Select Committee on Standards and Privileges First Report


APPENDIX 29

A second submission to Sir Gordon Downey from The Guardian

  This document is in response to a 133-page submission from Neil Hamilton, together with a later submission dealing with commission payments.[20]

PREFACE

  

We believe this response shows conclusively that Mr Hamilton has lied to:

    The Guardian newspaper

    The Chief Whip

    The Deputy Prime Minister

    The Cabinet Secretary

The Parliamentary Commissioner for Standards   In the document presently under consideration he now even lies about his lies to the above named people.

  We note the seven principles of conduct which the Nolan Committee considered underpinned public life. They are: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. They are stated in full on page 14 of Volume 1 of Lord Nolan's first report.

  We believe that Mr Hamilton's behaviour contravenes all these principles. We believe Mr Hamilton's lies to the Inquiry place him in Contempt of Parliament. Above all, we believe that a man who so casually and habitually lies is unfit to hold public office.

(1) The libel action: a fundamental question of justice   

Mr Hamilton's latest document reads as the script for the courtroom battle he walked away from. It consists of notes towards the cross-examination of Mohamed Al-Fayed. Since Mr Hamilton evidently believes that this 133-page text is the definitive demolition of both Mr Fayed and the case against him one cannot help wondering afresh why it is that he was unwilling to present this case in court.

  What is most noticeable about this 133-page document is his total failure to grasp this nettle: he makes no reference to his withdrawal from the libel action, let alone offer any credible explanation for it.

  If his story is true, he stood to make a six-figure sum in damages. Why, then, did he not persist with his action? The inescapable inference is that he knew full well that truth would out, and dared not take the risk.

  It is a norm of our society that public figures must sue for libel to remove a published imputation of dishonour, and it is a corollary of that rule that those who do not sue and (especially) those who back down at the door of the court, must be assumed guilty of the dishonourable imputation that they have declined to refute. Hamilton's whole case is an invitation to your inquiry to undermine this salutary norm. We believe that it is wrong for him to be able to do so - seeking to blacken the name of The Guardian under privilege - without first offering to you a documented explanation for his withdrawal from the libel action.

  What could plausibly explain his reluctance to fight an action he had so publicly launched and on which so much hung?

  Was it honestly because of a legal technicality, which only became apparent in the final days of the case? This has always seemed improbable.

       -    The solicitors, Peter Carter Ruck, are the most experienced firm in the country in handling large and complex libel cases. Is it really likely that they would have failed to anticipate the possible clash of interests between their two clients? If they did fail to anticipate such a clash that would surely be a matter so serious that Mr Hamilton would wish to recover his £150,000 through an action for professional negligence. Is he doing so?

       -    Mr Hamilton is himself a barrister, with personal experience of fighting a massive libel case. Is it credible that he could have invested two years of work and £150,000 of his own money without considering in advance the possibility that he and Greer might be better advised to have separate legal representation?

  Because he ran out of money? Unlikely.

       -    His last libel case was funded by Sir James Goldsmith - though Hamilton dissembled about this in a letter to The Times on 29 October, 1985 (Sleaze 58). His solicitors, Peter Carter Ruck, themselves lied about this to The Guardian, maintaining that Sir James had no involvement in the action during the course of The Guardian case. Unfortunately, the truth was revealed in Peter Carter Ruck's own memoirs.


       -    Hamilton, as a barrister who had previously fought a massive libel action, cannot plausibly claim to have been innocent about the huge costs involved in such litigation.

  As we have remarked before, there is something Hamilton and Greer (and their legal team) know about that final week before throwing in the towel and it is unlikely that the present Inquiry will get at the truth of the whole affair without questioning counsel and solicitors in the case.

  We have frankly presented our lawyers before the Inquiry and invited you to question them about any aspect of the case. Indeed, we have written extensively about our own legal preparations for the trial in Sleaze. Is Mr Hamilton willing to extend you the same opportunity?

  The other matter that strikes us about the libel action occurs in the document from Mr Hamilton's co-plaintiff and collaborator, Ian Greer. He has now ventured an explanation to you for his decision to withdrawn. At paragraph 2 of his letter he says that he was concerned about the impact of the new statements, and especially that Bozak might be taken seriously by the court.

  What strikes us about this explanation is that we can prove that Mr Greer did not receive these statements until 9.10 pm on Sunday 29 September, when his solicitors asked our lawyers to fax them urgently. The offer to withdraw the action (if only The Guardian would not insist on its costs) was made on Friday 27 September at 5.40 pm. The plaintiff's lawyers had by this time seen their respective professional bodies earlier that day. So here we have a clumsy attempt by Mr Greer, whom we understand to be working closely with Mr Hamilton in respect to your inquiry, to pull the wool over your eyes in respect of this crucial preliminary issue.

(2) Cash and the doctrine of "Plausible Deniability"

  Mr Hamilton says that he is being asked to prove a negative. That, he points out, is an inherently difficult thing to do.

  The Guardian, too, had an inherently difficult thing to do. Any MP accepting money on the scale that Tim Smith and Neil Hamilton did is bound to anticipate the possibility of the matter coming to light or being used against them. Neither man is stupid. Both have, to varying degree, displayed a capacity for dishonesty. It follows that they would take care to ensure that there would be as little proof as possible that these monetary transactions had taken place.

  Mr Smith has, at least (after initial lies to The Guardian) now admitted that he was paid. Moreover, it now transpires that he was paid in precisely the manner Mr Al-Fayed claimed he was paid - in face to face meetings with Al-Fayed and in cash (Smith submission pp 3/4) The sums were rather larger than anyone had so far accused him of taking. Mr Al-Fayed, as we have remarked before, does not have a head for detail, but nor, it appears, does he habitually exaggerate the truth. The Inquiry will recall that Mr Al-Fayed initially accused Mr Hamilton of staying at the Ritz for three days. It was Mr Hamilton who corrected him and confessed to staying six days.

  Taking the money in cash would, of course, be an elementary precaution. Cash is always deniable. Mr Smith initially denied it, and Mr Hamilton and Mr Greer persist in denying it. Hamilton knew that if it ever came to the crunch, it would be the word of a British MP against the word of (as Hamilton may have seen it) an excitable and voluble Egyptian who (Mr Hamilton may have taken an early view) might never be the most consistent witness.

  Having taken that view of the inherent unproveability of cash transactions, Mr Hamilton has never deviated. He has shown remarkable brazenness in sticking to his line. "Al-Fayed is a liar. Al-Fayed is a liar". If he can repeat it often enough (and he could scarcely repeat it more often during the course of these 130-odd pages) then surely he will be off the hook?   Our task was, if we may say so, rather harder than Mr Hamilton's. The English law of libel places the onus of proof on the defendant - something, with his experience of libel, Mr Hamilton also doubtless took into account. Anyone seeking to expose his conduct at any stage in the future would have to contend with this obstacle. As The Guardian's recent High Court experience shows, there is no public interest defence available to a newspaper in this country. (Happily, our reporting in that case was as solid as our reporting in this case).

   (3) Mr Hamilton's unwise challenge   Mr Hamilton makes a foolhardy invitation to the inquiry when he asks (paragraph 28): "The inquiry has to answer a simple question - Who is lying? Fayed or Hamilton?"   We can only state that we have found neither Mr Hamilton nor Mr Smith to be truthful witnesses. Had both men been truthful and open with us from the start we would have formed an entirely different view of this whole affair. But both men were not honest with us. Both men lied. Mr Smith has since admitted the truthfulness of The Guardian's (and therefore Mr Al-Fayed's story). But Mr Hamilton finds it difficult to explain his dishonesty with our reporters and with Peter Preston. So in his evidence to this inquiry he has lied about his lies. Through subsequent research and through reference to notes made contemporaneously we can prove that Mr Hamilton is lying to the Parliamentary Commissioner. Sir Gordon Downey may find it as objectionable as we did that an elected representative should lie to him.

  Similarly, the Deputy Prime Minister, Mr Heseltine must surely find it objectionable that a man so willing to lie to save his skin should remain an MP. The Cabinet Secretary and - through him - the Prime Minister must deeply resent the lies they were told by Mr Hamilton as he struggled to cling onto office. A man who lies to the two most senior politicians in the land is unworthy to hold public office. Those lies are incontrovertibly proved.

  Our earlier submission to the Inquiry detailed the lies to The Guardian and Peter Preston. Let us remind ourselves of the startling nature of the lie to Mr Heseltine, the Cabinet Secretary, the Chief Whip and - through them - the Prime Minister.

  On 21 October 1994 Mr Hamilton's career hung in the balance. He had been accused of gross dishonesty by a national newspaper. He was refusing to resign and was desperate to save his skin. According to the minute by the Cabinet Secretary, Sir Robin Butler, evidently intended for the eyes of the Prime Minister:

  "I pointed out that the Chief Whip and I had asked whether there was any other interest which he had not declared or anything else of which he was aware which could be of embarrassment to the Government and he said that there was not. Nevertheless, I encouraged the President to put this point to Mr Hamilton himself. The President has now done so, and Mr Hamilton has given him an absolute assurance that he had no financial relationship with Mr Greer, and the President has accepted this." [Emphasis added]   This assurance to Mr Heseltine was, as we now know, a direct lie. It succeeded in saving his job for a few more days. As instructive as the lie itself is the way in which Mr Hamilton reacts to the exposure of this lie.

  His first line of defence is to point out that this was a "fraught" telephone conversation. If this were so, he would have had ample time in which subsequently to consider his answer and to have contacted Sir Robin or Mr Heseltine to correct or amplify his statement. He did not do so. Indeed, he brazenly issued a statement two years later in which he says:

  "I responded I had not. It was my view then, and now, that the receipt of two payments many years ago did not constitute a financial relationship."   This is, of course, specious nonsense.

  Firstly, despite blaming the "fraught" nature of the conversation, he does not withdraw the remark. On the contrary, he seeks to justify it. Secondly, it is clear from the context of the minute that he is specifically being asked about his past relationship with Fayed and Greer. To dismiss it as "many years ago", and thus of no account, is blatant dishonesty. Thirdly, he is breathtakingly cavalier about the extent of the money he is concealing. Questioned on Newsnight, he equated the sums of money (total: £10,000) with buying two copies of The Guardian (total: 90p), demanding to know whether buying a couple of issues of a newspaper meant he had a financial relationship with the editor. For any MP to seek publicly to trivialise the Register of Members' Interests in such a juvenile manner - particularly in the wake of Lord Nolan's report - is distasteful.

  But never mind the lie to Mr Heseltine. The above minute shows that Mr Hamilton has, in any case, already told the Chief Whip and Sir Robin Butler (in person, not on the end of a "fraught" telephone line) that there were no other interests which he had not declared. (see minute above).

  Hamilton has now - after discovery - been forced to admit to Sir Gordon Downey that there was at least £15,000 worth of interests which he had not declared.

  By October 1994 there could be no possible confusion in Mr Hamilton's mind about the need to declare "commission" or "introductory" payments. In December 1989 he - along with all other MPs - had received a note from the Registrar of Members' Interests which said explicitly: "Single payments, such as commissions received for introductions . . . should be registered"

  So - a full five years after that warning - Mr Hamilton is here revealed as having knowingly and deliberately told a direct lie to his Chief Whip and to the Cabinet Secretary which was clearly intended for the ears of the Prime Minister.

  "The inquiry has to answer a simple question - Who is lying? Fayed or Hamilton?"

  Mr Hamilton may come to regret posing the question in those terms. For we know that Mr Hamilton, as an elected MP, deliberately lied to the Prime Minister, the Deputy Prime Minster, the Cabinet Secretary and the Chief Whip in order to save his skin.

  The Inquiry also knows that Mr Al-Fayed's claims about the other Minister of the Crown, Tim Smith, have turned out to be demonstrably true. Mr Al-Fayed's only error was to underestimate the sums he paid Smith rather than overestimate them.

  That, we submit, should be the starting point for Sir Gordon Downey.

MR HAMILTON'S DOSSIER

  We have no intention of responding to every one of Mr Hamilton's paragraphs. We believe the dossier to be disorganised, repetitious, specious and dishonest. What follows are simple observations pointing up some of the more obviously misleading passages. If the Inquiry would like us to address any specific points not addressed here we are happy to do so.

  The general comment we would make is that Mr Hamilton cannot come to grip with the case against him as it now stands - i.e., as it has been described in "Sleaze". His tactic is to set up the issue as a simple test of the credibility of himself versus Fayed, and then to vilify the latter, and to make copious criticisms of The Guardian's early investigations (which he caricatures as little more than an acceptance of Al-Fayed's word: see Peter Preston's appendix, below) He does not begin to answer the documented case against him as it now exists, based on his own letters to and on behalf of Al-Fayed, his admitted acceptance of payments in kind, his lack of disclosure to ministers and to the Registrar, the nature of the payments he has received from Greer and the lies he can be proven to have told about his relationship to Al-Fayed and Greer over the past three years.

MR HAMILTON, THE GUARDIAN AND THIS INQUIRY

  5-25 The document begins unpromisingly. There is an introductory barrage of accusations, many of which are repeated throughout the following 133 pages. It is instructive to examine this opening section, not because it is tremendously pertinent to the main charges, but because it does demonstrate from the start the way Mr Hamilton habitually weaves together minor evasions, dishonesties and conspiratorial fantasies to present a picture which might otherwise seem to have a patina of plausibility about it.

  12-25 It is claimed The Guardian "refused to cooperate with the Inquiry during October and November". This was apparently so that the Inquiry would be delayed until such a time as The Guardian had managed to complete a book and film on the subject in order to prejudice the inquiry.

  Sir Gordon knows this to be untrue. He knows that, from the beginning of October 1995, there was never any doubt that The Guardian was co-operating with his inquiry, though we never sought to conceal our anxieties about the process Mr Hamilton had chosen over the civil courts. Indeed, Sir Gordon knows that from the outset we were keen for him or his counsel to examine every one of the 40-odd files of documents accumulated during the course of successfully defending the libel action. That the inquiry has not proceeded faster is not due to some imagined conspiracy by The Guardian but was due to a number of factors. Among them:

  (a)   An unforeseen and unprecedented problem concerning the privileged status of certain documents which took some time - both on the Inquiry's part and on The Guardian's part - to resolve.


  (b)   The Inquiry's initial reluctance to inspect discovered documents in the possession of The Guardian's lawyers. This attitude on the part of the inquiry meant that as late as Monday 10 February 1997, there was still considerable confusion amongst members of the Inquiry team as to the extent and location of several key documents.


  (c)   The fact that The Guardian's lawyers were simultaneously preparing for, and fighting, another complicated libel trial in the High Court. The preparation of this two-week case (on which £750,000 of costs and damages potentially hinged) was additionally complicated (i) by the illness of leading counsel, requiring a new team to be instructed and briefed; and (ii) by a false start to the trial in early December. It started again in January 1996 with the original counsel, who required re-briefing. Geraldine Proudler of Olswang was doing her best to supply the Inquiry with the material it required (entirely, it should be emphasised, at the expense of The Guardian) at the same time as fighting this trial.

  Those are the reasons for any delay rather than the elaborate fantasy embroidered by Mr Hamilton. The Guardian has always pressed for the inquiry to proceed with maximum possible haste. Mr Hamilton might well care to explain why it took him until 28 November to hand over his material.

  Mr Hamilton's complaints of prejudicial publicity must be taken with something of a pinch of salt. From the moment his libel case collapsed (which coincided with the reference to Sir Gordon Downey) he and his wife paraded themselves in every television studio and on every newspaper interviewer's couch in order to protest his innocence and to blacken The Guardian's name.

  We can supply the inquiry with transcripts of the many lies he publicly disseminated during this period. He has also during the course of the Inquiry written several articles in newspapers - both national and local-and magazines seeking to poison the public mind against The Guardian and Mr Al-Fayed and to persuade people of his innocence. Nor has Mr Greer been idle. He, too, has been busy writing a book ever since withdrawing his libel claims and is actively seeking a publisher.

  We do not apologise for continuing to draw public attention to Mr Hamilton. We do not consider him fit to be an MP and we believe it is right that the public - especially his constituents - should be fully acquainted with his background of deception and dishonesty before a General Election. That would seem to be a fundamental duty of any newspaper in a democracy. The book, Sleaze, was our first attempt to coalesce the whole story of the sort of inappropriate lobbying activities - including those of Mr Hamilton, Mr Smith and others - which gave rise to the Nolan Inquiry. Lord Nolan's report showed our concerns to be amply justified.

  Our book was, indeed, intended to influence both the public and Sir Gordon Downey's inquiry. A copy of the book was openly sent to Sir Gordon upon publication with an invitation that he should read it and consider it as evidence against Mr Hamilton and others. We have reason to think that the book has assisted the Inquiry and Mr Pleming has, quite reasonably, questioned us on its contents.

  We think the Despatches film also contains material which should have assisted the Inquiry. We certainly helped the makers of this film by frankly answering any questions they posed of us. We believe that Mr Fayed participated on similar terms. We understand that Mr Hamilton was also asked to participate, but declined. The Editor of The Guardian had no knowledge of the contents of the film before the eve of its broadcast, January 15, which rather confounds any suggestion of orchestration. Since the Inquiry has limited investigative resources of its own and has repeatedly asked for evidence from The Guardian we presume it finds serious journalistic endeavours of this sort helpful rather than otherwise.

  The history of this whole affair is hardly one of a newspaper rushing into publication. The Guardian has been working on this story intermittently since the summer of 1993. Publication of any material was delayed for more than a year as a result of (a) the lies of Mr Smith and Mr Hamilton when first interviewed in July 1993 and (b) the further lies of Mr Hamilton in his letters to Peter Preston. Further dissemination of the facts about Mr Hamilton were then prevented by the Members' Interest Committee's ruling [which was not, in fact, well-founded in law] that the matter was sub judice. The unease this caused at the time has been shown to have been at least partially explained by two recent reports on the background to that period from the Committee on Standards and Privileges. The matter then did in fact become sub judice due to the imminent court case.

  It would certainly be an odd state of affairs if, having successfully defended a libel action, a newspaper were yet again-three and a half years later - to be prevented from writing about a subject in the public interest simply because the defeated plaintiff sought another arena for the claims to be examined. There is nothing in Erskine May or the Contempt Act to prevent such publication. The public would surely find it objectionable for an MP to seek indefinitely to prevent the disclosure of his dishonest behaviour on spurious sub judice grounds, especially when he is about to submit himself for re-election.

  Mr Hamilton's claims (19-22) of a conspiracy between The Guardian and two newspapers in Tatton which are owned by The Guardian's parent company, Guardian Media Group, are another fantasy. They are repeated in more lurid detail on page 72 (231-234, 237). Almost every statement in these paragraphs is fantasy. We invite the Inquiry to take evidence to this effect from any editor or senior executive on the Wilmslow and Knutsford Express Advertisers. We find it telling that Mr Hamilton has spent much energy in threatening legal action against small newsagents and booksellers in his constituency with a view to preventing them learning about his dishonesties in the immediate period before a General Election. We find such actions within a democratic system disturbing.

  26-30. The allegations Fayed makes against Smith and Hamilton derived from his first-hand knowledge - it was at his hand, or at his direction, that they received their cash. It is false to assert that there is no documentary corrobation - the documents evidencing what Hamilton did for Al-Fayed prove conduct which would not have been pursued had Hamilton not been paid. (To take just a few examples; his PQs and EDMs making allegations of which he had no knowledge; his letters to Al-Fayed and the Stock Exchange, 23 and 28 July 1987; his letter to ministers of 21 November 1987, ibid, 28 January 1988, together with the obsequious letter to Al-Fayed, ibid 29 July 1988; the "Hamilton notepaper" letters, which were sent (not to Hurd, but to Young and Clark) since we retrieved the original on discovery, 21-22 March 1989).

  31-33. The Guardian has been very careful not to rely on the word of Al-Fayed without strong corroboration, but does not accept Hamilton's characterisation of the DTI report or of the Betterman and Rider cases. It is our conclusion, from careful research, that he himself lied (indeed, perjured himself on oath) in the libel proceedings he brought and won against the BBC in 1985. We believe that, if the Inquiry is to examine the Bettermann case, then it should also examine Mr Hamilton's probity in the BBC case. It is pertinent to Mr Hamilton's probity in precisely the way he claims the Betterman case if pertinent to Al-Fayed's probity.

  We have not provided details of this, or of other extraneous occasions on which we believe Hamilton has lied. The issue is which man is lying in relation to Al-Fayed's allegations of payments in cash and kind. The thrust of Al-Fayed's allegations, if not the precise detail, has been consistent throughout in relation to Smith and Hamilton and we know he has told the truth, without embroidery, against Smith. Hamilton has lied in dozens of demonstrable ways from the moment the allegations were put to him.

CHAPTER 2

  This entire chapter is devoted to nit-picking the Fayed allegations relating to the payments. We have a few general comments:

  (1)   The thrust of Fayed's story has been consistent throughout. Hamilton was frequently paid, in cash of £2-3,000 a time, for his services.


  (2)   Fayed habitually talks in broad brush-strokes and had no command of, or interest in, detail. D J Freeman may not have understood this (see our opening statement).


  (3)   The differences in recollection between Al-Fayed and the three witnesses are what you would expect after eight years. What is plain is that there has been no "putting of heads together" to produce a perfectly consistent story, and no exercise the object of which has been, as Hamilton alleges, to "plug the gaps".


  (4)   The overwhelming impression from this chapter is that it is culled from preparation for the cross-examination of Al-Fayed. This makes it all the more crucial to examine the matter over which Hamilton is totally silent, viz why he withdrew his libel action rather than rely on cross-examination of Al-Fayed.

  There are a few statements and assumptions in this chapter which require particular comments, viz   58, 84-86: "The three cheques".

  Al-Fayed was under the impression that the election money was cadged from him by Greer on the pretext of paying the lobbying MPs, notably Smith and Hamilton. There is some reason to believe that he did use this excuse, at least for the £12,000: why else would Al-Fayed pay him after he had given McAlpine £250,000 for the Conservative campaign? Greer lied to Ali to cadge the £6,000 (one or two Tories in marginal seats) and was quite capable of lying to Mohamed about money he was really going to use for IGA purposes and not Al-Fayed's. The cheque for £13,333 is said to be a "special project" fee for a special project which was never undertaken and for which no plans ever came into existence. It was approximately two-thirds of the annual "under the counter" payment that Greer had previously been receiving in cash. Was it a pay-off, obtained by Greer by invoice and VAT payment because of the Select Committee's recent activity in challenging him over his payments to Grylls, and the imminent Privileges Committee condemnation of John Browne? We note that Greer met both Hamilton and Grylls, separately, in the week before this invoice was rendered.

  69 Here begins a constant theme: what was Al-Fayed getting for all these payments? The answer is that he was hiring an MP to act on his behalf. He was getting public support in parliament against his enemy Lonrho. He was getting defamatory attacks on Rowland, Lonrho and "The Observer" widely reported in the press, because they were being made by Hamilton (and Smith) under parliamentary privilege. He was getting pressure put on the DTI not to investigate his House of Fraser take over; when it did, Hamilton helped him get rid of Philip Heslop QC as an inspector; when it reported adversely, Hamilton and co successfully pressured Lord Young (a) to suppress the report for several years and (b) not to refer it to the Monopolies and Mergers Commission. His need for Hamilton ended in March of 1990, when the report was finally published with the announcement that no action of any sort would be taken against Al-Fayed. In short, Al-Fayed received from Hamilton value for his money.   82 Hamilton has not in fact produced all his financial records for the period 1985-92. He was under a legal obligation to produce his tax returns, 1985-94 and did not honour that obligation.

  71 The comparison is otiose. Smith was paid £18,000 in bribes between (he says) 1987 and 1989. In this period Hamilton gradually became the more aggressive of the two, especially after Smith "retired hurt" from Rowland's letter in January 1989. He was, as Al-Fayed says, the more demanding and the more brazen: unlike Smith, apparently, he was making no declarations to the Inland Revenue.

  99 The Inquiry may find Appendix 3 helpful in this respect. It shows a similar chart to the one Hamilton has constructed, showing the relationship between the work undertaken by Smith and the sums of money he admits taking. It is interesting that we count nine meetings where Smith met Al-Fayed alone. Nine times £2,000 equals £18,000 - precisely the sum Smith admit to receiving from Al-Fayed.

  101 This is a truly absurd point. Al-Fayed was not desperate in the summer of 1987: the DTI enquiry at this stage was going well for him. Subsequently, as the inspectors became tougher and began accepting the evidence provided to them by Lonrho, he became in dire need of political help. Hence all the subsequent payments.

  128 O'Sullivan may or may not have an accurate recollection: Hamilton denied us the opportunity to cross-examine him. His evidence is perfectly consistent with our interpretation of Al-Fayed alleging that Hamilton solicited and/or received payment on most if not all of the occasions they met alone.

  134 We referred in our opening statement to our lawyers' genuine perception that Al-Fayed was going out of his way to protect employees who, they always believed, must have known something about the payments. Their relevance only became clear in late August 1996, when (the matter having gone to sleep since June 1995) we analysed the telephone records taken by "Alison" and "Iris". We note with interest how morally justified Al-Fayed's initial concern to protect them has proved, given the viciousness of Hamilton's attack on Alison Bozak's fitness to be a solicitor (paragraphs 146-7).

  154 "What was I doing in exchange for all this money?"

Answer: a great deal of work which he would not have done had he not received it.

  "Why pay me when Campbell-Savours could do the work for nothing?".

Answer: Because he was a powerless back-bench opposition MP. Hamilton was a member of the governing party, on his way into the Government, a vice-chairman of the vital Trade and Industry Committee and secretary of the Conservative Finance Committee, his appointment to which, as he fawningly reminded Mohamed on 23 July 1987, will give him much more clout to advance his interests.

  154 (i) "Why was Hordern not used to put down written PQs?"

Answer: Why indeed? Greer canvassed this with him, he declined. He was always scrupulously careful to do nothing on the floor of the House to help Al-Fayed. Since he registered his interests, unlike Hamilton, his principled reticence in this respect is difficult to explain. Perhaps it avoided people asking how much he was being paid by the House of Fraser, and perhaps it gave him more credit with Channon and Young when he introduced Hamilton and Smith and Grylls as concerned member of the Trade and Industry Committee.

  (ii) "Why pay Hamilton vastly more than Hordern?" Answer: Why indeed? Hamilton was not paid vastly more than Hordern: he was on a very nice little earner of £24,000 per annum - a sum which even now he finds difficult to admit. Over the three years Hamilton was "active" in Al-Fayed's services, Horden earned £72,000. Hamilton must have made the equivalent (given the fact that - we believe - he either did not declare your payments and rewards to the Inland Revenue or managed to claim them as tax-free "ex-gratia" payments).

  156 See 134 above

CHAPTER 3

  179 The PQ was a most effective way to achieve Al-Fayed's objective of striking back at Lonrho, with defamatory statements made by "his" MPs under parliamentary privilege. Just look at Kenneth Fleet's report in The Times of Hamilton's first PQs, 8 November 1985. In 1994, The Sunday Times found MPs prepared to accept £1,000 for tabling one PQ.

  180 In all the hundreds of pages of documentation. We are, aware of only one occasion on which Hamilton refused to do Greer/Al-Fayed's bidding. That was because Eddie Shah, of "Today", was his constituent and supporter. But note the cryptic way in which he replies (19 August 1986) with a secret message sent to Al-Fayed through a Greer employee.

  187-193 At this point Hamilton develops his new theory that he was never asked about cash by Hencke and Mullin at the Terrace meeting, hence Al-Fayed never mentioned cash to Preston in relation to Hamilton, but only in relation to Smith. We dealt with this at the hearing. It is a lie (see separate section, below). It might be interesting, for the inquiry to review closely the Government documents disclosed on subpoena by the DTI - our recollection of them is that immediately after this meeting, Hamilton had his department search out all his references on record to his past activity on behalf of Al-Fayed. He was clearly worried about much more than the bill for the Ritz. And about what evidence might exist of his work for Al-Fayed.

  200-219 The Inquiry has had the opportunity to assess Peter Preston at the hearing. He makes his own observations below (Separate Appendix).

  220 Hamilton is ingenuous. The documentation we had at this stage helped to corroborate Al-Fayed. The letters of 21/22 March are damning, and we retrieved originals sent not apparently to Hurd, but to Clark and Young. The relationship between Hamilton's office and Greer's office was intimate - see the plaintiffs own witness from IGA who confirms that Christine Hamilton supplied IGA with the MP's letter-headed paper. What we are looking at, of course, is not an isolated incident but a pattern of conduct extending over three years.

  What is truly remarkable about the Al-Fayed/Greer/Hamilton axis is that this MP was prepared to sign letters and table motions which made defamatory - often criminal - allegations against Lonrho and Rowland. There is no evidence that he ever satisfied himself of their truth but merely reproduced or parroted the allegations made by the Fayed camp because - we say the inference is inescapable - he had received and/or was expecting to benefit personally from doing so. Hamilton goes on to say that the documents are "neutral". We can supply you with a copy of Geoffrey Robertson's draft opening, which sets out our interpretation of them.

  221-222 Peter Preston dealt with Hamilton's allegations about the "Rough Draft" at the hearing. Hamilton attributes it to Hencke and misunderstands its date and purpose.

  227-228 "The Guardian" had put its allegations to Hamilton orally; it had then received and carefully considered a three page dishonest written response.

  230-237 See our response in comments re Chapter 1.

CHAPTER 5

  238 The "intermediary" was in fact Lord Lester of Herne Hill.

  259 We know of no suggestion that Al-Fayed ever asked Hamilton to do anything for him after March 1990. The notion that Brian Hitchen is, in the circumstances, a reliable witness to Al-Fayed's motives is one that we find (to use Hamilton's favourite term) risible.

  274-291 From recollection, we do not think that these documents show that Hamilton acted scrupulously. Quite the contrary. He did nothing to declare his previous interests and rule himself out until his own officials expressed concern about Al-Fayed's letter (30 April 1992). He still did nothing, and improperly answered a parliamentary question on 13 May 1992, knowing that it was wrong for him to address the House on Al-Fayed without declaring an interest.

  His excuses at para 279 are not acceptable: no MP may breach parliamentary rules because he thinks it "pointless" to comply. It was not until June that he "came clean" - because his staff already knew of his difficulty about the ECHR case, and it was Dr Bell (we are relying upon recollection) who first raised with him the ambit of the "presentational problem" posed by his past intimate involvement with the Al-Fayed camp. We had thought it was her initiative which led him to stand down from Lonrho-related decisions.

  291 We are amused that Hamilton should make a virtue of his incuriosity about the DTI inspection report. There would have been nothing improper in him looking at papers relating to the HoF. The fact, surely, is that he never had any real interest in the matter, other than for the material benefits he received from arguing the cause. He omits to mention the fact that immediately after the Terrace interview in June 1995, he had his officials scour the entire department to find out what evidence it held against him.

  We find no reference in this section, or at all, to justify Hamilton's behaviour in helping Greer to obtain the "Big 8" contract, worth a fortune. His conduct in providing Greer with a secret opinion, pledging his support for the Big 8, which he knew Greer would use to win the contract, was disgraceful. His failure even to mention this much-publicised allegation is telling.

  292-294 (At this point the submission runs out of paragraph numbers, so ..... )

  Pages 87-107 This is all repetition of allegations made against Fayed earlier in Hamilton's submission. They all beg the question of why he was not prepared to put them to Al-Fayed in the witness box. (see page 102 "it was only as the full horror dawned upon Fayed that he would be subject to vigorous cross-examination in court ..... ").

  We note that the stepped-up vilification of Bond ("my guess is that she will have been paid handsomely for agreeing to commit perjury", page 105) and Bozak ("entering the ranks of bent solicitors", page 106) justifies Al-Fayed's initial protectiveness towards the witnesses.

  Pages 108-133 This is almost all repetition of points that could have been put to Al-Fayed, Hencke and Preston in cross-examination. If they do lead, as Hamilton contends, to the conclusion that they are liars and he is innocent, why did he back down at the door of the court?

  May we be permitted to venture a comment on Hamilton's psychological state, as it emerges throughout this submission? He is locked in a time-warp. He is obsessed with the state of his libel case as it existed in mid 1995. He believed, and may have been advised, that on the then state of the pleadings and witness statements, he would be sure to win. That would explain why he and Greer moved mountains to amend Article 9 of the Bill of Rights after the case was stayed.

  He cannot focus on the mass of new material which came to light, or was first analysed, when the case re-started in August 1996 and we frenetically prepared for the trial. He cannot deal with this evidence - his letters, the telephone records, Greer's accounts, the documents disclosed by the Government. All he can do is vilify, quite recklessly, the new witnesses, and return - obsessively and anachronistically and repeatedly - to Al-Fayed's character and to his complaints about the way The Guardian behaved in 1994.

  We might add that The Guardian was advised from the outset that we had an overwhelming argument for staying this case, on the authority of the Privy Council decision in Pebble v TVNZ (see our original defence). We naturally, therefore, did not expend too much time and money on preparing for a trial we believed would never happen. So Hamilton was lulled into a sense of false security. The trial he believed he would win was not the trial he and his legal advisers faced on 1 October 1996.

  Over the previous two months, The Guardian had five lawyers, five journalists and two accountants working full-time on the case, producing and requisitioning the evidence necessary to justify the story at trial. It therefore makes no sense for Hamilton to expend most of his submission biliously reviewing the events of 1994 and 1995, other than as a diversion to obscure his inability to explain the evidence which has emerged in the past six months.

  Let us give just one example: the letters he wrote to Al-Fayed and the Stock Exchange, dated 23 July 1987 - about the time he received cash (there was a private meeting/payment on 8 July) a few days before he lobbied Lord Young without disclosing his interests, and a few weeks before his holiday at the Ritz.

  How does he explain his language to Al-Fayed ("gives me a better position to act on your behalf") and his opening line to Sir Nicholas Goodison ("As vice-chairman of the Conservative Trade and Industry Committee, I have taken a close interest in . . . the House of Fraser")? This dishonest man is abusing his privilege as an MP, writing to a regulatory body on behalf of Al-Fayed, but disguising his retainer by pretending that he is acting on behalf of the Trade and Industry Committee, or at least because he is vice-chairman of that committee. This is just one of the damning pieces of evidence that Hamilton cannot bring himself to face, in 133 pages of submission.

  We note at page 111 his protestation that "the amount of work was not great. It amounted in all to a few hours a year." This is obviously untrue, in terms of all the meetings attended, lunches eaten and letters written. But what does it say about an MP who makes serious allegations of complicated crime without doing any research into the evidence? Of an MP who writes to DTI ministers claiming to have studied long submissions? He did no real work, because he did not really care, passionately or at all, about the private problems of Al-Fayed. He cared about the cash and rewards he received to promote his cause.

  Page 127 Hamilton does not address the untruthful Preston letter which he sent in October 1993 and which is another of his problems in seeking to convince any tribunal of his probity. Hamilton attempts to deal with this problem by saying it contained "innocent errors committed in haste". His flat lie in it about the circumstances of meeting Fayed - that it had nothing to do with Greer - he excuses by saying: "It is hardly surprising that I could not remember exactly when IGA were engaged". However his problem remains. More than a year later, on 17 October 1994, after a week in which he was warned and forearmed, Hamilton handed over this very letter to the Cabinet Secretary, maintaining that it was the truth. As we recall the subpoenaed Downing Street documents, Sir Robin Butler subsequently relied on this letter in reporting to the Prime Minister. This time the errors could not easily have been "innocent" or "in haste".

PAGES 125-133: MR HAMILTON'S ENDGAME

  The inquiry has to answer a simple question - Who is lying? Neil Hamilton - or Peter Preston, Paul Johnson, David Hencke and John Mullin?

  It appears to be critical to Mr Hamilton's defence to pretend that the allegations that he received cash from Mr Al-Fayed were never put to him by The Guardian.

  Mr Hamilton first raises this in pages 60-63 as evidence that either Fayed had never made the allegation to Peter Preston before publication, or that Mr Preston did not believe him.

  Peter Preston says of this claim:

  "Mr Al-Fayed mentioned the cash payments at our first meeting in June: they obviously caught my interest then and were prime factors in my briefing to the Home News Editor, Paul Johnson, who detached Hencke and Mullin from their other duties to work on the case. Mr Johnson tells me he remembers the briefing vividly and would say so to you in writing or in person if so needed.


  Mr Hencke and Mr Mullin knew the key aspects of the story they were pursuing. There is not a shadow of doubt in my mind that the allegations were put squarely to Mr Hamilton."   On page 125 Mr Hamilton notes that Mr Mullin and Mr Hencke challenged Mr Smith about "£2,000 cash in a brown envelope" and states: "He [Hencke] certainly never put such a question to me."

  He raises it again on page 71 (226). On page 126 he writes:

  "I categorically deny that Hencke or Mullin put to me any allegation of receiving cash from Greer or Fayed for PQs, still less that the figure of £2,000 a time was mentioned. The first I heard of this allegation was when I read it in The Guardian on 20 October 1994."

  On page 130 he again denies it (paragraphs 4 and 7). On page 131, paragraph 25, he returns to the theme, accusing David Hencke of a "direct lie" when he says he put the allegation of taking cash to Hamilton on July 12 1993.

  We refer you to four separate sets of notes and affidavits from John Mullin and David Hencke concerning the interview they had with Mr Hamilton in July 1993.

  (1) Mr Mullin's shorthand note (Exhibit A)[21] made immediately after leaving Mr Hamilton. We refer you in particular to the last paragraph. Mr Mullin has transcribed his note for your benefit. It reads: "Never received any payment other than those declared in the Register of Members' Interests".

  (2) Mr Mullin's note written on the computer on his return to the office (Exhibit B). We refer you to the question to Mr Smith on the first page:

  Q: "£2,000 inb (sic) a brown envelope?"

  "That's certainly not true"   We refer you to the next page where the same phrase is used in questioning Mr Hamilton:

  Asked about the brown paper bag, he was by this stagd (sic) somewhat agitated and began his increasing level of threats about Peter Carter Ruck: "I'm a man who sees it through . . . etc."   (3) Mr Mullin's affidavit (Exhibit C) reads:

  18 We then went on the record, and I asked Mr Hamilton formally about the allegation that he had accepted payments from Mohamed Al-Fayed, and that these consisted of £2,000 per question, paid in cash. He denied that this was the case. . .By this stage he was visibly agitated. He mentioned Peter Carter Ruck and Partners, and said; "I am a man who sees things through" which I understood to be a threat to bring libel proceedings¾

  (4) Mr Hencke's affidavit (Exhibit D) reads:

  8 We then confronted [Mr Hamilton] with the cash for questions allegation. Either John or I asked directly asked him: "Have you received any cash from Mohamed Al-Fayed in return for asking questions in the House on his behalf?" I also recollect that we mentioned the figure of £2,000 per question asked. Neil Hamilton denied the allegation. He said that he had never received any payment from Mohamed Al-Fayed or anyone else other than those declared in the Register of Interests. He asked whether we had any documents and I replied that we did not. He had become quite angry by this stage and stormed off.

  The Inquiry therefore has another direct conflict of evidence. If Mr Hamilton is right, then two senior reporters on The Guardian not only lied in their affidavits on which they knew they would be cross-examined, they also constructed fake notes immediately after seeing Hamilton and Smith.

  If you choose to believe the word and notes of Mr Hencke and Mr Mullin - who are both as prepared to testify on oath to the Inquiry as they were to a court of law - then it follows that Mr Hamilton has perjured himself to the Inquiry.

MR HAMILTON'S EXPLANATION OF COMMISSION PAYMENTS

  NNC in general: see our earlier submission. We remind the Inquiry of our view that we consider it is inappropriate for MPs to accept extra money, whether declared or undeclared, for acting on behalf of their own constituents.   UST. page 32. paragraph 6. see our earlier submission, with the quotation from the C4 Despatches programme where John Walter, the UK Corporate Affairs Director of US Tobacco says on the record that Greer was not introduced to the company by Hamilton:

  Walter:   "The company selected IGA themselves".


  Q:   ". . . not on an introduction from Neil Hamilton?"

  Walter:   "Correct. As I say, we put together a shortlist . . ."

  This directly contradicts Mr Hamilton's account.

  On Commission payments to UST, we are now able to disprove Hamilton's repeated claim that he did no Parliamentary work in return. Greer acquired UST as a £120,000 client by the end of April 1988 (the contract was formally signed to date from 1 May).

  One of the first things he did was offer to buy Hamilton some pictures (Hamilton made the purchase 29 April 1988). Hamilton immediately afterwards agreed to present himself as one of a Parliamentary delegation to Edwina Currie: the delegation went to see her on 12 May 1988, a few days later. The watercolours seem to represent a specific bribe for Hamilton to help out Greer on a particular occasion. This is similar to the episode a couple of months later with the garden furniture - upon receipt of which, Hamilton tabled a motion for Greer, in support of Fayed.

  Page 32 paragraphs 8-9 - page 33 paragraphs 1-2 Mr Hamilton should be cross examined on this accountant's note, which he submits as evidence that he was advised he need not pay tax on the "commissions".

  First: when did he seek the advice? He says (page 32, paragraph 9) that this conversation took place in the summer of 1988. By the top of page 33 the date has changed to 24 July 1989.

  The date is pertinent. The note of the telephone conversation in fact serves to further incriminate, not exonerate him.

  On 26 June 1989 Andrew Roth, the journalist and author Parliamentary Profiles, told Michael Grylls he had found out about Greer's payments to MPs. Confronted by this revelation, the conspirators took three steps to cover their backs:

  (i)   Greer wrote Hamilton a cheque on 13 July 1989 for the alleged balance of £10,000 owing to him.


  (ii)   A few days later - on 24 July 1989 - Hamilton contacted his accountant and asked if he could claim the "gifts and cash" from Greer were non-taxable, "ex-gratia payments". His accountant appears to have said he was not at all hopeful, but that it was worth trying.


  (iii)   Hamilton concocted two invoices, both dated 1 August 1989, purporting to relate to commission payments from NNC and UST respectively, and supplied copies to Greer.

  There were thus no proper receipts, invoices or declarations until long after the event, and only when Hamilton and Greer realised they had been needed to cover their tracks.

  Though Mr Hamilton, a tax specialist, quotes case law which he claims frees him from the necessity of paying tax the note actually quotes its author (KW) as follows: "KW said not at all hopeful". There is also the sentence "worth a try". These phrases fall rather short of the erudite case law cited by Mr Hamilton, a tax barrister. Are they, in fact, the fruits of Mr Hamilton's researches, or was it the advice given by his accountants?

  The note ends with the advice that the sums should be declared as ex gratia payments. Mr Hamilton nowhere states that the sums were in fact declared to the Revenue. His tax returns were never disclosed to the Guardian, as ordered by the High Court.

  Page 34 paragraph 6 Mr Hamilton's attempts to explain his non-registration grow ever more weaselly. He appears to have forgotten his statement to Sir Geoffrey Johnson Smith, dated 12 December 1993, in which Mr Hamilton explicitly acknowledged that, in areas of any doubt, it was up to MPs to seek clarification:

  "The onus is on the Member, in the first instance, to determine what properly ought to be declared . . . " [emphasis added]

  Then, Mr Hamilton was happy to accept that, where there was confusion it was up to MPs to seek guidance. Now he merely complains that the position was ambiguous, and pleads to be allowed the benefit of hindsight. These two statements are incompatible.

  He now asks for clemency on eight grounds:

  (1)   There was no agreement.

  Maybe not, but see immediate pattern of behaviour (above) once contract with IGA signed for UST.


  (2)   The payer had no expectation of any return.

  Ian Greer - and possibly UST if it was not, as we contend, an "introductory payment - certainly would have had an expectation of Mr Hamilton continuing to act in a manner helpful to UST and NNC. See dates and pattern of behaviour once contract with IGA signed with UST (above)

  (3)   It was normal practice in the industry.

  Andrew Gifford, as he would have testified, would have said it was not normal practice so far as MPs were concerned. The Public Relations Consultants Association says in its code of conduct, submitted to the Nolan Inquiry (page 508):

  [Members should not] ªoffer, nor give, nor cause a client or associate to give, any inducement to any MP . . . with intent to further their interests of any client."   In his oral evidence to Nolan (page 89) Mr Gifford said:

  "I would not expect [to make] any payment beyond the normal course of entertainment."   He goes on to quote the Code of Conduct of the Association of Professional Political Consultants (Nolan, page 90)

  "Save for entertainment and token business mementoes, not to offer, give or cause a client to give any financial incentive or other incentives to a representative or employee of Parliament".

  Again, Nolan page 91   446: Martin Jacomb: So it is absolutely categoric that your members do not pay MPs?

  Andrew Gifford: Absolutely categoric.

  Mr Hamilton has not provided any evidence that it was normal practice in the industry to pay MPs any kind of fees. The only lobbyist known to do so was Ian Greer.


  (4)   The nexus of the payments was the new business, not the fact Hamilton was an MP.

  We do not accept it was an introductory payment. We believe (see above) it was directly linked to the pattern of his behaviour as an MP. In any event, it is incredible to claim that any of this would have happened had he not been an MP.


  (5)   There was no attempt at concealment.

  Simply not true. He was given the opportunity of telling Sir Robin Butler, the Chief Whip and the Deputy Prime Minister about these payments. Not only was he not open about them, he lied about them. He did conceal them.

  The Inquiry will note Mr Hamilton's coy phraseology. He declared the receipts to his accountants "who prepare my tax returns or for the purpose of advising me on the tax implications." He stops short of saying that he did declare them on his tax returns (which were never supplied for the court action). Since his accountant's note ends: "Declare as ex gratia payment" it would be interesting to see whether Mr Hamilton did declare them as advised. If he did not, his statement at 5 is even more dishonest.

  (6)   There's no evidence his behaviour as MP was affected by receipt of money   See note on dates above, and Sleaze, passim.


  (7/8)   There may have been no requirement to register, in any case.

  Mr Hamilton's selective quotations neglect to quote the letter sent to every MP in December 1989, in which the Registrar of Members Interests warned:

  "I have received a number of inquiries recently about commission payments. The rules do not differentiate between single and continuing payments . . . Single payments such as commissions received for introductions . . . should be registered . . . where such payments relate in any way to membership of the House" [emphasis added]

     In any event, we submit that, for all Mr Hamilton's sophistry, the ordinary man would have little problem understanding the situation ever since 1975:

  "to provide information of any pecuniary interest or other material benefit which a member may receive which might be thought to affect his conduct as a member or influence his actions, speeches or votes in Parliament"

  His claim that the later addition of the words "reasonably" or "by others" in any way helps his position is desperate stuff. It is, anyway, not consistent with his admission to Sir Geoffrey Johnson Smith that it was not what "others" thought, but what the MP himself thought that should matter.

  If Messrs Clark, Mellor and Currie knew of the timing (above) it is, we submit inconceivable that they would not think that the large fee Mr Hamilton had just received was affecting his conduct.


20   See Appendix 33 (the page references in Appendix 29 relate to the original document forming Appendix 33). Back

21   Not printed. Back


 
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