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