Jennifer Arcuri, the entrepreneur whose friendship with Boris Johnson is the subject of a police watchdog investigation, loaned more than £700,000 to her own fledgling technology company shortly before it won a £100,000 government grant.
It is unclear where the money channelled to Hacker House, a start-up with hardly any income, came from. This adds to the mystery swirling around the American businesswoman before this week’s Tory conference and raises further questions for the government.
One person who knew Arcuri was “stunned” to learn that company accounts show her loaning Hacker House £713,354 last year. Other firms set up by Arcuri are in the red or have been dissolved. Her main company, Innotech Network, has negative assets of more than £350,000 and she is reportedly being sued in the US over an unpaid $100,000 student loan.
Questions have now emerged as to how the Department for Digital, Culture, Media and Sport established that the company was viable. The DCMS has admitted waiving a rule that any grant should not exceed half the company’s revenue. “The department needs to explain how their due diligence procedures were followed,” said Lib Dem MP Layla Moran.
Department guidelines say grants are available only for companies based in the UK, and that trainees should remain and work here. Hacker House has given addresses in London and Macclesfield, but its website lists a California telephone number. Calls to a UK number are met by an answering service with an American accent.
Arcuri and her husband, Matthew Hickey, originally listed their countries of residence as England and the UK respectively in Companies House filings in 2016 and 2017. Last Friday, following questions in parliament about the company, updated filings confirmed that the pair now list their country of residence as the US. Hacker House is one of several companies set up by Arcuri, who is now under scrutiny after allegations surfaced that Johnson was once a regular visitor to her flat in London’s Shoreditch.
In February this year, the DCMS awarded the firm a £100,000 grant to develop an IT training portal. Arcuri said she was “thrilled” as the money would help it develop new IT professionals. This was a coup for the US businesswoman, who shot to prominence when she persuaded Johnson to speak at a summit she organised in 2012. She then attended three overseas trade missions led by Johnson while he was mayor. Johnson appeared at three more of Arcuri’s conferences. Innotech received more than £10,000 in sponsorship from one of the mayor’s funds in 2013.
That year, Arcuri was awarded £15,000 and a place on the government-sponsored Sirius programme, which encourages foreign entrepreneurs to set up in the UK. According to a 2014 article on tech website Level39, Innotech worked “in tandem with UKTI [UK Trade and Investment] to launch the Sirius programme’s second cohort of graduate entrepreneurs.” It goes on: “Jennifer, who has brought Boris to Level39 as part of the Innotech Summit 2013, was keen to share the love when it came to starting up in the UK.”
Johnson has denied suggestions that Arcuri’s companies had preferential treatment because of her friendship with him. A spokesman for the Department for International Trade – which took over UKTI – declined to answer questions on the relationship between the trade body and Innotech.
Several inquiries have been launched since the allegations were revealed by the Sunday Times last weekend. The Greater London Authority (GLA) has asked the Independent Office of Police Conduct to assess whether Johnson, as a former police commissioner, should face a criminal investigation for misconduct in public office.
Johnson supporters said the referral was politically motivated, but Labour leader Jeremy Corbyn said: “A wholly independent assessment has looked at evidence of the payments made by the mayor’s office to one particular company and says there are serious questions to answer.”
The GLA oversight committee has also called on Johnson to explain his relationship with Arcuri.
The DCMS has suspended payment of a second tranche of the grant to Hacker House pending its investigation. A DCMS spokeswoman said: “Funding for this scheme was awarded through open and fair competition. We regularly monitor grant initiatives and treat any allegations of impropriety with the utmost seriousness.”
Requests for comment from Hacker House and Arcuri went unreturned.
