observations and justifications as these invariably are devices to deflect attention, condemnation and possibly outrage.

In this case it seems especially strange that the individuals have refused to give consent at this stage for something that will eventually come out in the wash, being disclosed (in what detail we do not yet know) in the summer, and just after a General Election too.

In the very best Private Eye tradition, “shurely we should be told”?

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