Select Committee on Standards and Privileges First Report


  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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Prepared 8 July 1997