Select Committee on Standards and Privileges First Report


APPENDIX 13

Consolidated pursuant to order of Sir Michael Davies dated 28 April 1995

1994-H-No-1654

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN
(1) NEIL HAMILTON

Plaintiff

and
(1) DAVID HENCKE
(2) PETER PRESTON
(3) GUARDIAN NEWSPAPERS LIMITED

Defendants


1994-G-No-1776

I N THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BETWEEN
(1) IAN GREER
(2) IAN GREER ASSOCIATES LIMITED

Plaintiffs

and
(1) DAVID HENCKE
(2) PETER PRESTON
(3) GUARDIAN NEWSPAPERS LIMITED

Defendants



WITNESS STATEMENT OF PETER PRESTON

I, Peter Preston, of 119 Farringdon Road, London, EC1R 3ER will say as follows:

  1. I am the Editor in Chief of Guardian Newspapers Limited, which publishes both The Guardian and The Observer. I have held that position since January 1995; for 20 years prior to that I was the Editor of The Guardian. The contents of this Statement are true to the best of my knowledge and belief. Exhibited to this Statement is an Exhibit marked PP 1. Unless otherwise specified, all page references in the Statement are to Exhibit PP 1.

  2. In late June 1993, I was contacted by Mohamed Al-Fayed via intermediaries. He said he had information for me about an unconnected matter concerning relations between the Conservative Party and individuals in the Middle East.

  3. In late June or early July 1993, I contacted Mr Al-Fayed and then went to see him in July, at Harrods. This was a "one to one" meeting. This was the first time I had met Mr Al-Fayed. The principal matter we discussed was the relationship between Mrs Thatcher and certain Saudis and contributions to Conservative Party election efforts. During that conversation, almost in passing, Mr Al-Fayed told me that, just prior to the 1992 election, Tim Smith MP has been in to see him to ask him for money for the Conservative election campaign. Mr Al-Fayed said he told Mr Smith that he, Mr Smith, should "go and see his Saudi friends". I was interested in Mr Al-Fayed's reference to Mr Smith and said so; Mr Al-Fayed then told me that some years ago and in the context of the House of Fraser enquiry, Ian Greer had approached him (Al-Fayed) offering his services and included in those services was an offer to arrange for two MPs, Neil Hamilton and Tim Smith, to ask questions in the House of Commons for which he would require cash to pass on to the MPs. As far as I recollect, Mr Al-Fayed mentioned the figure of £2,000 per question. I had not realised that Members of Parliament would accept cash in exchange for asking questions in the House and I thought this was a more immediately important story than some of the other matters Mr Al-Fayed discussed with me. Mr Al-Fayed then told me that Neil Hamilton had stayed at his Paris hotel, the Ritz, for a period of a week in 1987. I was shown details of Neil Hamilton's Ritz bill but was not given a copy of it. Indeed it was not until October 1994 that I received copies of any documents from Mr Al-Fayed. I took a few "jottings" after this meeting, which I now cannot locate.

  4. I was particularly struck by Mr Al-Fayed's story about his relationship with Ian Greer and his accounts of the practices of Greer's company; accordingly, after my first meeting with Mr Al-Fayed, I decided that The Guardian should spend some time investigating Ian Greer. Over the next several weeks, two of The Guardian's best reporters, David Hencke and John Mullin, worked virtually full time on the background for an Ian Greer story.

  5. Throughout July 1993, I received frequent up-dates from both David Hencke and John Mullin about their investigations. I remember, in particular, both of them telling me about their meeting in July 1993 with Tim Smith and Neil Hamilton at the House of Commons and their (separate) meeting with Ian Greer at about the same time. From these conversations, I knew that the reporters had asked both Smith and Hamilton whether or not they had taken cash in exchange for asking questions on behalf of Mr Al-Fayed/House of Fraser and they had both denied that allegation. I knew further that Neil Hamilton had initially failed to recollect that he had a week long stay at the Ritz Hotel but had "remembered" that stay once he was confronted with the relevant details by the reporters - namely the dates and room number. The reporters had commented to me how agitated and nervous Tim Smith appeared to be when confronted with the allegation. Equally, Ian Greer in his interview with the reporters had denied any knowledge of cash being provided to MPs in exchange for MPs asking questions on behalf of his client, House of Fraser.

  6. Towards the end of July 1993, the reporters were ready to do a substantial background piece on Ian Greer. The article was written at the end of July and our lawyers examined it ("the first Greer article"). I thought the article raised a number of important matters and I wanted to give it the prominence it deserved - there was little point in running it over the summer period and I though it was more appropriate to hold the article over until the beginning of the political season, i.e., September or October.

  7. I was faced with a major difficulty with the first Greer article. During my meeting with Mr Al-Fayed, referred to in paragraph 3 herein, he made it very clear that he was not prepared to be named as the source of what he had told me. In addition, he said that he did not want the Ritz Hotel to be referred to in any article The Guardian proposed to write nor did he want Harrods referred to. Finally, he was not prepared to provide me with relevant documents, although he assured me such documentation existed. I had of course seen a copy of the Ritz bill evidencing Neil Hamilton's stay and I thought that The Guardian could safely run that aspect of the story without risking identifying the source. Accordingly, it was included in The Guardian's first piece on Ian Greer. But, as Mr Al-Fayed was not prepared to go on the record about his allegation concerning arrangements between Ian Greer, Tim Smith and Neil Hamilton whereby Tim Smith and Neil Hamilton were paid cash in exchange for asking questions about the House of Fraser, I did not think The Guardian could at that stage run that aspect of the story.

  8. The political season began again in late September 1993/early October with the Party conferences. At about that time, I received a letter from Neil Hamilton dated 1 October 1993 referring to interviews conducted by The Guardian's reporters on the proposed Ian Greer story (Annex A). I note that Neil Hamilton copied that letter to Peter Carter-Ruck and Partners. I think it is fair to say that before I spoke to Mr Al-Fayed in July 1993, I knew nothing about Ian Greer, and not much about Tim Smith or Neil Hamilton. It goes without saying that The Guardian would not publish any article without researching it carefully and, where necessary, bringing in the lawyers to have a look at it.

  9. The Guardian's article about Ian Greer was published on Tuesday, 5 October 1993, page 6.

  10. In late 1993/early 1994, I agreed that David Hencke should be a consultant to the Cook Report to work on a story that they were doing on parliamentary lobbyists in general and on Ian Greer in particular. I was quite happy with that arrangement, done in his own time, and David Hencke kept me generally informed about how matters on the Cook Report were proceeding. The Guardian published its second major article on Ian Greer on 12 May 1994 ("the second Greer article"). That article reports an admission made by Ian Greer in the course of a meeting he had with the representatives of the "company" set up as part of the Cook Report investigation:

  "We would never go out and say we can arrange to have a question tabled, but actually we can. If we went out and said that, there's bound to be someone who would take great offence to think that a middle man could arrange such a thing but, as it happens, yes of course we do."   11. I spoke to Mr Al-Fayed a number of time in the period of July 1993 up to publication of the matter complained of on 20 October 1994. My diary indicates that I had meetings at Harrods on the following dates:

      14 July 1993

      30 September 1993

      14 October 1993

      [possibly 22 November 1993 - the diary entry is unclear]

      31 January 1994

      14 March 1994

      [possibly 16 May 1994 - there is a question mark]

      19 September 1994

      17 October 1994

  It is possible I had one or two more meetings with him than my diary indicates and I certainly spoke to him on the telephone on a number of occasions. In all the meetings prior to my October 1994 meeting (or meetings - there may have been two meetings that month) with Mr Al-Fayed before publication of the matter complained of, Mr Al-Fayed:

  (i)   Declined to be named as the source for the allegation concerning Greer, the two MPs and cash for questions and

  (ii)   Declined to hand over relevant documents to me.

  12. Although I cannot precisely recollect the date, I met Mr Al-Fayed at Harrods early in October 1994 in addition to the meeting that I have in my diary on 17 October 1994. The first meeting occurred shortly after Mr Al-Fayed had just lost his appeal to the European Court. Mr Al-Fayed was quite emotional at that meeting and, during it he repeated a number of allegations he had made over the previous 12 months, including the allegations he had made about Ian Greer, Tim Smith and Neil Hamilton. At this first meeting in October and at a subsequent October meeting, he agreed that he was now prepared to make relevant documentation available to me. For the first part of the October meeting, I met with Mr Al-Fayed alone. This was only the second occasion on which I met with him alone. It was the Greer/Smith/Hamilton story that I was really interested in, because it appeared that the evidence was readily available. I believe that the documents began to arrive at my office on or about 17 October 1994. Attached are copies of the documents I received from Mr Al-Fayed from 17 October 1994 up until the eve of publication. The next day, on 18 October 1994, David Hencke went to see Mr Al-Fayed with this notebook.

  13. On the morning of 19 October 1994, I remember sitting down with David Hencke and helping him write the introduction to the story that was to be published on 20 October. It was of course a very important story. The lawyers had a look at it and I then agreed with David Hencke that we would send a short facsimile to Ian Greer, Neil Hamilton and Tim Smith informing them that we were about to write an article. I didn't expect any particular response to these facsimiles. All the allegations we were going to make in the article had of course been put fairly and squarely to all three protagonists 12 months before and they had been denied. I believed by then that all three had lied. The Guardian's story was published on 20 October 1994.

  14. I have read the Replies served by the Plaintiffs in the proceedings in which they allege that the Defendants, including me, were actuated by express malice in publishing the matter complained of. This allegation is untrue. My response to the Particulars of Malice are set out in the following paragraphs.

  15. I was of course aware of the findings of the DTI enquiry into the takeover of the House of Fraser which were made public in March 1990 and in particular, of the finding that Mr Al-Fayed had lied in the course of the bid and to the Enquiry. The Guardian reported that finding - it was clearly a matter of public interest. There is simply no question of The Guardian, in October 1994, "rehabilitating" Mr Al-Fayed or "forgetting" what it had published about him four years previously, as is suggested in paragraph 5(4) of the Replies. The suggestion is ludicrous, as is the suggestion that The Guardian acted dishonestly. I did not meet Mr Al-Fayed until July 1993, at which time I formed my view of him. I met him a number of times between that date and the date of publication. He made a number of allegations in those meetings with respect to two allegations that were of particular interest to me namely, that:

  (i)   Neil Hamilton had stayed as Mr Al-Fayed's guest at the Ritz Hotel in Paris for a week and had failed to declare that in the Register of Interests.

  (ii)   That Ian Greer/Neil Hamilton/Tim Smith were parties to a "cash for questions" agreement.

  Both of these points were supported by documents provided to The Guardian and extensive background work, talking to other sources by John Mullin and David Hencke over a period of about 15 months. I believed what Mr Al-Fayed told me on these points.

  16. After spending a number of hours with Mr Al-Fayed, I was certainly left with the impression that he was disillusioned with the standards of probity in public life under this Conservative Government and that he felt he had been treated badly by that Government. Further, he was particularly distressed in the meeting we had after he had lost his appeal to the European Court of Human Rights in September 1994. But the fact is, Mr Al-Fayed made his allegations in his first meeting with me in July 1993. He made the two allegations referred to above almost in passing and repeated them over the next 15 months or so. As at July 1993, over three years had passed since publication of the DTI enquiry and his application for citizenship had yet to be heard. In addition, his final appeal to the European Court of Human Rights was a long way off. He did not strike me as having any particular sinister motive in telling me what he told me and, indeed, he did not seem to think it was much of a story. He was far more interested in telling me a number of other things about various other people, some of whom were members of the Government. I cannot speak for Mr Al-Fayed's motives, although I did muse about them in an article The Guardian published on 21 October 1994, but by the time Mr Al-Fayed was prepared to go on the record, The Guardian had all the evidence it needed to publish the two allegations and I have no qualms whatsoever about having done so.

  17. The allegations had been put to Ian Greer, Neil Hamilton and Tim Smith in July 1993 and they had been denied. Two things in particular had changed, since the allegations were first put to the three of them: not only was Mr Al-Fayed now prepared to go on the record but also The Guardian, as at about 17 October 1994, now had documentary evidence to support the allegations in addition to the details that had been provided by Mr Al-Fayed. I remember that either John Mullin or David Hencke had told me that when the allegations were first put to Neil Hamilton, he asked both of the reporters for documentary evidence of what they were putting to him. The fact that The Guardian now had documents was put specifically to Neil Hamilton in the facsimile sent to him on the afternoon of 19 October 1994. The point was also made to Ian Greer and Tim Smith in the facsimiles sent to them. Had either of the Plaintiffs come back to me with a substantial response to those facsimiles then certainly I would have considered their response and if necessary, held off from publishing the article. Neither Tim Smith nor Neil Hamilton responded to their facsimiles; my recollection is that Ian Greer simply denied every part of the story - including Mr Smith's role - and responded with a threat to sue.

  18. I have noted in particular, the Particulars of Malice pleaded at paragraphs 5(15) and 5(16) of the Replies to the effect that The Guardian published the article in order to "criticise/embarrass/damage" the Conservative Government and indeed that that was The Guardian's sole or dominant motive in publishing the matter complained of. These allegations are untrue. To my knowledge, allegations to a similar effect against both me and The Guardian have been made only once before in legal proceedings. Those proceedings, which were also libel proceedings, were commenced by Paul Judge, the Director General of the Conservative Party and were heard before a jury in the High Court in January 1995. The jury found for The Guardian in that action and specifically rejected an almost identical plea of malice made against it by Mr Judge as is made in these proceedings. The Guardian is a newspaper that publishes stories about the politics of the day. It needs to operate (and so does its Editor) in a world where MPs, including Conservative MPs, are accessible to it. It would be completely against The Guardian's interest if it acted in such a way so as to cut off its relationships with the Government of the day and the Conservative Party - it simply could not function as the newspaper that it is if it did. In any event, I believe that about 200,000 of our readers are Conservative voters and all other issues aside, it would simply be against its commercial interest for The Guardian to be motivated in the way alleged by the Plaintiff.

  19. I know that the allegations published by The Guardian were serious allegations and The Guardian did not publish them lightly. However, this story was, and remains a very important story and of very considerable public interest. I have of course offered to co-operate with the Committee of Member's Interests in its examination of Neil Hamilton's stay at the Ritz and to provide all relevant documentation in The Guardian's possession. I note that after The Sunday Times published its story on 10 July 1994 concerning Graham Riddick and David Treddinick, both of whom had taken cash in return for asking questions in the House, every newspaper in the country, including those which are generally regarded as Tory newspapers, took up that issue and followed it through, including reporting on the subsequent investigations by the Committee of Privileges into the actions of those two MPs. Every editor in the country appeared to agree that if Ministers accepted benefits in kind or were provided with payment, which they did not declare, in return for providing services to businessmen then this was an issue that struck at the heart of the proper and honest workings of Westminster.

26 June 1995


 
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