The Casablanca Deal: Secret contracts and unexplained payments at the University of Greater Manchester

Editor’s note: Today’s story is the latest in our investigation into the University of Greater Manchester. Because it contains allegations of possible corruption involving senior figures at the university, we handed the details of what we are reporting to Greater Manchester Police on Monday evening. If you know anything that could help us, please get in touch.

On Saturday, February 8, two days before he lost his powerful role at the University of Greater Manchester, Joseph Wheeler sent a series of WhatsApp messages to a colleague. Perhaps he sensed his “kingdom was falling”, as one person later put it, but whatever the reason for the urgency, Wheeler wanted to get paid. And he didn’t want to be paid directly.

“Can a Dubai account be set up please asap and credit in,” the first message said.

His colleague pointed out that would only be possible if Wheeler went to Dubai to create an account in person.

Two minutes later, Wheeler had come up with a Plan B: he wanted the money — said to be £56,000 — to be paid to his son’s bank account. He shared the name, sort code and account number.

“Let me know when done ta,” Wheeler wrote.

Why would a senior manager at a university – a man in charge of marketing, recruitment, admissions and HR, among other things – be asking for £56,000 to be made to a bank account in Dubai, or transferred to his son? We’ve been trying to work that out since we heard about the request last week.

Doing so has led us to allegations that are much more serious than anything we’ve reported about the university in recent weeks. We’ve obtained contracts, emails and other files which show that Wheeler and another senior staff member at the university recently set up a deal with a company in Casablanca, Morocco that was set to funnel large sums from one of the university’s biggest commercial partners into Wheeler’s private company. That deal looks like an arrangement for kickbacks – a form of illicit payment in return for something – to be paid to Wheeler’s firm, and the circumstances in which it was signed suggest bribery laws may have been broken.

On Monday night, we passed the claims made in this story to Greater Manchester Police, who said they are “liaising with our fraud team as to next steps”. Local MP Phil Brickell has told us he is writing to the Secretary of State for Education to ask for a meeting following our reporting. “These accusations are incredibly serious, and should be thoroughly investigated,” Brickell told us. “As someone who worked in compliance for a number of years, it is clear to me that this deal should have raised a number of obvious red flags.”

A spokesperson for the University of Greater Manchester did not deny any of the allegations in our story, but said it has launched an investigation. “The allegations that we have been made aware of are extremely serious and, as a result, the Vice Chancellor has invoked the University’s internal procedures to ensure they are dealt with appropriately.”

We’ve seen evidence that a similar side-deal with a different student recruitment partner was reported to the university’s vice chancellor George Holmes three years ago and that he seemingly did not take action against Wheeler or end his relationship with the university. Taken together, the allegations raise grave questions about the possibility of financial corruption at a public university that receives millions of pounds of taxpayers’ money, questions the university and Wheeler are currently choosing not to answer.

We sent more than 20 questions to both parties on Monday and neither has chosen to reply to any of them specifically. RSM has not replied at all, and the university says that its internal process means “we are unable to comment further until it has concluded.”

The Casablanca deal

The deal with the company in Casablanca was agreed at the Lowry Hotel late last year. The meeting began at 5.30pm with Joseph Wheeler ordering a gin and tonic and ended with an arrangement that promised to earn his company hundreds of thousands of pounds.

Wheeler was then one of the most senior figures at the University of Greater Manchester, and alongside him was another: Paul Starkey, the university’s executive director of strategy, brand and “future students”. The organisation they worked for was still then called Bolton University, and Wheeler and Starkey were pivotal figures in its attempt to rebrand and increase its access to a lucrative international market. Starkey was a full time employee of the university who reported to Wheeler and according to insiders, worked hand in hand with him. 

But there was something strange about the negotiation at the Lowry Hotel: the two men didn’t seem to be there to represent the university. Instead, the deal being hammered out would require ECN, a student recruitment company based in Casablanca, to pay a huge chunk of its profits not to the university but to RSM, a company owned by Wheeler, in return for RSM performing a short list of vaguely defined “marketing services”.

RSM, you may remember from our recent reporting, has been paid £8 million by the university over the past six financial years, apparently for handling the university’s marketing, social media and other functions. The cash coming from ECN to RSM under this new arrangement would be separate from – and additional to – that impressive revenue stream that RSM was already receiving from the university.

Sitting opposite Wheeler and Starkey was an executive from ECN, who had flown over from Morocco for this negotiation. He now found himself in an invidious position. His company had become a major source of students for the university, handling the recruitment and admissions for hundreds of applicants per year, most of them coming from Nigeria.

ECN’s 20-strong office in Casablanca had become known in the university as the “Africa Branch Office” and the students it attracted and processed brought in a significant proportion of the university’s international tuition fees. But the ECN executive knew that because of the positions they occupied within the university, Wheeler and Starkey were in a position to end that partnership. If he didn’t agree to pay Wheeler’s company RSM what they were asking for, his family could lose its business with the university entirely.

The executive from ECN “looked really nervous,” says a more junior university employee who was also at the meeting. “Like someone who was fighting for his life.”

The contract

This story — two university executives persuading a major university partner to transfer a slice of its income to a private company — may seem far-fetched. But in the past few days, The Mill has obtained the contract between the two parties, and that is what the agreement does. The contract is also curiously short: just four pages in total. It was signed by Wheeler on January 14, just over a month ago.

The contract requires ECN to pay Wheeler’s small Milton-Keynes based marketing company RSM “a sum equating to 40% of net revenue (after costs but before tax) for each student recruited to the University from the ‘Rest of the World’ territories”. The contract excludes students from Pakistan and Afghanistan – presumably because they are handled by a different agency, not by ECN – and it has a different fee structure for students recruited from Africa: for those, ECN will pay RSM 20% of each student’s “assessment fee”.

How much money can RSM expect to make from this deal? It’s complicated to work that out, because we don’t know how many students from each territory ECN will recruit, and the university doesn’t publish detailed breakdowns of which countries its students come from. But we can be pretty certain the contract is worth hundreds of thousands of pounds a year to RSM, and much more in future if things go well.

ECN gets an unusually high 30% commission on a student’s first year fees for every student it brings to the university. Since the university’s standard international fee is £15,950 per year, ECN’s commission works out at just under £5,000 per student. Let’s conservatively estimate that ECN’s costs (including advertising to prospective university students, going to student fairs and handling the admissions process) eat up most of that money, leaving a standard 20% profit margin. That leaves around £1,000 of “net revenue”, i.e. profit, for ECN. The new contract says ECN now has to pay 40% of that, or £400 per student, to RSM. If the university recruits 300 students a year from the “Rest of the World” territories, which insiders say is about right, then this part of the contract would see ECN paying RSM just over £100,000 a year.

The other part of the contract is easier to work out. For students from Africa, ECN will pay RSM 20% of each student’s £1,595 “assessment fee”. So that will deliver £319 per student to RSM. We understand that in recent years ECN has reliably brought in around 1,000 students each year from Africa. This second part of the deal could therefore be worth just over £300,000 annually to RSM.

In total, our estimates suggest RSM could expect to earn a total of around £400,000 a year from this side-deal with ECN, and much more in future if student numbers rise as hoped. Amazingly, several senior staff members at the university did not seem to know about the deal when we approached them this week, suggesting that Wheeler, Starkey and whoever else knew about it had managed to keep it a secret. 

What, you might be wondering, does ECN get from Wheeler’s company RSM in exchange for this handsome cut of its income? The contract says RSM Ltd “will provide marketing services” to ECN “to support the recruitment of international students”, which it says is “in accordance” with ECN’s contact with the university. Then follows a list of six bullet points, not one of them longer than a sentence. They include “Specialist marketing and recruitment advice and guidance”, “Introduction of new recruitment partners” and perhaps the vaguest one of all: “Provision of market intelligence and insight”.

The idea seems to be that Wheeler is offering to assist ECN with its work for the university by making its international student recruitment more effective; in return, RSM is taking a huge cut of what ECN earns per student.

Too good to refuse

Several things about this deal seem unusual. The most obvious one is Wheeler’s glaring – almost surreal – conflict of interest. He was one of the key decision-makers at the university, reporting directly to the vice chancellor while ten senior managers reported to Wheeler. This was despite the fact that Wheeler was to all appearances an outside contractor rather than an employee: a freelancer, essentially. Bolton University was ECN’s only client. ECN knew Wheeler was a top executive at the university, and they knew the man sitting next to him at the meeting – Starkey – was too.

This makes it look like a deal that ECN couldn’t refuse. If that’s the case, the payments being demanded by RSM were in effect kickbacks in return for a bribe: Wheeler and Starkey would not interfere with the existing ECN deal with the university as long as ECN agreed to this side-deal. Such an interpretation of the contract is bolstered by several sources that tell us Wheeler instructed a member of his team to put pressure on ECN in the weeks before the Lowry Hotel meeting by suggesting that ECN might lose their contract with the university if they didn’t agree to the proposal. We asked the university if they agree that the deal looks like an act of bribery and they did not respond to that question. We also offered RSM a chance to explain why this deal represented a legitimate business transaction and so far, they have not responded.

One big unknown is whether vice chancellor George Holmes knew about this deal that was negotiated late last year by two of his closest allies at the university, and if so, what action he took when he found out. The university’s publicly available bribery policy states that it will “robustly and promptly investigate all cases of actual or suspected bribery and ensure appropriate action is taken against any individual(s) involved in bribery.” It adds that “the Police will be informed where considered appropriate.” The university has not answered our question about whether Holmes knew and what action he took if he did.

Separate from criminal law, it is presumably stated in both Holmes and Starkey’s university contracts that they have a responsibility to secure value for money for the university in their dealings with external partners. If they felt that ECN was making excess profits in its recruitment of foreign students, they could have demanded to renegotiate the partnership to get the university a better deal, saving money for an organisation that receives massive taxpayer backing. Instead, they seem to have come up with a way to divert that money away from the university and into private hands. 

But you might have thought of another question about the deal, namely: why, if RSM already had a very lucrative contract with the university to provide marketing, advertising, social media, admissions and other support, should it be getting extra money on the side from the university’s largest recruitment partner? After all, as we’ve reported in the past fortnight, the university has paid Wheeler’s company on average £1.4 million per year over the last six financial years for services that sound very similar to the ones this new deal asks ECN to pay for (according to its public filings, RSM has six employees in total, so that £1.4m works out at £228,000 per staff member, some of whom we know earn significantly less than that). 

The RSM-ECN contract mentions things like “digital marketing”, “search engine optimisation”, and “social media campaigns”, all things that RSM is already being paid handsomely to do. Never mind that a handful of senior university staff have told us that they didn’t understand why RSM was being paid so much by the university. The fact remains that Wheeler’s firm was already being paid to provide those services to the university in a way that presumably already helps ECN’s work for the university. Why should RSM get paid again to provide those services separately to ECN?

A member of staff at the university who discussed the deal with Wheeler several times believes that the short list of “services” listed in the ECN-RSM contract was bogus. “Joseph was just going to take that payment and do nothing,” the staff member says. “He even told me that. He said ‘You don’t need to market a university – the fucking website markets the university’.” They also remember a meeting in 2022 in which Wheeler was told by Starkey how much money some of the university’s recruitment agents were earning. Wheeler is said to have turned to Starkey and said: “We are in the wrong business”. 

The explanation that RSM wasn’t actually going to provide much value in return for its payments seems to make sense. If ECN really needed this additional support from RSM, then how did ECN manage to recruit so many students before this new deal with RSM was done, becoming the university’s most valued recruitment partner over the last eight years? Again, if there was a logical explanation to these questions, so far the university and RSM have chosen not to provide us with it.

This brings us back to that “transfer” that Wheeler was asking his colleague to arrange from ECN ten days ago. We’re told this was an “initial payment” of £56,000 that formed part of the new arrangement between ECN and RSM. Why, we asked RSM, if this deal was a legitimate business transaction, was Wheeler asking for the money to be paid into his son’s personal bank account? 

RSM has not responded to that or indeed any of our questions. We also asked the university if such a request by one of its top executives constitutes a breach of its money-laundering and tax-evasion policies, but they haven’t answered that. A spokesperson for ECN confirmed the key details in our story, including the request to pay Wheeler’s son, but did not provide a statement. 

‘A commercial guy’

The intriguing new contract between ECN and RSM isn’t the first time Wheeler has tried to benefit personally from one of the university’s suppliers. We’ve seen evidence that back in 2022, Wheeler spoke to another commercial partner, a Manchester-based international student recruitment agency called Edvoy. Wheeler is said to have asked Edvoy’s chief executive Sadiq Basha to pay RSM a slice of the commission that Edvoy receives from the university on each student recruited. Wheeler reportedly offered to increase the commission the university pays to Edvoy if the chief executive was willing to do this. Edvoy would earn a higher commission of 30% from the university, up from the 20% it was receiving at the time. In return, Edvoy would then pay 7.5% to Wheeler, or perhaps (the details are unclear) to RSM.

This deal never got done, so there is no contract to look at. We’re told that Basha was confused by the offer: why should he pay Wheeler, who he said was using a university email to communicate with him, a special cut of the commission? “Joseph, I’m failing to understand, what is your role here?” Basha is said to have asked Wheeler. Edvoy wanted answers and so apparently contacted Starkey at the university several times about the rationale behind this proposed deal, but Starkey is said to have referred them back to Wheeler.

A senior manager at Edvoy said the company always acts with integrity and that he doesn’t personally remember the proposed deal. But someone who should remember it is the university vice chancellor, Holmes. We’re told that the university’s provost, Zubair Hanslot, informed Holmes about Wheeler’s proposal to Edvoy back in 2022. But if Holmes had a problem with what Wheeler was doing, he apparently didn’t communicate that to Hanslot. According to a staff member who spoke to Hanslot, the provost said Holmes didn’t object to the proposed Edvoy deal in which RSM would take its cut of commissions, and explained it away by saying: “Joseph is a commercial guy”.

Neither the university nor RSM have taken the opportunity to deny this story about Edvoy and about Holmes being informed. The university has not responded to our question about how many of these side-deals involving, on one side, Wheeler and RSM, and on the other side, the university’s recruitment partners, the university is aware of, and how many of them are currently in effect or have been in the past. They also didn’t tell us whether the university’s contract with RSM is still in effect (last week, they confirmed that it was, despite the university having cut ties with Wheeler personally).

Phil Brickell, MP for Bolton West, told The Mill: “Universities should serve their communities and provide enriching and good value education to their students, above all else. These accusations are incredibly serious, and should be thoroughly investigated.” He went on: “If it is shown that the University’s bribery policies are not worth the paper they are written on, I seriously worry that this will set a very bad example.” Brickell says he is seeking a meeting with the Secretary of State for Education over the story. “Ultimately, the buck stops with the University’s senior leadership team, including, obviously, the Vice-Chancellor,” he told us. 

The university says Holmes has “invoked the University’s internal procedures” to investigate the “extremely serious” claims in this story and has asked us to share any relevant evidence that we “claim” to have. Like so much of what we’ve revealed about the university in recent weeks, that position raises more questions than it answers. After all, most of the evidence we’ve gathered is either in the university’s possession already or could be obtained in short order. And if Holmes did know about these deals, it is surely the university’s board that should be investigating, rather than the vice chancellor, who urgently needs to explain why he kept paying Wheeler and RSM millions of pounds. But it’s just possible the police, or the government, will get there first.

If you know anything that could help us with this story, please get in touch.