Select Committee on Standards and Privileges First Report



Mr Hamilton's Credibility

  506. It was claimed by both Mr Al Fayed and The Guardian that Mr Hamilton's own credibility and character had been seriously damaged by a series of statements and actions on his part. These are set out in the following paragraphs.

  507. In his letter to the editor of The Guardian in October 1993[227] Mr Hamilton claimed that he did not originally meet Mr Al Fayed through Mr Greer since he had already been introduced to him a year or so previously by Sir Peter Hordern. Sir Peter, in his oral evidence[228], contradicted Mr Hamilton's account. He speculated that Mr Hamilton might have found himself on the same guest list for a lunch attended by Mr Al Fayed, but denied that he, Sir Peter, had been responsible for effecting an introduction.

  508. Mr Hamilton repeated his own version of these events when questioned by the Cabinet Secretary in October 1994. However, in his submission to the inquiry Mr Hamilton revised his original statements, saying that his "first connection with the Al Fayeds was a telephone call ... received on or about 29 October 1985 from Ian Greer".

  509. The Guardian claimed that the following statements in Mr Hamilton's October 1993 letter to Mr Preston had also been shown to be untrue and had been known by Mr Hamilton to be false at the time he made them:

    -    that Mr and Mrs Hamilton had been invited by Mr Al Fayed to use his private rooms at the Ritz in 1987 (thus lending support to Mr Hamilton's claim that the stay was akin to spending time with a friend and therefore not a registrable benefit), when no such private rooms existed at the hotel - a fact confirmed by Mr Al Fayed;

    -    that no bill had been tendered to Mr Hamilton at the end of the Ritz stay since no payment was expected; in fact a bill had been produced and Mr Hamilton had signed it;

    -    that Mr Hamilton had taken "no part of any kind in House of Fraser/Fayed" matters since he joined the Government in July 1990 - "in fact not since the summer of 1988"; the true position was that he had continued, throughout the rest of 1988 and 1989, to engage in activities of a Parliamentary or other nature which were either directly supportive of Mr Al Fayed or which indirectly protected his interests by attacking Lonrho;[229]

    -    that Mr Hamilton had "almost as soon as [he] arrived at the DTI" and "on [his] own initiative" removed himself from any decisions relating to Mr Al Fayed; in fact Mr Hamilton had not taken this action until he had been in post for about two months and had already replied to a Parliamentary question about the conduct of the Inspectors' inquiry into House of Fraser, as well as dealing with one or two issues relating to Lonrho in what the Permanent Secretary at the DTI described as an "impartial manner".

  510. In brief, Mr Hamilton's position in relation to these charges of untruthfulness was:

    -    that Mr Al Fayed's original invitation to him to stay at the Ritz had been expressed as though it related to the use of rooms in the hotel which were at the personal disposal of Mr Al Fayed and that the offer was made on the basis of friendship rather than a business relationship;

    -    that although a bill had been signed by him this was purely for internal accounting purposes;

    -    that although there had been contacts with Mr Al Fayed after the summer of 1988 and he had taken a certain amount of Parliamentary action, mostly of an anti-Lonrho nature, his involvement in the lobbying operation was significantly reduced and there were no delegations to Ministers on House of Fraser issues;

    -    the Parliamentary question he answered had raised no policy issues and he had accepted the advice of officials about the wording.

The Telephone Conversation with Mr Heseltine

  511. In October 1994, in the course of the Cabinet Secretary's investigation[230] into the allegations against Mr Hamilton and other Ministers which had been conveyed to the Prime Minister through an intermediary, the President of the Board of Trade, Mr Michael Heseltine, asked Sir Robin whether it had been put to Mr Hamilton that, whilst he might not have received money from Mr Al Fayed - either directly or through Mr Greer - this did not exclude his having had some other form of financial relationship with Mr Greer. Sir Robin pointed out that both he and the Chief Whip had asked Mr Hamilton whether there was any other interest he had not declared or anything else of which he was aware which could be of embarrassment to the Government; Mr Hamilton had said that there was not.

  512. According to the minute by Sir Robin which was attached to his draft report to the Prime Minster, Mr Heseltine had put the same point himself to Mr Hamilton over the telephone. Sir Robin's minute continued: "Mr Hamilton has given him [Mr Heseltine] an absolute assurance that he had no financial relationship with Mr Greer." It was on the basis of this assurance that it had been concluded that it would have been unjust to insist on Mr Hamilton's departure from the Government. (In the event, Mr Hamilton did resign his ministerial post a few days later for separate, albeit related, reasons).

  513. It was alleged by The Guardian that in giving this assurance to Mr Heseltine, Mr Hamilton had lied since he knew that in 1988 and 1989 he had been in receipt of two commission payments totalling £10,000 from Mr Greer for introducing new business to IGA. In The Guardian's view, these payments to Mr Hamilton created a financial relationship with Mr Greer which fell squarely within the scope of the question put to him by Mr Heseltine.

  514. In response to this charge, Mr Hamilton made a number of points:

    -    that the conversation with Mr Heseltine had been conducted over the telephone in fraught circumstances, with Mr Hamilton speaking from a noisy room and under siege by a large crowd of press and other media representatives;

    -    that at the time he had understood the question put to him by Mr Heseltine to be whether he [Mr Hamilton] had had the sort of financial relationship with Mr Greer which could be interpreted as meaning that Mr Greer was acting as a conduit for payments to him from Mr Al Fayed;

    -    that he had not mentioned to Mr Heseltine the commission payments he had received from Mr Greer because, although he did not believe he had done anything improper in accepting them, politics was "a rough game" and they might "be used as a very big stick" with which to beat him - ultimately bringing about his resignation as a Minister;

    -    that it "was a matter of timing" when to disclose the payments and that there had been no intention on his part to mislead Mr Heseltine;

    -    that, in any case, the receipt of two commission payments did not constitute a financial relationship with Mr Greer of the kind he understood to be implied in Mr Heseltine's question, any more than a reader of The Guardian who bought two copies of the newspaper had a financial relationship with its editor.[231]

  515. In order to ascertain his recollection of the conversation with Mr Hamilton, I obtained a statement[232] from Mr Heseltine. He told me that his concern had been to establish "whether Mr Hamilton had had any financial relationship with Mr Greer which might have put him under an obligation to him". He added: "I did not have to consider at the time what might or might not constitute a financial relationship because the reply I received was `no'. I did not ask any further questions, because the answer was unqualified".

  516. The Guardian challenged Mr Hamilton's explanation as to why he had misconstrued the thrust of Mr Heseltine's question. They emphasised the fact that essentially the same point about a possible financial relationship with Mr Greer had already been put to Mr Hamilton separately by both the Cabinet Secretary and the Chief Whip. There was therefore no excuse for Mr Hamilton to be unaware of the precise nature of the confirmation being sought from him by Mr Heseltine concerning Mr Greer. In any case, The Guardian argued, if Mr Hamilton had had any doubt about the substance of his answer to Mr Heseltine or any anxiety that he might not have explained himself sufficiently clearly to ensure that his position was accurately understood, he had had ample time to correct or amplify his statement.

  517. The Guardian also claimed that Mr Hamilton's failure to register the commission payments from Mr Greer, as well as certain benefits received from Mr Al Fayed, including the stay at the Ritz in 1987, was further evidence of his dishonesty.[233]

227  See Appendix 13 (attachment). Back

228  Q 955. Back

229  See para 400. Back

230  See paras 12 and 18. Back

231  Q 1894. Back

232  See Appendix 91-2. Back

233  The specific examples relating to non-registration of benefits by Mr Hamilton are examined at paras 546-586 and 588-616. Back

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Prepared 8 July 1997