OPINION OF THE WEEK: WhatsApp, Private Channels And Double-Standards

Tom Burroughes Group Editor March 10, 2023

OPINION OF THE WEEK: WhatsApp, Private Channels And Double-Standards

A year ago, an official organization said that UK government ministers and civil servants should not communicate via WhatsApp. Last week, a trove of communications from the time of government lockdowns was leaked, causing a political storm. Yet so far, it is bankers rather than politicians who get into hot water for using WhatsApp and other channels.

Anyone reading revelations about how senior UK government ministers spoke to and about each other over WhatsApp will have their own views on whether the Covid-19 ordeal was handled well or not. But aside from the understandable recriminations about this episode, it also sheds light on what arguably are double standards for using messaging services.

Consider this: while there are daily stories now of politicians using WhatsApp (and a few years ago, Hilary Clinton used a private email account when she was Secretary of State in the Obama years), they haven't had their knuckles rapped. They haven't been fined or banned from office. However, financial regulators have punished bankers and other financial sector figures for this conduct. Fines have been imposed, and firms scolded into tightening the rules. But with politicians, none as far as I know have been punished.

How do the policymakers, who ultimately stand behind all this, expect to be taken seriously if they don’t practice what they preach?

Many of the juicier comments from disgraced former UK health minister Matt Hancock, for example, were logged over WhatsApp. A trove of these messages came into the hands of journalist Isabel Oakeshott, Hancock’s biographer. She later published them, claiming it was in the public interest. (Hancock resigned in June 2021 after being photographed breaking social distancing rules with a colleague that he was having an affair with. He later bemused the public by going on the “I’m A Celebrity – Get Me Out Of Here” TV show.) 

Using such messaging apps has several problems for policymakers. There’s a big issue with logging Cabinet ministers’ discussions in this way rather than using paper. For example, historians can scrutinize Sir Winston Churchill’s WW2 correspondence and discussions with colleagues at the UK’s National Archives. In years to come, they may want to explore how governments debated and discussed lockdowns, the origins of the virus and vaccines. It is also necessary for members of parliament and journalists to do the same and hold governments to account. And if the discussions are on digital platforms, the content could be lost. (To be fair, physical records such as books and papers can deteriorate, files can be “mislaid,” etc.)

And then we get to the double-standard part. It is not clear to this author if ministers were forbidden to use WhatsApp at the time or were operating under guidance. According to a report in March last year, the Institute for Government said that ministers, civil servants and special advisors must be stopped from using their personal phones for important work business. The nub of the matter is what counts as “important work business.” 

Lest non-UK readers think I am ignoring them at this point, let’s not forget Hilary Clinton’s use of a private email account when she was Secretary of State in the Obama administration, a time that included episodes such as the attacks on the US Embassy in Benghazi. Her use of such an email account was a matter of concern in the 2016 US election that ended up with Donald Trump taking office. FBI director James Comey said in July 2016 that an FBI probe had concluded that Clinton had been "extremely careless" but recommended that no charges be filed because Clinton did not act with criminal intent, the historical standard for pursuing prosecution.

WhatsApp and bankers
But switch to the City and Wall Street, and it’s a different story. Even if a banker doesn't intend to flout the rules, he or she could be in trouble. "I didn't mean to do wrong" is not good enough. (Some may say that this is also a reflection of how traditional common law approaches have steadily eroded.)

Last year, for example, it was reported that Morgan Stanley is penalizing individual bankers for conducting company business via this route. In September 2022 the US Securities and Exchange Commission announced charges against 15 broker-dealers and one affiliated investment advisor for “widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications.” Firms such as Goldman Sachs, Barclays, Nomura and Cantor Fitzgerald, had “acknowledged that their conduct violated record-keeping provisions of the federal securities laws.” 

In the UK, the Financial Conduct Authority (FCA) fined Christopher Niehaus, a former investment banker, £37,198 for sharing client confidential information over WhatsApp. The FCA found that Mr Niehaus failed to act with due skill, care, and diligence.

The situation needs to be fixed. A problem, however, is that many clients digest information via social media and similar routes. 

WhatsApp and other platforms are convenient. I use it to message colleagues when we are on the road at conferences and awards events we put on around the world. I am sure many readers use it to keep in touch. But there are clearly regulatory boundaries when it comes to the sort of conversations and discussions that must be logged. I would not, for example, discuss a colleague’s work appraisal over this channel, or authorise a change of payment to my financial advisor, or instruct a lawyer over it. 

These are basic points, and politicians need to get in line with the very rules which they think fit to impose on the likes of us in the financial services sector. There’s a loss of trust in people in authority these days, and it has many causes. One of them is a sense of it is “one rule for us, another for them.”

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