In a scathing report, the House of Commons Public Accounts Committee, said that "a catalogue of errors and poor judgment" by Richard Alderman had undermined the SFO's reputation and damaged the morale of its staff.
And the committee published a letter which Mr Alderman sent to them just days after a gruelling evidence session before the cross-party group, in which he acknowledged it was "justified" in criticising his actions and offered "my deep and unreserved apology".
Auditor General Amyas Morse last year refused to sign off the SFO's accounts because of an "irregular redundancy payment" to former chief executive officer Phillippa Williamson, who took voluntary redundancy in April 2012, just four days before Mr Alderman's own departure. In December last year, Attorney General Dominic Grieve reported that Mr Alderman had agreed further severance payments to senior staff without following due process.
An investigation ordered by Mr Alderman's successor David Green found that the decisions to make Ms Williamson, chief operating officer Christian Bailes and technology head Ian McCall redundant were taken by the former director alone without informing ministers and that he failed to get Cabinet Office approval for the CEO's severance agreement.
Total severance packages were £464,905 for Ms Williamson, £437,167 for Mr Bailes and £49,885 for Mr McCall. A payment of more than £400,000 was made to enhance Ms Williamson's pension, despite not having the necessary approval. Mr McCall's package included £34,45 to which he was "not contractually entitled". And Mr Alderman decided on a £15,000 special payment each to Ms Williamson and Mr Bailes to avoid grievance actions, despite legal advice that there was no suggestion of any such claims.
The committee also condemned the "astounding" working conditions which Mr Alderman agreed for Ms Williamson during her four-year stint at the helm of the SFO, under which her home in the Lake District was designated her place of work. She worked at home two days a week, and travelled to London to work at the SFO three days, with the taxpayer footing the bill for travel and hotel costs totalling £98,946.
Richard Bacon, a senior Conservative member of the Public Accounts Committee, said: "The former director Richard Alderman's decisions showed a disregard for the proper use of taxpayers' money and a woefully inadequate grasp of the importance of Managing Public Money, HM Treasury's guidance document on the role of an accounting officer. By deciding the size of severance packages, and not seeking alternative placements for staff, he failed to follow due process.
"We welcome the new director's work to strengthen SFO governance and board-level decision making, which aims to prevent a director from independently taking such actions in future. The new director should also explore all possibilities to minimise the cost to the taxpayer, including requesting that the recipients of special severance payments repay the money."