Yes it can be embarrassing or awkward but that is the risk they take (and why for political roles the political due diligence should be in place first). Plenty in Labour were not happy about Mandelson’s appointment - not least due to the risk level of someone with that track record. Like Rayner, I want to see a lot more transparency on the process.
There have been scandalous appointments (and honours) in the past by all political parties but this one seems simply stupid considering what was already known publicly at the time.
Incidentally, failing the initial SC/DV checks doesn’t automatically stop you taking up a role advertised as requiring vetting.