John Poulson - Financial Trouble

Financial Trouble

Poulson's business model was initially highly successful and, at its apogee, was making an annual turnover of £1 million; he himself admitted to being a millionaire. However, it was consuming more contract work than was becoming available, and Poulson resorted to tackling these difficulties by bribing and corrupting local councillors, local authority officials and civil servants at all levels. This was an expensive strategy and Poulson later estimated that he "gave away" about £500,000 in the last few years of his involvement in the business.

As part of his attempts to get noticed, Poulson had become a local Commissioner of Taxes. However his own tax payments were seriously in deficit by the mid-1960s, mainly due to his extravagance on consultancies and gifts. In January 1968 the Inland Revenue finally decided to sue Poulson; on 18 November 1968 they obtained judgment in their favour for £211,639. Poulson struggled on, but in June 1969 his staff confronted him with the fact that he was approaching bankruptcy. He attempted to recoup cash he had poured into subsidiary companies, which alerted his consultants that all was not well. Maudling and his son quietly resigned in November 1969.

On 31 December 1969 Poulson was formally removed from control of J.G.L. Poulson and Associates. On 9 November 1971 he filed his own bankruptcy petition revealing debts of £247,000. The bankruptcy hearings in Spring 1972 were assisted by Poulson's meticulous record-keeping which detailed his payments and gifts. Poulson's generosity drew the comment from Muir Hunter QC during the bankruptcy proceedings that "n fact, Mr Poulson, you were distributing largesse like Henry VIII". The bankruptcy hearing also revealed Poulson's love for a lavish lifestyle and his penchant for rubbing shoulders with senior figures in the establishment. This desire to show his financial superiority over others only served to highlight his true character as a lonely, friendless and insecure person. Interestingly, one of Poulson's biggest creditors was the Inland Revenue to which he owed around £200,000. Whilst the Revenue were pressing Poulson for payment of this amount, he was himself presiding over debt hearings in Wakefield in his role as a Commissioner of Inland Revenue.

It swiftly became apparent that Poulson was at the centre of a massive corruption scandal, and in July 1972, the Metropolitan Police began an investigation for fraud. This precipitated the resignation of Reginald Maudling, then Home Secretary and notionally in charge of the police.