Richard Alderman tells select committee: what I did fell short of the standards expected of an accounting officer

The former head of the Serious Fraud Office has issued an extraordinary and abject apology to parliament for failing to get proper approval for nearly £1m of unauthorised payments to colleagues.

Richard Alderman wrote to the public accounts committee last week to say sorry for failing to get Treasury or Cabinet Office approval before signing off the severance payments.

Alderman, who was head of the UK's leading anti-fraud and anti-corruption unit for six years until last April, also apologised for arguing that he had done nothing wrong when he appeared before the committee on 7 March.

The letter, obtained by the Guardian, is a dramatic reversal of Alderman's position two weeks ago, when he refused to apologise to MPs, told them that the payments had been officially approved, and argued that he had acted properly, before admitting, under hostile questioning, that he had no written proof of contacting any of the relevant civil servants.

In the letter sent to the committee's chair, Margaret Hodge, Alderman wrote: "You will not be surprised to hear that I have been giving a great deal of thought to the hearing and to the very serious criticisms that the committee made of me.

"I … have come to the view that the committee were justified in making those criticisms. What I did on the key points singled out by the committee fell short of what the committee are expected to receive from an accounting officer.

"The purpose of this letter is to give you and the other committee members my deep and unreserved apology for the way that I handled these exit agreements."

"My failure to ensure personally that all of the relevant consents in these important issues had been given and documented fell well short of the standard that the committee are entitled to expect from an accounting officer," he said.

Alderman also said that he had reflected upon the meeting and said sorry for failing to apologise at the committee meeting. "I gave my evidence honestly and in good faith. It was clear, though, that the committee expected more from an accounting officer than I had done. I am sorry that I did not recognise this earlier and give you my apology at the hearing."

At the committee hearing, Alderman gave a combative account of events surrounding the payments to Phillippa Williamson, his chief executive; Chris Bailes, chief operating officer; and Ian McCall, head of IT.

Alderman claimed that the Treasury solicitor and solicitor general's office were aware of plans to make the three executives redundant once he had left office in April 2012. But his account was contradicted by his successor, David Green.

He was also condemned for allowing Williamson to work for two days a week from her Lake District home, while the taxpayer picked up an annual £27,600 travel and hotel bill for her three days in London.

Williamson left with £464,905, Bailes received £473,167 and McCall got £49,885. On taking over in April last year, Green commissioned senior civil servant Tim Hurdle to investigate the payments.

So unusual did the National Audit Office consider the exit packages, which included ex gratia payments of at least £15,000 for each of the departing trio, that it qualified the SFO's accounts.

Alderman, 60, failed to produce documentary evidence. "Where is the evidence in writing?" demanded Conservative MP Richard Bacon. Alderman said he had kept notes "in one of those spiral notebooks that I would keep with me at all times" but that he no longer had them.

"If you can't find your own notes, how are you going to find the notes of fraudsters?" asked Bacon. Both the Cabinet Office and the NAO gave evidence that no written approval had been given.

Green said he had been "unable to find any evidence" supporting a promotion for Williamson to a higher pay grade. "Is she an old friend of yours?" demanded Ms Hodge.

Alderman replied: "She had worked with me in the Revenue and she was an exceptionally talented civil servant." "She was an old friend of yours," retorted Hodge.

Alderman's tenure coincided with the SFO's botched investigation into property developers the Tchenguiz brothers, who have since filed a £300m damages claim. Robbie Tchenguiz attended the hearing but declined to comment. Under Alderman, the agency also closed its probe into fraudster Bernie Madoff's London operations and declined to examine Libor–rigging by UK banks.

Committee members welcomed Alderman's letter and added that the SFO could now explore clawing back some of the payments.

Stewart Jackson, a Tory member of the committee who had told Alderman that he had been "slovenly and sloppy" in his handling of public money and noted at the time that he had refused to apologise, said that it was a victory for the select committee system.

"These proceedings are not all about grandstanding – they can actually get to the heart of the matter and have a real impact on public services," he said.