Select Committee on Standards and Privileges First Report



The Principal Evidence against the Allegations concerning the existence of a "Slush Fund"

  213. Mr Greer vehemently denied the payment to him by Mr Al Fayed of any sums which, either individually or collectively, could be described as a "slush fund". More specifically, in relation to the component parts of this allegation, Mr Greer maintained:

    -    that no quarterly cash payments of £5,000 (or any sums) were received by him from Mr Al Fayed;

    -    that the cheque for £13,333 represented payment for legitimate lobbying and monitoring services on behalf of House of Fraser;

    -    that the two cheques totalling £18,000 were, as he had always claimed, used to make donations to Conservative party candidates' election campaign funds;

    -    that he had never demanded, or received, cash payments from any of his clients, a fact to which they could readily attest.

  214. In a statement to the inquiry, Baroness Turner, who was a non-executive director of IGA from 1991 to 1996, claimed that Mr Greer and IGA had been the victims of an unwarranted campaign of denigration in the media. She defended Mr Greer's business practices, saying that IGA had acted "in no way differently from its rivals in the same industry". She had no knowledge of any arrangements involving Mr Greer of the sort alleged by Mr Al Fayed and The Guardian. Indeed, the board of IGA had questioned Mr Greer closely on the matter and had been satisfied with his denial of any wrongdoing.


  215. Mr Greer made a number of different points in support of his denial that the alleged quarterly cash payments of £5,000 ever took place:

    -    Mr Al Fayed had failed to make any mention of this alleged method of payment in his witness statement for the libel action or at any time before then;

    -    there was an inconsistency in the evidence given in support of the allegation, in that, whilst Mr Al Fayed asserted that the payments had been made from the beginning of his association with Mr Greer, Ms Bozek and Ms Bond attested to this having taken place only for a period of about 18 months;

    -    in the absence of the doorman's security records, there was no corroborative evidence which actually placed him at 60 park Lane on the days on which payments were alleged to have been made to him.

  216. Mr Greer also sought to cast doubt on the allegation by arguing that if he had indeed been receiving four quarterly payments of £5,000, he would have amassed a total of £200,000[76] over the period in question - the implication being that Mr Al Fayed would not have indulged in such largesse without enquiring more closely what he was getting in return. It was not clear, however, how Mr Greer arrived at this figure since, on the basis of Mr Al Fayed's account, the arrangement would have lasted at most from the end of 1985 to the beginning of 1990.

  217. As further evidence contradicting this allegation, Mr Greer supplied me with a statement from Ms Elizabeth Swindin, his private secretary from 1987 to 1996.[77] The salient points of Ms Swindin's statement were as follows:

    -  "On no occasion have I ever left messages, with any client, requesting payment of moneys owing to either the company or Mr Greer, at any time".

    -  "I have never left messages with Mr Fayed's office requesting payment of moneys owing".

    -  "On no occasion have I ever received, opened or witnessed any envelopes containing cash from either Mr Fayed's office, or, indeed, from any other client".

  218. On being examined by Counsel to the inquiry about the two telephone message book entries for 19 September and 4 November 1988,[78] Mr Greer questioned why apparently only two such calls had been made in relation to a supposed arrangement involving payments four times a year for several years. He did not accept Counsel's suggestion that if Mr Al Fayed had wished to concoct evidence, as Mr Greer seemed to suggest he had done, this could have been carried out on a much more systematic scale.

  219. Asked directly whether it was his evidence to the inquiry that the two message book entries were forgeries, Mr Greer replied "Absolutely. 100 per cent"; and he added that the purpose of this fabrication had been to assist the defendants in the libel action. Mr Greer was pressed further as to whether there was any innocent explanation he could offer for the two messages, replying: "None whatsoever. There could not possibly be ... ".


  220. Mr Greer conceded that, at first sight, the justification for the £13,333 payment as a project fee related to the publication of the Inspectors' report into House of Fraser was at odds with what the documentary evidence showed to be a diminished level of lobbying over the period in question (early 1990). The reasons for the decline in activity were twofold. The first was the fact that all effective representations had already been made and it remained only for the Secretary of State to decide when to publish the document. The second was that once the report had been made public "the Parliamentary support that had been achieved over many years, to a large extent, melted away".

  221. This left, as IGA's anticipated workload, what Mr Greer termed "the fall-out from the report's publication - press coverage, Early Day Motions, Statements and Parliamentary Questions", which "all had to be monitored for the House of Fraser: a very time-consuming exercise". He himself had been "forced to undertake responsibility for `hand-holding', restraining where necessary, political intelligence, gathering information, the provision of strategic advice, etc". Mr Greer added: "As you will appreciate, the circumstances did not require letters on files".

  222. Mr Patrick Ferreira was employed by IGA, rising through the ranks to become Managing Director of IGA (Europe) and IGA International. He wrote to me on 7 March 1997[79] stating that it was at his suggestion that the House of Fraser consultancy fee, which had been reduced to £500 a month from December 1989, should be renegotiated. Although he was not in a position to comment on the discussions leading to the agreement of the special project fee of £13,333, he was able to confirm that there had been work for IGA to do on behalf of Mr Al Fayed and House of Fraser "early in 1990".

  223. It was also put to the inquiry that the invoice for £13,333 was subject to VAT and would therefore presumably have gone through the books of House of Fraser and IGA. I have found no evidence of any payments out of IGA accounts, coinciding either in time or in total amount, with the £13,333 received from House of Fraser.

C) THE CHEQUES FOR £12,000 AND £6,000

  224. As confirmation of his assertion that the two cheques from Mr Al Fayed for £12,000 and £6,000 were used for the purpose for which they had been requested, Mr Greer pointed to the evidence of a schedule of payments contained amongst the IGA accounting papers disclosed for the court process.

  225. This handwritten document,[80] headed "General Election - 11th June 1987 - Expenses" is in the form of a table, setting out in columns: the date, the name of each recipient or donor, the amount of credit or debit, and the running balance. The donations are recorded as: "May 19 - DHL International (the courier company) - £11,250"; and "May 30 - Cash receipts from M. Fayed - £18,000". There then follows a list of recipients: a number of individually named candidates and some local Conservative associations. Most of the donations are for £500, a few are for £1,000, and one - to the Kingston and Malden Conservative Association - is for £2,000.[81] Those of the recipients who are still Members of the House have confirmed to the inquiry that they, or their local party, received the amounts attributed to them in the schedule.[82]

  226. The way in which these payments are recorded indicates that those funded by Mr Al Fayed were made some time after the £11,250 donation from DHL had been exhausted. Of the £11,250 from DHL, a total of £10,250 had been paid out before the receipt, in two stages, of the funds from Mr Al Fayed.

  227. The only Members listed in paragraphs 723 and 724[83] whose local parties appear to have received a donation after the DHL money had run out are: Sir Andrew Bowden, Mr Norman Lamont, Mr Gerry Malone and Mr David Shaw.

  228. At the foot of the table is a note which reads as follows:

    "Expenses paid after date re Election

    Accruals (paid 10/7 £1,000 plus £5,319.90)".

  229. The figure of £5,319.90 is a reference to a cheque for that amount which was paid to Sir Andrew Bowden's election fighting fund and which was earmarked for the purchase of office equipment. This payment is dealt with in more detail in a later section of the report.[84]

  230. Analysis of the payment schedule shows that some three items - presumably election-related donations - totalling some £7,000 are not identified by the name of the recipients. I received no evidence which linked this money with any of the Members whose conduct is under investigation.

  231. Referring to the possibility that Mr Al Fayed had assumed the £18,000 was intended for a much smaller group of Members - the lobbying group in fact - Mr Andrew Stone, personal solicitor to Mr Greer, said that in so far as this perception had been based on Mr Greer's use of the words "one or two Conservative candidates" it was misplaced. To Mr Greer this phrase could mean anything from one to five hundred. It was a "diminutive expression, not one that would be taken literally if you knew him".

  232. Confirmation that the purpose of the £18,000 was the distribution of relatively small donations amongst a large group of candidates was provided by Baroness Turner in her statement to the inquiry.[85]

The Position of Sir Peter Hordern, Mr Smith, Mr Hamilton and Sir Andrew Bowden in relation to the `Slush Fund' Allegations

  233. Irrespective of the question of whether a "slush fund" existed, I have received no first-hand evidence that any Member of the lobbying group, with the exception of Sir Michael Grylls,[86] was paid money from it (as opposed to direct from Mr Al Fayed).

  234. So far as Sir Peter Hordern is concerned, it was alleged in the book Sleaze that in late 1988 he had tabled questions hostile to Lonrho "in return for payment". The implication was that, since it had never been claimed that Sir Peter ever received cash directly from Mr Al Fayed over and above his consultancy fee, this money came from Mr Greer. In the event, during oral evidence to the inquiry, The Guardian withdrew this allegation, explaining that it had been based on a misinterpretation of the documentary evidence.[87] The Guardian accepted that no such questions were tabled by Sir Peter.

  235. Similarly, there is no evidence available to the inquiry, either directly or in the form of the documentation assembled for the libel action, linking Mr Smith, Mr Hamilton or Sir Andrew Bowden with cash payments[88] channelled through Mr Greer. The principal circumstantial evidence of such a connection was Mr Al Fayed's belief that the additional payments he claimed to have made to Mr Greer were intended for "his Members".

The Position of Sir Michael Grylls in Relation to the "Slush Fund" Allegations

  236. The position in relation to Sir Michael Grylls is rather less straightforward. Sir Michael now accepts that he received three different types of payments directly or indirectly from Mr Greer during the latter part of the 1980s and the early 1990s. These were:

    -    an additional or `top-up' fee paid by Mr Greer to reflect the additional workload imposed on Sir Michael by his activities in support of UTC.

76  See Appendix 75. Back

77  See Appendix 76. Back

78  Q 1549-1571. Back

79  See Appendix 110. Back

80  See Appendix 73. Back

81  See para 735. Back

82  See paras 720-731. Back

83  In the later section of the report dealing with allegations of non-registration of election donations (see para 44). Back

84  See paras 296-306. Back

85  See Appendix 113. Back

86  See paras 236-271. Back

87  Q 801. Back

88  ie. excluding the cheque for £5,319.90 paid to Sir Andrew Bowden's election campaign fund. Back

89  A campaign organised by a number of leading British companies with trading interests in the USA with the objective of countering proposals in some states to levy company taxes on a unitary basis, that is to say on the basis of worldwide, not local earnings. Back

previous page contents next page
House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1997
Prepared 8 July 1997