Boris Johnson had “no role whatsoever” in awarding a grant to a firm owned by US businesswoman Jennifer Arcuri, a junior minister has told MPs.
Matt Warman said the government has launched a “review” of the £100,000 award made in February this year to Ms Arcuri’s training company Hacker House.
But he insisted it had been an “open, transparent and competitive process”.
It follows newspaper revelations about the prime minster’s friendship with Ms Arcuri, when the PM was London mayor.
Lib Dem MP Layla Moran, asking an urgent question in the Commons, said she cared “very little about the personal life of the prime minister”.
But she said she did “care a lot about how this government manages conflicts of interest and how it spends taxpayers’ money”.
“The fact that we are back in the Commons today is because the prime minister has been shown to have ridden roughshod over the laws of the land.
“It would be disappointing if we were to find that the prime minister has form in bending the rules for personal or political gain.”
‘Not based in UK’
So far, £47,000, out of the £100,000, has been paid to Hacker House under the government’s Cyber Security Immediate Impact Fund, with the remainder put on hold until the review has been completed.
Ms Moran said the government fund was meant to be for UK-based initiatives only.
“Yet we now know that Hacker House is not based in the UK,” she told MPs.
“The Sunday Times reports that its owner, Jennifer Arcuri, moved back to the USA in June 2018. These grants weren’t open for application until November.
“The registered address of the company is, in fact, a house in Cheshire and the current occupant, apparently, sends any post addressed to Miss Arcuri back to sender.”
The Lib Dem MP accused government officials of failing to carry out due diligence and asked why they had waived the rule that any grant made under the fund should not exceed 50% of the company’s revenue.
Junior culture minister Matt Warman, who was making his debut at the despatch box, said officials had been so impressed with other aspects of Hacker House’s application it “more than outweighed” the need for the company to meet the 50% of revenue criteria.
‘Unfit for office’
He told MPs the government’s review of the Hacker House decision would “leave no stone unturned” and its findings would be released next month.
But he repeatedly stressed that “the prime minister and his staff have had absolutely no role in the award of this grant” and that Mr Johnson, who was foreign secretary when the grant was awarded, had not lobbied officials on behalf of Ms Arcuri.
Labour’s deputy leader, Tom Watson, who is also the party’s culture spokesman, said: “As I understand it, Hacker House is a company headquartered in California. The principle owners of the company live in the United States.
“The company claims to have employees in London but refuses to reveal who they are or where they are. It is very difficult to see how the company fulfilled the criteria for these grants.”
Mr Watson said the allegations showed Mr Johnson was “a man whose character renders him unsuitable and unfit for the office he holds”.
Lib Dem MP Jamie Stone said: “The impression of money being doshed out to mates is corrosive to public confidence in the grant system and that, in turn, is damaging to the reputation of any government.”
Mr Warman replied: “That impression is, in part, why we are having that review.”
But, he added, there was no evidence the PM had done anything improper.
Conservative MP Damian Collins confirmed that Culture Secretary Nicky Morgan is due to give evidence on Hacker House to his DCMS select committee on 16 October.
Mr Johnson is, separately, being investigated by the London Assembly’s oversight committee over alleged conflicts of interest when he was London mayor, between 2008 and 2016.
The Sunday Times said Ms Arcuri joined trade missions Mr Johnson had led and received thousands in sponsorship grants.
Mr Johnson has said everything was done “entirely in the proper way”.