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Could these bombshell secret recordings FINALLY land Post Office bosses in the dock? Tapes show company top brass knew about the Horizon IT scandal but kept jailing postmasters for YEARS – campaigner weeps as he listens and MP demands prosecutions

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Pressure was mounting on the Post Office to face criminal action last night after secret recordings proved its bosses covered up the Horizon IT scandal.

They revealed that the company and Fujitsu knew their faulty computer system could alter sub-postmasters’ accounts more than ten years ago, despite denying this for years.

More than 900 sub-postmasters were convicted of theft, fraud and false accounting between 1999 and 2015 following faults in the Horizon system.

And national outrage ensued after the scandal was depicted in the ITV drama Mr Bates Vs The Post Office, based on campaigner Alan Bates’s bid for justice.

The recordings were made in 2013 when the Post Office hired forensic firm Second Sight to conduct an independent investigation.

Pressure was mounting on the Post Office to face criminal action last night after secret recordings proved its bosses covered up the Horizon IT scandal

Pressure was mounting on the Post Office to face criminal action last night after secret recordings proved its bosses covered up the Horizon IT scandal

In one recording, the Second Sight accountants present their evidence to Post Office company secretary Ms Lyons and chief lawyer Ms Crichton ¿ one day before then CEO Paula Vennells (pictured) met with victims campaigner Lord Arbuthnot. The accountants can be heard strongly recommending that Ms Vennells is briefed on the failings of the system. They were later fired

In one recording, the Second Sight accountants present their evidence to Post Office company secretary Ms Lyons and chief lawyer Ms Crichton – one day before then CEO Paula Vennells (pictured) met with victims campaigner Lord Arbuthnot. The accountants can be heard strongly recommending that Ms Vennells is briefed on the failings of the system. They were later fired

The first involved a call with IT specialist Simon Baker, in which it is admitted there is a possibility that sub-postmasters’ accounts could be altered without their knowledge.

Mr Baker said: ‘If somebody in Bracknell had a brainstorm and wanted to do something, they could just do it.’ Fujitsu’s head office is based in Bracknell, west London.

In another jaw-dropping moment, Mr Baker describes how he had informed Post Office executives Alwen Lyons and Susan Crichton that Fujitsu had admitted they could access sub-postmasters’ accounts secretly.

In previous revelations, it is understood that chief Horizon architect Gareth Jenkins told investigators as early as 2012 that the IT system could be accessed remotely by Fujitsu at its HQ. However, the Post Office did not admit this until 2019.

In the second recording, the Second Sight accountants present their evidence to Post Office company secretary Ms Lyons and chief lawyer Ms Crichton – one day before then CEO Paula Vennells met with victims campaigner Lord Arbuthnot.

The accountants can be heard strongly recommending that Ms Vennells is briefed on the failings of the system. They were later fired.

The recordings revealed that the company and Fujitsu knew their faulty computer system could alter sub-postmasters' accounts more than ten years ago, despite denying this for years

The recordings revealed that the company and Fujitsu knew their faulty computer system could alter sub-postmasters’ accounts more than ten years ago, despite denying this for years

Labour MP Liam Byrne, (pictured) chairman of the business and trade committee, said he felt 'pure rage' as he responded to what he says is the 'first evidence from 2013 that people knew there was a problem'

Labour MP Liam Byrne, (pictured) chairman of the business and trade committee, said he felt ‘pure rage’ as he responded to what he says is the ‘first evidence from 2013 that people knew there was a problem’

Labour MP Liam Byrne, chairman of the business and trade committee, said he felt ‘pure rage’ as he responded to what he says is the ‘first evidence from 2013 that people knew there was a problem’.

He said: ‘Not only did they mislead Parliament, they were sending people to prison as late as 2015. So two years after these recordings had been made.

‘This is potentially perjury, this is contempt of Parliament, it’s a miscarriage of justice. I mean, there’s a whole host of sins here.

‘It does now beg the question as to whether the police have now got sufficient evidence to act.’

Lord Arbuthnot broke down in tears when shown the evidence. He said: ‘I’ve been doing this for 14, 15 years now and to think that a British institution could behave like this, owned by us, is just terrible.’

Fujitsu, the Post Office and Mr Jenkins declined to comment. The public inquiry into the Horizon scandal resumes next month.

Former postmaster Alan Bates, who is portrayed by Toby Jones (pictured) in the drama, led and won the initial legal battle after himself falling victim to the faults

Former postmaster Alan Bates, who is portrayed by Toby Jones (pictured) in the drama, led and won the initial legal battle after himself falling victim to the faults

The scandal is seen as one of the UK's biggest miscarriages of justice and has gained recent national attention over recent days thanks to Mr Bates Vs The Post Office airing on ITV

The scandal is seen as one of the UK’s biggest miscarriages of justice and has gained recent national attention over recent days thanks to Mr Bates Vs The Post Office airing on ITV

Timeline of a travesty that’s still playing out 25 years on

  • 1999: The Horizon IT system from Fujitsu starts being rolled out to Post Office branches, replacing traditional paper-based accounting methods.
  • 2003: Sub-postmaster Alan Bates had his contract terminated by the Post Office after he refused to accept liability for £1,200 of losses in his branch in Llandudno, North Wales.
  • 2004: The branch in Bridlington, East Yorkshire, run by Lee Castleton, showed a shortfall of £23,000 over a 12-week period. Mr Castleton repeatedly asked the Post Office for help, but was sacked and sued for refusing to repay the cash. He was made bankrupt after a two-year legal battle, ordered to pay more than £300,000 for the company’s legal bill.
  • 2006: Jo Hamilton, sub-postmaster at South Warnborough, Hampshire, was sacked over financial discrepancies. She re-mortgaged her house twice to fill the shortfall and was charged with theft of £36,000. She later admitted a lesser charge of false accounting to avoid jail.
  • 2009: Computer Weekly magazine told the story of seven postmasters who had experienced unexplained losses. The Justice for Sub-postmasters Alliance (JFSA) was formed.
  • 2010: Mr Bates, from JFSA, writes to minister Sir Ed Davey about the flawed Horizon system and urges him to intervene. His warnings were dismissed.
  • 2012: With MPs raising concerns about convictions and the Horizon system, the Post Office launches an external review, with forensic accountants Second Sight appointed to investigate.
  • 2013: An interim report by Second Sight reveals serious concerns and defects in the IT system. The Daily Mail reveals dozens of postmasters may have been wrongly taken to court and jailed.
  • 2015: It is revealed the Post Office failed to properly investigate why money was missing and concluded computer failures may have been to blame. The Post Office finally stops prosecuting sub-postmasters but 700 end up being convicted.
  • 2017: A group legal action is launched against the Post Office by 555 sub-postmasters.
  • 2019: The High Court case ends in a £43million settlement but much of the cash was swallowed up in legal fees and victims received around £20,000 each. Post Office chief Paula Vennells awarded a CBE in New Year’s honours.
  • 2020: The Post Office agrees not to oppose 44 sub-postmasters’ appeals against conviction.
  • 2021: A public inquiry begins and is ongoing. The Court of Appeal quashes a further 39 convictions.
  • 2022: The Government announces a new compensation scheme.
  • 2023: Every postal worker wrongly convicted for Horizon offences will receive £600,000 compensation.
  • 2024: Mr Bates vs The Post Office first aired on ITV1 on New Year’s Day.

 

Last month Post Office boss Nick Read was accused of giving ‘misleading’ evidence to MPs as they called for the firm to be stripped of its role in delivering compensation to victims of the Horizon IT scandal.

A report by the Commons business committee suggested Mr Read, who is under internal investigation over his conduct, misled MPs on ‘at least two counts’.

These included the use of gagging orders and whether the Post Office had hired PR specialists to help deal with the crisis engulfing the firm.

The report branded the Post Office ‘not fit for purpose’ to administer payouts to postmasters.

It called on the Government to immediately step in and remove the Post Office from ‘any involvement in delivering redress’ amid reports of a ‘toxic’ culture.

Post Office boss Nick Read was last month accused of giving 'misleading' evidence to MPs

Post Office boss Nick Read was last month accused of giving ‘misleading’ evidence to MPs

It branded the beleaguered firm’s leadership as being in ‘utter disarray’ amid claim and counter-claim about alleged bullying and sexism.

The Post Office runs two compensation schemes and plays a key role in administering a third.

In one particularly damning passage, the report said: ‘The Post Office is not fit for purpose to administer any of the schemes of redress required to make amends for one of the biggest miscarriages of justice in British history.’

Hundreds of sub-postmasters were wrongfully prosecuted after they were blamed for non-existent shortfalls in their accounts produced by faulty Fujitsu software, called Horizon. 

But just a fifth of the budget set aside for compensation has been paid out, the report said.

It added: ‘The Government must immediately remove the Post Office from any involvement in delivering redress for sub-postmasters and the Government should set out to the Committee how it proposes to deliver swift and effective redress for sub-postmasters, and in what legally binding time frames.’ 

In February, the committee was told that some postmasters were receiving ‘insultingly low’ compensation offers.

Regarding evidence given in recent months by Mr Read, it added: ‘Mr Read concurred that reform of the Post Office’s culture is still a ‘work in progress,’ not ‘job done.’ 

‘In that context, we note that Mr Read has supplied misleading evidence on at least two counts, relating to the Post Office’s use of, first, non-disclosure agreements and, secondly, PR firms.’

In February, it emerged that the Post Office had hired PR firm TB Cardew on a £15,000 a month contract to help it deal with the fallout from the scandal.

Mr Read was also forced to clarify to the committee in a letter last month whether the Post Office used confidentiality agreements in reaching settlements with wronged postmasters

Mr Read was also forced to clarify to the committee in a letter last month whether the Post Office used confidentiality agreements in reaching settlements with wronged postmasters

But, in January, Mr Read denied that the Post Office had hired PR advisers in the wake of the ITV drama Mr Bates Vs The Post Office.

Mr Read was also forced to clarify to the committee in a letter last month whether the Post Office used confidentiality agreements in reaching settlements with wronged postmasters. 

He had originally said ‘no’ when asked by MPs if it continued using confidentiality agreements.

But his letter said: ‘On occasion Post Office enters into settlement agreements with postmasters, for example, to resolve disputes that may arise between Post Office and postmasters in the ordinary course of business.

‘Such settlement agreements include confidentiality provisions, as is the case in most organisations.’

It comes as furious sub-postmasters wrongly convicted in Horizon scandal said they were ‘glad’  Ms Vennells is handing back CBE.

Ms Vennells said in January that she is ‘truly sorry’ for the ‘devastation’ the scandal had caused to staff falsely accused of fraud when her organisation routinely denied there were problems with its systems. 

Former sub-postmistress Jo Hamilton said she was ‘glad’ the ex-Post Office had handed her CBE back, adding: ‘It’s a shame it took just a million people to cripple her conscience.’

Meanwhile, the Communication Workers Union reportedly said Ms Vennells should also hand back her millions in bonuses.

Former Post Office boss Paula Vennells (pictured) intends to hand back her CBE with immediate effect amid the fallout of the Horizon IT scandal, which led to the wrongful prosecution of hundreds of sub-postmasters

Former Post Office boss Paula Vennells (pictured) intends to hand back her CBE with immediate effect amid the fallout of the Horizon IT scandal, which led to the wrongful prosecution of hundreds of sub-postmasters

It comes as ITV's new drama Mr Bates vs The Post Office has drawn a renewed interest in the scandal after airing last week, with Mr Bates being played by Toby Jones (pictured in the role)

It raised the case again and piled pressure on Ms Vennells

It comes as ITV’s new drama Mr Bates vs The Post Office has drawn a renewed interest in the scandal after airing last week, with Mr Bates being played by Toby Jones (pictured in the role). It raised the case again and piled pressure on Ms Vennells

Postmasters accused of theft by Post Office celebrate outside the High Court In London after they had their convictions overturned. Thirty-nine former sub-postmasters who were convicted of theft, fraud and false accounting due to the Post Office's defective Horizon accounting system had their names cleared by the Court of Appeal

Postmasters accused of theft by Post Office celebrate outside the High Court In London after they had their convictions overturned. Thirty-nine former sub-postmasters who were convicted of theft, fraud and false accounting due to the Post Office’s defective Horizon accounting system had their names cleared by the Court of Appeal

More than 1 million had signed an online petition calling for the former Post Office chief executive officer to hand back her CBE

More than 1 million had signed an online petition calling for the former Post Office chief executive officer to hand back her CBE

Ms Vennells said: 'I have listened and I confirm that I return my CBE with immediate effect' (File picture)

Ms Vennells said: ‘I have listened and I confirm that I return my CBE with immediate effect’ (File picture)

It said: ‘Since she received these bonuses while overseeing the most widespread miscarriage of justice in British history, it would only be right to return this money.’ 

Ms Hamilton, who was wrongfully convicted in 2008 of stealing thousands of pounds from the village shop in South Warnborough, Hampshire, said: ‘It shows the people have spoken – about everything really.

‘It’s not just about her CBE, it’s about how disgusting the whole thing is.

‘We’re all sick and tired of people taking money, being paid exorbitant amounts of money, and politicians taking absolutely no notice of you whatsoever… I think the people are just sick of it.’

Varchas Patel, whose father Vipin who was wrongfully convicted of fraud in 2011 after being accused of stealing £75,000 from his Post Office branch in Oxford, said: ‘My initial reaction is good, I’m glad. She doesn’t deserve that CBE, she never did deserve that CBE.

‘Now the big question for me is, who gave her that CBE?

‘When she was given that CBE… there were two other things that happened – one, she was given a CBE, two, she was given a seat at the Cabinet Office and three, she was given a job as the chair of the Imperial College (Healthcare NHS Trust).

‘They gave her three golden handshakes for fighting Mr Bates in court.’

Mr Patel added: ‘It’s not just Paula Vennells, there are others.

‘There are in-house Post Office lawyers, and especially the in-house investigators – the investigators who investigated the likes of my father and others.’

Ms Vennells had also seen Prime Minister Rishi Sunak weigh in behind efforts to strip her of her CBE. 

Jo Hamilton, 66, was falsely accused of stealing £36,000 from a village shop in South Warnborough, Hampshire, and eventually pleaded guilty to false accounting in fear of going to jail

Jo Hamilton, 66, was falsely accused of stealing £36,000 from a village shop in South Warnborough, Hampshire, and eventually pleaded guilty to false accounting in fear of going to jail

Joe Hamilton (pictured) was falsely accused of stealing £36,000 from a village shop in South Warnborough, Hampshire, and eventually pleaded guilty to false accounting in fear of going to jai

Her nightmare started when the Horizon system started showing shortfalls in her accounts in 2003 – at one stage showing the amount double before her eyes

Mrs Hamilton is one the stars of a new ITV drama about the Post Office Horizon scandal called Mr Bates vs The Post Office. Pictured: Mrs Hamilton played by actor Monica Dolan

Mrs Hamilton is one the stars of a new ITV drama about the Post Office Horizon scandal called Mr Bates vs The Post Office. Pictured: Mrs Hamilton played by actor Monica Dolan 

Mrs Hamilton bought the village shop in 2001 and became the sub-postmaster two years later

Mrs Hamilton bought the village shop in 2001 and became the sub-postmaster two years later

The shamed ex-Post Office chief said: ‘I have listened and I confirm that I return my CBE with immediate effect.

‘I am truly sorry for the devastation caused to the sub-postmasters and their families, whose lives were torn apart by being wrongly accused and wrongly prosecuted as a result of the Horizon system’.

Her decision to hand back her honour came after more than a million people signed an online petition to take it off her.

It also followed Downing Street saying Mr Sunak would ‘strongly support’ an investigation by the Honours Forfeiture Committee into whether Ms Vennells should lose the award, which was given for her ‘services to the Post Office and to charity’.

Post Office minister Kevin Hollinrake also said she should consider voluntarily giving up the honour. 

The bosses who pocketed millions

PAULA VENNELLS, 62

Network director from 2007, managing director in 2010 and chief executive from 2012 to 2019 on £4.9million. The part-time Anglican priest was in charge during the IT disaster. Pursued staff in a £90million court case. Urged to return CBE for ‘services to the PO and charity’.

Paula Vennells, pictured, was network director from 2007, managing director in 2010 and chief executive from 2012 to 2019 on £4.9million

Paula Vennells, pictured, was network director from 2007, managing director in 2010 and chief executive from 2012 to 2019 on £4.9million

ALAN COOK

Also a CBE. Managing director from 2006 to 2010, when the firm prosecuted some 200 staff. Since leaving he has played a key role in a home repossessions scandal in Ireland, was chairman of Highways England as smart motorways were developed and led a failed attempt to sell the insurer LV to private equity.

ALICE PERKINS, 72

Wife of ex-Labour home secretary Jack Straw and £100,000-a-year PO chairman from 2011 until 2015, when some 120 postmasters were prosecuted. She is accused of failing to deal with the scandal.

DAME MOYA GREENE, 67

Earned £11.5million as chief executive of Royal Mail from 2010 to 2018. Accepted assurances that Post Office court cases were above board.

TIM PARKER, 66

Due to step down as chairman having led the Post Office since October 2015. Nicknamed the Prince of Darkness for job-cutting zeal.



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