Nepotism, fraud, gross misbehaviour, kangaroo courts and libel - these are just some of the serious charges being laid against decision-makers at Notting Hill Carnival Trust (NHCT). For once, newspaper headlines talking of "chaos" and "crisis" in Carnival are not exaggerated; if anything, they understate the gravity of the situation and complexity of the splits in the organisation.

At the time of going to press, Claire Holder remains in the Trust's offices at 332 Ladbroke Grove as NHCT chief executive, answerable to the Trust Board. According to an "opinion" of the Charities Commission, the Board consists of Ansel Wong, Ashton Moore, Debi Gardner, Antonn McCalla and Hesketh Benoit (referred to below as the "old Board"). Geraldine Connor, Glen Falconer, Keith Franklin, Cllr Patrick Mason, Roy McEwen, Avion Mookram and Clary Salandy, who have been appointed to the Board at various times in the past two years, are not, in the Charities Commission's opinion, legal trustees.

The Medwell probe

Serious differences between trustees, staff and carnivalists surfaced in September 2001 when the "members-in-waiting" passed a vote of no confidence in Glen Falconer, Debi Gardner, Roy McEwen and Ansel Wong; Falconer and McEwen were subsequently removed from the Trust Board. In November, Falconer and McEwen asked funders and the chairs of the carnival disciplines to look into the running of the Trust. The NHCT chief executive said that a Mr Medwell, a fellow of the Chartered Institute of Company Secretaries, would examine the Trust's constitutional matters; meanwhile, the funders began their own investigation.

Medwell told the Trust Board on 22nd November that, because the Trust's own rules stated that trustees could only be appointed at a Special Meeting and no such meeting had ever been held, none of the trustees who joined after the Trust Deed was signed in April 1997 had been properly appointed. The only legal trustees were Claire Holder, plus Benoit, Gardner, McCalla, Moore and Wong. However, the same Trust Deed stated that a paid member of staff could not be a trustee as well. The funders considered that this meant Holder's dual role was unconstitutional, whereas Medwell believed there was no conflict of interest, saying that Holder was a consultant rather than an employee.

The investigations also showed that there was no provision in the constitution for "members in waiting" - the name given to those members of the old Notting Hill Carnival Limited whose membership remained frozen until "certain formalities" had been completed in the changeover from NCL to NHCT. So long as the "freeze" continues, membership is effectively suspended and no one else may join the organisation.

New Board appointed

At two Special Meetings on 18 December 2001, Connor, Franklin, Mason, Mookram and Salandy were appointed to the Trust Board (the "new Board") and the Trust Deed was amended to allow the removal of those trustees who were accused of misbehaviour. At yet another meeting, Holder resigned as a trustee, to comply with the constitution. The new Board then used its new powers to remove Gardner and Wong as trustees. After this complicated constitutional manoeuvre, the new Board believed it could start preparing for Carnival 2002. It turned out not to be that simple.

The first blow fell on Christmas Eve, when the Evening Standard revealed that Ansel Wong and the other ousted trustees were asking the Charities Commission to investigate allegations against Claire Holder of fraud and nepotism. The main charge was that Holder had appointed members of her family (specifically, her sister Pat and brother Danny) to positions without first asking the Board. The group also accused the NHCT chief executive of failing to keep the Board informed of other activities, such as negotiations with funders, and claimed that they were given no chance to defend their actions when thrown off the Board.

Charities Commission steps in

The Charities Commission - the government body that oversees the running of all registered charities in the UK - was now obliged to investigate. The main funders of Notting Hill were also growing anxious. They had formed themselves into a Carnival Funders Group (CFG), comprising the Arts Council of England (ACE), Association of London Government (ALG), Greater London Authority (GLA), London Arts (LA) and the Royal Borough of Kensington and Chelsea (RBKC). The Group issued its first "Status Report" into the governance of the Carnival Trust on 17 January, covering most of the matters mentioned above. Predictably, the widely circulated report made alarming headlines too. The sense of crisis and confusion grew, not least because of suggestions in the press that the CFG members were threatening to stop funding the event. Holder and the new Board commissioned PriceWaterhouseCoopers to carry out yet another investigation into the running of the Trust.

On 8th March, the Carnival Funders Group issued its second Status Report, which included the Charities Commission's guidance. This stated that the only legal trustees of Notting Hill Carnival Trust were Hesketh Benoit, Debi Gardner, Antonn McCalla, Ashton Moore and Ansel Wong (Claire Holder having resigned her position on 18th December). Moore (aka calypsonian Mighty Tiger) had been voted off the Board in October 2000, but this dismissal was unconstitutional, the Commission said. As he had not resigned either, Moore should have been told of the 18th December meeting. The failure to tell him about the meeting meant that all the decisions taken on 18th December were invalid - including the appointment of the new Board and the dismissal of Debi Gardner and Ansel Wong. (A side effect was that between October 2000 and 8th March 2002 Moore was unaware that he was still a trustee. Although he played no part in the Board's activities over that period he remained legally liable for its decisions.) The Charities Commission confirmed that the members in waiting had no legal status at all and could play no role in the way the Trust was governed.

The CFG said that, while it recognised these five trustees as the legitimate Board of NHCT, it did not offer "any view as to the past actions or future suitability as trustees of any individuals or group of individuals who had considered themselves as Board members". Its report ended by urging all involved in the running of the carnival to work together and "to create by the end of 2002 a new organisation able to support and deliver the Notting Hill Carnival with the full confidence of its participants, its funders and its other stakeholders".

Locked out in Ladbroke Grove

This hope was shattered on Monday 11th March, when the two Boards met at the Trust offices. Accounts differ about what was said and done and by whom. However, it appears that, with the police brought in as witnesses, the old "legal" Board changed the locks on the Carnival offices, but left the building not entirely secure. An argument occurred on the street outside, and another police car arrived. Some time afterwards, Claire Holder made her way into the building, had the locks changed again and installed security guards.

Notting Hill Carnival Trust is now in pieces. There are two Boards, each believing itself to be the only legitimate decision-making body. The Carnival Funders Group recognises the old Board, which, in the Charities Commission's view, is the only legal one. The old Board does not trust the chief executive, but is itself divided between pro- and anti-Holder factions. Members of the new Board say that the Charity Commission's "view" is not a legally binding decision. However, the new Board does not seem to have, at the moment, the support of the main carnival funders.

The make-up of the CFG worries those carnivalists who agree with Holder that Kensington & Chelsea Council wants either to damage or take control of Notting Hill Carnival. RBKC has strongly denied that there is any plot to remove Claire Holder or to take over the carnival, but the Council's motives are still viewed with suspicion, because of its long history of antagonism towards the event. Nevertheless, the funders' concerns about a lack of transparency, accountability and democracy in the running of the Trust are shared by others in the carnival community. Some of these concerns date back well before the present problems: funders' representatives had long complained that members of Trust staff failed to keep them informed of developments, did not invite them to meetings and were reluctant to provide information. Within the Greater London Authority, frustration with the Trust's allegedly obstructive attitude has increasingly been expressed privately. However, while sources close to the GLA suggest that the Authority might welcome a change of chief executive, it seems implausible that this could be because Lee Jasper (senior policy adviser at the GLA) once stood against Claire Holder for the top post in Notting Hill Carnival.

A lawyers' carnival

What is clear is that the various factions have been conducting their campaigns through the press, each feeding its version of events to the media. Soca News understands that the BBC has also been gathering material for an investigative programme. This publicity is itself proving divisive - "trustees" on both old and new Boards believe that an action for libel is imminent against one or more newspapers following recent articles on the Trust's problems. Even without a libel action, lawyers seem likely to benefit from the Trust's problems, because a court decision may be the only way to settle the legal position of the various "trustees".

In the meantime, both Boards appear to be conducting their own negotiations with funders and the authorities for this year's carnival. The old Board - which may operate out of new offices if and until it regains access to 332 Ladbroke Grove - claims that the funding bodies are fully behind it and fully supporting carnival. The five trustees of the old Board intend to speak to the mas bands and all the disciplines, as well as the Golden Jubilee parade organisers. It says that in future the carnival organisation will operate in a more transparent way and will involve more carnival people. It is unlikely that the old Board would retain the services of either Claire Holder as chief executive or Chris Nortey as finance director. Until democratic elections from the membership could be held, the old Board anticipates the CFG seconding someone to act as an independent chair - Herman Ouseley and Lady Hollick are two names that have been discussed, Soca News has heard.

Back at Ladbroke Grove, Claire Holder has been meeting with Major Parker, the director of the Jubilee parade, and with funders as well. Much hinges on the PriceWaterhouseCoopers report, which, sources close to the new Board say, will clear the NHCT chief executive of all wrongdoing, including the charges of nepotism and fraud. A meeting had been arranged between both Boards and the director of the Charities Commission for the 19th March. Time for real unity Some degree of unity and control will need to be swiftly re-established within the carnival organisation if it is not to lose the support of major funders such as the London Arts, the Arts Council, the councils, the GLA and commercial sponsors. If the present divisions and uncertainty continue, there is a very real danger that this money will be permanently lost to Notting Hill. While this would certainly suit the anti-carnival cabals within Kensington and Westminster Councils, and might well be to the benefit of some of London's smaller carnivals, it would cause grave damage to Europe's premier festival. More immediately, the Trust must get its act together rapidly if it is to have any hope of bringing 4000 masqueraders on to the streets for the Queen's Golden Jubilee Parade on 4th June. The longer the row continues, the deeper the divisions will become, and the less money and goodwill there will be for Notting Hill Carnival 2002 and beyond.