Select Committee on Standards and Privileges First Report



b) Mr Brown

  617. Mr Brown, like Mr Hamilton, received a commission of £6,000 from Mr Greer for introducing United States Tobacco to IGA. This was paid in three tranches between July 1988 and July 1989. Also in common with Mr Hamilton, Mr Brown neither registered these payments nor declared them for tax purposes at the time. (He has since followed Mr Hamilton's course by making a voluntary disclosure to the Inland Revenue in October 1996, following the collapse of the libel action. In addition, Mr Brown has sent a cheque for £1,500 to the Revenue as a gesture of good faith).

  618. Mr Brown's reasons[281] for not registering the payments or immediately declaring them to the Revenue were the same as those offered by Mr Hamilton, namely:

    -    the payments did not give rise to any obligation on his part which could be thought to influence his actions as a Member and there was, in any case, doubt at the time in question about whether, and if so under what category, they should be disclosed;

    -    the payments were not, according to his accountant's advice, taxable since they were of an unexpected and ex gratia character.

  619. With hindsight, however, Mr Brown accepted that the payments should have been registered and he apologised for having failed to do so.[282] But he denied any deliberate intention to conceal a relevant interest.

  620. Mr Brown vigorously rejected the allegations made in the Channel 4 Despatches programme that neither he nor Mr Hamilton had been responsible for introducing UST to Ian Greer Associates and that the commission payments from Mr Greer were in reality a disguised consultancy fee.

  621. Mr Brown derived one other benefit from his connection with US Tobacco - a free flight to Connecticut, USA in September 1986 to be briefed by the company and to enjoy their hospitality. This benefit was registered by Mr Brown.

Commission Payments: Mr Andrew Roth's Evidence

  622. There is some uncertainty as to why, after the initial tranches, the balance of the commission payments to Mr Hamilton and Mr Brown was not paid until July or August 1989.[283] One explanation advanced was that this was merely the sweeping up of loose ends at the end of the financial year. However, if that was correct, it would be surprising that the balance of the £4,000 owing to Mr Hamilton for the introduction of NNC - that is to say after the payments in kind of paintings, garden furniture, and air tickets - was not settled in the summer of 1988. As indicated,[284] Mr Hamilton stated that the residual payment by cheque of £6,746.05 was made at his suggestion after he had been advised by his accountant that such introduction payments were not taxable,[285] but this possibility was discounted in his subsequent written submission.[286]

  623. An alternative explanation has been suggested in Sleaze,[287] namely that following a conversation in June 1989 between Sir Michael Grylls and Mr Andrew Roth, author of the reference work on Members, Parliamentary Profiles, word got back to Mr Greer that Mr Roth intended to publish what he knew of commission payments to Members. There then allegedly followed what Sleaze described as "a burst of activity", so that before publication of the next edition of Parliamentary Profiles in the autumn of that year "the books were to be wiped clean of all outstanding payments to politicians".

  624. I wrote to Mr Roth, who confirmed the accuracy of the passages relating to him in Sleaze and set out in more detail the background to his meeting with Sir Michael.[288]

  625. In a supplementary statement[289] Mr Hamilton maintained that in his references to his wife and himself Mr Roth was "wrong in every particular". The impending disclosure in Parliamentary Profiles of the fact that Sir Michael Grylls had received commission payments from Mr Greer had not had any effect of the sort alleged by Mr Roth on the relationship between Mr Greer and the Members associated with him. Mr Hamilton pointed out that Sir Michael had received commission payments after July 1989.

  626. Sir Michael Grylls, in his response,[290] argued that the very fact that he had confirmed to Mr Roth that he had received commission payments from Mr Greer proved that, as he had always claimed, he had been "completely open" about his connection with IGA. Apart from one factual point, Sir Michael had no other comments to make on Mr Roth's statement.

  627. My own analysis of the IGA documents provided to the inquiry showed that:

    -    final "balance" payments were not made to the Members concerned until August 1989;


    -    there is some evidence that commission payments continued to be paid to Sir Michael into 1990;[291]

    -    so far as can be ascertained, no payments were made to Members apart from Sir Michael after August 1989.

c) Mr Smith

  628. The cash payments to Mr Smith by Mr Al Fayed were examined earlier in the Report[292] in so far as it was alleged that they evidenced a corrupt relationship - in that Mr Smith was being paid for services rendered on behalf of House of Fraser. The payments also, however, raise issues relating to non-registration.

  629. Mr Smith gave as his reason for not immediately declaring the payments the fact that he had sought to have his relationship with Mr Al Fayed put on a more formal footing - akin to the sort of consultancies he had with other organisations which were registered - but that Mr Al Fayed had not responded to this suggestion.[293] Mr Smith now recognised that his failure to register the payments was an error.

  630. As indicated earlier,[294] the process by which Mr Smith eventually brought the fact that he had been paid cash by Mr Al Fayed into the open was a protracted one.

  631. It began on 28 January 1989 with Mr Rowland's letter to Mr Smith accusing him of being in Mr Al Fayed's pay. Two days later Mr Smith saw Mr Al Fayed at Harrods. On 6 February Mr Smith wrote to the Registrar to declare an interest as a consultant to House of Fraser.

  632. Mr Smith's explanation for the form of his letter to the Registrar was that he had been advised that it was not possible to make a retrospective entry to cover the position during the period when he was being paid by Mr Al Fayed (though it is notable that in a similar context in 1992, Mr Hamilton registered a directorship of the Plateau Mining Company for 1990). A few days later Mr Smith sent the Registrar a revised version of his Register entry, accompanied by an undated compliment slip, including the name of House of Fraser, but with the words "Consultant to" amended to "Adviser to". After a short interval, less than 5 days, Mr Smith sent a further revised entry, this time omitting any reference to House of Fraser. Two more changes were notified to the Registrar, one reinstating an interest described as "Financial adviser to House of Fraser", the other removing it again. Mr Smith's successive entries in relation to House of Fraser over a two-and-a-half week period in February 1989 were therefore as follows:

      1)  Nil

      2)  Consultant to the House of Fraser plc

      3)  Adviser to House of Fraser

      4)  Nil

      5)  Financial Adviser to House of Fraser

      6)  Nil

  633. Mr Smith justified the fleeting appearance in the Register of his interest in House of Fraser by claiming that an updated print-out of the Register was placed in the Library of the House every fortnight[295] and that this was publicly available. This, according to Mr Smith, adequately discharged his duty both to regularise his position and to make the necessary notification of that fact to the House.

d) Sir Andrew Bowden


  634. The cheque for £5,319 received by Sir Andrew Bowden from Mr Greer has already been examined[296] in the context of allegations relating to payments for lobbying services. But it also raises registration issues because of the rule relating to sponsorships which requires the declaration of contributions to election expenses above a certain limit. The requirement is triggered where "to the knowledge of the Member the sponsorship in any case exceeds 25 per cent of [his] election expenses".

  635. In Sir Andrew's case the allegation is that the cheque for £5,319 was plainly intended to help defray his election expenses and that since it breached the 25 per cent limit (it was actually more than Sir Andrew's total declared expenses of £4,426)[297] it should have been registered.[298]

  636. It was also alleged in the book Sleaze that Sir Andrew had breached his statutorily permitted election expenditure limit if the £5,319 was included in the total - as, it was argued, it should be. This is, however, a matter for the appropriate legal authorities, not this inquiry, to pursue.

  637. The evidence for regarding the cheque for £5,319 as a contribution to election expenses is that:

    -    it was, according to Mr Greer,[299] clearly solicited from him by Sir Andrew in the context of an impending general election in which Sir Andrew was not confident of holding his seat; indeed, Sir Andrew had said that in the light of the poor state of his local association's finances, a donation from Mr Greer "was absolutely vital";

    -    the offer was on the table by around the end of March or early April 1987, only a little over two months before the general election and four to five weeks before the official campaign began;

    -    the fact that the cheque was actually paid some time later, after the general election, is irrelevant, since its purpose was to cover expenditure incurred before the election;

  638. Sir Andrew explained that the equipment purchased with Mr Greer's donation was "needed in the context of running the local party". The cheque for £5,319 was therefore not "a contribution of money ... to be spent during the four week election campaign itself but [was] to meet expenses and costs that were met and accrued before the election campaign started". Sir Andrew added, of the 1997 pre-election period: "... at this moment, I and my association are spending considerable sums of money before the [...] campaign begins on a whole range of things, supplies, leaflets. None of this has to be declared or is part of my election expenses, which will not commence until the beginning of the [...] campaign".[300]


  639. In his statement to the inquiry,[301] Sir Andrew disclosed that between 1986 and 1988 he had received payments totalling between £500 and £1,000 from Mr Greer in return for lectures he had given to clients and staff of IGA. There is a reference to a sum of £1,000 in Mr Greer's schedule of election donations to candidates in 1987 and, although the recipient is not identified, this payment seems to be linked to the £5,319.

  640. Sir Andrew's entry in the Register published in January 1987 contained a reference, under the category of "Trades or Professions" to "Lecturing and Broadcasting". A similar declaration appeared in the Registers published in December 1987 and January 1989 (there being no separate 1988 Register because of the timing of the 1987 general election). There was no indication of the source of the payments under this heading and no entry recording single payments in the "Financial Sponsorship" category.

  641. Sir Andrew indicated in his oral evidence[302] that he regarded these payments as "nominal sums for one-off situations where [Mr Greer] had asked me to come and talk to his staff or clients".

281  See Appendix 60. Back

282  See Appendix 60. Back

283  The balance of £6,746.05 was paid to Mr Hamilton by cheque dated 13 July 1989 (it was paid into Mr Hamilton's Special Reserve account on 17 July 1989); the balance of £2,000 was paid to Mr Brown on 3 August 1989. Back

284  See para 604. Back

285  Q 2181. Back

286  See Appendix 33, paras 756 to 764 (Mr Hamilton's explanation was that Mr Greer wanted to "clear his books" (see para 498). Back

287  Sleaze, p 133. Back

288  See Appendix 105. Back

289  See Appendix 41. Back

290  See Appendix 58. Back

291  See para 239. Back

292  See paras 307-343. Back

293  See Appendix 42. Back

294  See paras 312-325. Back

295  Q 1118. Back

296  See paras 296-306. Back

297  Q 1195. Back

298  Allegations of a similar nature against a large number of other Members are examined later in the report (see paras 720-737). Back

299  Q 1392-3. Back

300  Q 1204. Back

301  Q 1196. Back

302  Q 1214-5. Back

previous page contents next page
House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1997
Prepared 8 July 1997