House of Commons - Standards and Privileges

Select Committee on Standards and Privileges First Report

VI. SUMMARIZING THE EVIDENCE - Continued

5) ANALYSIS OF THE ALLEGATIONS OF CASH PAYMENTS, DIRECT AND INDIRECT, RELATING TO THE HOUSE OF FRASER LOBBYING OPERATIONS (Contd.)

2) Alleged Cash Payments by Mr Al Fayed directly to Members

272. In essence, this set of allegations is that between early 1987 and 1989, Mr Smith and Mr Hamilton received cash payments, principally in tranches of £2,500, either from Mr Al Fayed in person or in envelopes left for collection, in return for lobbying Ministers and taking action in Parliament on behalf of House of Fraser; and that Sir Andrew Bowden received a payment of £5,000 for the same services, and demanded a larger sum, of perhaps £50,000 or £60,000 to act as a consultant to House of Fraser. These allegations are addressed below as they relate to each Member in turn.

Sir Andrew Bowden

THE EVIDENCE IN SUPPORT OF THE ALLEGATION (£5,000 IN CASH AND A DEMAND FOR £50,000)

273. As indicated earlier,[102] Sir Andrew Bowden was recruited by Mr Greer to join the House of Fraser lobbying team in February 1987 on the strength of his reputation as a campaigner.

274. In his oral evidence to the Privileges Committee in 1995, Mr Al Fayed alleged that Sir Andrew had taken "for his services £5,000" and that he had also demanded £50,000 a year as a retainer in return for assisting in the campaign against Lonrho and Mr Rowland. Mr Al Fayed added that Mr Royston Webb had been a witness to these events.

275. Mr Al Fayed chose not to pursue these allegations by making a formal complaint to me, although, as his Counsel explained,[103] he was willing to provide evidence to the inquiry on those matters within his knowledge in relation to Sir Andrew's conduct.

276. Asked, therefore, to explain the circumstances in which Sir Andrew allegedly received a cash payment, demanded a much larger sum as an annual fee, and subsequently ceased his connection with the House of Fraser lobbying operation, Mr Al Fayed made the following statement:

"He asked for cash himself and I gave him all the papers on what Tiny Rowland was doing and all the files about those things. He mentioned exactly the same as Neil Hamilton, what he can do and all his connections. He said: `Fine, this is the payment, I would like to go and think about everything and I will let you know next week'. He called and said: `My arrangement is £50,000 and £5,000 every month if you want me to continue' and I said: `Thank you, do not do any work for me'. That was it."

277. It was not clear from this whether Sir Andrew had asked for an initial sum of £50,000 plus £5,000 per month, or whether - more probably - Mr Al Fayed had meant to refer to a total annual fee of £60,000, made up of £5,000 per month.

278. Documentary evidence found amongst the papers produced on discovery for the libel action lends some support to the allegations. An entry dated 16 February 1987 in the telephone message book in Mr Al Fayed's office at 60 Park Lane records Mr Greer as calling to say: "Andrew Bowden would like the meeting to be just you [Mohamed Al Fayed], AF [Ali Fayed] and Ian [Greer] - no lawyers." This refers to a meeting set up by Mr Greer for 18 February to introduce Sir Andrew to Mr Al Fayed as a new member of the lobbying team. The implication of the request to exclude legal advisers from the meeting, if true, might be that Sir Andrew wished to discuss in private the arrangements for his remuneration for the work he was about to undertake for Mr Al Fayed.

279. Mr Webb was cited by Mr Al Fayed as a witness to the taking of cash by Sir Andrew and his demand for a large consultancy fee. Mr Webb told the inquiry in his written statement[104] that when Sir Andrew's introductory meeting with Mr Al Fayed was over he had asked to be briefed thoroughly by Mr Webb on the issues involved in the dispute between House of Fraser and Lonrho. Sir Andrew had told him that he would be using a constituent, Mr Michael Land, a former employee of Lonrho, to assist him in the work for Mr Al Fayed. At the briefing meeting Mr Webb met Mr Land and "was not impressed" by him.

280. Mr Webb's statement continued as follows:

"Sometime later, I asked Mr Al Fayed what was happening with Andrew. He told me that we would not be using him as he [Sir Andrew] had asked Mr Al Fayed for £50,000 a year. Sir Andrew had said that his fee would have to be pitched at that level to allow for the involvement of Mr Land. Mr Al Fayed told him it was excessive, I am told, and that was the end of Andrew's role. Mr Al Fayed subsequently told me that he had paid £5,000 to Andrew for his initial work".

281. Mr Webb stated in oral evidence, however, that he had not known about any financial arrangement involving Sir Andrew before learning about it from Mr Al Fayed and had not therefore witnessed the £5,000 being handed over.[105]

282. Mr Webb continued that any suggestion, such as had been attributed to Sir Andrew in the press, that Mr Land's financial arrangements were to be negotiated directly by him (Sir Andrew) with Mr Webb, was untrue. According to Mr Webb there had never been any discussion of the possibility that Mr Land would be paid direct by Mr Al Fayed for his services. Rather, if Sir Andrew concluded a consultancy agreement with Mr Al Fayed, it was assumed that any fee would cover expenses, including any payments to Mr Land.

283. Mr Webb added that he remembered asking Mr Greer for his understanding of the circumstances in which Sir Andrew had parted company with Mr Al Fayed. Mr Greer replied, according to Mr Webb's account, that Sir Andrew had been "too greedy".

THE EVIDENCE AGAINST THE ALLEGATION (£5,000 IN CASH AND A DEMAND FOR £50,000)

284. In his written statement,[106] Sir Andrew denied the allegations concerning cash payments as follows: "I did not receive any remuneration or material benefit for my help and support for Mr Al Fayed or Mr Greer."

285. In his oral evidence, Sir Andrew repeated that denial and added, for the avoidance of doubt, that he had never asked Mr Al Fayed for any money on his own behalf.[107] He acknowledged, however, that Mr Al Fayed might have confused a request for a payment for himself (ie. Sir Andrew) with the possibility of some form of remuneration for Mr Land, who, Sir Andrew confirmed, did have a financial arrangement with Mr Al Fayed.

286. Sir Andrew's version, set out in his written statement, of his introduction to Mr Al Fayed was that in mid-February 1987 he attended, at Mr Greer's suggestion, a meeting at 60 Park Lane at which "a number of his advisers and other Members of Parliament" were present.

287. Counsel to the inquiry took up the apparent discrepancy between Sir Andrew's description of the initial meeting and the telephone message suggesting that those present should be strictly limited to the Al Fayeds and Mr Greer, with "no lawyers". Sir Andrew insisted initially that his recollection remained that there had been a meeting with Mr Al Fayed attended by other Members of Parliament; that this was the meeting he had referred to in his statement; and that it must therefore have taken place before 18 February.

288. Counsel pointed out to Sir Andrew that there was no contemporaneous documentary evidence of any meeting at that period with Mr Al Fayed, other than on 18 February. After being invited to consult his diary for 1987 Sir Andrew accepted that it recorded a meeting on 18 February at 60 Park Lane. In the light of that evidence, Sir Andrew believed that this must have been the occasion he was seeking to recall which had involved other Parliamentary colleagues and legal advisers. At all events, he was certain that this was the first time he had met Mr Al Fayed - indeed it was the only visit he ever made to 60 Park Lane.

289. Counsel then asked Sir Andrew how he explained the telephone message requesting "no lawyers". Sir Andrew replied that he could not remember having left any such message, but that, if he had, it could only have been because, in any discussions about the possible role to be played by Mr Land, he wished to protect the position of his constituent in view of his "somewhat chequered business life".[108]

290. In a subsequent letter, dated 25 February 1997, Sir Andrew stated that, "after further prolonged study of my papers and records", he now recognised that he had been mistaken in claiming that the meeting on 18 February 1987 had been attended by other Members.

291. Asked about the reasons for his departure from the Al Fayed camp, Sir Andrew said that the probable explanation was that when Mr Land fell out with Mr Al Fayed's advisers, he (Sir Andrew) had suffered the backlash. As Sir Andrew put it: "It may be ... that because of what had happened with Michael Land and because of my association with him it was then indicated to Ian Greer that perhaps it would be better if I was not continuing in any way to be involved or told about informal meetings, or whatever it may be, and therefore phased out, if you like."

292. I obtained a statement from Mr Land[109], who told me that he had never himself met Mr Al Fayed and therefore never had any financial relationship with him directly. Mr Webb had explained to him that he personally would not be involved in the arrangements for remunerating Mr Land, but that he (Mr Land) would be contacted in due course. A few days later, following a telephone call, he collected an envelope from the reception desk at Harrods' South Street offices, which contained £500 in £20 notes. Over the next three months, three further payments totalling £1,500 were made to him by the same method. He had offered Sir Andrew a commission fee, but this had been declined.

293. As regards the factors which brought his association with House of Fraser to an end, Mr Land cited an increasing unease on his part about the role he was being asked to play and, more particularly, a break-down in trust with Mr Webb.

294. In his oral evidence,[110] Mr Greer rejected the comment attributed to him by Mr Webb to the effect that Sir Andrew had, in Mr Greer's words, been `sacked' for being too greedy in his financial demands on Mr Al Fayed. In fact, according to Mr Greer, it had been on Mr Webb's initiative that he, Mr Greer, had informed Sir Andrew that Mr Land's services were no longer required. (In a subsequent note,[111] Mr Greer stated that his use of the word `sacked' was a reflection of the message he had been asked to convey to Sir Andrew; it was not intended to imply that Sir Andrew had been employed by Mr Al Fayed).

295. Mr Greer did not, however, support Sir Andrew's possible explanation of the "no lawyers" request for the 18 February meeting, namely that he wished to discuss sensitive matters relating to Mr Land's background with Lonrho. Mr Greer appeared to find this very implausible.[112]

THE EVIDENCE IN SUPPORT OF THE ALLEGATION (THE £5,319 ELECTION DONATION)

296. The question of the payment of a cheque for £5,319 from IGA to Sir Andrew Bowden was touched upon in the earlier section of the report dealing with the allegations relating to a "slush fund" for Members operated by Mr Greer using money provided to him by Mr Al Fayed. The fact that the cheque was received by Sir Andrew directly, or indirectly through his local party, was not denied; it was the purpose of the payment which was disputed.

297. The Guardian claimed that this was, in effect, a payment for services rendered, or to be rendered, on behalf of Mr Al Fayed. Mr Al Fayed himself made clear his own assumption that all the money paid by him to Mr Greer over and above his annual consultancy fee was destined for the Members he regarded as forming part of his team. Moreover, Mr Al Fayed insisted that this payment (the £5,319) was quite separate from the £5,000 in cash he claimed he paid direct to Sir Andrew.

298. The offer by Mr Greer of financial assistance to Sir Andrew's campaign funds appears to have originated from conversations between the two men in the early part of 1987. A letter to Sir Andrew, dated 3 April 1987, from his agent, Mr George McGowan (which was attached to Sir Andrew's statement and which Sir Andrew claimed to have found amongst "a large pile of papers ... in relation to Mr Al Fayed"[113]) referred to "the generous offer of assistance you have received". The letter went on to examine what office equipment could be purchased with the funds which had been promised, and items totalling £5,320 were suggested for consideration. Later in his letter Mr McGowan said to Sir Andrew: "Much as it would be nice to use up all the funds offered, I don't see much point in acquiring office equipment which we would not need, when, oddly enough, we could get all that we needed for a little less". This clearly implied that the figure of £5,320 represented somewhere near the total funds available and that, consequently, Mr Greer's offer of about £5,000 was on the table by, at the latest, the end of March 1987.

299. Sir Andrew stated that he had enjoyed assistance, in terms of personnel, from Mr Greer in relation to other election campaigns; but he acknowledged[114] that he had not received any significant financial contributions from Mr Greer, other than in 1987. Sir Andrew also accepted that he was not involved, at that time, in advising or promoting the interests of IGA clients other than Mr Al Fayed.[115]

300. However, at about this time, Sir Andrew, who had only joined the House of Fraser lobbying team in mid-February 1987, was active in a number of ways on behalf of Mr Al Fayed.

301. Principally, this activity consisted of:

- a letter to the Secretary of State for Trade and Industry dated 23 March;

- four questions for written answer, tabled on 23 March;

- a letter to the Home Secretary, dated 25 March;

- agreeing, on or about 2 April, to attend a meeting organised by Mr Greer on 9 April;

- two questions to the Secretary of State for Trade and Industry for written answer on 10 April;

- a further question for written answer shortly after 10 April 1987.

302. The payment to Sir Andrew of £5,319 was by some margin the largest election campaign donation made by Mr Greer from the money provided by the Al Fayeds. The next largest was £2,000, to a single association, but the great majority were for £500. It also exceeded by a significant margin the figure of £4,426 given by Sir Andrew for his total election expenditure for 1992, as declared in his statutory return.

THE EVIDENCE AGAINST THE ALLEGATION (THE £5,319 ELECTION DONATION)

303. Sir Andrew denied any impropriety arising from the gift of £5,319 and, in particular, rejected any suggestion that it was in some way linked to the work he was carrying out on behalf of Mr Al Fayed. In his oral evidence[116] he declared: "As far as I am concerned, it was wholly unconnected and I had no knowledge that it came as a result of money given by Mr Al Fayed to Mr Greer ...".

304. Mr Greer accepted that, although - as previously indicated[117] - Sir Andrew had at previous elections "had the benefit of quite a number of my staff down to help him in the run-up to the election period", he had never, before 1987, received a cash payment of such a size (or, indeed, any financial assistance). The reason for his particular generosity towards Sir Andrew in 1987 was that the two had "got to know each other perhaps a little better. He [Sir Andrew] had done one or two things with clients and one or two other things to help me". He had been persuaded by Sir Andrew that his local party organisation urgently required an injection of modern office equipment in order to function efficiently.

305. But Mr Greer denied that there was any direct relationship between the timing of the donation and the pattern of Sir Andrew's lobbying activity during the period just before the election. He told the inquiry: "... it is unfortunate that the dates coincide in the way they do, but I would ask you not to draw any conclusion from that at all, it is entirely coincidental".[118]

306. It was also put to the inquiry that, although the offer of financial assistance appeared to have been made in late March or early April 1987, payment was not made until July, by which time Sir Andrew's period of activity in support of House of Fraser had almost come to an end.

102 See para 130. Back

103 Q 473. Back

104 See Appendix 97. Back

105 Q 1769, 1770 and 1788. Back

106 See Appendix 62. Back

107 Q 1239. Back

108 Q 1248. Back

109 See Appendix 116. Back

110 Q 1441 and 1452. Back

111 Q 1441 (witness's note). Back

112 Q 1395-1400. Back

113 Q 1209. Back