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