THE DOCUMENTARY
EVIDENCE
256. It was pointed out
to Mr Greer by Counsel to the inquiry that although Mr Al Fayed
did not claim to have paid money directly to Sir Michael,
he argued that the alleged sums passed to Mr Greer were intended
for rewarding the Members who were active in the House of Fraser
lobbying group. In that context, therefore, the message book
entries apparently showing Mr Greer asking for a quarterly payment
from Mr Al Fayed were especially relevant when set against other
documentary evidence from IGA's accounting papers relating to
Sir Michael.
257. It was put specifically
to Mr Greer that in September and November 1988 he was apparently
reminding Mr Al Fayed about an outstanding three months' payment
of £5,000; and that extracts from IGA's cash books for the
following year showed two payments of comparable amounts to Sir
Michael, also apparently assessed on a quarterly basis. Thus,
the first cash book page referred to an amount of £5,750,
payable for "Commission 1.7.89 to 30.9.89", whilst the
second was headed "Commission Sept to Dec 1989, Qtr",
again in the sum of £5,750, but was described as being attributable
both to "commission" and, elsewhere on the page, to
"fees".
258. Mr Greer accepted[95]
that since it was not his practice to make quarterly payments
to anyone, and since fees and commission were quite distinct categories,
he could not readily provide an explanation for the cash book
entries. He speculated that "it could have been he [Sir
Michael Grylls] introduced four clients in one year, I do not
recall. You could have had a situation where he introduced a
client and it was a commission payment, but it was paid in stages
rather than, for whatever reason (cash-flow perhaps), as a one-off".
But Mr Greer acknowledged[96]
that the coincidence between the amounts and the quarterly pattern
of the payments allegedly demanded of Mr Al Fayed in 1988 and
actually made to Sir Michael in 1989 was "striking".
259. In an attempt to clarify
the position, Sir Michael supplied the inquiry with a schedule
of payments[97]
which he had received from IGA between 1983 and 1993. This schedule
was not as helpful a piece of evidence as might have been expected,
partly because the categorisation of the sources of the individual
payments was confused, partly because it was incomplete, and partly
because it was difficult to match up the entries with the three
payments listed in the evidence to the Select Committee in 1990.
These inadequacies are described in more detail in turn below.
260. The sources of the
payments (that is to say the person or organisation to whom the
relevant invoices were sent) are variously described as "Ian
Greer"; "Ian Greer/UTC"; "UTC"; and "UTC/IGA".
But it is not clear which of the payments represent commission
and which are fees in relation to the Unitary Tax Campaign and,
within the latter category, which reflect payments direct from
UTC (only two are recorded as such) and which are the so called
`top-up' fees from Mr Greer. Two of the payments, in October
1985 and April 1986, are for extremely exact amounts including
a number of pence, the precision of which Sir Michael was
unable to account for. Ten of the payments are for sums (£5,750
and, from 1991 onwards, £5,875) which appear to comprise
a basic £5,000 element plus VAT at the prevailing rate.
These are not entirely explicable, either from the point of view
of their size or timing, in terms of the known pattern of commission
payments, or of fees relating directly or indirectly to UTC.
261. The three commission
payments described by Sir Michael in his 1990 evidence
to the Select Committee were received by him on 1 November 1985;
14 May 1986; and 3 October 1989. Sir Michael explained
that, so far as the dates in the schedule were concerned, these
related to the invoices, which were normally rendered on the first
of the month, whilst the cheques in payment were "often received
a month or two later". This implied that a gap of up to
six weeks, approximately, might be expected between the dates
of the three commission payments and the relevant invoices in
the schedule.
The November
1985 Payment
262. In the schedule supplied
by Sir Michael, the closest entry to 1 November 1985 was
that described as "Oct 1985 - Ian Greer/UTC - £7,834.38".
(The nearest entries on either side of two payments were for
January 1985 and April 1986). But it was put to Sir Michael
by Counsel to the inquiry,[98]
that neither in its attribution to Ian Greer/UTC nor in its specific
amount, did this look like a commission payment for introducing
new business. In response, Sir Michael stated: "it
is possible, because it is rather an odd sum, it may have included
a part of a referral payment because we sent a composite invoice.
But, as I say, I cannot be sure of that".
The 14 May
1986 Payment
263. The nearest entry to
14 May 1986 in the schedule was "April 1986 - Ian Greer/UTC
- £5,965.83". As with the first of the three payments
acknowledged to the Select Committee, this appears misdescribed,
if, as Sir Michael claimed, it relates to an introduction
fee.
The 3 October
1989 Payment
264. The 3 October 1989
payment did not appear at all in Sir Michael's schedule.
In a letter dated 21 February 1997 explaining the omission, Sir
Michael stated that, on re-checking his books, he had come
across an invoice for September 1989 in the sum of £5,750
relating to the Unitary Tax Campaign, which would have triggered
a payment on 3 October. Sir Michael continued that as
it had been his belief that this invoice was rendered directly
to UTC he had not included it in the schedule, which was intended
only to cover invoices submitted to IGA. But Sir Michael's
explanation did not shed any light on the process by which consultancy
fees from UTC, whether paid direct or via Mr Greer, came to be
included with the three commission payments acknowledged
to the Select Committee in 1990.
265. In a later letter,
dated 25 February, Sir Michael mentioned two further payments
not listed in the schedule. The first was in June 1989, in the
sum of £5,750, which related to consultancy fees invoiced
directly to UTC, not IGA. (The second June 1989 invoice had been
included in the schedule, as it was paid by IGA). Other invoices
rendered in 1989, but paid direct by UTC, were dated 1 July (£5,750)
and 1 December (£5,750). Neither of these payments appeared
in the schedule for the reasons already given by Sir Michael.
266. A further omission
from the schedule, however, was an invoice for £5,750 for
UTC-related fees, dated 1 September, and paid by IGA (not UTC)
on 28 September 1989. This is very close in time to the payments
Sir Michael told the Select Committee he had received on
3 October of the same year,[99]
but it remained unclear after Sir Michael's oral and written
evidence whether in fact these were one and the same.
267. I obtained statements[100]
from Mr Malcolm Moring, IGA's former bookkeeper in which he made
the following points:
- that
quarterly payments of £5,000 plus VAT were made by IGA to
Sir Michael throughout the period from March 1987 until
1994 and that these payments related to introduction fees;
- that
Sir Michael sent invoices for these payments to Mr Greer;
- that
in about October or November 1987 he (Mr Moring) collected, on
Mr Greer's instructions, £6,000 in cash from IGA's bank and
gave it to Mr Greer; that no explanation for this cash withdrawal
had been given by Mr Greer; and that the transaction was not recorded
in IGA's accounts;
- that
every Friday from March 1987 until 1995 he gave Mr Greer £50
out of petty cash, in a brown envelope;
- that
he had had no knowledge of any arrangement whereby IGA recovered
from UTC fees paid to Sir Michael; his recollection was
that IGA charged UTC an agreed fee for Sir Michael's services.
268. In his response to
Mr Moring's evidence, Mr Greer said that he had discussed the
issues raised in it with Sir Michael. He wished to make
a number of observations:
- the
invoices for Sir Michael's top-up fees of £10,000
per annum in relation to UTC work were rendered twice a year;
- it
was a mystery why Mr Moring had described the introduction fees
as being paid to Sir Michael on a quarterly basis;
- he
had no recollection of drawing £6,000 in cash in 1987, or
any other year; if he had done so, it would have had to be fully
accounted for through receipts and cash book entries;
- cash
withdrawals of £1,000 had been made in 1987 and 1992 to fund
the expenses of staff members sent to help candidates with their
election campaigns;
- the
weekly £50 withdrawal from petty cash was part of his legitimate
expenses allowance, used for immediate items such as taxis or
drinks; the Inland Revenue were aware of the allowance.
269. Mr Greer added that
Mr Moring's statements could be explained by reference to difficulties
in his personal background and consequent emotional problems.
270. My own analysis of
the IGA accounts did not disclose any regular pattern of quarterly
payments to Members or others - in fact I saw evidence for only
two such cases.
271. Accepting that he had
not been able in all cases to provide detailed explanations for
the circumstances surrounding the various types of payments from
IGA or UTC, Sir Michael vigorously denied any impropriety
on his part. In particular, he rejected any suggestion of a link
between money received from Mr Greer and his lobbying activity
on behalf of Mr Al Fayed. And he added that he had never been
paid to lobby Ministers on behalf of IGA, except in the case of
UTC.[101]
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