Disgraced former Co-Op bank boss, Paul Flowers, claimed £75,000 in false expenses from a drugs charity, it has been claimed.
Mr Flowers, a former Labour councillor, clocked up the claims over five years during his time as the chairman of the trustees at Lifeline, according to the charity's chief executive Ian Wardle.
Mr Wardle told Sky News that he had raised questions over Mr Flowers' claims in 2004 and there had been an investigation during which the former Methodist minister was asked to account for his claims item by item.
Mr Flowers is under investigation by police after being filmed by a newspaper allegedly buying and using illegal drugs, including crystal meth, crack cocaine and ketamine - a horse tranquilliser used as a party drug.
He said that the "total cost of clearing up the mess" left by Mr Flowers during his time at the charity was £150,000.
Mr Wardle said: "I developed concerns at the beginning of 2004 about some of the claims which had been made and I spoke to our treasurer at the time and we then involved our solicitor and then to cut a long story short in June 2004 I raised the matter formally, fully and in depth with our trustee body.
"Our trustee body suspended Reverend Flowers and then we investigated the claims and we investigated five years of claims."
Mr Flowers allegedly buying drugs in a newspaper sting Mr Flowers said that, after taking advice from a QC, they had sought to keep the matter quiet because they feared it would cause significant damage to the charity's reputation.
He said that he had filed a 70-page report on the matter to the Charity Commission.
The development comes amid the deepening crisis over Mr Flowers appointment to lead the Co-operative Bank which was sparked by the drugs sting revealed in a newspaper on Sunday.
David Cameron on Wednesday announced there would be an inquiry into Mr Flowers' appointment to the bank and its ailing finances.
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