Jason Nissé: He could have been a hero, but Harley missed his calling at the Abbey

BNFL's radioactive donations

Poor old Ian Harley. The prospect of being forced on to his sword has been around virtually since he took over as Abbey National's chief executive four years ago – and it has been close to a racing certainty since the profit warning last month. The scraps that preceded his accession to the throne were reminiscent of the Ottoman Empire and left a great deal of bad feeling in Baker Street. In a sense he was always on to a loser.

But before you shed a tear, consider this. Shortly after Mr Harley became chief executive, Derek Wanless came a knocking. The then boss of NatWest was offering a deal to merge the two banks, giving Abbey an attractive slice of the cake and creating a serious rival to Lloyds TSB. Mr Harley said no. NatWest tried to merge with Legal & General, failed and was bid for by Bank of Scotland. The Bank of Scotland bid failed because Royal Bank gazumped it. So it bid for Abbey. Lloyds TSB bid for Abbey as well, spoiling the BoS deal. Halifax then stepped in to steal BoS and Lloyds TSB was blocked by the Competition Commission, so ending up with nothing. Abbey was left all alone.

Ian Harley could have been a hero. Instead he had to come to terms with two fundamental problems. The first was that as a "subscale player", Abbey was battling in a fiercely competitive British banking market against people with a lot more muscle. Second, a disproportionately large amount of Abbey's profits came from a treasury business that Mr Harley did not really understand.

There are those who would point to the departure of Gareth Jones, the head of Abbey's wholesale operation, as a turning point. But the dominance of the treasury business was a problem long before that. Abbey was an unbalanced bank – mortgage lending and long-term savings do not fit well with trading in junk bonds.

In trying to get this problem under control, Mr Harley made it worse. The way to unwind difficult treasury positions is to trade them. But admitting you have problems is to alert the sharks that you are dead in the water. So in the past few months Abbey has been trying to sell off its book of poor credit investments, when it should have been trying to hedge its positions or buy insurance.

What any new boss will make of this I don't know. He may not have much time to think. The City assumes Abbey will be taken over shortly. But then it has been assuming that for the past four years.

BNFL's radioactive donations

If Norman Askew has an idle moment, I would recommend he looks up an American website called Opensecrets.org. This site details the publicly available information about donations made by individuals and organisations to US politicians and political parties. Had the BNFL chief executive scanned the site, he would have known long ago that the nuclear group's two US operations – BNFL Inc and Westinghouse Electric Corporation – were making substantial donations to both the Democrats and the Republicans.

As he didn't, we were treated to the astonishing admission that Mr Askew had not been aware that BNFL Inc had given $50,000 (£32,000) to the Democrats in January this year, and had somehow missed the $55,000 given so far this year by Westinghouse to both US parties. This is made all the more curious when we learn that both Mr Askew and BNFL's finance director, John Edwards, sit on the boards of BNFL Inc and Westinghouse.

Mr Askew claims that the payments were in the normal course of business and had no material positive effect on BNFL's business. But I find the timing interesting. The early part of this year was a time when the nuclear industry was lobbying hard to get the Yukka Mountain nuclear waste repository in Nevada approved. This lobbying was co-ordinated by the Nuclear Energy Institute, a body which boasts BNFL plc, BNFL Inc and Westinghouse as members. BNFL says that it does not expect to obtain a financial benefit from the Yukka project, so it is curious that it was upgrading its lobbying at a time when the Yukka vote was going though the US Congress.

BNFL has now stopped paying money to US politicians, which is just as well as it appears a terrible waste of resources.

Having written off £2.3bn of liabilities last week, BNFL needs to start getting a grip on the way it is run or else the Government will never be able to privatise it.

j.nisse@independent.co.uk