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"The Slush Fund"
751. Mr Al Fayed maintains
that he contributed in three separate ways to a pool of money
or "slush fund" to enable Mr Greer to make payments
to "his" Members for the work they were doing on his
behalf:
(i) quarterly
payments of £5,000 in cash to Mr Greer in addition to his
annual consultancy fee;
(ii) a cheque
for £13,333 + VAT to Mr Greer on 1 February 1990;
(iii) cheques
for £12,000 and £6,000 to Mr Greer shortly before the
1987 election.
752. Mr Greer maintains
that the additional quarterly payments did not exist; that the
cheque for £13,333 + VAT was a project fee for work related
to the publication of the DTI Inspectors' report on the House
of Fraser; and that the cheques for £12,000 and £6,000
were to provide contributions towards the election expenses of
around 30 Members or candidates.
Alleged
Cash Payments to Mr Greer
753. On the alleged cash
payments to Mr Greer, Mr Al Fayed is somewhat vague about the
period and amounts - and it is to be noted that this allegation
does not appear to have been raised before September 1996. However,
Mr Al Fayed's basic allegation is strongly supported and corroborated
by Ms Bozek and Ms Bond as first-hand witnesses, and by circumstantial
evidence in the form of telephone messages referring to a payment
under the arrangement which was said to be overdue.
754. Mr Greer claims that
Ms Bozek and Ms Bond are lying and that the messages are forgeries
- going so far as to suggest that they were constructed in Mr
Al Fayed's office to fit in with alleged payments made by Mr Greer
to Sir Michael Grylls. However, he acknowledges that if
the messages are genuine, he can offer no innocent explanation
of their content.[338]
His secretary confirms that she never left such messages with,
or received cash from, Mr Al Fayed's office.
755. I found the evidence
of Ms Bozek and Ms Bond concerning this allegation convincing,
particularly on the main substance that cash payments were made
to Mr Greer over and above the agreed contractual rate for the
provision of lobbying services. Moreover, expert forensic examination
of the messages strongly supports their authenticity as contemporaneous
documents. Nor has Mr Greer improved his own credibility by providing
misleading information to the Select Committee on Members' Interests
in 1988, 1989 and 1990.[339]
756. On the basis of the
evidence to the inquiry, including that of Mr Al Fayed as corroborated
by Ms Bond and Ms Bozek, I conclude that there is a strong probability
that cash payments, additional to his consultancy fee, were made
to Mr Greer, over a period of time, probably about 18 months;
and that these sums were either handed to him or collected from
60, Park Lane. I note the statement by his secretary - but she
may well have been unaware of the arrangement.
757. I am not persuaded
that this arrangement was agreed between Mr Greer and Mr Al Fayed
at the outset of their contractual relationship. It is more likely
that the question of additional cash payments to Mr Greer arose
at some time during the course of that association.
The Cheque
for £13,333 plus VAT
758. Mr Al Fayed claims
that the payment of £13,333 plus VAT was to reimburse Mr
Greer for "overheads" which he (Mr Al Fayed) assumed
would include rewards to the lobbying group. Mr Greer, on the
other hand, maintains that it was a specially negotiated three
months project fee for monitoring developments and providing advice
following the publication of the DTI Inspectors' report (by which
time the full consultancy had been reduced to a far more modest
level).
759. As The Guardian
have pointed out, there is no indication from the papers produced
to the inquiry that any "project" was undertaken, and
I have seen scant evidence to support the claim that much time-consuming
activity was involved by IGA on Mr Al Fayed's behalf. Mr Al Fayed
himself saw little need for additional lobbying or monitoring
work by that stage. Moreover, the fee was paid in advance, some
three months before the Inspectors' report was published, and
its amount represented an annual equivalent of over £50,000
- more than double the rate for the original consultancy. On
balance, I find Mr Greer's explanation unconvincing and my suspicion
is that at least part of the money might have been available,
and used, for other purposes. However, as this cheque postdates
the main period of Parliamentary activity on the part of the group
of Members with which this report is concerned, and as the allegation
is mainly based on the uncorroborated word of Mr Al Fayed, that
suspicion remains unresolved.
The Cheques
for £12,000 and £6,000
760. As with the cheque
for £13,333, the fact that these payments were made by Mr
Al Fayed to Mr Greer is not in dispute. Equally, there is little
doubt, on the evidence of the IGA payments schedule,[340]
that the funds were used by Mr Greer either to provide contributions
towards the campaign expenses of a number of identified Members
or candidates, or to meet other related election expenditure.
It follows therefore that the allegation that the cheques for
£18,000 were used to make payments to members of the lobbying
group is not substantiated, with the exception of Sir Andrew
Bowden.[341]
761. Although the broad
distribution of the funds seems to be reasonably clear there is,
however, disagreement about the purposes for which they were originally
solicited. Mr Greer is in no doubt that he always intended
to use the funds for making donations towards the election expenses
of selected Members and candidates. Mr Al Fayed, on the other
hand, believed - and continues to believe - that they were meant
as "special payments" for "his" Members, particularly
Mr Hamilton and Mr Smith; and that, having contributed
heavily to the Conservative Party's central funds, he would have
had no interest in supporting any local campaigns.
762. In fact, this could
have been a genuine misunderstanding between the two men. In
asking for the second cheque, Mr Greer spoke of helping "one
or two Conservative candidates" and this could have been
interpreted by Mr Al Fayed as support for "his" Members.
But Mr Greer may equally have been thinking of a small number
whom he had been unable to support from the earlier cheque.
763. I do not think there
are grounds for saying that Mr Al Fayed was deliberately misled.
On the other hand it is difficult to escape the conclusion that
Mr Greer selected the Members concerned for his purposes, not
Mr Al Fayed's.
764. These conclusions on
the "slush fund" are important to my inquiry because
of the opportunity such a pool of money created for making payments
to Members. Mr Greer's actions are only under investigation to
that extent.
338 See
para 219. Back
339 See
paras 237-242. Back
340 See
paras 224-31. Back
341 See
paras 767 and 778-80. Back
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