Select Committee on Standards and Privileges First Report


APPENDIX 75

Letter from Mr Ian Greer to the Parliamentary Commissioner for Standards

  Further to my holding reply of 3 February in response to your letter of 30 January 1997, I am writing, as required in response to the various points that you have raised, prior to giving oral evidence before you.

  In so doing, I should like to make the following points at the outset:

  (i)   This statement is made by me personally, without the benefit of any formal legal advice which, as you know, I am unable to afford. It is clear that Mr Fayed, on the other hand, has been able to call upon the best lawyers that money can buy.

  (ii)   I reserve the right to add to the statement in the light of the foregoing.

  (iii)   I would be happy to respond to any general financial questions that you may wish to raise, although it is fair to say that I am not particularly numerate and will require assistance if you are minded to raise any detailed issues.

1. Allegations against Members

  I have prepared a brief note on the above, which I attach herewith. I believe that my sworn witness statements, prepared in anticipation for the libel trial, cover most of the ground and I did not feel it would be necessary to repeat what I have already said.

2. "Demand for Cash"

   -    I have never made any demand for cash to either Mr Fayed or his staff, nor have I received any cash from him or from them.

   -    There was no arrangement entered into between Mr Fayed and myself to pay any moneys to me, my company, or any Parliamentarians, beyond the annual contractual fee that was agreed between us at the time of my company's appointment, of £25,000 per annum, for the provision of political consultancy advice.

   -    There was never any discussion between Mr Fayed and myself about the need for Members of Parliament to be paid for any Parliamentary activities undertaken in the interests of the House of Fraser.

   -    The much-quoted phrase "you can rent MPs like taxis" is not mine and it is a fabrication.

   -    Mr Ali Fayed was present at my first meeting with Mr Mohamed Fayed when I agreed the contractual terms and where I am alleged to have made the remarks about hiring MPs. I note that he has not provided a statement supporting his brother's allegations and I imagine that plans have been made to call him.

   -    Over 25 years as a political consultant, I have acted as advisers to between 300 and 400 companies and organisations. I would be happy to provide you with a list to enable you to approach any or all of them to ascertain whether I have ever suggested that it would be necessary for them to make either payments through me or directly to Parliamentarians, in order to achieve their objectives. You will find that they will confirm that I have never done so. This is in stark contrast to Mr Fayed's allegation.

  Insofar as the witness statements and oral evidence given by Ms Bond and Ms Bosek, may I make the following observations:

  (i)   Mr Fayed did not allege that I had ever received payments in cash until a full two years after he made his original allegations that MPs were paid to ask questions. Some three days before the trial was due to commence, he produced two witnesses, making this extraordinary statement for the first time.

  (ii)   Ms Bond and Ms Bosek suggest that considerable sums of money were handed to me - £5,000 (and more) per quarter, in cash. (Possibly a total of £200,000 over the period that I acted for House of Fraser/Harrods). It seems highly unlikely that such vast sums of money could have slipped Mr Fayed's mind for two years.

     I believe that the concept of my having had cash, was introduced as part of Mr Fayed's allegations in order to plug the gaps in his witness statement and the interview that he provided to The Guardian. He became aware at this late stage, that cheques in the sum of £12,000, £6,000 and £13,333 (which he alleged had been used to pay MPs), could be fully accounted for and indeed have been. He therefore had to fabricate new evidence to sustain his position.

  (iii)   It seems surprising that if, as is alleged, quarterly payments in cash were made and that I had frequently telephoned to demand such payments, only one such note exists, that the message was taken by an unidentified "junior" and that there are no telephone messages taken by either Ms Bond or Ms Bosek, both of whom allege that I left messages of demand with them on "numerous occasions".

  (iv)   In any case it is not my practice to discuss a client's financial matters with anyone other than the principals concerned - in the case of the House of Fraser, Mr Fayed or Mr Royston Webb.

  (v)   The allegations of cash payments to me were made some three days before the trial was due to commence and there was concern about their impact. I was advised that a seemingly respectable professional (Ms Bosek, a trainee solicitor), prepared to give evidence on oath, would be taken seriously by the court. This, I believed, had to be balanced against the fact that Mr Fayed invariably found it convenient to produce employees, past and present, who were prepared to give evidence on his behalf, testifying to the most bizarre happenings that regularly defied belief.

     Mr Hamilton, I understand has since discovered the close relationship between Mr Fayed and Ms Bosek and also the fact that if Mr Betterman's evidence is correct, she seems to have been prepared to lie in the past.

  (vi)   Ms Bond, in response to questioning, says that she remembered me because I was allegedly close to the Prime Minister. There were no such reports about this until the early 1990s (probably in 1992, when there was a piece in the Diary column of the Times). Her "recollection" therefore predates this.

  (vii)   It is further suggested that, from time to time, cash payments were delivered to my office. Presumably no record has been produced by Mr Fayed of such deliveries, or indeed to whom these huge sums of money were handed. This is hardly surprising, as no cash deliveries were ever made by him to my office.

     It is also suggested that my secretary made calls from time to time requesting cash due to me. This is untrue. My former secretary will, I am sure vouch, if called upon to do so, that she made no such calls, nor did she at any time receive on my behalf, any envelopes containing cash from Mr Fayed.

  (viii)   The allegation that either my secretary or I called Mr Fayed's office on 4 November 1988, demanding cash, is simply not true. I neither demanded cash nor received any.

3. Method of commission payment to Mr Neil Hamilton, MP

You say that I have "accepted" that commission payments were made by me to Mr Neil Hamilton, MP. You will appreciate that this was made clear by me in my witness statement prepared for the libel action against The Guardian, which was made of my own volition. Moreover, I wrote to you on 14 October 1996, informing you of this fact.

  Insofar as the method of commission payments made to Mr Hamilton, Mr Hamilton was due £10,000 for two new business referrals that he had made to my company (US Tobacco and National Nuclear Corporation). Mr Hamilton requested that the payment should be made partly by cheque and partly in settlement of two or three bills. I did not see anything wrong in meeting his request, as long as the amount paid did not exceed that to which he was due and as long as an invoice for the amount was submitted, which Mr Hamilton did in fact do. The cheque payment, together with the settlement of three invoices were duly entered in the company's books.

4. Peter Jones Invoice

As your team of accountants will have noticed in examination of the company's records, a number of initials are used beside invoices due for settlement. "IGA" would denote that an invoice was the company's responsibility, "N/R" would mean that an expense incurred was not rechargeable or recoverable from a client, "NNC" would mean an expense incurred on behalf of the National Nuclear Corporation and was therefore rechargeable to them. "P" means an item of personal expenditure, to be recovered by the company from an individual.

  In the case of the bill to which you refer, it is perfectly understandable given the goods in question, that the bookkeeper should enquire whether the invoice should be allocated to the company, or if it was an item of personal expenditure.

5. Submission by Mr Fayed

SCOPE OF THE INQUIRY

  I have, I believe, dealt fully with the commission payments made by my company to Mr Hamilton. Insofar as gifts and payments are concerned, the garden furniture, air fares and paintings were, as has already been clearly stated, part of the commission paid for the referral of two clients - UST and NNC. Insofar as the allegation is concerned that Mr and Mrs Hamilton had "access" to shopping accounts held in the company's name at London stores, this is not true. The purchase of garden furniture for Mr Hamilton is recorded in the company's books, from which you will also see that there are no other purchases on any other store accounts, at any time, by Mr or Mrs Hamilton. Mr Hamilton, when a Minister at the DTI, behaved in a scrupulously honest manner insofar as our clients were concerned. He showed neither my clients nor IGA any favour, nor did he at any time divulge any information relevant to my clients' interests to me nor any member of my staff.

  For the record:

Prudential Mr Hamilton lunched with the company's Chief Executive and Board Members. I was not present. The invitation to the Minister was issued by the Prudential. It must be remembered that the insurance industry was part of his Ministerial responsibility and therefore it is not surprising that he met them, along with other insurance companies.

  Tony Berry, Blue Arrow I have at no time met Mr Berry nor had any contact with Blue Arrow. It is true that Mr Michael Ashcroft, the Chairman of ADT (an IGA client) was on the Board of Blue Arrow. I met Mr Ashcroft very rarely and at no time was the subject of the DTI Investigation ever discussed with him or his staff. The work undertaken by IGA for ADT was principally related to possible acquisitions. On no occasion did I discuss with Mr Hamilton the investigation into Blue Arrow.

  Trafalgar House was a client of IGA. I cannot remember discussing the company's interests with Mr Hamilton, nor am I aware of any action which the former Minister may or may not have taken, which affected the company's interests.

  Accountancy Firms - The Big Eight it is true that arrangements were made for Mr Hamilton, to meet representatives of the country's leading accountancy firms, which were IGA clients. The issue of limited liability, with a view to Government legislation, was the reason why IGA had been appointed. The meeting that the Minister had with the representatives of the Big Eight was no different to that of any Ministerial meetings with industry representatives. I was not, however, present at the briefing, although it is possible that a member of my staff attended. This would in no way be unusual.

House of Fraser

I have already dealt with my company's appointment by the House of Fraser in my statement prepared for the libel trial and believe I can add little. It is interesting to note, however, that in the submission made to you, no mention is made of my allegedly famous remark that MPs can be rented like taxis, nor is the statement relating to the initial meeting supported in any way by Mr Ali Fayed, who was the only other person present.

  It is accurate to state that Mr Hamilton was one of the first Members approached by me, after my company was appointed on behalf of the House of Fraser. The fact that within two days of our appointment I had spoken to Mr Hamilton, was a demonstration of our efficiency and nothing more. He was in fact, the correct person to approach in the orderly conduct of my business.

  The fact that other Members subsequently tabled Questions, wrote letters to Ministers, signed the EDMs etc., proves the strength of feeling of many Members who took an interest in the Fayed/Rowland battle. It does not appear to be suggested by Mr Fayed that Mr Ian Wrigglesworth, MP, Mr Bryan Gould MP, Mr Harry Greenway MP and Mr Teddy Taylor MP, were paid by Lonrho; they are simply depicted as Members who were actively engaged in fighting the Lonrho corner, presumably for the reason that he had convinced them, rightly or wrongly, of the rightness of his case. It was no different as Mr Fayed was concerned. Members were prepared to fight his corner, without payment.

  Finally, I must say that it has been very difficult to keep up to speed with Mr Fayed's changing allegations.

  The Guardian on 20 October 1994, carried the headline "I (Mr Fayed) paid MPs to plant Questions". The initial allegation was that Mr Fayed paid me "tens of thousands of pounds" to give Mr Hamilton and Mr Smith for asking Parliamentary Questions "at £2,000 a time". Mr Fayed said "every month we got a bill for Parliamentary services and it would vary from £8,000 to £10,000 depending on the number of Questions".

  Six weeks later Mr Fayed said that the invoices did not vary, but that he had "handed over three cheques for £12,000 and £6,000 in May 1987 and £13,333 plus VAT in 1990 to place Ian Greer in funds so as to make payments to, amongst others, Neil Hamilton for work that was being undertaken". (Fayed's solicitors, 5 December 1994.)

Two years later "Mr Greer approached Mr Ali Fayed and said he needed money for some of the MPs who were going to be fighting the 1986-87 General Election". (Michael Cole, Fayed's press spokesman, ITN, 1 October 1996.)

Guardian, Amended Defence "Fayed made cash payments to Greer at the rate of £5,000 in cash on a quarterly basis". (27 September 1996.)

Mr Fayed's submission to Sir Gordon Downey Not only were payments made to Mr Hamilton and Mr Smith, but also to Sir Andrew Bowden, Sir Michael Grylls and Mr Gerry Malone, and Sir Peter Hordern knew of such payments.

  Why wasn't this allegation made at the beginning? It seems clear that whenever I have been able to disprove any allegations, Mr Fayed has had to make up new ones. His latest allegation of cash payments is perhaps the most impossible to disprove and it is the reason why he had made it. It is totally false.

  I believe that there is very little that I can add to what I have already said on numerous occasions. If, however, you would like any clarification of the points above, I would be happy to do so in oral questioning.

Ian Greer

12 February 1997

ALLEGATIONS MADE AGAINST MEMBERS

General points applicable to all Members

1. The phrase "a group" of Members of Parliament is regularly used by Mr Fayed in his allegations. No group existed, in spite of the fact that interest groups, both formal and informal, are an integral part of Parliamentary life. The reason why the five independent Members referred to in the allegations became interested in a similar cause is very simple. The House of Fraser controversy was a DTI responsibility. Three were elected Members of the Conservative Party Trade and Industry Committee, regularly in touch with DTI matters, Sir Michael Grylls, Tim Smith and Neil Hamilton. It was therefore important that their active support was canvassed.

  Sir Peter Hordern was the paid adviser to the House of Fraser. It would therefore have been foolish and discourteous not to keep him informed of Parliamentary activity that was being undertaken in the interests of the company.

  Sir Andrew Bowden was a friend of many years, an independently minded campaigner with good personal links to Edward du Cann, the Chairman of Lonrho.

  It should be noted that the Chairman of the Finance Committee, Sir William Clarke, along with 40 or 50 Peers and Members were all regularly briefed or written to.

  2. No cash payments or material benefits were ever requested of me by any Member, nor were any made at any time.

  3. Invitation to the Paris Ritz. It is true that at the specific request of Mr Fayed, I issued an invitation to six Members of Parliament to visit the Duke and Duchess of Windsor's home in Paris. Mr Fayed wanted to demonstrate his investment in preserving British heritage both at home and abroad. I have no record of any MPs accepting or declining the invitation, prior to the trip being cancelled.

  4. Cheque payment to Ian Greer Associates in the sum of £12,000, £6,000 and £13,333 were allegedly to pay Mr Hamilton, Mr Smith, Sir Andrew Bowden and Sir Michael Grylls. As my witness statement in preparation for the libel action sets out, and as the accounting records show, the £18,000 was for individual candidates' fighting funds at the time of the 1987 General Election. The Constituency Association of Mr Neil Hamilton, Mr Tim Smith, Sir Michael Grylls and Sir Peter Hordern did not benefit from any donations.

  The £13,333 was for additional work undertaken by IGA at the time of the DTI Report's publication. I am surprised that Mr Fayed persists with this allegation (that such moneys were for the purpose of putting MPs in funds) when:

  (a)   there is a letter on record from me to his brother requesting funds for the General Election in 1987;

  (b)   his own spokesman on Independent Television on 1 October 1996 said: "Mr Greer approached Mr Fayed and said he needed money for some of the MPs who were going to be fighting the 1986-87 General Election". (Michael Cole, Mr Fayed's press spokesman). The cheques totalling £18,000 were Mr Fayed's response to my request for election donations to constituency fighting funds.

Mr Neil Hamilton MP

See remarks above, correspondence and witness statement.

Mr Tim Smith MP

See remarks above, correspondence and witness statement.

Sir Andrew Bowden MP

  It is alleged that a cheque for £5,319.90 was allocated to the Andrew Bowden Constituency Fighting Fund at the time of the 1987 General Election. This is true. The donation was made from moneys that I had raised from two sources. It is, therefore, impossible to say that this money came from Mr Fayed. Equally important, neither Sir Andrew nor any other candidate was informed of the sources of my funding. As far as I am aware, it was for the purchase of constituency office equipment "Other fees" - I have already referred to this in my earlier submission to you (16 December 1996).

Sir Michael Grylls MP

  The above Member received a number of referral payments for the introduction of new business to IGA. Sir Michael was identified at the time of the Select Committee Inquiry in 1990. When I was asked how many payments had been made to him, I relied upon the information provided to me by the company bookkeeper. In good faith, therefore, I stated that there had been three referral payments. Up until discovery, in the preparation for the libel action, I believed this to be an accurate statement. The Guardian's accountants had access to my company's accounts with my full permission. In going through the relevant ledgers and working papers, it came to light that the referral payments made to Sir Michael were more than we had originally thought. This was the first I knew of the error that had been made. You will recall that I wrote to you in early October advising you of the error by the company bookkeeper which had come to light.

  In retrospect, it perhaps would have been wise for me to have kept a record of the exact number of commission payments IGA had made to Sir Michael. At the time however, it was impossible to conceive how important an issue this was to become. Although I believe that the new business referral payments to Sir Michael amounted to six, I have not been able to verify this, as I no longer have access to the company's books and records. However, these have been made available to you (and previously on discovery, to The Guardian).   I believe however, that it should be recognised that having informed the Select Committee that I had made introductory payments to Members of Parliament (then identified as A, B and C), the principle had been established and there was no advantage to me in understating the number of referral payments made.

  It was acknowledged by the Committee that there was no wrong doing on my part to make such payments - their interest was only in the matter of a Member's declaration. I fully accept, however, responsibility for the carelessness on my part in not having personally checked the number of referral payments made to Sir Michael, or having asked my accountants to verify the information with which I had been provided.

  As I am sure you are aware, Sir Michael acted as an adviser to the Unitary Tax Campaign (UTC), the Secretariat of which was IGA. The campaign was undertaken by a group of major British companies and stretched over a period of more than 12 years. Sir Michael was paid a fee by the campaign. However, the amount of time that he was forced to spend on Parliamentary activity and on the business of fighting the Campaign, both in the UK and the US, in support of British industry, was very substantial.

  At an early stage, Sir Michael sought my advice as to whether his UTC fee could be increased to cover this extra time. In spite of the fact that the companies concerned enjoyed substantial resources, they were not able to provide the funds to do so. At the time, the campaign was an important and prestigious one to IGA. I was therefore happy to agree a regular "top up" fee of £10,000 per annum to allow him to spend the necessary time in furtherance of the campaign.

  The fee was specifically for UTC work. It was naturally Sir Michael's decision as to how he chose to declare the payment. The UTC declaration made by him appeared appropriate, which is why I assume he made it.

  It should be recognised that the UTC campaign, as declared by him, encompassed some sixty member companies. It was not considered necessary for him to declare each and every one of them which were, by their contribution to the campaign, paying his fee.

Sir Peter Hordern MP

  It is suggested that the above Member knew that payments were being paid to his colleagues and that he did not disclose the fact to the appropriate authorities. I did not receive any cash to make any payments, nor do I believe did any Member receive payments directly. It is therefore understandable why Sir Peter did not make any disclosure.

Mr Gerry Malone, MP

I have known Mr Malone for a number of years. I knew his constituency to be highly marginal, having worked with Iain Sproat (the former MP for that constituency) at an earlier General Election. I donated from the funds raised by me, an unsolicited contribution to Mr Malone's fighting fund and received an acknowledgement. I cannot ever remember discussing the matter with Mr Malone, and it was in no way a reward for any Parliamentary activity he had undertaken in the interest of the House of Fraser, nor was it in expectation of any favour. As was expected, Mr Malone lost his seat at that election.

Lady Olga Maitland MP

I have already dealt with this matter in my submission of 10 December 1996.

Mr Michael Brown MP

Mr Brown received a referral payment for the introduction of US Tobacco. It should be noted that the commission paid by me was unsolicited by him. The payment was five per cent of UST's first year's fee. (Five per cent was also paid to Mr Hamilton, as you are aware).



 
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