Select Committee on Standards and Privileges First Report


APPENDIX 30 - Continued

A submission to Sir Gordon Downey from The Guardian

  This document is in response to a submission from Sir Michael Grylls MP[27]   The Guardian complaints against Grylls are not fully formulated in your letter of 28 January.

  We regard him, as Sleaze makes clear, as the person most singly responsible for bringing Parliament into disrepute though his corrupt links with Greer throughout his time as chairman of the Conservative backbench Trade and Industry Committee.

  I note that Al-Fayed has not alleged that Grylls received cash payments in envelopes like Hamilton, Smith and Bowden. This does not necessarily mean that he did not receive any. You will note the strong friendship between the two men's wives and families which still persists, and his eagerness to tell you (6 February) what he understands Fayed's position to be. However, to uphold our complaint it is not necessary to show payments via Fayed. Grylls was receiving so much only from Greer, only some of it (and that only notionally) related to "introductory commissions" that he was in effect working for Greer, or for whatever Greer client he was asked to help. Indeed, as soon as Greer was hired by Fayed he contacted Grylls (31 October 1985) and made a payment to him the very next day.

  The complaint against him might be formulated as follows:   Sir Michael Grylls was not a fit and proper person to serve as a Member of Parliament, whose traditions he disregarded and dishonoured by:   1. Entering into a corrupt association with the lobbyist Ian Greer and his company IGA, whereby he was regularly and secretly paid large cash sums in return for providing parliamentary services to Greer clients. Such of the said cash sums as have been traced by the complainant amounting, between 1987 and 1992, to over £86,000, and include the payments listed in para 12 A(i) of the amended defence in Greer v The Guardian.

  The said parliamentary services he provided between 1986 and 1990, in the case of Greer client Al-Fayed, included

  (a)   writing letters to ministers, and to the Attorney General;

  (b)   attending meetings with ministers;

  (c)   attending many meetings with Greer and with other MPs paid to serve in the Al-Fayed cause;

  (d)   supporting initiatives in the House in defence of Al-Fayed and in attacking his enemy Lonrho.

  2. Exploiting since 1981 his chairmanship of the back-bench Trade and Industry Committee to make secret profits for himself by:

  (a)   directing persons and companies who sought his assistance in that capacity to IGA, knowing he would receive a secret commission from IGA;

  (b)   lobbying ministers to favour clients of IGA, without revealing that he was working for and being paid by that company.

  3. By deliberately omitting to disclose his close relationship with IGA on the Register for the years 1988 and 1989 (when he was particularly active in Greer's interests on behalf of Fayed) and by deliberately making a misleading declaration as to the relationship with IGA in the years 1986 and 1987.

  4. By lying to the Select Committee on Members' Interest in (a) a letter of 6 June 1990, in which he claimed always to have registered appropriate interests in relevant years which excluded 1988 and 1989 and (b) in a letter dated 14 June, in which he claimed he had received only payments in respect only to three companies (there were at least five), on only three occasions (there were at least 10).

  5. By refusing to give any assistance as an MP to Rank Xerox, which had approached him as chairman of the Trade and Industry Committee, until they had hired IGA to act for them, this demand being made in the knowledge that he would in that event receive a lucrative "kick-back" from IGA (for further details, see Sleaze p. 29-31).

  6. By making the same demand of British Airways, in the knowledge that he would receive a "kick-back" from IGA which he would not pay over or disclose to BA.

  7. By making a speech in the House in support of BA and putting down BA-related PQs (24 July 1987; 15 July 1988) without disclosing his interest as a paid lobbyist for Greer clients or as the recipient (with his wife) of the reward of a free BA trip to Rio de Janeiro.

  8. By writing to a constituent, John Jillings, attacking a book critical of Al-Fayed without disclosing his own links to Al-Fayed and his lobbyist (Sleaze page 98).

  9. By conspiring with Greer to receive £10,000 from the contract Greer would sign with Whitbread, such payments being described as an "introductory commission" but in reality being a reward for services which Grylls had and would continue to perform for IGA clients including (but not limited to) Whitbread.

  10. By making a similar arrangement, also in 1989, to receive £6,500 from IGA as 10 per cent of money paid by Honour Hong Kong, to lobby in parliament for that company and for other Greer clients.

  11. By making a similar arrangement with Greer in respect of money received from Biro Bic.

  12. By failing to take the proper action after realising that Greer lied in evidence to Select Committees in 1988 and 1990.

  13. By advising a constituent, a property company in Camberley run by Charles Church, to employ IGA, and then taking a secret profit by way of an "introductory commission" from IGA which was not revealed to the property company.

  14. By deliberately omitting to disclose on the Register his relationships, direct or through IGA, with the companies in 6, 9, 10, 11 and 13 above, and his relationship with Al-Fayed, which included at the very least, over several years, free lunches, hampers (worth £185 each) and a holiday at Balnagown.

  15. By improperly obtaining for an employee of IGA, Andrew Smith, a House of Commons "Research Assistant" pass to which Grylls knew he was not entitled but which would benefit his work for IGA.

  The allegation in paragraph 5 above can be confirmed by Keith Lockwood: the allegations to the same effect in Sleaze were published to his knowledge and approval. His telephone number is 01483-423150.

  We enclose three pages of calculations by David Leigh and Jamie Wilson which may be of interest. The first table shows the £86,000 received by Grylls from Greer. The second shows the chronology of Grylls references to Greer on the Register - which until 1990 give no inkling of any relationship other than (in 1986 and 1987) through the Unitary Tax Campaign. The third table contains some examples of other remuneration - he was receiving £35,505 from Electrophonetics, at least £5,000 from Cape and almost £10,000 from Le Carbone.

  Grylls letter of 6 February is vague and evasive. He fails to meet most of our allegations. It may be helpful for you to see the Central Television evidence showing the alacrity with which he recommended IGA.

  We are most struck by his description of how Greer "regularly worked out what he felt was a fair amount for my extra time ._._. I accepted his figures without question and invoiced him accordingly" This is bizarre, unless Grylls is - as we suggest - at the beck and call of Greer and his clients and paid by Greer according to how he has performed for them. It was certainly not "the simplest way of accounting" although it was the simplest way for Greer to pay him his rewards.

  He does not mention it, but Greer also thought it appropriate to pay him £10,000 every year - entered by the accountants as "usual fees".

  Grylls was continuously in Greer's pay before, during and after the period during which Grylls carried out Greer's wishes in lobbying for Fayed. It now seems to be admitted by Grylls that the regular flow of money was only notionally related to "introductions", or to Grylls' work for that long-standing Greer client, the UTC. Grylls describes it as a "system" - one which was plainly convenient for both of them.

  Grylls spoke in Parliament for a Greer client on whose specific behalf he had received money (British Airways - speech in 1987 Sleaze, page 32). He took money from Greer for introducing him to a constituent - the company Charles Church. The payments are listed in Greer's books as relating to "Charles Church Developments". This firm, as Grylls admits, was located in his own constituency.

  On his own admission, Grylls was receiving payments from Greer during the period when Grylls was helping Greer's client Fayed. Grylls gave false evidence to the Select Committee on Members' Interests as to dates and numbers of payments for "introductions". Greer's books show a continuous stream of payments. There were not three companies "introduced" but at least five.

  Grylls does not appear to deny that he received money re BA, Whitbread, Charles Church, Biro Bic and Honour Hong Kong. We have done no extensive research on possible linked parliamentary activity. It is curious that Whitbread was in fact a long-standing client of Greer, which makes the "introductory commission" appear even more notional.

  Gryll's constituents - and the public in general, particularly those who went to him as chairman of the backbench Trade and Industry Committee - were entitled to know that he had financial benefits coming indirectly from at least five organisations. They were also entitled to know that he was getting paid regularly by Ian Greer, a lobbyist. And they were also entitled to know that he was working in Parliament on behalf of at least one controversial Greer client - Fayed. None of these facts could be discovered from the register of Members's Interests.

  The entries Grylls made were misleading, and deliberately so. He has been careful to obscure the fact that he has enriched himself from major companies through Greer, all this business attained because he was a Member of Parliament who was chairman of an important backbench committee of the governing party.

  It can now be seen that Greer's evidence to the Select Committee was a travesty of the truth. Given the closeness between the two men - they regularly dined, according to Greer's diary - they must have put their heads together in respect of it. Indeed, when the clerk (Mr Hastings) first wrote to Greer questioning his previous evidence about being "completely disassociated" from MPs, he replied to the Committee on 30 October 1989, the very day on which his diary records a meeting with Grylls, obviously to formulate the reply. Grylls must have learnt of the evidence Greer subsequently gave, parts of which we know to be incorrect - certainly not the full truth.

  If the new Standards and Privileges Committee is to work, it must place a duty on MPs who know that evidence given to it is false or incomplete to come forward and tell it the full truth. Thus Grylls should be censured for permitting Greer to "cover up" for him as well as for his own untruths when he came before the Committee in 1990 and minimised his financial transactions with Greer.

Alan Rusbridger

pqs:

86/7 on international courier companies (DHL)

BABCAL merger

24 July 1987 BA
15 July 1988 Hong Kong

On our available documentation, he was paid (int al) the following by IGA

November 1985Unknown sums (his evidence to MI Committee
14 May 1986Unknown sums (ditto)
27 March 1987:pounds 5,750 (pounds 5k plus VAT
FY June 1986-June 1987pounds 12k plus pounds 15k comms i.e. total pounds 27k
FY June 1987-June 1988pounds 8,400 UTC
pounds 1,250 Biro Bic (i.e. total pounds 9,650
12 September 1988:pounds 1,083.33 (comm Charles Church and Biro Bic)
6 January 1989:pounds 8,050 (pounds 7k plus VAT
1 June 1989:pounds 5,750 (pounds 5K plus VAT
(Totals FY June 1988-June 1989 pounds 5k plus pounds 12k fees plus pounds 1,083 comm i.e. total pounds 18,083)
1 July 1989:pounds 5,750 (pounds 5k for a "quarter"
28 September1989:pounds 5,750 (pounds 5k for a "quarter")
(FY June 1989-June 1990pounds 5k Whit comm plus pounds 1,166.67 comm plus
pounds 10k "usual fees" i.e., total pounds 16,166.67)
1 June 1992pounds 5k plus pounds 875 VAT "Fees"
(FY 1991-92pounds 10k fees) (or maybe pounds 1k - hard to read
(FY 1992-93pounds 5k plus pounds 5k fees i.e., total pounds 10k
March 1994pounds 130 (silver magnifying glass-gift from IGA

The Draft TOTAL IS MORE THAN pounds 86,000.

  May 1990 Committee report:   Greer said Ian Greer Associates had made two PAYMENTS in 1985 and 1986 to MP A (GRYLLS) and a further payment to him in the past two years. PAYMENTS were also made to MP B in 1986 and 1988 and a payment to MP C in 1988.

Mr Greer later wrote to the committee, saying that his company had made two PAYMENTS to Member A in 1985 and 1986, two to Member B in 1986 and 1988 and one to Member C in 1988. A further payment had been made to Member A earlier this year.

  The Tory MP Sir MICHAEL GRYLLS told the committee that he took three PAYMENTS for introducing company chairmen to effective lobbyists. He argued that he had a degree of discretion as to how they declared their interests and that there was no category for one-off PAYMENTS.

  Consultant to: (and the nature of his declarations):   For comparison: only one declaration: 1975: consultant to Edward Butler Wine Group January 1985: adviser to the United States Unitary Tax Campaign plus six consultancies January 1986: adviser to the Unitary Tax Campaign (I. Greer Associates) first reference to Greer plus seven other remunerated consultancies.

January 1987:
adviser to the Unitary Tax Campaign (I. Greer Associates) plus eight consultancies.

December 1987: A
dviser to Unitary Tax Campaign plus six consultancies

January 1989:
adviser to the Unitary Tax Campaign plus six consultancies

8 January 1990:
Le Carbone Lorraine (GB) Ltd

Sterling Winthrop Group Ltd

Chysauster Homes Ltd

adviser to the Unitary Tax Campaign plus nine consultancies.

Clients: Ian Greer Associates. first mention as a client - covering everything. January 1991:

Digital Equipment Company Ltd

Association of Authorised Public Accountants

Biwater Group Ltd

Humphreys and Glasgow Ltd

Harlingspear Ltd

Pittard Garnar plc

Doctus plc

Allied Partnership Group plc

Freight Complex Development and Management Ltd
adviser to Unitary Tax Campaign

Clients: Ian Greer Associates

Soil Structures International Ltd

Companies:   
Vosper Ltd 1981-85

  Chysauster Homes Ltd, company running retirement homes; subsidiary of O'Connor McGrath plc. 7 November 1988-29 January 1991; went insolvent and liquidators called in April 1991. Grylls was creditor for pounds 4,313. Took until 1996 for all assets to be realised. Still not wound up 17 June 1996.

  Sterling Winthrop (US drugs) 1986-31 December 1991. 20 December merged with Sanofi UK Ltd. and became Sanofi Winthrop Ltd. In 1994 was a director of Sanofi Winthrop Pension Trustees Ltd. chair of the all-party pharmaceutical group 1981.

  Le Carbone (Great Britain) Ltd, makers of carbon products; parent company French; chairman in 1981; pounds 3,750; pounds 5,814 in 1982; pounds 6,000 in 1983; pounds 6,324 in 1984; pounds 7,000 in 1985; pounds 7,500 in 86; pounds 8,508 in 1987; pounds 8,508 in 1988; pounds 9,500 in 89; pounds 9,500 in 90; pounds 10,500 in 91; pounds 11,085 in 1992; pounds 11,012 in 1993; pounds 10,865 in 1994 and 1995.

  CT Oil & Gas Ltd. a small prospecting company with a subsidiary in Texas. 3 March 1989 to 29 November 1991. No directors remuneration in 1989, 1990 and 1991. Dividend paid on preference on 8 August 1989 at 75p: 6,081 ordinary shares; 7,948 preference. Dissolved and struck off the register 13 June 1995 Section 652(5) C Act 1985.

  Cape plc., big building materials firm, part of Charter plc, now divested of asbestos products; non-exec, 2 August 1990 - entry records being parliamentary spokesman for the Institute of Directors salary unclear; either up to pounds 5,000 or up to pounds 10,000. 1992 accounts show no one in the nil - pounds 5,000 range.

  What he did in parliament, meetings, letters etc. The 1996 accounts show him receiving fees of pounds 13,000 - he has joined the remuneration committee.

  Electrophoretics International, medical research into protein markers; dir 13 July 1994; non-exec chairman 13 October 1994; held 3,000 pounds 1 shares; 300,000 1p shares in 1995. salary pounds 35,505.

A submission to Sir Gordon Downey from The Guardian

  This document is in response to a submission from Tim Smith MP[28]   Mr Smith admits that he got £18,000 in cash handed over personally by Fayed. This is a quite dramatic confirmation of Fayed's own claims as to his modus operandi.

  Mr Smith's claims that he did not get a bribe to stage the 1986 adjournment debate is unsupported, and surprising. His claim to have no records is not consistent with his resignation statement that he had declared the payments on his tax returns. Presumably, he may have put some of the cash in a bank at the time.

  Mr Smith pretty well admits that he stopped taking money following delivery of Rowland's letter threatening to expose him in February 1989.

  He admits starting to take bribes on the eve of the 1987 Election. This is the same time at which Fayed alleges he began to pay cash to Hamilton as well as private meetings.

  Mr Smith's confession to the receipt of £18,000 from Al-Fayed at least relieves us of rehearsing the evidence against him. His letter to you contains a number of lies and half-truths which you will probably have picked up from the documents and chronology: the purpose of telling them seems to be to minimise his role and to distance himself from Greer.

  The complaint against him might be formulated as follows: Tim Smith is not a fit and proper person to be a Member of Parliament, because

  (i)   Between 1986 and 1989 he solicited and/or received at least £18,000 in cash and other material benefits, as bribes to do favours for Mohamed Al Fayed and to put his power and privileges as an MP at Fayed's disposal.


  (ii)   Between 1986 and 1989 he was corruptly motivated in his actions taken on Al-Fayed's behalf in the House, inter alia in tabling questions and signing early day motions and proposing an adjournment debate;

  (iii)   He went as a delegate to ministers on three occasions to argue on Al-Fayed's behalf, dishonestly pretending to them that he was concerned as Vice President of the back-bench Trade and Industry Committee, rather than admitting he was an agent retained by Fayed.


  (iv)   He wrote numerous letters to ministers without disclosing that he had been paid to write them by Al-Fayed.

  (v)   Having received bribes of over £18,000, he deliberately failed

(a)   to register any financial interest, or

(b)   to notify the Speaker, Privileges Committee or the police;

(c)   to make full disclosure as an MP to the Prime Minister or Cabinet Secretary of his corrupt and/or criminal conduct when offered the security-sensitive post at the Northern Ireland office.


  (vi)   In September 1996, in breach of the Code of Conduct for MPs (Resolution of House, 19 July 1995) he failed to uphold the law, acted selfishly and opaquely and contrary to the public trust reposed in him and contrary to the public interest, in refusing to assist the course of justice at the trial of Hamilton and Greer v The Guardian and indeed attempting to obstruct justice by having his name removed from the pleadings in the case.

  You will note that we have this time called a spade a spade, i.e., a bribe a bribe. What Smith and Hamilton received was what both the law and the general public would call a bribe: i.e., to prostitute their public office and lend their parliamentary power and privilege to the cause of Al-Fayed.

  It is historically what parliament would have called a bribe, from the Speaker's Case in 1695 until the establishment of the Register, the ironical effect of which was to remove the language of bribery and corruption and replace it by the concept of failing to register. Clandestine payments now involve a member being dealt with for "failure to register" and not for corruption. In our respectful view, it is time Parliament viewed the conduct of MPs like Smith and Hamilton as the general public does, i.e., as criminal conduct for which they should be put behind bars.

  Perhaps the most satisfactory recommendation you could make to the committee in both men's cases is that the evidence against them be sent to the DPP in order that they be prosecuted, for common-law bribery. You will be aware that the stumbling block to this approach was always Lord Salmon's view that an MP did not hold an "office" - this was rejected by Mr Justice Buckley's judgment in R v Harry Greenway in 1993.

  Buckley J did not think Article 9 prohibited prosecution of an MP where the bribe had been received outside parliament (as here) for services other than speaking in the House - i.e., for lobbying ministers in the manner of Smith and Hamilton, and perhaps for tabling written questions.

  You will see that we have added, in ground (vi), a post-Nolan Code point about which we feel very strongly. Smith's evidence was important to establishing the truth of the issue in the libel action, and he knew it. Instead of behaving as the Code requires, selflessly upholding the law by assisting the court towards a just decision, Smith did everything he could to prevent the truth from coming out. We are told he wrote to the Lord Chief Justice complaining that his name was mentioned in the pleading: he certainly wrote to us saying he would not comply with any subpoena. He instructed counsel to apply for his name to be struck out of the pleadings.

  In so acting, he may have been within his legal rights (the court never ruled on the matter). But his behaviour was cowardly, refusing to assist justice in order to save himself from embarrassment. We believe the public would have nothing but contempt for his action, and it would lower MPs in their estimation. If the "Personal Conduct" section of the code is to mean anything other than seven vague generalities, he must be condemned for his behaviour as a potential witness which was selfish, lacking in integrity, designed to cover up his own misbehaviour and entirely lacking as a leadership example.

  We append some questions[29] prepared by Geoffrey Robertson for Smith's examination, so you can appreciate both his relevance to the trial and his reasons for making himself unavailable.

We comment on Smith's letter as follows:

PAGE 1

  Paragraph 3 - This is extraordinary. A trained accountant like Smith would instinctively provide fee-notes and receipts for any consultancies or fees which were above-board. These were bribes. Presumably, he has his tax returns, 1986-90, or can give you permission to obtain them from the Inland Revenue.

  Paragraph 4 - His interest in the House of Fraser stemmed from the prospect of financial reward.

PAGE 2

  Paragraph 3 - Smith was calling Al-Fayed in January 1986: it may well be that he took the initiative in referring his services, and was then referred to Greer (they had lunch on 29 January 1986).

PAGE 3

  Paragraph 1 - "I drafted them all myself" - not according to Greer correspondence.

  Paragraph 4 - This is deliberately misleading: Smith is back-dating his knowledge that the inquiry was damning for Al-Fayed, in order to provide a pretext (other than the Rowland letter) ducking for cover in February 1989. In fact, it is clear from the letter of 29 January 1988, Greer to Smith at Plaintiff's discovery 323 that Smith knew from January 1988 that the report would condemn Fayed. He knew Fayed would have to "take a deep breath" if the Report "goes the way we think it will." That is why, throughout 1988, he rubbishes the Inspectors, their procedure and then the (unpublished) report. He knew for certain it would be a disaster in early March 1988 (when Fayed walked out - i.e., did not co-operate with the Inspectors) and was well aware that his paymaster had been condemned in the report when he accepted a bribe to write his extraordinary four page letter to Lord Young on 18 August 1996.

  Paragraph 5 - We do not accept that the payments did not begin until 1987. He needed to be persuaded to move the adjournment debate and Greer knew how to persuade: see Sleaze page 67. The fact he had no records of the payments characterises them as bribes (although what about his tax returns?). We suspect he is so anxious to distance himself from Greer precisely because he was paid by that route for the adjournment debate. The envelopes came at private meetings the following year.

PAGE 4

  Paragraph 2 - It would be interesting to see Smith's diaries - they record more meetings than do Al-Fayed's. Most significantly, how many meetings do they record with Greer? And when?   Paragraph 3 - This is not conduct which is naive. It is conduct which is criminal. Smith plainly solicited the payments, which he neither billed as fees nor receipted as fees. Al-Fayed would pay him by whichever method he preferred.

PARAGRAPH 4

  (i)   Smith minimised (he did not terminate) his relationship with Greer and Al-Fayed after Rowland accused him of taking bribes, in the letter of 28 January 1989. On 30 January he sees Al-Fayed - no doubt to solicit danger money - and at some stage gives a copy of the Rowland bribery letter to Greer, because on 3 February Greer (not Smith) faxes this letter to Palmer for legal advice. On 8 February Smith meets Greer and on 13 February meets Al-Fayed (another final pay-off). What this chronology demonstrates is that, contrary to both their protestations, Greer knew about the bribery allegations against Smith and we believe he must have known about the bribes.


  (ii)   Here is a mystery. We have never seen any letter written by Smith to the Registrar on 6 February. We hope Smith can provide it and we can see a copy. Was this the famous occasion on which he disclosed his receipt of two teddy bears, thus demonstrating his brazen contempt for the whole process? What exactly did Smith tell the Government chief whip? No doubt you will call him to give evidence. If he was in fact told by Smith about the payments from Al-Fayed, then we would wish to lodge the strongest complaint against the chief whip for not acting appropriately or at all on this information.

PARAGRAPH 5

  The report was officially published in March 1990. It was unofficially published - everyone knew it was the real thing - in March 1989. Smith knew from early 1988 which way it was going.

PAGE 5-6

  (1) It is surprising that all these MPs now deny that they were members of a lobby group. They were (in the libel action, this was admitted in the Reply) and they were orchestrated by Greer.

  (2) What did Greer do to "persuade" Smith to move an adjournment debate?   (6) The relationship was not terminated in February 1989. Smith and Hamilton met Greer and Al-Fayed in April, and in May Smith tabled an EDM.

  Smith meets Greer on 5 and 6 April and again on 7 and 27 November. On 21 November 1989, Smith is still telephoning Fayed. What happened, after the Rowland allegation, was that Greer took Smith out of the question-firing line. But he was still on the team.

  (7) This is so understated as to make us wonder whether Smith, notwithstanding his confusion, has really come to terms with his conduct. You will be aware of all the letters he wrote to ministers and the three occasions on which he met them.

  (8) We do not believe this. We have not been able to find evidence that any payment was entered on the Register.

PAGE 7

  5A. Greer quite clearly directed Smith's parliamentary activities. As he told Fayed, Smith will behave "as we wish".

  6. The chronology gives the lie to Smith's claim. How did Greer get hold of the Rowland letter, to fax it to Palmer? It was Greer who thereafter reduced his activities, after Fayed had paid him the danger money.

  13. We do not believe this. Greer even arranged for Smith to meet Pollard to progress the allegations against Michael Howard: he must have had Smith either in his debt or have known that he was in Al-Fayed's debt.

  Do let us know if we can be of any further assistance. We have noticed that Greer made considerable use of Smith (prior to his becoming a minister) in his pitch to the "Big 8", and so it could be interesting to examine their relationship over this matter.

Alan Rusbridger




27   See Appendix 49. Back

28   See Appendix 42. Back

29   Not printed. Back


 
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