A police investigation into allegations of fraud and financial mismanagement by the mayor of a London council has found “no credible evidence of criminality”.
Lutfur Rahman, elected mayor of Tower Hamlets, east London, was accused by the BBC’s Panorama of more than doubling public funding to Bangladeshi and Somali groups from £1.5m to £3.6m in the face of recommendations from council officers. He denied the allegations, saying they had been motivated by racism and Islamophobia.
The communities secretary, Eric Pickles, sent inspectors into the borough to investigate Rahman’s activities, but Metropolitan police officers who reviewed the allegations found no evidence of fraud or other offences.
He will face no further action from police “at this stage”, but the force said it was appropriate for outside auditors from PricewaterhouseCoopers (PwC) to continue their financial review of the council.
A Scotland Yard statement said: “On Friday 4 April the Metropolitan Police Service received three files of material from the Department for Communities and Local Government relating to the London borough of Tower Hamlets. These comprised material referred to the DCLG by a member of the public and by the BBC Panorama programme.
“The files have been reviewed by a team of officers over the past six days. In addition, officers have liaised with PricewaterhouseCoopers, who are conducting a full and wide-ranging audit of financial matters at the London borough of Tower Hamlets.
“There is no credible evidence of criminality within the files to provide reasonable grounds to suspect that fraud or any other offence has been committed at this stage. Therefore the MPS will not be investigating at this point in time and believe that it is appropriate for the material to be reviewed further by PwC and DCLG. We will continue to liaise with them should their audit uncover any evidence of criminality.”
PwC has been asked to report back to Pickles by 30 June. Tower Hamlets council, which says it has seen no evidence that its processes have been run inappropriately, welcomed the police statement.
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