Select Committee on Standards and Privileges First Report


VII. CONCLUSIONS (Continued)

Alleged Payments to Members from the "Slush Fund"

  765. Some of the allegations that Mr Al Fayed's money was channelled to members of the lobbying group via the "slush fund"[342] can be disposed of quite briefly.

  766. The charge in Sleaze that Sir Peter Hordern tabled questions "in return for payment" has since been withdrawn by The Guardian and, in my opinion, was totally unjustified. Sir Peter himself took the view that it would be improper to engage in Parliamentary activity on behalf of a sponsoring company and the record shows that he asked no such questions.

  767. Similarly, there is no evidence - despite any expectation by Mr Al Fayed to the contrary - that money from any element of the "slush fund" was passed by Mr Greer to Mr Smith, Mr Hamilton or Sir Andrew Bowden (leaving aside, in Sir Andrew's case, the question of a donation to election expenses out of the cheques for £18,000).[343]

  768. There is therefore only one case to be considered in this context - that of Sir Michael Grylls.

Sir Michael Grylls

  769. Sir Michael now accepts that he received three different types of payment from Mr Greer (commission payments for introducing new clients, fees from the Unitary Tax Campaign, and "top-up fees" from Mr Greer related to his work for the Campaign), but he denies that any of these originated from Mr Al Fayed. The position as regards each kind of payment received by Sir Michael appears to be as follows:

i) Commission Payments

-    In evidence to the Select Committee on Members' Interests in May and June 1990, both Mr Greer and Sir Michael stated that the latter had received three commission payments for introducing new business to Mr Greer. This information was inaccurate and, in October 1996, was amended to "between four and six" (by Sir Michael) and to "as many as seven" (by Mr Greer). Subsequent evidence suggests that even this may have been an understatement. The error was attributed to IGA's poor book-keeping, which only came to light under discovery for the libel trial.

ii) Fees from the Unitary Tax Campaign (UTC)

-    Also in October 1996, Mr Greer explained that Sir Michael had received a regular fee from the Unitary Tax Campaign (UTC) which was sometimes paid to him by Mr Greer and recovered from UTC. Indeed, he says that this helps to explain the confusion over the commission payments in his evidence to the Select Committee.

iii) Other Payments

-    Finally, it is claimed that Mr Greer paid a top-up fee of £10,000 a year to Sir Michael for additional work on behalf of UTC for which Sir Michael felt he was insufficiently rewarded under his UTC consultancy. Mr Greer maintains that he agreed to such an arrangement because the UTC was an important client and did not have the funds to pay such a supplement itself. This view is challenged by the former chairman of the Campaign, who was unaware of the need for a supplement or of any suggestion that the organisation's resources were inadequate. The former Group Executive of IGA, who acted as Secretary to the Campaign, was also unaware of the top-up fees - or any consultancy arrangement involving Sir Michael - and resigned from the company because of these and other "discrepancies in relation to payments to Sir Michael" which came to light at the time of the withdrawal from the libel action.

  770. Extracts from IGA's cash books include records of payments which cannot be reconciled with the explanations given to the inquiry by Mr Greer and Sir Michael. For example, these show two quarterly payments to Sir Michael of £5,000 plus VAT in 1989, even though Mr Greer said that it was not his practice to make quarterly payments to anyone. He acknowledged that the coincidence between these quarterly amounts and those allegedly demanded by him from Mr Al Fayed in 1988 was striking. I have not received any convincing explanation on this point from Mr Greer, and although he directed me to the IGA bookkeeper, that source only added to the concerns in relation to these payments.

  771. Sir Michael's own records were hopelessly muddled. It was impossible to disentangle the payments under the three headings in paragraph 769 above. Ten of the payments were for £5,000 and these were not wholly explicable in terms of the pattern of commission payments or fees relating directly or indirectly to UTC.

  772. I have to conclude that there has been no satisfactory explanation for these sums and that Mr Greer was making significant payments to Sir Michael which were neither introduction commissions nor fees associated with the UTC. I am unable to conclude that the funds originated from Mr Al Fayed but that has to be a distinct possibility. It would help to explain Sir Michael's active participation in the lobbying operation.

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342  That is to say, apart from the cheques for £12,000 and £6,000, which have already been dealt with in this context (see para 760). Back

343  See paras 778-80. Back

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Prepared 8 July 1997