Private jet and match tickets: McCluskey in the spotlight after Unite’s internal report

McCluskey had flown by private jet from Liverpool John Lennon Airport to watch the Champions League final between Tottenham Hotspur and Liverpool. An avid Liverpool supporter, he watched his team win 2-0.

McCluskey strongly denied at the time that he was in a ­relationship with Murphy, with legal threats issued over suggestions they were a couple. The union boss finally ­admitted the ­relationship with one of the key figures in Corbyn’s team, in his 2021 autobiography Always Red.

“We engaged the press in a game of cat and mouse, getting Howard Beckett [Unite’s head of legal] to use his legal genius to knock out gossipy stories,” he wrote. “We wanted our relationship to be kept private, away from the public gaze.”

But there was a more serious question about the Spanish jaunt, which goes to the heart of McCluskey’s decade at the helm of Unite, one of Britain’s biggest unions. Who picked up the bill?

In a forensic 61-page interim report published by Unite on Tuesday, it was alleged that the Liverpool firm building a hotel and conference centre for the union had paid for the match ticket and arranged the private flight for McCluskey and Murphy. It was among a number of football games the firm had arranged for the union boss to watch.

According to the report, there was “no indication” that McCluskey had reimbursed the Flanagan Group, the hotel contractor. McCluskey’s lawyers told the BBC last week that he paid for his own travel in full and, as far as he could recollect, paid the cost of his football tickets. A legal representative for Murphy said she paid for her own travel, did not attend the match and was not staying in Madrid with McCluskey.

In 2022, Tortoise, now the owner of The Observer, put to McCluskey the allegation that he had flown to Madrid for the match on a private jet courtesy of the Flanagan Group. At that time, McCluskey responded that this and other allegations were “intended to damage my reputation”, “intentionally false” and “malicious”.

The new report alleges that McCluskey had described the directors of the Flanagan Group as “good friends”. By June 2019, the month of McCluskey’s trip to Spain, the project’s costs were spiralling out of control.

According to the report, Unite spent at least £72m more on building the complex than it is now worth. It is alleged there was £30m of ­overcharging by the Flanagan Group. McCluskey stepped down as the union’s general secretary in August 2021, several months before his term of office was due to end. Sharon Graham succeeded McCluskey at Unite, which is Labour’s biggest union funder.

Gerard Coyne, Unite’s ­former regional secretary in the West Midlands, who twice stood for the union leadership, said: “This is one of the biggest financial scandals in union history and I feel overwhelming relief that a light has been shone on this terrible episode.

“It’s gobsmacking that an organisation that had a turnover of more than £170m a year had no proper checks and balances on financial spend and accountability. There was a shocking and systematic misuse of union members’ money.”

The hotel development, a short stroll from Birmingham city centre, was intended to save the union money and initially conceived as an 185-room hotel and conference centre to be used by members. It became a costly white elephant, and its construction is now being investigated by the Serious Fraud Office.

A company called Blackhorse HCC was set up in 2016 to manage the project, with the report detailing how McCluskey signed off the accounts each year as the bills racked up.

The firm is believed to be named after a pub next to the hotel and was run with limited oversight. According to Unite’s report, three of its directors claim they were not told they were on the board until 2020.

Flanagan Group was appointed despite allegations of delays and cost overruns on previous Unite ­projects. “Len McCluskey signed the contracts,” states the report. “[He] overruled Unite staff who raised questions about the firm, and overruled ­lawyers who advised against the contracts.” Flanagan Group submitted bills throughout the project that were “massively over the original estimates”, according to the report. They include £1.3m that the firm billed to drill holes in the walls. This work was estimated to cost £90,000.

When interviewed over the fiasco by a lawyer appointed by Unite to investigate, McCluskey cast blame on Ed Sabisky, the union’s former finance chief, the report claims. He told the lawyer that it was Sabisky’s decision to appoint the Flanagan Group.

McCluskey said he delegated “the entire management of the project” to Sabisky and relied on him to ensure what he signed was “suitable and appropriate”. He said he was only told by Sabisky about the overspend at the end of 2019. Sabisky died in March 2020 after a stroke.

Tuesday’s report raises questions over McCluskey’s account. Sabisky, a former finance director for Vauxhall Motors, was a popular figure in the union. According to an official quoted in the report, he had been “100%” against engaging Flanagan Group.

When Sabisky began criticising Flanagan Group for delays on the project in July 2017, McCluskey emailed: “I want the finger of blame approach stopped.” The report states that McCluskey signed formal building contracts the following month. His lawyers said last week he does not recall signing the main hotel contract.

Graham commissioned an independent valuation of the hotel project, which concluded it had cost the union at least £110m, but was worth only £38m. There has been a write-down of £66m in the union’s 2021 accounts.

“Money left our union when it should not have,” Sharon Graham said last week. “I will do everything in my power to get our money back.” The interim report details the online harassment Graham has been subjected to since launching the investigation.

Lawyers acting on behalf of McCluskey told The Observer he was “deeply disappointed” by the statements and report published by Unite. They said the allegations published about him were “categorically rejected by him as inaccurate, selective and highly misleading”, and that it would be inappropriate of McCluskey to comment in detail because of an ongoing investigation.

Flanagan Group has been approached for comment. It has previously said there were many reasons for the increased costs of the project, including radical changes to the design and working practices, that the scheme was delivered fairly and it should be regarded as an “exceptional asset” for the union.

Photographs by CRHA/Backgrid, Andy Hall/The Observer and Nick Maslen/Alamy