British lawmakers condemn BBC executive payouts

‘Cronyism’ cited in report over $40m in severance payments to departing staff

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British lawmakers delivered a stinging rebuke on Monday to top BBC executives and trustees, including the corporation’s former chief Mark Thompson, saying their award of severance payments to outgoing managers appeared to be part of a culture of cronyism.

In a report which included an assessment of payments of 25 million pounds ($40.75 million) made to 150 departing BBC staff from 2009 to 2012, parliament’s Public Accounts Committee (PAC) said many of them “far exceeded” contractual entitlements, that some of the justifications put forward were “extraordinary”, and that the BBC’s governance model was “broken”.

“There was a failure at the most senior levels of the BBC to challenge the actual payments and prevailing culture, in which cronyism was a factor that allowed for the liberal use of other people’s money,” the PAC said in a statement.

The scale of some of the severance payments, many of them made as austerity cuts swept Britain, angered politicians and members of the public, who fund the broadcaster through a compulsory licence fee.

Thompson, who quit the British broadcaster last year to become chief executive of the New York Times, robustly defended the severance payments in September in front of the same committee, saying they had ultimately helped the BBC cut costs.

In a statement cited by the Guardian newspaper on Monday and released before the embargo on the PAC report was lifted, Thompson was quoted as saying:

“The members of the PAC are entitled to criticise the result, but the decision to make the settlement was made in an entirely proper and transparent way.

Despite some inflammatory language in the PAC report, there is absolutely no evidence of any wrongdoing by anyone at the BBC in relation to these severance payments.”

A handful of U.S. media commentators have questioned Thompson’s handling of the episode, saying they want to know more about the cases. The New York Times said it has full confidence in him.

Margaret Hodge, the PAC’s chairwoman and a senior lawmaker, said the payments had put the BBC’s reputation at risk and that the influential committee remained concerned about the veracity of some of the oral evidence it had heard.

“Some of the justifications for this put forward by the BBC were extraordinary,” she said in a statement.

“We are asked to believe that the former Director General Mark Thompson had to pay his former deputy and long-time colleague Mark Byford a substantial extra sum to keep him ‘fully focused’ on his job instead of ‘taking calls from headhunters’”.

The committee agreed with an assessment of the affair by Tony Hall, the current BBC chief, that the publicly funded corporation had “lost the plot” in its management of the payouts, she said.

The BBC said it had already acted to cap future payments at 150,000 pounds and to clarify the responsibilities of executives and trustees to ensure more rigorous standards.

The severance payment row came after a tumultuous year for the BBC during which Thompson’s successor, George Entwistle, resigned after 54 days in the job to take responsibility for a BBC news report which falsely accused a former politician of child abuse.

The BBC is still seeking to rebuild public confidence which was shaken in 2012 when it emerged that Jimmy Savile, one of the corporation’s biggest stars of the 1970s and 80s, was a prolific child sex abuser over decades.

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