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CHAPTER 5: CHRONOLOGY OF FAYED'S WOOING OF
THE PRESS
Peter Preston and The Guardian - June 1993
238. In June 1993 Peter Preston was contacted "via intermediaries"
by Fayed who said "he had information for me about an unconnected
matter concerning relations between the Conservative Party and
individuals in the Middle East".
239. [The "unconnected matter" was
another completely false Guardian story published in June
1993 that Prince Bandar bin Sultan, then Saudi Defence Minister,
had secretly flown to London before 1992 election to hand £7
million to an unnamed Cabinet Minister. Six months after publication
The Guardian was forced to retract, apologise and pay
substantial damages to Prince Bandar].
240. In July 1993 Preston went to see Fayed
at Harrods. In the course of this meeting Fayed alleged that
"some years ago. . .Ian Greer had approached
him offering his services and included in those services was
an offer to arrange for two MPs, Neil Hamilton and Tim Smith,
to ask questions in the House of Commons for which he would require
cash to pass on to the MPs." (paragraph 3).
Preston went on:
"as far as I recollect Mr Al Fayed mentioned
the figure of £2,000 per question." 241. The
Guardian published part of Fayed's story in October 1993.
However, at this time:
"Fayed made it very clear that he was not
prepared to be named as the source of what he had told me. In
addition he said that he did not want the Ritz Hotel to be referred
to . . .nor did he want Harrods referred to. Finally he was not
prepared to provide me with the relevant documents, although he
assured me that such documentation existed.' paragraph 7).
242. Following the initial meeting with Preston
in July 1993 they continued to meet - in July, September, October
and November 1993; again in January 1994 and several times thereafter.
Fayed's Contacts with the Sunday Times - January
1994 243. By January 1994 Fayed was
also in contact with the Sunday Times. The Privileges Committee
(see Session 1994-95 First Report Volume 1 paragraph 11 et
seq) summarises the contacts which led to the publication
of the original "cash for questions" story.
In January 1994:
"during a conversation between`a prominent
businessman' and a member of the Sunday Times staff, the
businessman apparently volunteered that he had made payments
to four Members of Parliament to ask Questions and that the `going
rate' for each Question was £1,000." (paragraph 11).
244. The method of dripping the story to the
Sunday Times was the same as in the case of The Guardian:
"Mr Witherow (Editor of the Sunday Times):
It came up in the course of a meeting, a meeting
which was not related to this at all." (Question 495).
245. The restrictions placed upon Preston and
The Guardian were replicated here. Initially,
"The businessman refused to allow the Sunday
Times to make any direct use of this information or to use
his name . . . " (paragraph 13).
246. Further similarities are revealed as the
story develops:
" . . . the businessman had made one-off
payments personally after having approached Members directly
and . . . he was also thought to have used a lobbying firm as
an intermediary." (paragraph 12).
247. Then there is one striking piece of information:
"Over the next few months the Sunday
Times followed up this information (in several ways) . . .
The first of these . . . was for one of its journalists, Jonathan
Calvert, to approach a firm of public affairs consultants pretending
to be a road haulier from Cardiff interested in maintaining a
campaign against tolls on the Severn Bridge. This was quickly
dropped when the newspaper became aware that a television company
was involved in an investigation of the same lobbying company."
(paragraph 17).
The TV programme was revealed in Maurice Chittenden's
letter of 25 February 1995 to the Clerk of the Committee (Volume
II, Appendix 10, page 177) as The Cook Programme. This confirms
conclusively that the unnamed lobbying company was Ian Greer
Associates. IGA was also the victim of an entrapment exercise
by this TV programme, to which David Hencke was seconded from
The Guardian as a consultant and which used as its base
a Fayed apartment in Park Lane.
248. As is clear from the Committee's cross-examination
of the Sunday Times journalists, they went to extraordinary
lengths to prevent identification of the source of the "information"
on which their entrapment exercise was justified. But the pieces
of the jig-saw fit too neatly together for any other conclusion
to be drawn - Fayed was their source.
249. The Privileges Committee Report was
published on 3 April 1995. On 5 April Maggie Brown, media correspondent
of The Independent, reported:
"The Sunday Times began investigating
whether some MPs took cash for tabling parliamentary questions
early last year after a tip-off believed to have come from Mohamed
Al-Fayed . . . . . . . . . . . . . . . . . . . . . . . .. Richard
Ellis, managing editor said yesterday that the paper could not
stand up the original allegations, involving four people . .
. but then conducted a general trawl of 20 MPs." 250.
If, as seems overwhelmingly likely, Fayed was the Sunday Times
source it is significant that he told them that the "going
rate" in the case of each of the four MPs was £1,000
whereas he told Preston it was £2,000.
251. It is also noteworthy that the managing
editor of the Sunday Times (being less gullible than Preston
or Hencke) should have concluded that the paper "could not
stand up the original allegations." This piece of detective
work further demonstrates that Fayed is lying.
Brian Hitchen and the Sunday Express
252. On Sunday 25 September 1994 Fayed telephoned Brian Hitchen,
editor of the Sunday Express "in an extremely agitated
state." Fayed made a number of allegations against me. Apparently
these allegations were made in "a taped interview"
(see Note for the Record prepared by Alex Allan 30 September 1994).
253. These allegations were:
(1) "Neil Hamilton had received £50,000
from him via Ian Greer to ask 17 Questions on his behalf in the
House of Commons." In his discussion with David Hencke
on 19 October 1995 Fayed said the following (see Hencke witness
statement paragraph 19):
"The sum of £50,000 was paid by House
of Fraser to IGA as a fee."
"Neil Hamilton and Tim Smith MP were paid
by Mohamed Al-Fayed sums of cash in return for them asking questions
about the House of Fraser/Lonrho dispute in the House of Commons.
Mohamed Al-Fayed said further that the payments worked out at
£2,000 for each question. I (Hencke) said to him that I
understood that the two MPs had asked 17 questions in the House
relating to House of Fraser/Lonrho and accordingly, I assumed
that a total of £34,000 had been paid over. Mohamed Al-Fayed
indicated that this was probably right."
"In addition Mohamed Al-Fayed mentioned
the figures of £8,000 and £10,000 which he said were
paid monthly to IGA. From what Peter Preston had previously told
me although Mohamed Al-Fayed did not expressly refer to this
fact, I understood that the payments were made to Smith and Hamilton
via Ian Greer." All these allegations are fabrications.
They can be positively disproved by examination of documents;
their internal inconsistency alone renders them risible.
(2) Fayed's letter of congratulation
"When Al-Fayed had written him a
letter of congratulations [? on his appointment as a Minister],
the letter had inadvertently been sent to Mr Hamilton's office,
not his home. Mr Hamilton had rung Mr Al-Fayed and complained
vociferously, saying that he would have to distance himself in
the future." Fayed wrote a letter to me in my ministerial
capacity at the DTI on 15 April 1992. It was quite clearly deliberately
sent to me at the DTI and not inadvertently as he claims. It was
marked "Private and Confidential." It was a letter
of congratulation written in the most effusive terms on my appointment
as Corporate Affairs Minister.
It went on: "I hope your new responsibilities
will allow you the time to come into Harrods to join me for lunch
some day soon." The stated purpose of the invitation was
to discuss the progress of his case against the DTI in the European
Court of Human Rights. Fayed's case alleged that the procedures
employed by DTI Inspectors breached the Convention.
On arrival in the DTI the letter had been passed,
without reference to me, to Company Investigations Division for
consideration and a draft reply. I saw the letter for the first
time on 31 April 1992, together with the accompanying advice
from an official, John Moore.
The advice was that "it would be inappropriate
to . . . respond." This was reiterated in a cover-note attached
by my Private Secretary, Mrs Kate Spall. I initialled her note
on 31 April (which presumably should read 30 April or 1 May),
having accepted the advice.
Mr Moore pointed out that there was to be "an
oral hearing before the Commission in Strasbourg on 15 May to
consider the merits and admissibility of the Fayeds' claim. In
the circumstances this is an extraordinary letter to write."
He further advised that:
"Any form of response to this letter is
in danger of being made public with an accompanying partial interpretation"
in view of the fact that "throughout their dispute both Lonrho
and the Fayeds have taken every opportunity to publicise material
which they considered helpful to their respective causes and have
paid little regard to the privacy markings on correspondence."
I assumed that, even though obviously self-interested, it
was a genuinely meant congratulation. I did not wish to be thought
personally rude by failing to send a suitable acknowledgement.
However, I had been a departmental Minister only for two weeks
or so and did not feel able to reflect the official advice - I
certainly did not wish to compromise the DTI's position in the
litigation.
Contrary to Fayed's assertion, I did not "ring
him and complain vociferously". When I next happened to see
Sir Peter Hordern MP and Ian Greer I mentioned to them that I
had received the letter that, for legal reasons, I was unable
to reply and asked them to explain, if they were talking to Fayed
at some point, that I meant no discourtesy.
I last spoke to Fayed, to the best of my
recollection, in 1989 Michael Cole wrote a letter on 26 October
1994 to the Chairman of the Tatton Conservative Association.
He points out that I did not reply or acknowledge Fayed's letter
of congratulation and then goes on to say:
"You might think it right to ask him why?
You might think it right to ask him why he sent a message via
Mr Ian Greer and you might like to enquire the content of the
message." I am not really sure what Mr Cole is hinting
at here but, if Fayed's story of my telephoning him had been
true, why would I have "sent a message via Ian Greer";
Cole would surely have mentioned the telephone call. Unwittingly
Cole exposes another Fayed lie.
As to the content of the alleged conversation,
it would hardly have been necessary for me to tell Fayed that
I "would have to distance myself from (him) in the future"
as I had had no contact of any kind with him since I joined the
Government in July 1990.
This story was another lie.
(3) "Mr Hamilton and his wife had
stayed for three nights at the Ritz in Paris as his guest. They
had run up a bill of £3,500 including £200 bottles
of wine."
"Mr Al-Fayed claimed to have proof
to back up all these allegations: letters, files, photostats of
cancelled cheques." Fayed had no documentary proof
worth the name. It is clear from the Ritz bill itself that Fayed
was wrong in every particular. We stayed six nights not three,
the notional bill was over £4,000 and we had no bottles of
wine costing £200. (The 5 October 1993 Guardian report
says "one bottle of wine alone cost more than £150";
presumably the £50 difference is accounted for by inflation
in Fayed's mind in the interim).
Fayed's meeting with Ian Greer on 22 September
1994. 254. It clearly rankled with
him and I believe that it is one of the reasons why he has singled
me out to be the especial victim of his allegations. Although
HoF's contract with IGA had ended on 31 August 1994, on 22 September
he telephoned Ian Greer and asked him to come to Harrods for tea.
This was the day after the ECHR had unanimously found against
him in his case against the DTI.
255. [Typically, Michael Cole lied in his Press
briefings about the origins of this meeting. The Financial
Times of 21 October 1994 reported:
"According to Mr Cole, concern that Mr
Fayed was about to go public led to Mr Ian Greer . . . calling
for and obtaining a meeting with the Harrods chairman on 22 September."
It is difficult to understand why Greer might have been concerned
that Fayed was about to go public as, up to that point Fayed
had met only Preston and met him confidentially. He did not even
speak to Hitchen until 25 September.] 256. Greer says in
his witness statement (paragraph 28) that at this meeting Fayed
started the conversation by criticising me. He complained that
he had thought me to be a friend and someone who, when given the
opportunity, would help him. He mentioned especially my failure
to reply to his letter of 15 April 1992 as evidence of my ignoring
him.
257. Fayed made a number of wild allegations
- including that Margaret Thatcher had been involved in "deal-making"
during and after her premiership. He suggested that this was the
reason that she currently lived in a "£4 million house".
He claimed that no Prime Minister from Edward Heath onwards had
been free from bribery and corruption. He also ranted at length
about allegations of corruption involving Michael Howard.
258. He clearly believes that, in failing to
abuse my Ministerial office in order to help him, I betrayed him.
His real complaint is not that Government is corrupt but that
he could not corrupt it.
259. I was a junior Minister directly responsible
for the matter of greatest concern to him - Companies Acts Investigations.
In his mind I could have rescinded the Brooke/Aldous report and/or
commissioned a new one to exonerate him. This is confirmed in
the Note of the Prime Minister's conversation with Brian Hitchen
on 30 September 1994:
"Mr Al-Fayed was a very angry man. His
honour had been smashed to bits by the ECHR rejection of his
case. He was disappointed and disillusioned. He wanted the DTI
inspectors' report to be reviewed or withdrawn." (page 4).
I believe that this explains his special animus
against me.
FAYED'S MOTIVES
Conversations with Brian Hitchen
260. The key document in the public domain is the Note of
the Prime Minister's conversation with Brian Hitchen on 30 September
1994.
In order to gauge the accuracy of Hitchen's
report of his conversation with Fayed it will be necessary to
obtain the tape recording or transcript from him. Now that Hitchen's
involvement is public knowledge and Fayed has no grounds for
objection a demand to produce it could not reasonably be resisted.
261. [As appears from the Notes of the meeting
with Hitchen, Michael Cole lied in his Press briefing on 20October
1994 in a spectacular way:
"Mr Cole last night denied that Mr Fayed
has asked Mr Greer or any other intermediary to convey the substance
of the meeting to the Prime Minister as a way of putting pressure
on the government. It may be that someone went to Mr Major but
we didn't ask them to." (Financial Times 21 October
1994).
"If anyone chose to act as an intermediary
with Downing Street it was without our knowledge." (The
Times 21 October 1994). 262. Cole's statements are flatly
contradicted (inter alia) by Hitchen's statements below:
"Fayed wanted to meet the Prime Minister.
If he did not get some sort of satisfaction he would go to Tony
Blair and tell him all this. (i.e., the substance of his allegations)."
and
"Al-Fayed was on his back daily, sometimes
twice a day to ask whether Hitchen had been able to do something
with No. 10." 263. Fayed stated in an interview to the
Daily Mail published on 21 October:
"I have never asked for anything from the
Government." Even for Fayed that was a blockbuster lie.
Hitchen's meeting with the Prime Minister
30 September 1994 264. Hitchen reported to the Prime
Minister that Fayed:
"had rung him last Sunday (25 September
1994) in an extremely agitated state. He knew Fayed well from
contacts in the past. He was normally generous and charming, but
was dangerous when angered.
"He was clearly very upset about the recent
ECHR judgment that had rejected his appeals against the behaviour
of the DTI inspectors."
"Fayed was a very angry man. His honour
had been smashed to bits by the ECHR rejection of his case. He
was disappointed and disillusioned. He wanted the DTI inspectors'
report to be reviewed or withdrawn.
"He was also fed up that his application
for British citizenship had been lying in the Home Office for
18 months without any result . . . His brother Ali was in the
same position . . . unable to get British citizenship.
"He could go to France where he would be
welcomed and given citizenship - probably made a Duke.
"Fayed wanted to meet the Prime Minister.
If he did not get some sort of satisfaction he would go to Tony
Blair and tell him all this.
"Hitchen indicated that, in a subsequent
conversation he had tested Mr Al-Fayed out on whether citizenship
might be his bottom line. Fayed had angrily said that that was
not enough, that was not the main issue." 265. Brian
Hitchen later saw Alex Allan and Christopher Meyer at Number 10
on 18 October. This meeting was recorded in a Note by Meyer.
Allan said:
" . . . there could be no question of the
Prime Minister either seeing Al-Fayed or doing deals with him.
Al-Fayed had been making threats. The Prime Minister would not
allow himself to be drawn into something which looked like blackmail.
Hitchen said that he agreed entirely." Hitchen said:
"Al-Fayed was on his neck daily, sometimes
twice a day to ask whether Hitchen had been able to do something
with Number 10." Allan then said:
" . . . it was not clear what Al-Fayed
wanted. He would not get in to see the Prime Minister; he would
not succeed in reopening the DTI investigation; his application
for a British passport would be treated in the usual way. If
he thought that threats would work he was very much mistaken."
Hitchen said:
"Fayed was not very stable. `He doesn't
think like we do.' He was very ruthless. If he thought that he
could bring people down he would do so. He claimed to have passed
his allegations to Paddy Ashdown because he . . . he was fed
up and wanted something done. He also said that he had given certain
papers to Mr Ashdown." Hitchen was intending to see
Fayed that same day (Wednesday 18 October). But it was agreed
that Hitchen should say nothing about his contacts with Number
10 (and particularly not about his meeting with the Prime Minister).
It was agreed that it would be better to wait until the end of
the week before saying anything to him.
Conversations with Peter Preston
266. In the event Fayed's patience became exhausted; indeed,
had already become so. Fayed had continued to see Peter Preston
throughout 1994 - on 31 January, 14 March, 16 May (?) and 19 September
and, as Preston notes in his witness statement (paragraph 11):
"Although I cannot precisely recollect
the date, I met Mr Al-Fayed at Harrods early in October 1994.
Fayed also finally saw Preston on Tuesday 17
October." 267. That the ECHR judgment was the catalyst
for Fayed's nuclear reaction is confirmed not only by Hitchen
but also by Preston:
"The first meeting (in October) occurred
shortly after Mr Al-Fayed had just lost his appeal to the European
Court. Mr Al-Fayed was quite emotional at that meeting."
(paragraph 12).
" . . . he was particularly distressed
in the meeting we had after he had lost his appeal in the ECHR."
(paragraph 16).
Revelations since 20 October 1994 of Fayed's motives
268. Michael Cole wrote in the Spectator of 19 October
(page 36) denying that Fayed was influenced in making his allegations
by the turning down of his citizenship application. He says that
this cannot be the case as his application was not finally determined
until 23 February 1995 - more than four months after The Guardian
story of 20 October. 269. This is disingenuous. Although
it seems that Fayed's main interest was in discrediting the DTI
report it is clear from the Hitchen interview and the Greer conservation
of 22 September that Fayed attached great importance also to
the lack of progress in the granting of his passport application.
270. Furthermore, a report in The Times
by Angela Mackay and Nigel Williamson on 21 October 1994 states:
"Fayed's decision to disclose the names
of MPs whom he alleges he paid in return for political favours
appears to flow from a Home Office refusal to grant British citizenship
to his brother Ali . . . Fayed's belief that his brother's claim
was stymied at ministerial level appears to have triggered his
quest to expose government `parasites in pinstripes'." 271.
On 20 October Fayed gave an interview to Brian Vine which was
published in the Daily Mail on the 21st. Fayed said:
" . . . 18 months ago my brother Ali applied
for British citizenship . . . Ali's citizenship seems to have
been blocked for some reason and I put it down to a leading Tory
who had something to do with the Home Office." This
was a reference to Charles Wardle MP, who had ministerial responsibility
for citizenship applications until the reshuffle in July 1994.
Wardle had previously made aggressively anti-Fayed interventions
in the Commons. Fayed ascribed these to his position as parliamentary
consultant to Peat Marwick, Lonrho's auditors.
272. At one and the same time, therefore, Fayed
was complaining that Wardle's behaviour was an abuse and
"unacceptable in a democratic country"
(see Fayed's letter to Sir Peter Hordern MP of 8 September 1994)
and yet he was complaining that I had betrayed him by failing
to misuse my influence as a Minister on his behalf:
"(Fayed) said that he had thought he was
a friend and someone who, when given the opportunity, would help
him. He complained that Mr Hamilton, on being appointed to his
ministerial position had ignored him . . . " (Greer witness
statement paragraph 28).
"Mr Hamilton now did not want to know Mr
Al-Fayed". (Note of Hitchen/PM interview) 273. On the
foregoing evidence no reasonable person could possibly doubt the
importance of the citizenship application as an ingredient in
his decision to seek revenge on the Government and those whom
he thought had let him down.
Scrupulous conduct as corporate affairs minister
274. Documents produced by the Government on Discovery demonstrate
conclusively that I acted scrupulously as Corporate Affairs Minister.
275. Alex Allan's Note to the Prime Minister
of 30 September states:
"When he was appointed as a Minister in
the DTI Mr Hamilton was open in saying that he had previously
been involved in representations on behalf of the Al Fayeds
. . . Mr. Hamilton has quite rightly indicated that it would
not be proper for him to play any part in dealing with issues
relating to House of Fraser as a DTI Minister. He has not done
so." This is confirmed by documents revealed by the
DTI.
276. I decided on or around 30 April 1994 to
accept the official advice not to reply to Fayed's letter of
congratulation.
277. On 8 May 1994 Alex Carlile MP tabled a
Question for Written Answer asking about the adequacy of the
DTI investigation into House of Fraser. I knew nothing about this
until I received the draft reply together with the background
papers from officials on 12 May.
278. At this stage Carlile's interest in Fayed
had been confined to criticising regulators' failure to take
action against him for his various misdemeanours and it was assumed
that this lay behind the Question.
279. The draft reply was in a standard form.
It said virtually nothing - that action by regulators was a matter
for them. I signed off the draft reply without alteration or
discussion on 13 May. I could have sent the PQ for another Minister
to deal with; but that would have delayed the reply by several
days, which seemed pointless as the reply would have been no
different.
280. On 4 June I held the first of my regular
quarterly meetings with officials from Investigations Division
to review current cases. At this meeting I instructed officials
not to send me further papers relating to HoF/Fayed matters,
on account of my earlier involvement. I announced that I would
be taking no decisions on matters affecting their interests.
Michael Osborne drafted a minute recording my decisions.
281. On 8 June my Private Secretary, Mrs Kate
Spall, drafted a Minute to the same effect, also asking Edward
Leigh to take such decisions as might be necessary. Leigh was
succeeded in due course by Patrick McLoughlin and my then Private
Secretary, Paul Hadley, wrote to McLoughlin's Private Secretary
on 22 March 1994 to confirm that he was content to take on the
responsibility.
282. On 16 June Michael Heseltine's Assistant
Private Secretary responded saying that he was content for Leigh
to consider Fayed issues but that he would like to take any final
decisions himself.
283. On 26 June an official in Competition Division
sent a Minute to Dr Bell, its then Head, setting out the facts
of my involvement in HOF/Fayed issues as a backbencher.
284. On 29 June Dr Bell recorded in a margin
note that she had discussed with me "the presentational
problem arising from (my) past involvement" and noted my
decision additionally "not to be involved in decisions on
the Lonrho proceedings or mergers involving Lonrho".
285. The word "presentational"
was emphasised because officials advised me that I was perfectly
entitled in law to take any decisions on HoF/Fayed/Lonrho matters;
no legal impediment arose because of the lapse of time since
my previous involvement as a backbencher. Nonetheless (ironically
in view of subsequent events) I thought that it would be prudent
to remove any risks of appearing to compromise myself, the Department
or the Government and chose to exclude myself.
286. This decision was minuted by my Private
Secretary on 29 June. I had received two merger cases involving
the sale of Lonrho subsidiaries - on 20 May and 11 June. These
cases were wholly uncontroversial; the DGFT had recommended in
each case no reference to the MMC.
287. I accepted both recommendations without
demur and, as the decision was in Lonrho's favour, no legal or
presentational difficulty could arise. I could have passed these
cases over to another Minister to decide; paradoxically, if I
had been so pernickety I could have been criticised by Lonrho
for causing unnecessary delay which, no doubt, The Guardian
would have said was prompted by my support for the Fayeds!
288.
However, having had two Lonrho cases in a short time, it occurred
to me that I might well be presented in due course with a contentious
or controversial case. I was concerned not to expose myself and
the Government to captious criticism if I did have to refer a
Lonrho proposal to the MMC. It seemed sensible to discuss the
legal and presentational position with officials.
289. Although Paul Hadley's note of 31 October
1994 says that I excluded myself "on the first occasion (4
June 1992) I was asked to take decisions relating to House of
Fraser" this is not accurate. I actually excluded myself
before any decision fell to be made. The 4 June meeting was my
first routine discussion on all current cases; I was not asked
to take any decisions relating to HoF at that meeting.
290. The records conclusively show that I acted
ultra-scrupulously. Had I been as venal and dishonest as Fayed
claims I could easily have acted covertly to inform and help him
on the ECHR case. Fayed would have paid handsomely for such information
and help - he admitted that he was ready to pay up to £2
million for an advance copy of the DTI Inspectors' Report (see
above paragraph 214).
291. I would also have been extremely interested
to see some of the background and unpublished material relating
to the DTI Inspectors' Report on HoF. I neither saw nor made any
attempt to see any papers relating to HoF - apart from the background
to the WPQ on 13 May 1994 and the single paragraph in the Investigations
Quarterly Review on 4 June 1994. Although I could have seen any
relevant papers I did not even allow my curiosity to get the
better of me, let alone breach a confidence or abuse my office
to Fayed's advantage.
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