The minister in charge of tax expressed support for a strategy to undermine evidence from a whistleblower who uncovered the notorious Goldman Sachs "sweetheart" deal, according to emails seen by the Guardian.
David Gauke, the exchequer secretary to the Treasury, approved of a plan to brief a journalist with information to help discredit testimony from Osita Mba, a solicitor with HM Revenue and Customs (HMRC).
Mba had told two parliamentary committees that the then head of tax, Dave Hartnett, had shaken hands on a deal allowing the US bank to escape paying up to £20m in interest charges.
Margaret Hodge, the chair of the public accounts committee, said Gauke's involvement raised concerns about whether the minister was listening to public anger about tax-dodging or focusing on the whistleblower who had brought problems to light.
"The government claims it is committed to ensuring that big business and wealthy individuals pay their fair share of tax, she said. "But this raises serious questions about whether, behind the scenes, it is simply a case of business as usual.
"The minister responsible appears to have gone along with HMRC's efforts to dismiss out of hand our criticisms, and public concerns, around these 'sweetheart' deals, efforts which involved attempting to discredit the evidence of a whistleblower who had come forward. Clearly, he [the minister] and HMRC have questions to answer."
The leaked emails were sent by a senior figure in HMRC's media department to Gauke's private secretary, Oliver Haydon. Sent on 15 December 2011, sparked by an article published that morning in the Times, they claimed that the soon-to-be released public accounts committee report would be highly critical of Hartnett and Revenue & Customs, and of the Goldman Sachs deal.
Mba had written to the public accounts committee and the Treasury select committee earlier in the year telling MPs that Hartnett had shaken hands on a deal without following proper procedures, leaving taxpayers out of pocket.
In one email, the Revenue & Customs executive wrote to Gauke's secretary saying that they needed to challenge Mba's evidence.
"The belief that Mr Mba has genuine and deep knowledge of the Voda [Vodafone] and GS [Goldman Sachs] settlements is growing when in fact the picture he presents is partial, incomplete and flawed," the executive wrote.
"Much of the PAC [public accounts committee] report on large business settlements is likely to be based on his submissions and we feel this must be challenged if HMRC's reputation is not to suffer very serious damage.
"We propose to do this by having Dave Hartnett brief [a named Financial Times journalist] – on the record – with a view to a Saturday/Monday story. We would welcome your views."
Haydon responded: "Thx - I've relayed to XST [Gauke] whose initial reaction was positive. I'll confirm when I speak to him in the next hour or so."
Earlier that day, a corporate communications at HMRC had been asked by Haydon to explain Revenue & Customs' media strategy over the report, according to the emails.
The executive urged Gauke publicly to defend Revenue & Customs' large-business strategy once the PAC report had been released, but Haydon said he had declined: "As I've said before, XST [Gauke] is not minded to do any media personally. But he has not yet come to a final view on this."
The report was released the following week, and Gauke did not speak out as Hartnett came under pressure to resign over his role in the deal and for allegedly misleading MPs – an allegation he denied.
Members of the committee called for Revenue & Customs to stop disciplinary proceedings against Mba after it was reported that he had been suspended from work.
MPs also asked the National Audit Office to investigate the Goldman Sachs case and four others in which "bespoke" deals had been organised for large businesses that were in dispute with Revenue & Customs.
Judge Andrew Parks led a review of the five bespoke deals, but his report was not publicly released, on grounds of taxpayer confidentiality. Instead, Amyas Morse, the head of the National Audit Office told MPs he had read the report, and that the deals had been cleared.
However, Morse's role in the Parks report has been questioned after a leaked document showed that he had appeared to undermine the process before it began by telling Hartnett the inquiry would find "nothing of substance".
Last Tuesday, the Guardian disclosed that the deals were worth £4.5bn, raising questions over how much the exchequer had failed to take in as a result.
The deal with Goldman Sachs was further unravelled on Thursday when, at a judicial review hearing, an email put before the court showed Hartnett told colleagues at the time of the deal that the Goldman Sachs deal had been agreed in part to avoid embarrassment to George Osborne, Revenue & Customs and himself.
Tax campaigners have called for the Independent Police Complaints Commission, which has powers to investigate serious allegations against tax officials, to open an inquiry into Hartnett.
A Treasury spokesperson said Gauke was "entirely supportive" of HMRC's large-business strategy, and agreed that inaccurate statements about it should be corrected by HMRC.
"Andrew Parks' independent review of this particular settlement found it to be reasonable. As you would expect, the minister was not kept informed of any details of Mr Mba's employment matter; nor was he involved in any decisions related to its handling," the spokesman said.
Revenue & Customs declined to comment, for legal reasons.
guardian.co.uk © Guardian News and Media Limited 2010