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".
iv) STRATEGY
NETWORK INTERNATIONAL
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:
- the
appointment with SNI had been resigned within the four week period
allowed for registering new interests;
- 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.
267 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