Rachel Reeves, now the Chancellor of the Exchequer, faced scrutiny during her tenure as a senior manager at banking giant HBOS. An investigation into her expense spending was initiated following a whistleblower's complaint in early 2009. The complaint alleged a concerning spending culture within the Customer Relations department, implicating Reeves and two other senior managers in using the bank's funds for personal benefits.
The whistleblower's complaint detailed extravagant spending by Reeves, including an instance where she allegedly spent £152 on a handbag and perfume as gifts for her boss, funded by the bank. This accusation was part of broader claims that the managers used bank resources to "fund a lifestyle" with inappropriate expenses on dinners, events, taxis, and gifts. Despite the serious nature of these allegations, Reeves denied any wrongdoing and claimed she had no recollection of being under investigation.
A memo circulated in late 2008 called for tighter cost controls within the department. It mentioned the need to "improve cost controls" and focus on "Financial Risk Control within Customer Relations." Yet, Reeves and her colleagues allegedly ignored these directives. The memo also highlighted concerns regarding "spending on travel" and the use of "corporate spending cards, including Motivation cards," which were made available to senior managers.
Reeves and her team had access to both corporate credit cards and another payment card known as a 'Motivation' or 'Thanks' card. An internal audit assessed the complaint and supporting documents, uncovering evidence of apparent misconduct by the three senior managers. By April 2009, the investigation had escalated to involve an investigative branch of the Risk department due to the seriousness of the allegations.
"Given the nature of the allegations – claiming expenses for things you wouldn't normally claim expenses for – and the relative seniority of the individuals, the matter was referred for investigation by a team outside of that department," stated a source who worked in risk at the bank.
Reeves departed from HBOS in 2009, reportedly on amicable terms, receiving a severance payment. Her team vigorously denied all allegations, insisting she had not been subject to investigation. They presented several formal HBOS employees for interviews who corroborated Reeves's account. A lawyer involved in her compromise agreement remarked:
"Absolutely no allegations of wrongdoing or misconduct were mentioned by the HBOS HR team during this process."
Several former colleagues, however, maintained that Reeves was investigated over her expense claims. A former colleague remarked on the prevailing culture at HBOS:
"A culture developed among senior managers in Customer Relations where gifts were given freely to direct reports – both upwards and downwards."
Reeves held the position of Complaints Support Manager at LBG/HBOS during a tumultuous period marked by the global financial crisis. Her career trajectory saw her transition into politics, eventually ascending to the role of Chancellor. She lists her experience as an economist at HBOS on her LinkedIn profile, positioning it as her last role before entering parliament.
In response to internal efforts to tighten expenditure, Reeves authored an email focusing on expense management:
"Focus attention on particular aspects of travel that are costly and perhaps need more consideration."
A colleague responsible for finance responded:
"I don't believe that the goalposts are being moved."
Reeves's departure from HBOS reportedly included favorable terms, with a former colleague stating:
"HBOS allowed her to keep a company car for six months after she left and she was given a favourable reference."