Select Committee on Standards and Privileges First Report



  193. Drawing on the different sources of evidence - Mr Al Fayed, The Guardian in its submission to the inquiry, and the book Sleaze - it is possible to summarise as follows the allegations of cash payments, direct and indirect, relating to the lobbying operation on behalf of House of Fraser.

The so-called Slush Fund [59]

    -    that Mr Greer received, either as part of his original arrangement with Mr Al Fayed, or in response to a request made by Mr Greer during the course of their business relationship, £20,000 a year in cash, in four quarterly payments of £5,000, on top of the agreed annual consultancy fee of £25,000;

    -    that just before the 1987 election Mr Greer solicited from Mr Al Fayed cheques for £12,000 and £6,000 to assist with the election campaigns of "one or two Conservative candidates";

    -    that in 1989, Mr Greer submitted an invoice to Mr Al Fayed for £13,333 plus VAT, allegedly a special project fee arising from the DTI Inspectors' report, which was subsequently paid by cheque and which was over and above the annual consultancy fee;

    -    that all three of these additional sources of money were intended to create a "slush fund" from which Mr Greer would make payments to Members within the `group', as the need arose, for lobbying services rendered by them on behalf of Mr Al Fayed.

Cash Payments by Mr Al Fayed directly to Members

    -    that, over a period starting shortly before the 1987 election and ending in 1989, a series of cash payments, usually of £2,500, were made to Mr Smith and Mr Hamilton, either in person or to be delivered or collected, plus a larger, single payment of £5,000 to Sir Andrew Bowden, in return for lobbying services on behalf of Mr Al Fayed.

Other Benefits and Payments in kind

    -    that, between 1985 and 1989, various benefits were provided and payments in kind made to Members in the lobbying group in return for services rendered by them to Mr Al Fayed.

  194. Although the allegations relating to the existence of a "slush fund" concern, in the first instance, Mr Greer - whose conduct is not under investigation - it was necessary to examine them in some detail since, if substantiated, they would have had a direct bearing on the complaints against those Members alleged to have benefitted from the fund.

1. The so-called Slush Fund

The Principal Evidence in Support of Allegations concerning the Existence of a "Slush Fund"


  195. The evidence from different witnesses about the alleged £5,000 quarterly cash payments to Mr Greer varies in its details. In their witness statements prepared for the aborted libel action, Alison Bozek,[60] former executive personal assistant to Mr Al Fayed at 60 Park Lane,[61] and Iris Bond, a secretary to Mr Al Fayed at the same office, claimed that Mr Greer had negotiated a £5,000 quarterly cash supplement to his £25,000 annual consultancy fee. Whereas the latter was invoiced on a monthly basis to Mr Webb at Harrods, the £5,000 payments were collected by Mr Greer from 60 Park Lane. According to Ms Bozek,[62] Mr Greer would telephone to ask "Is there a letter for me?" or "Mr Al Fayed is behind in quarterly payments, can you arrange it?" Mr Al Fayed would either prepare an envelope himself for Mr Greer or would give instructions for this to be done and for the cash to be handed to Mr Greer, or left for his collection. Ms Bond described a broadly similar picture in her oral evidence.[63]

  196. The suggestion that Mr Greer from time to time collected envelopes from 60 Park Lane was endorsed by Mr Philip Bromfield, the security doorman at that address.[64] He explained that when an envelope was to be picked up, a secretary from Mr Al Fayed's office would telephone him to ask for a porter, who would then bring the envelope down and hand it to him. The name of the recipient would be typed on the front and the flap would be sealed with sellotape. The envelope would usually be of a size large enough to accommodate triple-folded A4 paper, but rarely so thick as to indicate bulky contents.

  197. Mr Al Fayed's position on this point differed slightly from that of Ms Bond and Ms Bozek in that, although in his oral evidence[65] he confirmed the existence of an agreement with Mr Greer for regular quarterly top-up payments of £5,000, his written submission[66] referred to requests from Mr Greer "on occasion" for money in addition to his retainer - implying a somewhat more casual arrangement.

  198. Documentary support for the allegation of extra quarterly payments to Mr Greer is found in two entries in two of the telephone message books kept at the 60 Park Lane office. These books consist of a series of pages, each containing four printed message boxes, with a perforated inner edge bound on a wire spiral spine. Each `set' consists of a top page and, immediately below it, a second page which preserves an NCR ("no carbon required") image of the message. Each book is numbered and the date is written in the top right-hand corner and again further down, if it changes during the course of a page. The date is also usually recorded in the individual message box.

  199. The first relevant message relates to 19 September 1988. (In fact the message itself is undated but it appears between two other entries with that date. Since the invariable practice was to use the next available box and to avoid leaving a gap, it can be assumed that the message in question was also taken on 19 September). The entry itself records Mr Greer as leaving a message for Mr Al Fayed as follows: "July/August/September payment due". The handwriting is similar to that of other entries which are attributable to Ms Bozek. It carries a tick to indicate that the message was delivered to Mr Al Fayed.

  200. In view of the evidential importance of this and related documents, I decided, with Mr Al Fayed's full co-operation, to subject them to forensic analysis. This was carried out at the Metropolitan Laboratory of the Forensic Science Service Agency by Dr Christopher Davies, a senior document examiner. The main purpose of the analysis was to establish whether there was any evidence to indicate that any of the relevant messages had not been written contemporaneously with the rest of the book in which they occurred, had been altered or added to, or had been substituted with another entry. It was also of interest, although less critical to my inquiry, to determine whether or not the handwriting of each message was found elsewhere in the message books.

  201. The findings of the forensic analysis[67] of the entry for 19 September 1988 were that there was "no evidence of any attempt to alter or erase any part of the message". There were indications that the tick was added after the message itself. This would, however, be consistent with the practice, as described to me, whereby the entry would not be ticked until the message had been confirmed as having been delivered. Dr Davies's report on this message entry concluded: "All my observations are ones I would expect if the questioned set[68] and the messages it contains are part of a contemporaneous record. I have found nothing to suggest that the questioned message is in any way different from the general body of messages in this book".

  202. The other message which offers corroboration for the allegation that Mr Greer received additional three monthly payments of £5,000 from Mr Al Fayed is dated 4 November 1988. It says: "From Ian Greer to MF (Mr Al Fayed): You owe July, Aug, Sept £5,000. Iris tell AF". This message refers to the same period of months as the note on 19 September and it appears, on the face of it, to be a further reminder from Mr Greer that a payment remains outstanding. The handwriting is again that of Ms Bozek and the purpose of the reference to "Iris" (Ms Bond) is to ensure that she conveys the message to Mr Al Fayed.

  203. Dr Davies's main finding from his analysis of this message was that he had "found no evidence of any alteration to it, nor ... of any attempt to erase any part of it". And he concluded: "My observations are those that I might expect to make if the questioned message formed part of a contemporaneous record. I have found nothing unusual about this message, nor anything that would serve to distinguish it from other messages in this book".

  204. No other message book or diary entry has been produced to me to show that other requests for additional payments were made by Mr Greer. Furthermore, the two message book entries cover the same quarter - July, August and September 1988; there is no documentary evidence relating to such alleged cash payments in earlier or later quarters.


  205. The payment to Ian Greer Associates of a sum of £13,333 (£15,332.95 including VAT) in 1990 is not disputed. An invoice for that amount, dated 1 February 1990 and ascribed to "fees", was authorised for settlement by Royston Webb on 19 February. The fees were intended to cover a three month period beginning on 1 February. A note in Mr Webb's writing, dated 12 February, says "Agreed with AF". It is to be assumed from the form of Mr Webb's annotation that a cheque for that amount was paid to IGA shortly after authorisation and that it was a cheque from House of Fraser or a related company, not a personal cheque from Mr Al Fayed.

  206. What is at issue is the purpose for which the payment was made. It was Mr Al Fayed's contention, first in his solicitors' letter to the Select Committee on Members' Interests in 1994, and subsequently in his witness statement for the libel trial, that the sum of £13,333 was for services rendered by Members, although in his oral evidence Mr Al Fayed added the clarificatory phrase "through Ian Greer"[69] Mr Al Fayed explained that, as with the alleged quarterly £5,000 payments, when Mr Greer asked for reimbursement of "overheads", he had not enquired very closely what this term meant, but had assumed it referred to the need to reward those Members who formed part of the lobbying group. According to the book Sleaze,[70] Mr Al Fayed believed that the additional payments were needed by Mr Ian Greer because his basic consultancy fee of a little over £2,000 a month was at the lower end of his normal scale of charges for high-profile lobbying work of this kind.

  207. To the claim by Mr Greer that the £13,333 was a special project fee, The Guardian replied in its second submission to the inquiry[71] that such a project "was never undertaken" and "no plans [for it] ever came into existence". The most that Mr Greer appeared to have done following the official publication of the DTI Inspectors' report was to provide a Parliamentary clippings service. This, in The Guardian's view, strengthened the theory that the purpose of the money was, in reality, to place Mr Greer in funds to enable him to make payments to various Members in connection with his lobbying operation. As it was put by Mr Geoffrey Robertson QC, Counsel for the newspaper: "The curiosity of this payment is that it was rendered ahead of time, according to Greer, for work which was not in fact ever done".[72]

  208. The remark by Mr Robertson was a reference to the fact that the payment was authorised on 19 February 1987, but the publication of the Inspectors' report, which was claimed to have given rise to the special project, did not take place until 7 March.

  209. Suspicions as to the true purpose behind the £13,333 have been fuelled by the extraordinary preciseness of the amount, which appears to be the product of dividing some larger sum either by three or by a multiple of that figure. Questioned on this point, Mr Webb told the inquiry that, although he had authorised the invoice for payment, he had not been "aware of any discussion that lay behind it". And he added: "For example, if there had been a meeting between Ian and Mohamed and they had decided that this sum was to be paid for a particular reason, but for the sake of cosmetic appearance let us call it something else, then it would be the something else that I would be aware of". Mr Webb agreed that the sum was an odd one and that it had probably resulted from "a certain amount of horse-trading".[73]

C) THE CHEQUES FOR £12,000 AND £6,000

  210. Shortly before the 1987 general election, Mr Greer received two cheques from Mr Al Fayed. The first, debited to Mohamed Al Fayed's account on 21 May, was for £12,000 and the second, debited on 2 June, was for £6,000. The fact that these cheques were given to Mr Greer is documented and is not challenged. As with the cheque for £13,333 in 1990, it is the use to which the payments were to be put (and were actually put) which is the source of dispute between Mr Al Fayed and The Guardian, on the one hand, and Mr Greer (and by extension the accused Members), on the other.

  211. In his witness statement for the libel action, Mr Al Fayed referred to the cheques as "special payments", adding: "I was specifically asked by Ian Greer for this money to pay Messrs Hamilton and Smith and I paid it to him for that reason".[74] He challenged the explanation that the money was intended for donations to a number of Conservative candidates' election expenses on the grounds that he had already made a large contribution to central funds and would not have been interested in assisting with local campaigns.

  212. Some support for Mr Al Fayed's view of the purpose of the cheques as being for making payments to a small group of Members emerged from the letter requesting the second tranche sent by Mr Greer to Ali Fayed on 28 May 1987. In this letter Mr Greer wrote: "I spoke to you last week and you kindly said you would speak to Mohamed about the possibility of helping one or two[75] Conservative candidates during the election campaign. I think a cheque for £6,000 would be sufficient ... I will let you have a note after the election of whom was assisted". In the event, no such information was provided to Mr Al Fayed.

59  This is the term used in Sleaze (p 64). It has also been adopted, for the sake of convenience and brevity, in this report. Back

60  In certain press reports, Ms Bozek has been referred to as Alison Foster, which is her maiden name. Back

61  60 Park Lane is one of two addresses which feature prominently in the allegations - the other being Harrods. 60 Park Lane is part of an apartment block owned by Mr Al Fayed and where he has his residence and main office. Harrods, the department store owned by Mr Al Fayed, is in Knightsbridge, where Mr Al Fayed also has an office. A third address, South Street, close to 60 Park Lane, is the headquarters of House of Fraser Holdings. Back

62  Q 69. Back

63  Q 217-228. Back

64  Q 422-3. Back

65  Q 639. Back

66  See Appendix 5, para 43. Back

67  See Appendix 94. Back

68  ie. the set of four messages on a page; "questioned" in this context means "whose authenticity has been challenged". Back

69  Q 573. Back

70  Sleaze, p 64. Back

71  See Appendix 30. Back

72  Q 808. Back

73  Q 1836-7. Back

74  Q 545. Back

75  Emphasis added. Back

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