House of Commons - Standards and Privileges

Select Committee on Standards and Privileges First Report

APPENDIX 29 - Continued

Appendices

APPENDIX 1: PETER PRESTON ON THE ROLE OF THE GUARDIAN

(2) Paragraph 187 of Mr Hamilton's submission on my note taking.

It may be worth saying to the Inquiry what I have said in other forums before. I don't believe that editors should be their own reporters: the roles don't easily fit. I was the first link with Mr Al-Fayed because he asked to see me. But I neither intended nor wanted to be the reporter on the story. It was my role, rather, to talk about the matters between us - not one story, remember, but three - and jot down, as necessary, anything that struck me as useful to pass onto the reporting team, who then pursued their own inquiries. At no stage in the summer of 1993, I think, would Mr Al-Fayed have talked to a reporter anyway. His team were already exerting pressure on him to maintain the lowest of profiles, as was evidenced in the last July meeting which Ms Proudler and Mr Jonson, along with Mr Cole and Mr Webb, attended.

Mr Pleming (paragraph 815) raised with me Mr Al-Fayed's testimony on dates and payments, and asked about further "supporting evidence". I began to reply to that, but other questions intervened. So perhaps it is worth giving a full response here.

My initial conversations with Mr Al-Fayed produced three broad areas demanding further inquiry.

(a) Mr Smith and Mr Hamilton, and the money they were alleged to have taken, cash in hand or envelope.

(b) Mr Hamilton's stay at the Ritz.

All three were obviously important, but evidence of cash passing from hand to hand was equally obviously very difficult to prove if the source of those allegations would not go public (at that stage) and would adduce no documentary evidence. He was a first hand witness to the transactions, putting his reputation at some further risk. That was a serious beginning, but not a continuance. One could probably only attempt to shake an admission out of the cash recipients by surprise questioning. That is precisely what Mr Hencke and Mr Mullin tried to do. But, with varying degrees of emphasis, the charges were denied.

The Ritz bill, however, was a form of documentary proof. We had seen it, but were not allowed to have or use a copy at that stage. Mr Hamilton was questioned about it and gave an evasive answer, as he gave evasive answers in his letter to me of 1 October 1993. Remember, I had seen the bill in July. I had also seen Mr Hamilton's signature on this "notional transaction".

But in many ways the scope and nature of Mr Greer's activities seemed to me the most important story in the public interest category. The Guardian (as Professor Tony King said at the Nolan committee hearings) had a long and proven track record in reporting the influences surrounding our Parliament. As editor, that was one of my special interests.

Mr Hencke and Mr Mullin worked from July to October on all three stories. But cash-for-questions at that point lay in balk. So, unless the Ritz bill could be printed and the Ritz named in print, did Mr Hamilton's Paris stay. But we all learned a great deal about the modus operandi of IGA, and printed it on 4 October.

That work - and the background investigation surrounding it - began to convince me that IGA was a kind of state within the state. It lent some support to Mr Al-Fayed's allegations. So in the clearest terms did Mr Hamilton's 1 October letter. I knew about "notional transactions". I knew (because we had already trawled up more questions than he said) that his account of his activities for Harrods was mendacious. I knew, then, that he had continued working for Harrods long after the summer of 1988 - even after The Observer's printing of the DTI report. And I knew that, as a lawyer, he wouldn't copy in Peter Carter-Ruck light-heartedly. The letter was a threat, but also riddled with untruth. It lent some further support to Mr Al-Fayed's allegations: but since even the Ritz aspect of them could not be made public at that date, there was nothing to be done about it.

The Cook Report episode, in my mind, offered further evidence of a supporting nature. Mr Greer said, on hidden camera, that he could arrange to have MPs ask questions. He offered an audience with Neil Hamilton (amongst others) at a future meeting.

During the winter and spring of 1993-94, moreover, I was also engaged with another reporting team on an investigation of another stay at the Ritz (Mr Jonathan Aitken's) and another then unpublishable bill. The inquiry, if it wishes, is very welcome to study the exhaustive correspondence that followed between Mr Aitken and myself. There, everything is on paper. I will only say that, by my own efforts, I formed the conclusion that Mr Al-Fayed had been right to sense something wrong. The documentation chimed with his suspicions. Again, the facts supported him.

It would be quite wrong to say that, by September 1994, 15 months after the original meeting, I was in the parody position of simply endorsing everything Mr Al-Fayed said. That was not so. He very much wanted The Guardian to take up his suspicions about the Home Secretary. But he was not a first-hand witness and the evidence seemed fragmentary. He had, though, decided to attach his name to his allegations. It was me, not him, who pressed for a return to Mr Hamilton, Mr Greer and IGA. His advisers, in joint discussions, did not doubt the substance of the allegations, merely the wisdom of airing them. I said, in clear terms, that we needed every shred of documentary proof of Mr Hamilton's efforts on his behalf. It arrived copiously in the days before a decision to publish. We hadn't spotted all the questions on our Hansard trawl. We didn't know about the letters to Ministers or the Ian Greer correspondence. Here it was.

The question at the end for me, as an editor, was a simple one. There were direct clashes of testimony. Mr Smith had told us he took no money. Mr Al-Fayed said differently. Mr Hamilton had told us he took no money. Mr Al-Fayed vehemently disagreed. We were talking cash, delivered in private. It was inevitably, in part, a question of judgment. What did our experience of Mr Hamilton and Mr Greer tell us? The supporting evidence (abetted by then by other facts we had learned about Mr Hamilton's other activities) convinced me that it was our duty to publish the allegations.

I did not expect every fact and every date to prove correct. Mr Al-Fayed frequently seemed to contradict himself in conversation. (I note from Mr Smith's testimony that he actually received more than Mr Al-Fayed remembered). But I was, and remain, convinced that Mr Al-Fayed has always told a basic truth: he paid Mr Hamilton private cash to do a great deal of parliamentary work for him, just as he paid Mr Smith. Mr Hamilton did not disclose that to the Registrar, as he did not declare much else.

APPENDIX 2

The Guardian's formal charge sheet against Neil Hamilton

We shall not repeat our reasons for objecting to this procedure. But if you believe it is essential to the success of your enquiry, then you may pin us to the allegations that "The Guardian" had made to its readers. These might briefly be expressed as follows: Neil Hamilton is not a fit and proper person to be a Member of Parliament, because: I. Between 1985 and 1990, in his capacity and using his privileges as an MP, he acted on behalf of Mohamed Al-Fayed in return for material benefits obtained in cash and kind, deliberately failing to disclose these payments as required by parliamentary law. His said actions on Al-Fayed's behalf included:

(a) tabling questions in Parliament;

(b) initiating and/or signing Early Day Motions;

(d) attending meetings with ministers;

(e) Writing letters to outside bodies such as the Stock Exchange.

His said material benefits included:

(a) payments in cash of several thousand pounds a time and/or of Harrods vouchers, which were solicited and/or received from Al-Fayed in consideration of services provided or to be provided on some, if not all, of the occasions on which the two men met privately and alone at Harrods or at 60 Park Lane between 1987 and 1989 (the dates being those listed in the amended defence);

(b) payments in cash of several thousand pounds a time for the same consideration collected or delivered in circumstances witnessed or described by Bond, Bozak and Broomfield;

(c) payments or rewards in kind, received courtesy of Al-Fayed and in consideration of services provided or to be provided, including;

(i) a six day all expenses paid holiday in 1987 at The Ritz Hotel, Paris, valued at over £5,000;

(ii) an all expenses paid holiday at Balnagown in 1989;

(iii) various gifts, including on several occasions hampers valued at £185.

His aforementioned deliberate failures to disclose include failures appropriately to declare or register his interests in relation to Al-Fayed or Harrods or any particular material benefits obtained there from:

(a) on the Register of Members' interests;

(b) in correspondence with ministers;

(d) to Parliament at Question Time;

(e) to parliamentary colleagues who provided additional signatures for his EDMs.

II. That he had a corrupt relationship with the lobbyist, Mr Ian Greer, in which he received rewards in money and in kind for services rendered to Greer and/or to his client without disclosing or registering such relationships as parliamentary law required. The payments and rewards included:

(a) £700 paid on his behalf to Tony Sanders Antiques in April 1988;

(b) the £959.85 worth of furniture purchased on Greer's John Lewis account in July 1988;

(d) A sum of £6,746.05 paid by cheque on 13 July 1989.

III. That he received benefits from US Tobacco Inc., including stays at the Essex House Hotel in New York and the St James Hotel in London and in relation to US Tobacco Inc. (£6,000 from Greer) in return for advancing the interests of US Tobacco by using the power and privileges of his office as an MP, inter alia by:

(a) tabling and supporting Early Day Motions;

(b) tabling an amendment to the Finance Bill to amend the Tobacco Products Duty Act in June 1989;

All the above actions were taken without disclosing or registering his interest, as required by parliamentary law, and without making the appropriate declaration in all correspondence and meeting with ministers.

IV. Because he made a secret profit out of his advice to a constituent, the National Nuclear Corporation, namely his advice to retain IGA, for which he was rewarded by a payment of £4,000 by IGA which he failed in breach of trust to disclose to the said constituent (which was in any event paying him £7,500 as an adviser) and which he failed in a deliberate breach of parliamentary law, to disclose or to register, in any or any appropriate fashion.

V. That he deliberately declined to register his financial interest after being appointed as consultant to Strategy Network International.

VI. That he falsely entered in the Register of Members' Interests that he had resigned from the Board of Plateau Mining in June 1990 (as required when he was in that month appointed a Government whip) whereas in fact he did not resign until 30 September 1990; that he attended lunches and Annual General Meetings of the said company whilst a minister in an attempt to give it credibility, well knowing that it was in a perilous state.

VII. That on 13 March 1992, he acted improperly, as a Member of Parliament, in answering questions in the House about the DTI inquiry into Al-Fayed, without declaring his own past interests in this matter.

VIII. That he acted improperly as a Member of Parliament in assisting Ian Greer and IGA to obtain a contract with the "Big 8" accountancy firms by (a) providing him with a secret statement of his ministerial approval for the "Big 8" case which statement he knew would be used by Greer to obtain this extremely lucrative contract and (b) by attending a meeting arranged by Greer with these clients.

IX. That it may be inferred that he, as an MP who is a barrister specialising in tax law, failed to disclose to the Inland Revenue any or all of the Schedule D and Schedule F income referred to in paragraphs I, II, III and IV above, either as payments or as benefits in kind.

X. That he, as an MP, knowingly and deliberately lied to the Cabinet Secretary, the Chief Whip and the Deputy Prime Minister about his relationship with Ian Greer, at a time when he knew that this false information would be acted upon by the Prime Minister, by the Government and by the Cabinet Secretary.

XI. That he, as a Member of Parliament, allowed his wife to take copious amounts of his headed parliamentary stationery for delivery to the lobbying firm IGA, which it used for its own business purposes of drafting letters on behalf of its clients.

XII. That he has, as a Member of Parliament, lied in evidence to the Parliamentary Commissioner for Standards and is therefore in Contempt of Parliament.

Alan Rusbridger 19 February 1997

APPENDIX 3

Tim Smith claims he was paid fees in cash by MAF between May 1987 and January 1989. According to his diary he met MAF on 14 occasions. It is not clear if he was paid on all these occasions.

Chronology 1986-89

The Observer

Note: We count nine face to face meeting with Al-Fayed at which no-one else was present. We note that 9 £2,000 = £18,000.

John Mullin: Notes in computer file after meeting with Smith and Hamilton

These all Thursday.

Smith: extremely nervous.

Linked to House of Fraser - he was an accountant with Peat Marwick in 1971 - they did work on the Lonrho account - he says he was disgusted by what he saw, and took an interest thereafter.

As secretary of the (Tory?) Trade and Industry Committee (run by Grylls) he and all officials were invited to an Ian Greer function for House of Fraser circa 1985. (must set the context here - who was Secretary of State, what was happening in the bid etc).

Put down 17 questions on House of Fraser between 28 October 1987 and 23 January 1989. They then stopped, right after Lonrho's letter (quote line about how much and when and the last par). He admits to being frightened by that letter.

Says Greer offered MPs visits to the Ritz. He turned it down because he didn't think it was right. But he did accept big teddy bears for his children from Harrods. He values them at £100 (check the price). Put it in register of interests, which he says is updated every couple of weeks, but had it taken out before it became the published version.

Denies receiving payment for asking questions: "That's not true" Q: "£2,000 inb a brown envelope" "That's certainly not true." (Interesting use of phraseology, don't you think?) No role to play in fundraising, only came on board at central office in July 1992.

Hasn't received any money for any parliamentary business.

Hamilton: Ludicrous to suggest an MP or Minister is influenced by lobbying. It's a con, waste of money.

Friend of Greer for 15 years, introduced through Grylls, who was Christine's boss. She's his wife.

Introduced to House of Fraser through Sir Peter Horden, its consultant.

It appealed to his libertarian instinct, (oh yeah, pull another) . . . questioned about hotel: OK then might have stayed a night at the hotel.

Taken Opera tickets worth hundreds of pounds as well Paid his own fares.

Can't remember or explain why he didn't declare it.

Never received any payment other than those in the register of interests.

On the record: Rules himself out of DTI questions on House of Fraser - Lonrho battle re European Court.

But not on British Gas, one of Greer's recently introduced client, which is facing MMC probe.

(And apparently, none others) Asked about the brown paper bag, he was by this stage somewhat agitated and began his increasing level of threats about Peter Carter-Ruck: "I'm a man who sees it through . . . etc"

John Mullin Witness Statement (Excerpt)

* * *

[Mr Hamilton] denied ever seeing the bill.

16. When I asked him why he had not registered the stay at the Ritz, he said that he received opera tickets all the time, and he asked me if I was suggesting that he should register those as well. He tried to bluster his way out of these difficult questions. Finally, he said that he could not remember, and could not explain why he had not declared his stay at the Ritz. I was the one who asked the questions about registration of members' interests, as I was trying to pin down exactly what Mr Hamilton had and had not done, and what he had and had not registered. The atmosphere completely changed during the course of the conversation. To begin with, he had been having a convivial chat with David, but by the time I began to talk to him about his failure to register, he had a face like thunder.

17. One of the points which Mr Hamilton raised in defence of his behaviour so far as House of Fraser was concerned, was his interest in Skoal Bandits. He said that his interest in House of Fraser was prompted by idealist libertarianism, as was his interest in Skoal Bandits. Although we were aware that US Tobacco, the manufacturers of Skoal Bandits, were clients of Ian Greer, we had not specifically put this to Mr Hamilton. He raised it voluntarily, and was happy to talk about his association. He was very proud of the fact that he was associated with Skoal bandits, and my recollection is that he said that he was a consultant to the company. Reference was made by him to parliamentary questions. I cannot now recollect how far Mr Hamilton was pushed on the point of Skoal Bandits, but we were not prompted to ask whether he was paid as a consultant and if so how much.

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, and said that he had ruled himself out of questions involving House of Fraser or Lonrho when he was at the Department of Trade and Industry. He said that he had not however ruled himself out for British Gas, who was also one of IGA's new clients, and who was facing an MMC probe at the time. It was specifically put to Mr Hamilton that he was paid money by Mohamed Al-Fayed to ask questions. 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 proceedings if we publish these allegations. The interview lasted a good 30 minutes, maybe more. There were other people on the terrace at other tables at the time. David Hencke was doing the tough questioning and I was taking a back seat.

19. We then went to see Perry Miller, who was a Greer aide. We put three allegations to Mr Miller: namely that he had been caught importuning a soldier in public toilets at Colchester; that his positive vetting had been withdrawn; and that when he went to work for Ian Greer Associates Limited he was able to furnish Greer with insider details of contracts at the Ministry of Defence.

19.1 Our reason for approaching Perry Miller were that there were persistent rumours that Ian Greer was recruiting from government agencies and departments to get insider knowledge. We were not particularly interested in the circumstances of Mr Miller's departure from the Ministry of Defence, and The Guardian would not have been interested in covering this in salacious detail. Mr Miller was aghast and denied all the allegations. We did not put anything to him about Greer's modus operandi, and did not ask him whether he had knowledge of Greer paying MP's.

19.2 The next day David and I went to see Ian Greer by appointment. The interview was tape recorded, and we have kept a copy of the tape. The first few moments of the interview were awkward. Greer delivered a lecture on our modus operandi, and we had to placate him. I told him that a lot of what had gone before was by way of background, and that The Guardian was not interested in doing a hatchet job on him. The whole interview lasted about one hour. Ian Greer was very angry at the beginning of the interview. I believed, that although he was very angry, he was quite interested in the interview.

David Hencke statement 26 June 1995 (Excerpt)

* * *

Not only did we have a meeting alone with an MP in a Committee room (which is very rare) but secondly, and this was a striking feature of the meeting, Tim Smith was very, very nervous. John Mullin asked Tim Smith about his relationship with Mohamed Al-Fayed and asked him whether or not he had ever stayed at the Ritz Hotel in Paris. Tim Smith told us that he had done some work on the Lonhro account when he was an accountant with Peat Marwick in 1971. He had taken a bit of an interest in Lonhro thereafter and he agreed that he had put down 17 questions relating to the House of Fraser between October 1987 and January 1989 but had stopped after receiving a threatening letter from Lonhro. He told us further that as a member of the Executive of the Conservative Backbench Trade and Industry Committee (run by Michael Grylls MP) he and several others were invited to an Ian Greer function for the House of Fraser some time in 1985. He told us further that Ian Greer had offered several MPs a visit to the Ritz Hotel in Paris apparently at Mohamed Al-Fayed's instigation. This was the first I had heard of this allegation. Tim Smith told us that he had turned this down because he did not think it was right, although he did accept two big teddy bears from Harrods which he declared in the MPs' Register. We then asked him whether or not he had received payments from Mohamed Al-Fayed in exchange for asking questions on behalf of the House of Fraser in their dispute with Lonhro. He denied that. We asked him whether or not he had received £2,000 cash in a brown envelope for asking questions and he said to that "that is certainly not true". He said that he had not received any money for the conduct of any Parliamentary business.

8. Shortly afterwards, on the same day, we saw Neil Hamilton on the terrace of the House of Commons. Again, I did not take any notes during this meeting. Neil Hamilton confirmed that he had been a friend of Ian Greer for 15 years and he had been introduced to him through Michael Grylls. He said further that his wife Christine, had formerly been Michael Grylls' secretary. He said that he had been introduced to the House of Fraser through one of its consultants, Sir Peter Hordern. We then asked Neil Hamilton whether or not he had stayed in the Ritz Hotel in Paris as a guest of Mohamed Al-Fayed. He said that "he might have stayed a night or two at the hotel".

We then pressed him and asked him "are you sure it was not longer". He said words to the effect that it might have been and then we presented him with the dates and the room number. Just prior to the meeting with Tim Smith and Neil Hamilton. I had had a discussion with Peter Preston during which he gave me details of Neil Hamilton's room number at the Ritz and of dates relating to Neil Hamilton's stay there. I had this information on a scrap of paper in the meeting with Neil Hamilton. I now cannot locate that scrap of paper. Then, despite the fact that his memory appeared to have failed him a minute or so earlier, Mr Hamilton went into graphic detail about his stay at the Ritz Hotel and complained that the room he had received had been a bad room with no view and that he thought the Ritz was overpriced. We asked him why he did not declare the stay in the Register of Members' Interests and he did not explain why he had not. He may have mentioned that in his view it was not registrable, or that he had overlooked it. We then confronted him with the cash for questions allegation. Either John or I 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 whole meeting lasted about 20 minutes.

9. A number of things had impressed me after the two short meetings with Tim Smith and Neil Hamilton - in particular:

- That Tim Smith was very nervous when we were speaking to him.

- That I had reason to doubt Neil Hamilton's truthfulness. At first he appeared only vaguely to "recollect" a day or two's stay at the Ritz but once we had confronted him with the details of his stay, he then went into some considerable detail about his stay there.



© Parliamentary copyright 1997	Prepared 8 July 1997