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9. The first allegations
to have a bearing on this inquiry were contained in articles by
David Hencke and John Mullin in The Guardian of 5 October
1993. In one article it was alleged that Mr Neil Hamilton
did not declare in the Register of Members' Interests a week's
holiday for himself and his wife at a five-star hotel in 1987
for which the bill was over £5,000; and that this contrasted
with the action of Mr Tim Smith in registering a gift of
two teddy bears received from the same source. The hotel was
later identified as the Ritz in Paris, and the source as Mr Mohamed
Al Fayed, the owner of Harrods.
10. A second article on
the same day drew attention to the activities of Ian Greer Associates,
a lobbying company, and to the links it had established with a
number of Members including Mr Hamilton, Mr Smith
and Sir Michael Grylls.
11. The former editor of
The Guardian, Mr Peter Preston, and the journalists directly
involved told the inquiry in oral evidence that they were, at
that time, already aware of further allegations, made by Mr Al
Fayed, that Mr Smith and Mr Hamilton had been paid
"cash in hand" for Parliamentary services, but that
these needed to be researched before being suitable for publication.[6]
12. Subsequently, in late
September 1994, allegations made by Mr Al Fayed concerning a number
of Ministers, including Mr Smith, Mr Hamilton and
Mr Howard, were conveyed through an intermediary[7]
to the Prime Minister. He instructed the Cabinet Secretary, Sir
Robin Butler, to investigate the allegations and prepare a report.
13. On 20 October 1994 The
Guardian published a further article alleging that Ian Greer
Associates were paid tens of thousands of pounds by Mr Al Fayed
to reward Mr Smith and Mr Hamilton for asking Parliamentary
questions on behalf of House of Fraser,[8]
at £2,000 a time. Mr Al Fayed was quoted as having been
told by Mr Greer: "You need to rent an MP just like you rent
a London taxi". Mr Greer denied the allegations as "wholly
and totally untrue", as did Mr Hamilton.
14. On the same day, 20
October 1994, Mr Hamilton and Mr Greer issued writs for
libel against The Guardian, and Mr Smith (who had
admitted receiving money from Mr Al Fayed) resigned from his Ministerial
post. It appeared that the decision that he should leave the
Government had been reached some days earlier, but that it had
taken a little time to arrange the details of the announcement,
including the exchange of letters with the Prime Minister.
15. In letters of 21 and
27 October, Mr Alex Carlile formally complained to the Select
Committee on Members' Interests that Mr Hamilton had failed
to register the hospitality at the Ritz and the receipt of Harrods
vouchers to a value of about £6,000.
16. The second part of the
complaint was subsequently extended to include cash payments,
and was supported by a letter from D J Freeman, solicitors to
Mr Al Fayed, claiming that payments of cash totalling £20,000
and gift vouchers to a value of £8,000 had been made to Mr
Hamilton in the period June 1987 to November 1989.[9]
17. In response to these
allegations Mr Hamilton argued that the hospitality could
be seen as non-registrable under the rules as they were interpreted
at the time; that he had never received cash or vouchers from
Mr Al Fayed; and that the Select Committee's inquiry should not
be substituted for the Court action.
18. The Cabinet Secretary's
report was published as a written answer to a Parliamentary question
on 25 October 1994. It recorded the fact that Mr Smith
had admitted receiving money from Mr Al Fayed and had tendered
his resignation from the Government, but that Mr Hamilton
continued to deny the allegations of cash payments. Later the
same day, however, Mr Hamilton also resigned his post,
at the request of the Prime Minister, on the grounds that the
allegations against him (which by then covered a number of other
matters) disabled him from carrying out his responsibilities as
Minister for Corporate Affairs.
19. From the Select Committee's
First Report of 1994-95, published in June 1995, it can be seen
that the Committee was divided over whether to pursue the second
part of the complaint against Mr Hamilton (that is to say
the allegation that he had received cash from Mr Al Fayed). In
the event it decided not to do so because, as the Committee put
it, "it has been argued that the libel action might be prejudiced
by any Parliamentary inquiry". The letter from D J Freeman
was not published.
20. On the first part of
the complaint the Committee decided that the stay at the Ritz
was registrable but that a relative lack of clarity in the registration
form in 1987 could be pleaded in mitigation. It concluded that
it was unnecessary to recommend further action by the House.[10]
21. In giving evidence to
the Committee of Privileges in November 1995 in a case involving
Mr Jonathan Aitken and The Guardian, Mr Al Fayed submitted
a memorandum containing allegations of misconduct against a number
of Members. It repeated the charges against Mr Hamilton
and Mr Smith and the letter from D J Freeman was re-submitted.
But Mr Al Fayed went further, adding Sir Andrew Bowden
to those who he said he had paid for Parliamentary services and
charging Mr Michael Howard with acting in a Ministerial capacity
whilst failing to disclose a relevant conflict of interest.
22. At that time the allegations
were largely unsupported by evidence. The Privileges Committee
decided not to pursue them and Mr Al Fayed's memorandum was not
published. Instead, the Committee recommended, and in January
1996 the House agreed, that the memorandum and unreported evidence
should be referred to the Select Committee on Standards and Privileges
"for examination by the Parliamentary Commissioner for Standards".
23. Since it was not clear
who was included in the complaint, I wrote to Mr Al Fayed on 5
February 1996 asking him:
- to
specify the Members against whom he was lodging a complaint;
- to
specify the allegations of misconduct;
- to
supply supporting evidence not covered by the documents provided
to the Privileges Committee.
24. In August 1996 Mr Al
Fayed's solicitors delivered a formal letter of complaint, together
with detailed supporting evidence, against Mr Howard. I have
dealt with this matter in a separate report to the Committee.[11]
The solicitors said that Mr Al Fayed was not proposing to provide
evidence against Mr Hamilton and others because of the
libel case, then still in train.
25. Mr Hamilton and
Mr Greer withdrew from the libel case on 30 September. I therefore
wrote again to Mr Al Fayed asking him to specify his complaints
against Members. The following day, The Guardian launched
a vituperative campaign, aimed particularly against Mr Hamilton,
under the headline "A liar and a cheat".
26. Following representations
from the Opposition, the Speaker made her statement to the House
on 14 October (see preface above). This effectively extended
my remit to include all significant allegations in the public
domain. Since most of these were attributable to The Guardian,
I wrote to the Editor, Mr Alan Rusbridger, asking him to specify
his complaints and to supply supporting evidence.
27. Much of the ensuing
three months was taken up by the complex investigation involving
Mr Howard. At the same time, however, strenuous efforts were
made to clarify the allegations against Mr Hamilton and
the other Members, and to assemble the relevant documentation
for the current inquiry.
28. On 18 October The
Guardian sketched out the case against Sir Michael Grylls,
Sir Andrew Bowden, Sir Peter Hordern, Mr Gerry Malone, Lady Olga
Maitland, Mr Michael Brown, Mr Smith and Mr Hamilton.[12]
In the case of Mr Hamilton, the newspaper confirmed that
the allegations were based on their amended defence in the libel
action. As regards the other Members they said: "We will
formulate these complaints with precision in due course".
29. Achieving this greater
precision proved more difficult than envisaged. The Guardian
had prepared for a court case against Mr Hamilton and Mr
Greer. They were less well-equipped to formulate a case against
others and, indeed, were reluctant to be cast in the role of "complainants".
On the other hand, since they persistently made allegations in
print - drawn together eventually, in the publication Sleaze:
The Corruption of Parliament[13]
- I took the view that they had an obligation to formulate the
complaints and to support them with evidence.
30. Meanwhile, at the end
of November 1996, I received a written statement from Mr Al Fayed
which indicated that, although other Members were mentioned, his
only specific complaint was against Mr Hamilton. He subsequently
confirmed, however, that he was prepared to assist the inquiry,
if possible, with information concerning allegations made against
other Members.
31. On 15 January 1997 the
solicitors to The Guardian (Olswang) confirmed that the
newspaper's complaints were, with minor exceptions, those set
out in their letter of 18 October 1996. These were subsequently
spelt out in greater detail (see preface), by which time much
of the evidence had been assembled.
32. I feel bound to observe
in passing that, had The Guardian not been simultaneously
devoting resources to the production of Sleaze, the process
of assembling documents for this inquiry would have been greatly
assisted.
33. That said, I also wish
to acknowledge that, but for The Guardian's persistence
in pursuing its original investigations, many of these serious
allegations would never have been brought into the open.
34. I cannot, however, view
in the same light The Guardian's action in leaking extracts
from the transcripts of oral evidence given to the inquiry. I
repeat what I said in a press statement on 21 March 1997, namely
that the selective publication of incomplete evidence was both
inimical to the principle of natural justice and a gross breach
of the trust placed in The Guardian as a party to the inquiry.
35. I do not think that
The Guardian's conduct, because of the late stage at which
it occurred, prejudiced my own inquiry. But it enables those
who are the subject of complaints to argue that the outcome of
the investigation has been prejudged by the media.
6 See
paras 176-180. Back
7 Attempts
to obtain from the intermediary the tapes of his original conversation
with Mr Al Fayed proved unsuccessful as they were no longer in
the intermediary's possession. Back
8 The
stores group owned by Mr Al Fayed which includes Harrods. Back
9 See
Appendix 1. Back
10 See
paras 574-577. Back
11 See
para 5. Back
12 See
Appendix 16. Back
13 Sleaze:
The Corruption of Parliament,
by David Leigh and Ed Vulliamy (referred to in this report as
Sleaze). Back
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