Businessman Lex Greensill had a sometimes “extraordinarily privileged” relationship with government, a Cabinet Office report has found.
The report says the Australian financier’s government role gave him “a marketing platform” for his business.
Civil servants “should have considered” the conflicts of interest, it adds.
Labour’s deputy leader Angela Rayner said the report had been set up as “a classic Boris Johnson cover-up and whitewash to protect the government”.
The inquiry also criticises ex-Prime Minister David Cameron for his lobbying efforts on behalf of Greensill’s company, which collapsed in March.
Report author Nigel Boardman said Mr Cameron had “on occasion understated the nature of his relationship with Greensill Capital” when seeking to influence the Treasury’s decisions.
However, he concluded that Mr Cameron “did not breach the current lobbying rules and his actions were not unlawful”.
The government ordered an inquiry when it emerged the former prime minister had lobbied ministers via text messages on behalf of the finance firm.
At the time, Mr Cameron – who had taken a role with Greensill in 2018 – was accused of trying to exploit private contacts with former government colleagues, for his own benefit.
Greensill Capital specialised in supply chain financing – a technique aimed at making it easier for businesses to receive payments.
During Mr Cameron’s time in Downing Street, Mr Greensill worked informally for the government before being made an unpaid adviser on supply chain finance.
Mr Boardman says this appointment appears to have been “properly made” but adds “this area of public appointments is opaque and ill-defined”.
“The process should be more clearly delineated, and requires greater transparency to maintain public confidence.”
At this point, Mr Greensill had not yet set up his company, but Mr Boardman says “potential conflicts of interest” such as his “proximity” to banking giant Citibank should have been considered “more fully”.
He also notes that Mr Greensill was able to start work “before receiving the appropriate security clearance”.
“It has been argued that the government’s processes for managing lobbying are insufficiently transparent, that external organisations are able to exploit certain loopholes to land their messages more effectively, and that a privileged few have a disproportionate level of access to decision makers in government, said Mr Boardman.
“I think some of these observations are justified, particularly in the context of the fact-finding work which I have done in relation to Greensill Capital’s engagement with government.”
Labour’s Angela Rayner said the terms of Mr Boardman’s inquiry had been limited “to avoid a wider investigation of lobbying, privileged access and the revolving door between Whitehall and business”.
“The rules that are supposed to regulate lobbying are completely unfit for purpose and require radical and immediate overhaul,” she added.