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Letter from Ms Geraldine Proudler of Olswang,
Solicitors, to Counsel to the Inquiry
NEIL HAMILTON MP AND OTHERS
I understand from Nicki Schroeder that you have
not yet been able to resolve the problem which we discussed on
Friday relating to disclosed documents, but that you will be writing
to Mr Hamilton and Mr Greer to obtain their confirmation that
they will not raise any objection to us using information obtained
on discovery for the purpose of the parliamentary inquiry. Pending
the outcome of this correspondence, as requested, I am very happy
to let you have copies of the notes which we discussed on Friday
in relation to individual MPs. This is on the basis that these
notes will be seen only by the members of the inquiry team, and
that it will not be made known to third parties that the information
in the notes originates from The Guardian or its lawyers.
Clearly most of this information is contained in the documents
which you have or to which you have access, and therefore I trust
that this will not cause any difficulty. I also hope that the
notes will assist in expediting your inquiry.
It may be helpful if I confirm the position
in relation to each of the MPs whom we discussed on Friday:
1.
Neil Hamilton
The Amended Defence contains the core allegations
against Neil Hamilton, and it is not anticipated that any further
submission will be made about him at this stage by The Guardian.
As you know, The Guardian would very
much like the opportunity to respond to the evidence given to
the inquiry, and I look forward to hearing from you when Sir
Gordon Downey has decided on the procedure to be adopted in this
regard.
2. Tim Smith
I enclose a copy of the note we have prepared,
which is sent to you on the basis set out in the first paragraph
of this letter. This is in fact the central note relating to the
activities of the Harrods team of MPs, and much of the information
in it relating to meetings of the Harrods team and meetings with
ministers applies equally to Neil Hamilton, Tim Smith, Sir Michael
Grylls and Sir Peter Horden.
3. Michael Grylls
You agreed on Friday that since you have
all of the accounting documents showing the extensive payments
to Grylls, and these are no longer in our possession, you would
not ask for a note from us dealing with the financial details
of Grylls relationship with Greer. We are therefore preparing
a short background note in general terms.
4. Sir Peter Horden
The allegations against him are set out in
the letter from Alan Rusbridger dated 18 October 1996, but we
have agreed to let you have a short note amplifying what is said
in that letter.
5. Andrew Bowden
I enclose a copy of the note about Andrew
Bowden which is sent to you on the basis set out in the first
paragraph above.
6. Gerry Malone
Once again the allegations against him are
set out in Alan Rusbridger's letter of 18 October 1996, but we
have agreed to let you have a short note explaining particularly
the reference to the link to Leon Britain.
7. Michael Brown
We have explained to you that the principal
sources of information relating to the activities of Michael
Brown are the Greer accounting documents, which you have received,
and the documents held by the Department of Health in relation
to the Skoal Bandits campaign, which would have been the subject
of a subpoena by us once we had been given leave to make the
amendments to the Defence. Once again the allegation against
Michael Brown is set out in Alan Rusbridger's letter of 18 October,
but I will let you have a short note expanding on what is said
in that letter.
8. Lady Olga Maitland
I enclose the note which I showed you on
Friday, and which is sent to you on the basis set out in the
first paragraph of this letter.
I hope that you will find the enclosed notes
helpful, particularly the central note in relation to Tim Smith,
and I look forward to hearing from you when the position in relation
to information from disclosed documents is clarified.
15 January 1997
TIM SMITH
Tim Smith's connection with
and interest in Mohamed Al-Fayed and House of Fraser appears to
have begun towards the end of January 1986, some months after
Ian Greer had been retained by Al-Fayed in November 1986. Between
11 March 1987 and 23 January 1989 Smith asked a total of 28 questions
in the House of Commons relating to the alleged misdeeds of Lonrho
and the Department of Trade and Industry investigation into House
of Fraser or Tiny Rowland's circulation of defamatory material
about Al-Fayed. Al-Fayed alleges that over the same period he
paid Smith personally approximately £6,000 cash in face to
face meetings, the dates and times of which he no longer recalls.
In January 1986 Smith was invited by Ian Greer
to a meeting to discuss House of Fraser and a possible meeting
with Paul Channon, then Secretary of State for Trade and Industry.
No immediate action was taken by Greer following the meeting.
The idea was discussed again by Neil Hamilton, Michael Grylls
and Smith with Al-Fayed over lunch at Harrods on 10 March, following
which an undertaking was given by the MPs for a delegation to
visit Channon to discuss House of Fraser's concerns about Lonrho.
The meeting did not in fact take place, Channon being unwilling
to become involved in the dispute between Lonrho and House of
Fraser.
Towards the end of March 1986, Smith agreed
with Greer that he would apply for an adjournment debate to raise
the issue of the independent directors of The Observer
newspaper and interference by Tiny Rowland, a matter of great
interest to Mohamed Al-Fayed who believed that The Observer
was conducting a personal vendetta against his family. On 16
April Greer was able to write to Al-Fayed confirming that Smith
had agreed to apply for the debate. The application was successful
and the debate took place on 17 June 1986, following which Greer
wrote to Smith congratulating him on the speech. A few days later
Smith enjoyed lunch with Al-Fayed and Greer - no doubt as an
expression of their gratitude.
A few months later, in August 1986, Greer was
again organising MPs to contact Paul Channon about Lonrho - this
time by letter. On 4 August he wrote to Smith asking him to write
to Channon opposing Lonrho's acquisition of Today newspaper.
The following day, Smith agreed to do so - along with Grylls and
Peter Hordern. Hamilton declined - for reasons which he asked
IGA to explain to Al-Fayed.
At the beginning of 1987 Greer wrote to Al-Fayed
suggesting that Smith would be appropriate for the role of paid
adviser to House of Fraser after the next election. This followed
another lunch which Smith had enjoyed, together with Grylls,
Hordern and two Parliamentary Private Secretaries at Harrods with
Greer and Al-Fayed. Smith apparently declined the offer, and
on 9 February Greer wrote to Al-Fayed saying that Andrew Bowden
would campaign on his behalf - whilst Smith "could be used"
in other ways. Greer later asked Smith to meet Bowden to brief
him on strategy.
Very shortly afterwards Smith agreed to put
down another Parliamentary question for Al-Fayed about the misdeeds
of Lonrho. He met with Al-Fayed and his legal adviser on 2 March,
and spoke with Greer the following day, promising to put the
question down that evening. The next day, two days after the meeting
with Al-Fayed, Smith called and left a message with both Al-Fayed
and Greer for them to call - no doubt to report that the question
had in fact been put down. The question was answered on 11 March
by Michael Howard, and later the same afternoon Smith again met
with Al-Fayed. Just a week later Smith agreed to meet with Al-Fayed's
in house legal adviser, and further questions were put down,
which were answered on 23 March. The following week Smith was
entertained to lunch by Al-Fayed and his in house legal adviser.
During this period Smith was very busy on Al-Fayed's
and House of Fraser's behalf. It was at this point (2 April)
that the invitation was received via Greer from Al-Fayed to Hamilton,
Smith, Bowden, Grylls and Hordern to enjoy a weekend at the Ritz.
Scarcely had the invitation been extended, however, when news
came that a team of DTI inspectors had been appointed to investigate
House of Fraser. An emergency meeting of Hamilton, Grylls, Smith
and Al-Fayed took place three days later, following which the
invitation to the Ritz was postponed.
Smith had a further three meetings with Al-Fayed
over the next month, and tried to contact him at least once by
telephone. In the same period parliamentary questions put down
by Smith for Al-Fayed were answered twice. Pressure was again
being brought to bear by Greer for a delegation of MPs to visit
Paul Channon. On 11 May Smith met with Al-Fayed, and received
from Al-Fayed's in house legal adviser a briefing for the meeting
with Channon, which was also copied to Hamilton, Grylls and Hordern.
All four met with Channon on 13 May. A strategy meeting
was arranged to take place at Harrods on 15 July, after the General
Election. It was attended by Hamilton, Bowden, Grylls and Smith,
and it was agreed that a delegation should be formed to the new
Trade Secretary, Lord Young. That meeting took place towards the
end of July and was attended by Hamilton, Smith and Hordern,
and was for the purpose of trying to persuade the Trade Secretary
that the DTI investigation should be abandoned.
When Parliament reconvened the following Autumn,
Smith was again in contact with Greer. They met on 22September,
and on 13 October. Smith attended a further meeting, this time
with Hamilton, Hordern, Grylls and Al-Fayed. Further meetings
took place in November and December, the purpose of which was
to plan a further delegation to Lord Young, which took place
on 14 December. During the same period Smith put down a series
of questions, which were answered on 28 October, and 5, 13 and
19 November.
By January the following year, it was clear
to Greer that the DTI inquiry was not going to be favourable to
Al-Fayed. A meeting with Al-Fayed, Smith and Hordern was convened
on 15 January, and two weeks later Greer wrote to Smith, referring
to the possibility of the report going "as we think it will".
Throughout this period Smith was in regular contact with Al-Fayed
by telephone, and on 17 February and 11 May they met. Smith was
continuing to put down questions - answered on 10 and 29 February,
25 May and 13, 19 and 26 July.
Al-Fayed had been contacted by a woman by the
name of Francesca Pollard, who had told him that she had information
which would show that the government's motives for beginning the
DTI inquiry were improper. She had tried to obtain redress through
her own MP, who had dismissed her as an eccentric. In June 1988
Greer suggested to Al-Fayed that Smith should take up Pollard's
cause, and subsequently arranged a meeting between Pollard and
Smith.
By July 1988 Tiny Rowland's suspicions had been
roused, and on 15 July he issued a press release broadly hinting
at bribery - and pointing to Smith's connections with Al-Fayed
and Greer. Following this press release Greer met with Smith
on a number of occasions, finally reporting to Al-Fayed on 10
August that "Smith will do as we wish". A few days
later Smith telephoned Al-Fayed to let him know that he would
be away on holiday for three weeks. Before leaving however he
drafted a four page letter to Lord Young, which Al-Fayed's legal
adviser thought was "splendid". That letter referred
to the positions of Hamilton and Hordern but did not disclose
any financial interest.
On his return from holiday, Smith continued
with his activities on behalf of Al-Fayed, meeting with him on
at least three further occasions before the end of the year and
speaking to him by telephone. Questions put down by Smith for
Al-Fayed were answered on 10 and 28 November.
1989 saw the end of Smith's involvement with
Al-Fayed and House of Fraser and the termination of Greer's retainer.
Before the retainer was terminated, however, Smith met with Al-Fayed
on at least four occasions and with Greer alone on three. On
23 January he put down a question about a Rowland publication
"Hero from Zero", which prompted a letter from Rowland
warning Smith that Rowland knew that Smith was in the pay of
Al-Fayed. Although Smith continued to meet with Al-Fayed, Hamilton
and Greer after this letter, he took no further public part in
the campaign, and his parliamentary questions abruptly ceased.
On 20 October 1994, following publication of
The Guardian article, over which Hamilton sued, Smith resigned,
telling the Prime Minister that he had accepted money from Al-Fayed
in return for Parliamentary activities.
ANDREW BOWDEN
Andrew Bowden has a longstanding
friendship with Ian Greer. In 1984, Bowden had provided one of
Greer's employees, Anthony Mayes, with a Research Assistant's
pass.
It appears that Greer first approached Bowden
to ask him for assistance with the House of Fraser account in
November 1986. On 18 November, Greer met Bowden at the House
of Commons. Shortly before this meeting, Greer had met with Mohamed
Al-Fayed to discuss House of Fraser's objectives for the next
parliamentary session. It is believed that one of the matters
which Greer and Al-Fayed were discussing was the composition
of the team of MP's to work on House of Fraser's behalf. The matter
most exercising Al-Fayed at that point was Lonrho's proposed
acquisition of Today newspaper.
By February 1987, Greer and Al-Fayed had decided
that it would be appropriate for a Member of Parliament to be
appointed paid adviser to House of Fraser. On 5 February 1987,
Greer wrote to Al-Fayed suggesting that Tim Smith may be an appropriate
choice. It would appear, however, that Smith was not prepared
to go that far. Some four days later, Greer had lunch with Bowden
at Greens restaurant, and following lunch he faxed Al-Fayed to
say "At last we have a campaigner". Greer wrote "I
have known Andrew for twenty years and can depend on him. He
is without doubt the right person." Greer also commented
that "We can use Tim Smith in other ways". The suggestion
of using Bowden evidently met with Al-Fayed's approval, and a
few days later, Greer contacted Al-Fayed to set up a meeting
with Bowden on 18 February.
Bowden telephoned Al-Fayed two days before the
meeting was due to commence, to say that he wanted the meeting
to be attended only by Greer and Al-Fayed, and that no lawyers
should be present.
The meeting with Greer and Al-Fayed duly took
place on 18 February. During the course of the next month, Greer
met with Bowden on a further five occasions. One of these meetings
was also attended by Royston Webb, Al-Fayed's in house legal
adviser.
A further meeting between Bowden and Al-Fayed,
also attended by Ian Greer, took place on 22 March, some ten
days after Al-Fayed had learned that the Department of Trade and
Industry was to investigate his worth. Two days later, Bowden
tabled four questions for Al-Fayed. Two were directed to the Home
Secretary on the resignation from the Metropolitan Police of
Chief Superintendent Ken Etheridge and his appointment as security
officer with Lonrho. As a member of the Fraud Squad, Etheridge
had previously enquired into Lonrho's activities in the 1970's.
The same day, Greer wrote to Smith, asking him to brief Bowden
on strategy. He wrote "Andrew Bowden has become involved
with Mohamed - the more the merrier!" The day after the questions
were tabled, Greer met Bowden in the lobby of the House of Commons,
and he subsequently faxed copies of Bowden's questions to Al-Fayed.
Less than a week after the questions had been
tabled by Bowden, and at a time when Smith and Hamilton had also
been actively asking questions on behalf of Al-Fayed, Greer wrote
a private and confidential letter to Bowden, Hamilton, Smith
and Grylls, saying that Al-Fayed wanted to invite them to Paris
for a weekend stay at the Ritz and to visit the Duchess of Windsor's
home in the Bois de Boulogne, which he was refurbishing. He wrote:
"I am sure you will appreciate that this is in every way
a private invitation and I would therefore be grateful for it
being kept as such". The visit had to be postponed, however,
when Paul Channon announced less than a week later, on 9 April,
that he was setting up an enquiry into the House of Fraser takeover.
The MP's were told by Greer that it would be inappropriate if
the trip went ahead.
On the same day that the invitation to visit
The Ritz was withdrawn, Bowden's parliamentary questions were
answered, and a meeting took place between Bowden, Webb, Grylls,
Smith, Hamilton and Greer at the House of Commons. Bowden had
also intended to attend the meeting, but was unable to do so.
Two weeks later, Greer, Bowden, Smith and Hamilton met with Al-Fayed.
Writing to a colleague at around the same time, Greer said: "Mohamed
is due to meet three or four key Conservative MPs to discuss the
current position and what can be done in terms of representation
within the course of the next few weeks or longer. I am anxious
to see a delegation led by Michael Grylls MP, Chairman of the
Tory Party Trade & Industry Committee, supported by Tim Smith
MP, Vice Chairman, Neil Hamilton MP, Andrew Bowden MP and Sir
Peter Hordern MP - seek an interview with Paul Channon¼Andrew
Bowden and other MPs can continue to table parliamentary questions
on other relevant matters - Lonrho, AGM, the Etheridge affairs
etc. . . ." In mid-1987, Bowden introduced as one of
his constituents, a disaffected former Lonrho employee, to Al-Fayed's
lawyers. Bowden acknowledged that it was unlikely that his constituent
was going to help Al-Fayed for nothing, but denied that he personally
had been paid an introduction fee.
The 1987 General Election was called on 11 May.
During the next weeks, Bowden continued to maintain contact with
Al-Fayed. On 24 May, Greer telephoned Al-Fayed to let him know
that Bowden had four tickets to the Trooping of the Colour, to
which Al-Fayed was being invited. Almost a month later, Greer
was again in contact with Al-Fayed, attempting to arrange a meeting
with Bowden, and the group of four - Grylls, Smith, Hamilton
and Horden. The meeting proved difficult to organise, and did
not take place until 13 July.
Following this meeting, Bowden dropped out of
the picture. In his evidence to the Privileges Committee in November
1995, Al-Fayed claimed that this was because Bowden had asked
to be retained by House of Fraser at £5,000 per month. Al-Fayed
was already paying Sir Peter Horden MP as a declared consultant,
and he was unimpressed with Bowden's work. Al-Fayed alleged that
he had already paid Bowden £5,000 for asking the parliamentary
questions.
For the 1987 election, Bowden's Election campaign
fighting fund was paid £5,319.90 on 25 June by Ian Greer
Associates, on a company cheque. This payment came from money
provided by Al-Fayed and Dave Allen, the head of the courier
company, DHL, which was paid to a total of 24 MP's. The donation
was more than the entire sum declared on Bowden's official election
returns for his total campaign expenditure. Bowden declared that
he had spent £4,660. Moreover, it was more than the legal
maximum allowed for an individual's total expenditure to contest
that seat - which was £5,135. Bowden did not declare the
donation on the Register of Members' Interests.
LADY OLGA MAITLAND
Lady Olga was paid
"commissions" of several thousand pounds by Ian Greer
for services provided on various issues, as follows:
1. On 31 January 1992 Ian Greer
made a payment by cheque (amount unknown) for Lady Olga's assistance
in relation to Kuwaiti money;
2. A payment of fees was made on
3 February 1992 relating to Serbia, part of which appears to have
been paid in cash. This was during the course of the Croatian
war, and at this time Greer had a contract to act for the Serbian
Government;
3. On 6 October 1992 Lady Olga
provided an invoice for consultancy services (unspecified) of
£3,000. According to Peter Carter-Ruck and Partners this
invoice related to work carried out in Kuwait some time prior
to this date, in relation to which Lady Olga had not rendered
an invoice, but the invoice was produced when it was requested
by the auditors of Ian Greer Associates. None of this has been
verified.
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