BRITISH CIVIL SERVICE SCANDAL

Dominion, Volume 21, Issue 129, 29 February 1928, Page 11

BRITISH CIVIL SERVICE SCANDAL

REPORT OF BOARD OF INQUIRY HIGH OFFICIAL DISMISSED OTHER OFFENDERS PUNISHED. As a result of the iivestigations of a board of inqury, certain highly.placed members of the British Civil Service have been punished in coniection with private speculations n foreign currency. “Serious is the offences were in certain ciscs,” the report states, “. . . . no question of corruption or ok the use of official information occurred in any one of them.” Rugby, February 27. The report of the Board of Inquiry appointed to investigate certain satcnients affecting Civil servants mad- in the recent law ease of Iremonger versus Dyne was laid on the table in the Hcuse of Commons to-night. Accompanying it was a minute stating that the Pr.nie Minister and Foreign Secretary, havng carefully considered the report, “ire glad to observe that serious as Wire the offences in certain cases from the service point of view, no question of corruption or of the use of official information occurred in anv one of then. “As a consequence of tlie findings, the Secretary of State has directed tlht Mr. J. D. Gregory be dismissed from the service, that Mr. O. S’C. O’Mallty be permitted to resign, and that LieutCoinmander Maxse be severely reprimanded and forfeit three years’ seniority.”

Actions Inconsistent with Obligations. The report of the inquiry is a lengthy document compiled after much evidence had been taken, divided into three parts. Thefi rst part deals with the cases of the three Foreign Office officials mentioned in connection with speculations in foreign currency. The board came to the conclusion that while Gregory, O'Malley, and Maxse neither used nor endeavoured to use any official information for the purpose of their transactions, such transactions ought never to have been undertaken by Civil servants, least of all by those to whom, from the nature of their work, the sensitiveness and suspicions of foreign countries with regard to such dealings in their currencies cannot havebeen unfamiliar. The action of these three officials, in the view of the board/ was inconsistent with their obligations as Civil servants. Gregory Conscious of Impropriety. Regarding Gregory, the board says: “We cannot doubt that he was conscious of the impropriety cf what he was doing, and we do not regard it as a sufficient excuse that he did not at any time make use of official information for private ends.” The case of O’Malley, wdio initiated the business, the board regards as distinguishable from Gregory’s only by the smaller volume and shorter duration of the transactions. They think extenuating circumstances admissible in Maxse’s case. The second part of the report deals with the question whether other .Civil servants have been engaged in similar transactions. In two specific cases in which officials had volunteered statements to the board regarding past investments, the view- is expressed on the impropriety of their actions, which, however, bore no resemblance, except in form, to the systematic operations of the other three officials mentioned, and the board is satisfied that no question had arisen of inside information having been used. No Manipulation of Zinovieff Letter. The third section of the report deals with the allegation that to serve his own financial ends Gregory had manipulated the publication of the Zinovieff letter and the Note to the Soviet Charge d’Afiaires regarding it. After careful analysis of the circumstances and events regarding this episode, the conclusion reached is that not the slightest foundation exists for attaching suspicions to Gregory. In fact, the report shows that Gregory, in departmental minutes, advised against the publication of the documents. Moreover, the fact that thev were published had no effect upon the course of foreign exchanges. Duty of the Service to the Public. Dealing with the position of Civil servants generally, the report concludes :— The public expects from them a standard of integrity and conduct not only inflexible, but fastidious, and it has not been disappointed in the past. We are expressing the view of the Service when we say that the public has the right to expect that standard, and that it is the duty of the Service to see that the expectation is fulfilled.— British Official Wireless. '

SCOPE OF OPERATIONS HEAVY LOSSES RECORDED. London, February 27. The report of the Civil Service Inquiry shows that O’Malley, Gregory, Maxse, and Mrs Dyne, wife of a former schoolfellow of Gregory, whose house was the meeting-place of the circle, were interested in franc speculation. The operations reached a crisis in April, 1921, Gregory and Mrs. Dyne agreeing to share a loss amounting to £34,000, but the joint operations continued in order to retrieve the loss. There was a second crisis at the end of 1921, when Gregory continued the operations on his own account. He made a profit until 1920, when the tide turned. He ceased to speculate m January, 1927, the losses aggregating £20,000, and the profits £15,000, leaving a loss of £5OOO, apart from losses on a joint account amounting to £15.000. Gregorv’s dealings involved over 250 million francs.