Select Committee on Standards and Privileges First Report



  587. The purpose of the Register and the main principles underlying it were described in an earlier section of the report.[267] The detailed rules and registration categories as they have developed over the years since the Register was established, are set out at Annex 5.

a) Mr Hamilton

  588. In addition to the 1987 Ritz stay and the alleged 1990 trip to Paris, the implications of which have been dealt with in the previous section of the report, Mr Hamilton is alleged to have received a number of other benefits which he failed to register.


  589. In August 1989 Mr and Mrs Hamilton stayed for a few days at Balnagown Castle, near Invergordon in Scotland, which is owned by Mr Al Fayed. More accurately, the Hamiltons were accommodated in one of the holiday cottages which stood in the grounds of the castle.

  590. Mr Hamilton subsequently referred to the house as little more than a "flat above a converted stables".[268] It was argued against Mr Hamilton that, even if that somewhat disparaging description were true, the value of the accommodation, food and other services provided (that is to say the cost Mr Hamilton would have incurred as a paying customer) must have been considerable - many hundreds of pounds at least.

  591. In his oral evidence, Mr Hamilton explained that this stay was not declared on the grounds that it represented private hospitality and, as such, was not, in his view, registrable.[269] Mr Hamilton said that it was at Mr Al Fayed's suggestion that he and his wife had stopped off at Balnagown on their way up to Cape Wrath as part of a holiday in Scotland. Mr Hamilton concluded: "So we did stay there for a couple of days, but what of that?".

  592. Mr Al Fayed, for his part, insisted that it was Mr Hamilton who had engineered the invitation.


  593. Mr Hamilton admitted that Mr Al Fayed gave him two Harrods gift hampers, one in 1988 and one in 1989, although he challenges the value of £185 each put on them by Mr Al Fayed. Mr Hamilton did not register the hampers, on the grounds that, at that time, small gifts did not have to be declared and the current monetary limit was only introduced subsequently.


  594. Mr Hamilton received commission payments to a total value of £10,000 from Mr Greer in return for introducing two new clients to IGA. These were: the National Nuclear Corporation (NNC) and United States Tobacco (UST). The introduction fee in relation to UST was shared equally with Mr Michael Brown.[270]

    National Nuclear Corporation

  595. IGA were appointed in May 1987 as public affairs consultants to NNC. This followed a recommendation by Mr Hamilton, who claimed that he had been asked by NNC to suggest a suitable company. The fee agreed by NNC with IGA was £40,000 per annum, initially for a six month contract which was subsequently extended to 18 months. Mr Hamilton received an introduction fee representing 10 per cent of the annual payment to IGA, that is to say £4,000.

  596. Mr Hamilton claimed[271] that this was an ex gratia payment which he had neither expected nor sought. He rejected the argument put forward by The Guardian in its defence to the libel action that such payments were not the regular pattern in the lobbying industry.

  597. Mr Hamilton was supported in this view by Mr Greer who stated[272] that it was "usual business practice" to make a payment to someone who had introduced a new client and that doing so did not give rise to any continuing obligation on the part of the person who received the commission.

  598. A contrary opinion was, however, expressed by Mr Charles Miller, Secretary of the Association of Professional Political Consultants. He told the inquiry: "I have consulted across our membership on the question you raise and can confirm that the payment of commissions by lobbying firms to MPs was not a common practice during the period in question; indeed only one firm could recall ever being approached by an MP for such purposes". He added that since 1994 regulated lobbyists had been banned from having any financial relationship with Members and that IGA had fully observed the rule since its introduction that year until their resignation from the Association at the end of 1996.

  599. In addition to the commission paid by Mr Greer to Mr Hamilton for introducing NNC to IGA, Mr Hamilton received £7,500 directly from NNC. This represented the fee for a one year consultancy which began on 1 November 1987.[273]

  600. Mr Hamilton registered the consultancy agreement, but not the commission payment from Mr Greer in respect of NNC.

    United States Tobacco

  601. United States Tobacco appointed IGA as political consultants around May 1988. The contract was worth £120,000 a year to IGA and Mr Greer paid Mr Hamilton and Mr Brown[274] a joint introduction fee of ten per cent of that figure. Each Member therefore received £6,000. Neither Mr Hamilton nor Mr Brown registered this payment.

  602. Mr Hamilton was thus paid two commissions totalling £10,000 (£4,000 in relation to NNC and £6,000 in respect of UST). He took this amount partly in cash and partly in kind.[275]The breakdown between the two was as follows:

Date Method of Payment   Value
May 1988 Antiques £700.00
May 1988 Garden furniture £959.95
July 1988 Air fares to New Orleans[276] £1,594.00
Sub-Total £3,253.95
July 1989 Cheque £6,746.05
TOTAL £10,000.00

  603. The internal accounting documents of IGA indicate that the antiques and the garden furniture were both charged to the personal account of Mr Greer. I have not seen any IGA documentation or papers of Mr Greer's relating to the purchase of the air tickets.

  604. Mr Hamilton told the inquiry that this method of payment was adopted at his suggestion (a fact confirmed by Mr Greer) because in principle goods had a lower taxable value than cash.[277] Asked why the whole of the £10,000 had not been paid in kind, Mr Hamilton explained that there had been no further purpose in the arrangement once his accountant had advised him in July 1989 that the introduction fees were treated as ex gratia payments and were therefore not taxable as income.[278]

  605. Mr Hamilton acknowledged having received two further benefits from, or in connection with, US Tobacco, which were not registered. These were:

    -    a one night stay, at UST's expense, during the summer of 1989 at the St James's Hotel, Westminster, caused by the need to attend a "discussion dinner" with UST executives at IGA's offices (Mr Hamilton's London flat had been let out to friends);

    -    three nights, paid for by UST, at the Essex House Hotel, New York in October 1989 (Mr Hamilton was on a two-day visit to New York with the Treasury Select Committee and was invited by a UST executive to attend a dinner the day after the Committee's programme was due to finish. It was suggested that Mr Hamilton should stay in UST's accommodation for all three days in New York rather than switch from the Committee's hotel for one night).

  606. So far as the commission payments relating to NNC and UST were concerned, Mr Hamilton gave the following main reasons for not making a disclosure in the Register (in addition to his claim that such payments were normal practice in the lobbying industry):

    -    the payments were not made pursuant to any agreement and the payer (Mr Greer) had no expectation of any return;

    -    his position as a Member was irrelevant;

    -    he had not been influenced in the exercise of his duties as a Member;

    -    there had been no attempt at concealment, as the payments had been receipted for IGA's accounting purposes and revealed to his accountant;

    -    neither payment fell within the nine categories set out in the Register at the time;

    -    the Select Committee on Members' Interests had, when considering a complaint against Sir Michael Grylls in 1990, acknowledged ambiguities in the registration categories so far as single payments were concerned.[279]

  607. Nevertheless, with hindsight, Mr Hamilton conceded that, "in a more censorious climate" his judgement about the registrability of the two commission payments was open to question.

  608. As to the other benefits, the two hotel stays paid for by UST, Mr Hamilton argued that the first had arisen from unavoidable circumstances and the second was purely a matter of convenience in that he was already in New York on Select Committee business and did not wish to change hotels for one night only. The value of the accommodation could not readily be quantified as, he had been told, the rooms were not priced by the day. Contrary to the assertion by The Guardian, he had not been accompanied by his wife.

  609. The Guardian made the following points in response:

    -    whatever case Mr Hamilton had for claiming that the first commission payment was not expected, no such excuse was available for the second payment;

    -    that any doubt which might have existed about the registrability of single payments such as commission or introduction fees had been removed in the Registrar's circular letter to Members in December 1989, which Mr Hamilton would have received in plenty of time to include, at the very least, the 1989 cheque for £6,746.05 in the 1990 edition of the Register;

    -    that in the light of the overall purpose of the Register, set out in the introduction to the annually published edition, and particularly in view of the fact that he had received payments from Mr Greer directly linked to UST, both of the hotel stays paid for by UST should have been registered.

  610. One other aspect of Mr Hamilton's relationship with US Tobacco was the subject of a complaint. It was claimed in a Channel 4 programme Despatches, broadcast in January 1997, that Mr Hamilton did not in fact introduce UST to IGA and that, in consequence, the payment made by Mr Greer to Mr Hamilton was not a genuine commission payment, but a disguised consultancy fee. This allegation, which applies equally to Mr Brown, was vigorously denied by both Mr Hamilton and Mr Brown, and also by Mr Greer.

  611. In the Despatches programme, Mr John Walter, a former senior executive of UST, was shown saying that Mr Hamilton and Mr Brown had not been responsible for effecting the introduction of UST to IGA, who had in fact been selected as part of a review process involving a number of companies. However, in a letter written to Channel 4 shortly after the programme's transmission Mr Walter claimed that he had been quoted out of context and that the rest of his remarks, which had been edited out, would have made this clear.

  612. In a statement to the inquiry[280], Mr Walter said that UST had first come into contact with Mr Hamilton and Mr Brown in 1985-86. The appointment of IGA as political consultants was made in about May 1988. UST had been looking round for suitable candidates for some time and had considered a number of companies, the names of three of which had been suggested by Mr Brown. IGA had been chosen "after one or two meetings with Mr Greer". UST had not at that time had any knowledge of the introduction fees paid to Mr Hamilton and Mr Brown. Mr Walter concluded that after nine years it was impossible to recall "to what degree their comments had any influence on [UST's] decision".


  613. On 2 July 1990. Mr Hamilton joined Strategy Network International (SNI), a lobbying firm which acted on behalf of overseas, particularly southern African, interests, as a Parliamentary consultant. The agreed fee was £8,000 per year. In the event Mr Hamilton resigned from SNI on becoming a whip three weeks later, having received one month's payment in advance of £667.

  614. Mr Hamilton did not register this arrangement, nor the fact that it was a paid appointment.

  615. He justified his omission with the following arguments:

    -    there had been no related Parliamentary activity;

    -    advice received by him in 1994 suggested that the payments might have been considered de minimis in 1990;

    -    in October 1994 the Registrar was quoted by Mr Andrew Mitchell, a Government Whip who was then a member of the Select Committee on Members' Interests, as saying that Mr Hamilton's argument in support of non-registration was "not worthless".

  616. The counter-arguments advanced to the inquiry were that:

    -    the four weeks' grace period did not mean that an interest acquired and subsequently disposed of within that timescale was deemed never to have existed for registration purposes;

    -    whether there was any related Parliamentary activity was irrelevant in determining whether the interest might have been thought to influence Mr Hamilton's actions in the House or his conduct as a Member;

    -    that a single payment of £667 for a month's work was scarcely negligible;

    -    that Mr Hamilton should have sought advice from the Registrar in 1990, not 1994.

See paras 96-105. Back

268  Q 2062. Back

269  Q 2062. Back

270  See para 617. Back

271  See para 490. Back

272  See Appendix 71, para 22 (witness statement of 27 June 1995). Back

273  This payment is examined separately in the context of other allegations (see paras 698 to 702). Back

274  See para 617. Back

275  The tax position regarding these payments was dealt with in paras 492-501. Back

276  Mr Hamilton was attending the Republican Party Convention. Back

277  Q 2121. Back

278  See para 490. Back

279  The Committee also emphasised that there was no doubt in principle that such payments should be registered (see para 647). Back

280  See Appendix 103. Back

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