Select Committee on Standards and Privileges First Report



3) Other Payments and Benefits received by Members from Mr Al Fayed

a) Harrods Gift Vouchers

  539. A further aspect of the allegations of payments to Mr Hamilton in return for lobbying on behalf of Mr Al Fayed is that he received Harrods gift vouchers.

  540. This allegation relates only to Mr Hamilton and not to the other Members alleged to have taken cash, Mr Smith and Sir Andrew Bowden. It was first made by Mr Al Fayed in the letter he sent to the Select Committee on Members' Interests through his solicitors, D J Freeman, in December 1994. The schedule of dates and payments contained in this letter included, in addition to cash sums, four references to Harrods gift vouchers having been handed over, totalling on each of two occasions £1,000 and on two others, £3,000 each.

  541. This strand of the allegations against Mr Hamilton was then picked up in Mr Al Fayed's witness statement for the libel action, in which he claimed that "on occasion [Mr Hamilton] would broadly hint that he wanted `to go shopping'". Mr Al Fayed would take this as his cue to hand over gift vouchers to Mr Hamilton. The allegation was subsequently repeated in Mr Al Fayed's submission to the inquiry.

  542. Mr Al Fayed explained in his written submission[245] that there was no documentary evidence which would have enabled the origin and destination of individual vouchers to be traced. He added that although a system of numbered counterfoils had been introduced following the transfer of voucher administration from Glasgow to London in May 1991, no records covering vouchers issued prior to that date now existed.

  543. It was pointed out to Mr Al Fayed by Counsel to the inquiry that, whereas in his letter to the Select Committee he had spoken of the gift vouchers as having been denominated in £100 amounts, he appeared less certain in his oral evidence and mentioned larger figures - £500 or £1,000. Mr Al Fayed replied that while he stood by his previous evidence as to the total amount in vouchers handed over on each occasion, it was difficult to be precise about the breakdown of each sum. The evidence to the Select Committee had been given by him to the best of his recollection.[246]

  544. Ms Bond was not aware of any vouchers having been put in envelopes for Mr Hamilton's collection from 60 Park Lane and she thought it probable that these would have been handed over at Harrods. She recalled Mr Al Fayed occasionally remarking of Mr Hamilton "Oh God! Sometimes he likes the vouchers".[247]

  545. Mr Hamilton denied the allegations that he had received gift vouchers as vigorously as he had rejected those relating to cash payments. He pointed to the lack of corroboration by any witnesses other than Mr Al Fayed; the absence of any documentary evidence in the form of accounts or counterfoils; and the inconsistency in Mr Al Fayed's description of the way in which the vouchers had been denominated.

b) The 1987 Stay at the Ritz

  546. The stay by Mr and Mrs Mr Hamilton at the Ritz hotel in Paris in 1987 is relevant to two separate but related allegations against Mr Hamilton. The first is that it constituted a large benefit which was part of the overall remuneration from Mr Al Fayed for the lobbying services Mr Hamilton was providing in relation to House of Fraser. The second is that Mr Hamilton failed to register the benefit. (The question of non-declaration is examined in a separate section of the report).[248]

  547. The facts about the Ritz stay which are now accepted by both sides are:

    -    that a visit to the hotel by Mr Hamilton and other members of the lobbying group had been fixed for April 1987, but had been cancelled as a result of the decision by the Secretary of State for Trade and Industry to appoint Inspectors to investigate the House of Fraser take-over by the Al Fayeds;

    -    that, when it was re-scheduled, the stay involved six nights and lasted from 8 to 14 September 1987;

    -    that only Mr and Mrs Hamilton took part in this re-arranged stay;[249]

    -    that no expenditure in the hotel was charged to the Hamiltons;

    -    that Mr Hamilton signed a bill for the "extras" incurred but he was not asked to pay for them;

    -    that the Hamiltons were accommodated in a standard hotel room;

    -    that Mr Hamilton did not register the stay.

  548. It should be noted, however, that on two of these points Mr Hamilton's position has changed:

    -    in his letter to Mr Preston of October 1993 he had appeared to doubt the existence of a bill;

    -    in the same letter, Mr Hamilton had stated that the offer of a stay at the Ritz related to the use of Mr Al Fayed's "private rooms"; there was nothing elsewhere in the letter to suggest that the Hamiltons had, in the event, been accommodated in a normal hotel room. (This had remained Mr Hamilton's position in 1994 when he was questioned by the Cabinet Secretary).

  549. The thrust of Mr Al Fayed's allegation against Mr Hamilton was:

    -    that in September 1987 he had invited himself to stay at the Ritz and then abused Mr Al Fayed's hospitality;

    -    that this - at least in Mr Hamilton's eyes - luxurious holiday formed a part of his reward for furthering Mr Al Fayed's interests.

  550. Since there is no documentary evidence relating to the circumstances in which the Hamiltons' Ritz visit eventually came about (as opposed to the background to the earlier, cancelled trip to Paris), there is only the respective testimony of Mr Al Fayed and Mr Hamilton on which to base a judgement.

  551. Mr Al Fayed's account, as given in his oral evidence,[250] is that Mr Hamilton, having engineered, through Mr Greer, an invitation to the Ritz in April 1987 then decided, after that trip fell through, to seize the first available opportunity to reinstate it. According to Mr Al Fayed, Mr Hamilton had told him that he would be driving to the south of France for a holiday and would like to stay at the Ritz en route: "It was definitely at his [Mr Hamilton's] request I arranged that".

  552. The phrase in Mr Al Fayed's submission[251] to the inquiry that "Mr Al Fayed had extended the invitation to the Hamiltons" must therefore be taken to mean, if it is to be consistent with Mr Al Fayed's oral evidence, that the offer to Mr Hamilton of accommodation at the Ritz was the result of Mr Hamilton's initial prompting. This interpretation was borne out by Ms Bozek's oral evidence.[252]

  553. Mr Al Fayed also claimed that Mr Hamilton sought to stay again at the Ritz a week or so later, on his return journey to England. By this stage, Mr Al Fayed had concluded that Mr Hamilton was abusing his hospitality and instructed the hotel manager to indicate to Mr Hamilton that no accommodation was available.

  554. In a statement[253], the hotel manager, Mr Frank Klein, confirmed that some days after the Hamiltons had left on 14 September he had been handed a message by the hotel's reservations department which indicated that either the Hamiltons or someone acting on their behalf had rung to say they wanted to use the Ritz accommodation again on their way home. On Mr Al Fayed's instructions he had arranged for the reservations department to call the person who had left the message to say that the hotel was fully booked.

  555. Mr Webb told the inquiry[254] that he had heard from Mr Greer about this second request by Mr Hamilton. Mr Greer had recounted to him (Mr Webb) a conversation between Mr Greer and Mr Hamilton in which the latter had admitted to having telephoned the Ritz to try to obtain accommodation for the return journey to England and to having been surprised to be told it was full. Mr Hamilton had added that his wife had then rung the Ritz under an assumed name, to be assured that a double room was available.

  556. According to Mr Webb, during the same conversation with him, Mr Greer had expressed his anger with Mr Hamilton for "openly boasting to people that essentially he had taken [Mr Al Fayed] for a ride at the Ritz, that he and Christine had over-indulged, that they were having vintage champagne at breakfast and so forth". According to Mr Webb, Mr Greer had told Mr Hamilton not to be "such a bloody fool", the implication being that his behaviour was a potential embarrassment to Mr Greer in his dealings with Mr Al Fayed and other clients.

  557. This raises the question of the scale of the benefit derived by Mr Hamilton from the stay at the Ritz, which in turn requires some assessment of the expenditure he charged to the hotel's account.

  558. Mr Al Fayed put the total cost of Mr Hamilton's stay at £5,115 (at 1996 prices), made up of £2,105 for basic accommodation charges and £3,010 for meals, room service and other extras. Mr Hamilton was asked to sign a bill for everything but accommodation as a check for accounting purposes on the items actually consumed and the services received.

  559. Mr and Mrs Hamilton also had at their disposal the hotel manager's chauffeur-driven limousine, which they used on two or three occasions. In addition, Mr Al Fayed claimed that spending money of between £2,000 and £3,000 had been given to the Hamiltons. This was confirmed in oral evidence by Ms Bozek.[255]

  560. In his statement Mr Klein produced a day by day breakdown of the Hamiltons' stay and the value of the items charged to the hotel. This was based on his recollection and expert knowledge of the hotel's pricing regime, since the actual menus and room service tariffs for 1987 were no longer available. Mr Klein's analysis showed that the Hamiltons had taken all their meals, other than lunch on 11 and 13 September, at the hotel,[256] that many were ordered from room service, and that numerous additional items, such as laundry, parking, stamps, newspapers and telephone calls, were charged to Mr Al Fayed.

  561. Mr Klein expressed his distaste for the Hamiltons' conduct during their stay, declaring: "Certainly if I were staying as a guest of someone else, I would consider it appropriate to eat out sometimes during my trip so as not to be seen to be taking advantage of their hospitality".

  562. As further evidence of what he saw as over-indulgence on the part of the Hamiltons, Mr Klein cited the facts that:

    -    they several times opted to dine à la carte when there was a cheaper set menu alternative;

    -    they ordered the more highly priced items on the à la carte menu, including expensive wines;

    -    they consumed several items from their room's minibar which, on the basis of the prices, must have related to spirits, small bottles of wine, or champagne;

    -    they on one occasion sent hotel staff on errands to make purchases from a shop;

    -    they made use of one of the hotel chauffeurs, possibly to collect or deliver an item.

  563. Mr Hamilton disputed the allegations made against him relating to the Ritz stay in a number of respects.

  564. He claimed that on both occasions - in April and September 1987 - the original idea for the stay at the Ritz had come from Mr Al Fayed. In arguing this, Mr Hamilton relied on a letter dated 3 April 1987 to him from Mr Greer in which Mr Greer wrote: "As I am sure you know, last year Mohamed Al Fayed bought the Duchess of Windsor's home in the Bois de Boulogne, Paris. Mohamed thought that you and Christine may like to join him for a weekend in Paris, staying at the Ritz and visiting the Bois de Boulogne". The letter also spoke of Mr Al Fayed's "very kind offer" and cautioned Mr Hamilton that it was "in every way a private invitation".

  565. For his part, Mr Al Fayed disputed the interpretation of the letter as meaning that he had issued, unprompted, an invitation to Mr Greer to pass on to Mr Hamilton and the other members of the lobbying group. In writing such a letter, Mr Greer had, according to Mr Al Fayed, been acting without authority and presuming upon his generosity.

  566. So far as the visit in September 1987 was concerned, Mr Hamilton's strong recollection was that it was Mr Al Fayed who had "pressed" him to stay at the Ritz when he heard of the Hamiltons' plans to motor through France.[257]

  567. Mr Hamilton also denied having attempted to obtain the use of accommodation at the Ritz on his journey back to England. In this he was supported by Mr Greer, who had "no great recollection" of that aspect of the conversation with Mr Webb described in the latter's evidence.[258]

  568. As regards the extent of any benefit he derived from the Ritz stay, Mr Hamilton rejected categorically, as with the other allegations of cash payments made against him by Mr Al Fayed, that he had received £2,000 to £3,000 of spending money for the trip to France.

  569. He did not believe that he had taken advantage of Mr Al Fayed's hospitality - his understanding of the invitation was that he should feel free to make full use of the hotel and its facilities. The scale of the bill reflected the fact that the Ritz was an expensive place to stay. However, the cost to Mr Al Fayed was comparatively modest. He added that if Mr Al Fayed had really resented his conduct at the hotel, it was strange that he had - if the allegations were to be believed - continued to pay Mr Hamilton for over a year afterwards.

  570. Mr Al Fayed's reply to the latter point was that although he had felt annoyed by Mr Hamilton's behaviour, this was not a reason to discontinue the arrangement from which both parties benefitted, whereby Mr Hamilton promoted the interests of House of Fraser and Mr Al Fayed paid him for his services.

  571. Mr Hamilton accepted[259] that he had "talked freely" on his return about his visit to the Ritz because it had been "a very exciting experience". But to describe this as "boasting" would be a distortion. He denied[260] ever having been taken to task by Mr Greer for the expansive way in which he had described the hotel stay to colleagues.

  572. On this aspect of his evidence, however, Mr Hamilton was contradicted by Mr Greer[261] who, whilst eschewing the description of Mr Hamilton's conduct as "boasting", conceded that he (Mr Hamilton) had been prone over the years to "recount stories and tales" in a way that could have been interpreted, as far as Mr Al Fayed was concerned, as taking his generosity for granted. Mr Greer said that whilst he may not have used precisely the term "bloody fool" to refer to Mr Hamilton, "at the end of the day those possibly were my sentiments".

  573. Mr Greer made clear that his reaction was governed by commercial rather than ethical considerations: "I was looking after Mr Al Fayed. He was my client. I respected him and it was important, therefore, to me that anyone who was having an association with him to a lesser or greater extent also saw him in that light".

  574. Mr Hamilton's failure to disclose the Ritz stay in the Register of Members' Interests is a matter of record and was the subject of an investigation by the Select Committee on Members' Interests in 1995.

  575. In his submission to this inquiry Mr Hamilton repeated broadly the same justification for not registering the stay as he had offered to the Select Committee. In essence, this was:

    -    that the visit to the Ritz was a private arrangement, not comparable to a situation where a Member stayed at a hotel and had his expenses defrayed by a third party;

    -    that the bills recording the room and service charges represented a purely notional transaction, since the hotel was owned by Mr Al Fayed;

    -    that the rules relating to the registration of hospitality were less clear in 1987 and that, since then, the Parliamentary climate had changed, leading Members to "become more self-critical in their analysis of what is properly registrable".[262]

  576. Since, in his defence, Mr Hamilton also drew attention to the Select Committee's own acknowledgement of a degree of ambiguity in the rules as they stood in 1987, it is relevant to quote the main conclusions of the Committee. These were:

    -    that whilst the registration form in use in 1987 made no explicit reference to gifts and hospitality, it was clear from the introduction to the annually published Register that every Member was under a general obligation "to provide information of any pecuniary interest or other material benefit which ... might be thought[263] to affect his actions, speeches or votes in Parliament";

    -    that whilst certain aspects of the original rules were "not free from ambiguity", it had always been open to any Member to consult the Registrar or seek the opinion of the Committee;

    -    that even if it were true that Members had, in the past, been more relaxed in their compliance with the rules, this "was not something which the Committee can, in retrospect, condone";

    -    that Mr Hamilton's argument that his stay at the Ritz was no different from a stay at a sumptuous private residence was unacceptable.

  577. The Committee decided not to recommend any further action by the House, but strongly implied that the reason for this conclusion was that Mr Hamilton had already resigned as a Minister as a result of other allegations about his conduct.

  578. Mr Hamilton was asked by Counsel to the inquiry whether, had it gone ahead, he would have registered the planned visit to the Ritz in April 1987. Mr Hamilton thought that he would have done so, on the grounds that, on that occasion, Mr Al Fayed was intending to pay the costs of the air fares and other transport arrangements. By contrast, the stay in September 1987 was "an incidental event in a holiday which was going to take place in any case".[264]

c) The 1990 Visit to Paris

  579. The issue of a proposed further visit to the Ritz by Mr Hamilton arose when the inquiry's attention was drawn to an extract from Mr Al Fayed's telephone message book dated 28 June 1990. It read:

     "From:    N. Hamilton

      Message:    Guest Appt [Apartment] at Ritz

      5 July office

      9 July"

  580. This entry was of particular interest in view of Mr Hamilton's evidence in his written statement for the libel action that he had not seen Mr Al Fayed since 1989. Mr Hamilton explained that the message related to a telephone call from him to ask Mr Al Fayed whether it would be possible for him and his wife to stay at the Ritz while they were attending a friend's wedding near Paris.

  581. Mr Hamilton said that he had completely forgotten about the call until the message book extract had been put to him by the inquiry.[265] He had not connected the incident with Mr Al Fayed because he did not actually meet him in June 1990. Asked whether he had spoken to Mr Al Fayed, Mr Hamilton gave a somewhat contradictory response. Initially he stated that he did "not recall speaking to him at all", then immediately purported to remember Mr Al Fayed saying in reply to his request to use the Ritz: "No, I do not think you can stay at the Ritz, but what I will do is talk to my son and see if his apartment is free". This, according to Mr Hamilton, Mr Al Fayed did, and Mr and Mrs Hamilton spent perhaps two nights at the apartment.

  582. Mr Hamilton did not register this hospitality and I sought from him an explanation for the omission.

  583. In his reply,[266] Mr Hamilton stated that he did not believe that the rules in operation at the time would have required him to register hospitality of this kind. This was all the more so in view of the facts that:

    -    no monetary limit of the sort now in force then applied to the registrability of hospitality; and

    -    it would have not been possible to calculate the value of the accommodation.

  584. Mr Hamilton also argued that there was ample evidence that other Members had accepted hospitality, whether in the form of accommodation or invitations to sporting events, which they had not seen any need to register.

  585. In view of the fact that Mr Hamilton did not deny that in 1990 he had enjoyed the use of free accommodation provided by or through Mr Al Fayed, I was surprised to receive a letter from Mr Al Fayed's solicitors which contained the following points:

    -    that in 1990 Mr Hamilton did make a request to stay at one of the private apartments owned by Mr Al Fayed in Paris (although Mr Al Fayed personally had no recollection of this he accepted that the arrangements had been made through his Park Lane office);

    -    that a reservation for Mr Hamilton for four nights in July 1990 at one of the apartments owned by Mr Al Fayed was duly confirmed;

    -    that subsequently the reservation was cancelled and "Mr Hamilton did not arrive";

    -    that Mr Al Fayed's son did not own an apartment in Paris.

  586. A number of the other allegations against Mr Hamilton, as well as some of those concerning other Members, relate specifically to non-registration of benefits. These are examined in the next section of the report.

245  See Appendix 5. Back

246  Q 736-746. Back

247  Q 347-350. Back

248  See paras 658-696. Back

249  Sir Peter Hordern's separate stay at the Ritz is dealt with in the section of the report relating to allegations of non-registration; see paras 642-4. Back

250  Q 500-511. Back

251  See Appendix 5, para 37. Back

252  Q 165. Back

253  See Appendix 5, Exhibit 29. Back

254  Q 1859. Back

255  Q 116. Back

256  No analysis was made by Mr Klein for 13 September, although the bill shows that an evening meal was taken in the hotel restaurant. Back

257  Q 2076 (referring to Mr Hamilton's letter of 1 October 1993 to the editor of The Guardian). Back

258  Q 1616. Back

259  Q 2094. Back

260  Q 2098. Back

261  Q 2098. Back

262  HC (1944-95) 460, para 11. Back

263  This phrase was amended in 1993 to read "which might reasonably be thought by others". Back

264  Q 2078-9. Back

265  Q 2116. Back

266  See Appendix 40. Back

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Prepared 8 July 1997