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.)

Mr Hamilton

344. The allegations against Mr Hamilton within this category of complaint are broadly similar to those against Mr Smith, namely that he accepted, over a period of about eighteen months to two years beginning in May or June 1987, a series of cash payments from Mr Al Fayed in return for lobbying services on behalf of House of Fraser. The principal differences with Mr Smith's case are, first, that it is claimed that Mr Hamilton also received Harrods vouchers and, second, that Mr Hamilton denies the allegations.

345. In common with Mr Smith, Mr Hamilton was an officer (vice-chairman) of the Conservative Trade and Industry Committee throughout most of the timescale covered by the allegations (June 1987 to 1990). (The exception was the period from October 1986 until the 1987 general election during which Mr Hamilton was a Parliamentary Private Secretary). Mr Hamilton himself accepted that his leading position in the Committee was a significant asset to the House of Fraser lobbying group and probably the main reason why he was recruited by Mr Greer.[139]

THE EVIDENCE IN SUPPORT OF THE ALLEGATIONS CONCERNING MR HAMILTON

a) Mr Al Fayed

346. The principal evidence in support of these allegations was Mr Al Fayed's first hand account, set out both in his written submission to the inquiry and, previously, in his statement to the Select Committee on Members' Interests in December 1994.

347. The process by which the payments came to be made was described in Mr Al Fayed's submission:[140] "Mr Hamilton would make clear how much time he was spending on House of Fraser's behalf. Mr Al Fayed took these entreaties to be thinly veiled requests for compensation and Mr Al Fayed would oblige Mr Hamilton, giving him cash sums or Harrods vouchers. Mr Hamilton would also occasionally call Mr Al Fayed's office and ask if an envelope was ready for his collection. On these occasions, money would be placed in an envelope for Mr Hamilton's collection".

348. In oral evidence, Mr Al Fayed elaborated on the circumstances in which Mr Hamilton had initiated the question of payment. The first reference to this possibility had occurred in the context of the appointment of DTI Inspectors and the added workload this had generated.[141] Mr Al Fayed was also clear that Mr Hamilton had brought up the subject of payment before Mr Smith did so.[142]

349. The cash payments were in tranches of £2,500 consisting of bundles of £50 notes, whilst the vouchers varied in value between £1,000 and £3,000, in £100 denominations.

350. The dates on which payments are alleged to have been made were set out in a schedule included in Mr Al Fayed's statement to the Select Committee on Members' Interests in 1994. This showed an initial cash payment on 2 June 1987, followed by two further cash payments in June and July 1987; three further cash payments in February, July and October 1988; a payment of a Harrods voucher in December 1988; a cash payment in January 1989; two payments of Harrods vouchers in February 1989; a cash payment in July 1989; and a final payment of a Harrods voucher, in November 1989. The total value of the alleged payments in cash or vouchers, was £28,000.

351. The process by which the schedule came to be drawn up by Mr Al Fayed's solicitors, and in particular the matching of payments to specific dates, was described in an earlier section of the report.[143] It is not Mr Al Fayed's contention that a payment was made to Mr Hamilton on each occasion on which they met, but only if they were alone together. It follows, therefore, according to Mr Al Fayed, that if a meeting recorded in his diary as being solely with Mr Hamilton was in fact attended by some other person, no payment would have been made.

352. Nor does Mr Al Fayed allege that money was passed to Mr Hamilton on every occasion when they met alone. In oral evidence Mr Al Fayed stated: "maybe two or three times I did not give him any cash".

353. There were, according to Mr Al Fayed, two main methods of payment from him to Mr Hamilton:[144]

- direct from Mr Al Fayed in person;

Mr Hamilton's

354. The fact that the second of these payment methods was not referred to in Mr Al Fayed's witness statement for the libel action was put down by him to the difficulty of recalling the precise details of what happened after ten years.[145] But he insisted that the basic thrust of the allegation - that Mr Hamilton received payments of cash or vouchers - was true.

355. A third method, the delivery of cash to Mr Hamilton, was mentioned in the written statement of Alison Bozek and was pursued in the course of oral evidence, on the basis of documents (in the form of telephone message book entries) suggesting this as a possible further payment route.[146]

356. Asked by Counsel to the inquiry about the reasons for his - by most business standards - unconventional habit of carrying around large quantities of bank notes and vouchers in his briefcase, Mr Al Fayed replied: "... it is different for someone like me employing thousands of people. I have sudden arrangements of travel, commitments, three homes, families; all the time I want to be in a position of cash which I can use for all types of purposes ... It is just a practicality to facilitate my life".

357. The significance of the date of the last of the alleged payments to Mr Hamilton, November 1989, appears to be that it marked the gradual tailing off in the long campaign to influence the contents of the Inspectors' report, or the method and timing of its publication. In that context, Mr Al Fayed accepted the summary of the position given by Counsel to the inquiry: "You paid him money over a lengthy period and then you stopped paying because there was now no reason to pay any more".[147]

358. In addition to cash payments and vouchers, Mr Hamilton is also alleged by Mr Al Fayed to have accepted certain benefits in kind, including a stay at the Ritz Hotel in Paris. These allegations are dealt with in a separate section of the report.[148]

b) The Guardian

359. Although The Guardian is not a first-hand witness to the payment of cash to Mr Hamilton, it can, through its journalists' evidence attest to the facts that:

- Mr Al Fayed was making the basic allegations concerning Mr Smith and Mr Hamilton as far back as the summer of 1993;

Mr Smith

c) Mr Smith

360. The example of Mr Smith is relevant to Mr Hamilton's position in other respects also:

- both Mr Smith and Mr Hamilton were officers of the Conservative Party Trade and Industry Committee during the period covered by the allegations;

Parliamentary

Sir Michael Grylls

Sir Peter Hordern

- Mr Smith's acceptance of cash, handed over in envelopes, coupled with Mr Land's[

149

d) Mr Royston Webb

361. The evidence of Mr Royston Webb, although second-hand in the sense that he was not present when cash was handed over or collected, is nonetheless of some interest - not least because he was originally proposed as a witness to the inquiry by both Mr Hamilton and Mr Greer.[150]

362. Mr Webb is a qualified barrister and chartered secretary who joined Mr Mohamed Al Fayed's organisation, in the capacity of general counsel, on 1 September 1985, shortly after the take-over of House of Fraser by the Al Fayeds. Until his retirement on 30 September 1996, he worked directly for Mohamed Al Fayed, but also had frequent contact with his brother, Ali. Mr Webb was a director of all the main companies in the group and until July 1993 was also on the board of House of Fraser. He is currently retained as a consultant by Mr Al Fayed.

363. In his written statement[151], Mr Webb declared that while he had been shocked to read of Mr Smith's admission to having accepted cash from Mr Al Fayed, he had not been "at all surprised" by the publication of similar allegations against Mr Hamilton. He explained this remark by reference to an occasion on which Mr Hamilton had visited Mr Al Fayed and had given him a pair of House of Commons cuff-links. Afterwards Mr Al Fayed had scoffed at this present, with words to the effect that he had given Mr Hamilton "thousands of pounds" and all he had received in return was "a pair of cheap cuff-links".

364. In his oral evidence[152], Mr Webb stated that although he had heard other references by Mr Al Fayed to the fact that he was paying Mr Hamilton, the incident with the cuff-links had stuck in his mind, not least because Mr Al Fayed had subsequently given them to him. (Indeed Mr Webb told the inquiry he still had the cuff-links and occasionally wore them.)

e) Corroboration

(i) Alison Bozek

365. Ms Alison Bozek was until September 1994 employed as a personal executive assistant in Mr Al Fayed's 60 Park Lane office. In her witness statement prepared for the libel action, Ms Bozek said that she had first met Mr Hamilton in about 1987 when he visited Mr Al Fayed at the Park Lane office. Such visits usually occurred "once every four to six weeks", although there were times when they might have been "as frequent as once a week".

366. According to Ms Bozek, Mr Hamilton telephoned the office on numerous occasions "to enquire whether Mr Al Fayed had an envelope ready for him". If no envelope was ready, she would inform Mr Al Fayed who, in her presence, would place cash in an envelope to arrange for delivery to Mr Hamilton or for his collection from the reception desk at 60 Park Lane. Sometimes, according to Ms Bozek, Mr Hamilton would telephone "at very short notice" to say that he would be "stopping by" to pick up his envelope.

367. In her oral evidence Ms Bozek elaborated on the reference in her witness statement to the preparation of envelopes for collection or delivery to Mr Hamilton She explained that when Mr Hamilton spoke of "a letter" or "an envelope" this was not always code for "cash", but could sometimes mean documents. If payment was the real purpose behind a request for an envelope, this would sometimes be hinted at at the time of the telephone call, but on other occasions it would be necessary to ask Mr Al Fayed whether or not a bundle of notes should be prepared.[153]

368. Ms Bozek also emphasised the fact that diary entries and message books gave only a limited idea of the pattern of meetings between the Members concerned and Mr Al Fayed. There were two reasons for this incompleteness:

- Mr Al Fayed sometimes made appointments on his own authority and forgot to inform his office staff, so that no entry ever appeared in the diary;

154

369. Of Mr Smith, Ms Bozek said that she thought that he had come to 60 Park Lane but she had not personally been involved in the making or preparation of payments to him.

370. Asked whether the alleged payments to Mr Smith, Mr Hamilton and Sir Andrew Bowden formed part of a wider pattern involving other associates of Mr Al Fayed, Ms Bozek answered: "I do not remember large payments to anybody else". She added, however, that Mr Al Fayed was generous with tips and it was not unusual for him to give, for example, a hotel manager £500 or £1,000 if the service had been of a high standard. Pressed further to recall whether payments larger than £1,000 had been made to people other than the Members named in the allegations, she stated that in order to answer the question properly she would have to look at past records, including message and meeting books.[155]

371. But, according to Ms Bozek, it was precisely the fact that Mr Hamilton was a Member of Parliament which caused his acceptance of cash payments to stand out in her memory.

372. Although she had never personally handed cash to Mr Hamilton, she had on numerous occasions either placed money in an envelope to Mr Al Fayed's instructions or watched as he did so.

373. It was put to Ms Bozek that her account of the methods by which Mr Hamilton received cash - either by collection from the reception desk at 60 Park Lane or by delivery to his home - was inconsistent with paragraph 4 of Mr Al Fayed's witness statement, which spoke only of payments being made at face to face meetings.

374. Ms Bozek replied that she had not previously seen Mr Al Fayed's witness statement,[156] but she did not see any discrepancy between it and her own evidence. It merely indicated that Mr Hamilton had taken more money than she had appreciated, if account was taken of the additional payments made at meetings when the two men were alone.[157]

(ii) Iris Bond

375. Ms Iris Bond is employed as a personal secretary in Mr Al Fayed's office at 60 Park Lane. Her statement, prepared originally for the libel action, concurred in its essentials with that of Ms Bozek, so far as Mr Hamilton was concerned. She added that telephone calls would also be made by Mrs Hamilton to arrange meetings between Mr Al Fayed and her husband. On several occasions prior to a meeting with Mr Hamilton, Mr Al Fayed would make a remark to the effect that "he was coming to collect his money" and would prepare, in Ms Bozek's presence, an envelope containing a bundle of notes to the value of £2,500.

376. Ms Bond also recalled an occasion when Mr Al Fayed telephoned her from Harrods and told her to bring £5,000 in cash, as he was expecting to meet Mr Hamilton there.

377. In oral evidence, Ms Bond was as reluctant as Ms Bozek to comment, without first consulting the records, on the possibility that cash payments had been made to other people of a size comparable with those alleged to have been received by Mr Hamilton.[158]

378. As to the frequency of payments, Ms Bond thought that the average would have been one a month, spread over a period of about a year. She could not, however, be more precise since no record of such payments was kept for accounting purposes.

(iii) Philip Bromfield

379. Mr Philip Bromfield is the security doorman at 60 Park Lane. Mr Bromfield, in his witness statement for the libel action, recalled seeing Mr Hamilton entering 60 Park Lane, announcing himself and asking to see Mr Al Fayed. On at least two occasions when Mr Bromfield was on duty at the front desk, an envelope was brought down to him from Mr Al Fayed's office and he was informed that Mr Hamilton would call to collect it. Mr Bromfield's statement continued: "On each of three occasions, Mr Hamilton personally came to the front desk and told me his name, and then asked me if I had an envelope for him. Because I recognised Mr Hamilton, I would hand over the envelope to him".

380. In her own evidence[159] Ms Bond had indicated her understanding that the records kept at the security desk would have noted the fact that an envelope was to be picked up and the person by whom, or on whose behalf, it was to be collected. Once the envelope had been collected, that fact, together with the time, would be recorded.

381. Mr Bromfield confirmed that this was, broadly, the system which operated, but he doubted whether the relevant security records would still be in existence some ten years later. Mr Al Fayed's solicitors subsequently confirmed that the books had, indeed, been destroyed in line with normal practice for that kind of document.

382. Counsel to the inquiry asked Mr Bromfield why, out of all the people who crossed his path, he particularly remembered Mr Hamilton (and Mr Greer)[160] in the context of visits to 60 Park Lane to collect envelopes. Mr Bromfield explained: "If they come to see Mr Al Fayed, I make it my duty, I suppose, to recognise these people so that the next time they come, if there was a next time, I would recognise them and their entry would be a bit quicker ... I would not have to stop them". He added that the collection of an envelope was a relatively infrequent occurrence in comparison with the total number of visitors to 60 Park Lane.

383. Mr Bromfield accepted that, whilst he could attest to the fact that envelopes were brought down to the front desk and subsequently collected by Mr Hamilton, he had no knowledge of their contents. But he did not recall the envelopes as being bulky, and certainly not the size of a parcel.[161]

139 Q 1962. Back

140 See Appendix 5, para 40. Back

141 Q 670. Back

142 Q 589. Back

143 See para 191. Back

144 ie. as opposed to via Mr Greer. Back

145 Q 779. Back

146 See paras 390-392. Back

147 Q 700. Back

148 See paras 546-578. Back

149 See para 279. Back

150 See Appendix 33, para 85 and Appendix 73. Back