Select Committee on Standards and Privileges First Report


APPENDIX 33 - Continued

CHAPTER 7: ANALYSIS OF LIES AND ERRORS IN THE WITNESS STATEMENTS

(A) Mohamed Fayed

  362. Paragraph 1:

  "Mr Greer contacted me to offer his services"

  This is a lie.

  As explained at paragraphs 160-162 above Lord King suggested to Fayed that he engage Greer (whom King engaged on behalf of British Airways). Fayed acted on this advice and asked Greer to come and see him.

  The purpose of this lie is to give an impression of Greer as a predator and Fayed as an innocent dupe.

  However, by the time he came to record his interview for Channel 4's "Dispatches" programme in January 1997 Fayed had forgotten his earlier lie and, by mistake, told the truth - that Lord King, not Greer, had taken the initiative.

  363. Paragraph 2:   "Mr Greer specifically told me it was perfectly normal to pay MPs to ask question in the House of Commons and undertake similar activities. At one of our meetings he told me that MPs could be "rented like taxis". Mr Greer specifically put forward Neil Hamilton and Tim Smith as MPs who would agree to be paid in exchange for asking questions, lobbying and other parliamentary services."   These are all lies.

  364. As explained at paragraphs 163-180 above it is inconceivable that Greer would have spoken in these terms. He has always denied employing MPs as consultants. It was not necessary for him to do so in order to do his job satisfactorily.

  It would be interesting to take a random sample of Greer's clients over 25 years and ask them whether he had ever made such a suggestion to them.

  Why should Greer blurt this out uniquely in Fayed's case?

  365. What possible benefit would Greer derive from paying MPs specifically to take up Fayed's case? Payment of MPs could only serve to reduce his own fee income from Fayed.

  Why should Greer have felt it necessary to pay MPs on Fayed's behalf. At that stage Fayed had no shortage of natural sympathisers on account of Conservative antipathy towards Rowland and Lonrho. Peter Hordern had already enlisted the support of the officers of the backbench Trade and Industry Committee without difficulty.

  Written PQs could have been very easily and legitimately asked by Sir Peter Hordern MP, who was HoF's registered parliamentary consultant. It would not have been necessary for Greer to employ other MPs for this purpose.

  366. Whilst it was certainly not unusual for MPs in the 1980s to be retained as parliamentary consultants by specific interest groups it was rather unusual for lobbyists. No doubt the reason for this is that lobbyists have the expertise to get what they want by persuasion anyway and it would be otiose to employ an MP. Small or new companies might have an MP on the board or as a consultant but the industry leaders like IGA would certainly have had no need to do so.

  367. The idea that Greer would say "you have to rent MPs like taxis" is risible, bearing in mind his experience and the length of time he has operated without paying MPs.

  The idea that, even if retained as consultants, MPs would charge by the PQ, let alone at the absurd figure of £2,000 a time, is preposterous.

  Only a fool would be taken in by such a claim. Fayed was surrounded by sophisticated advisers both inside HoF and externally. If he was so startled by Greer's alleged claim why did he mention it to no one else at the time - particularly Sir Peter Hordern or Royston Webb?

  368. He is quite clear that, at the time, he knew such an arrangement would be corrupt:

  "I could not believe that in Britain, where Parliament has such a big reputation, you had to pay MPs. I was shattered by it." (Guardian 20 October 1994 column 2).

  If this statement were true, it is inconceivable that he would have kept Greer's alleged statement to himself. Yet he has produced no witness to corroborate his reaction. Indeed, Royston Webb, who was closely involved with all Fayed's dealings with Greer, makes clear in his recorded telephone conversation with Greer that he knew nothing about such practices.

  369. Paragraph 3:   "Between 1987 and 1989 I made a number of payments in cash or in Harrods gift vouchers directly to Mr Hamilton . . . "

  This is a lie and is analysed in detail at paragraphs 163-132 above.

  370. Paragraph 4:   "There were a number of occasions when Mr Hamilton came to see me . . . and on each occasion when he and I were alone, he asked for money . . . . . . Mr Hamilton would tell me that he was undertaking a lot of work for me, that it was expensive and that he needed money for that work. I felt embarrassed to turn him down and so I invariably gave him a bundle of £2,500. Our meetings were alone and although my diary confirms the dates of the meetings no-one else would have seen the money being given to Mr Hamilton. The money I gave to Mr Hamilton did not correspond to a particular "tariff" for services . . . I cannot now remember the specific activities he undertook each time he visited me to ask for money . . . each time I made a payment to him at his request it was because he had or was going to undertake some Parliamentary work . . ."   This is a pack of lies.

  371.

  (a)   No witnesses to alleged cash handovers.

  He is careful at this stage to emphasise that "he and I were alone" and "no-one would have seen the money being given."

  372. Why was there no mention of Bond or Bozek at this point? If true, this was the natural time to adduce corroborative evidence. He did produce his driver, Glyn John, in corroboration of an unimportant point - that he regularly draws out large sums of cash from his bank. It is irrational to provide corroboration of a trivial point but, given its alleged existence, none on the vital one.

  373. So he was clearly aware of the need for corroboration where possible. Bromfield and Bond were, like John, at all material times his employees, working in close proximity to him. Bozek left his employment only in September 1994, a month before The Guardian published his allegations. She was easily contactable at Allen and Overy.

  374. Furthermore, he says:

  "my diary confirms the dates".

  It is inconceivable, if the evidence were true, that he would not have produced here some mention of witness evidence to reinforce his diary entries - which remained the only "evidence" to justify his allegations until the employee witnesses were produced on the eve of the trial two years after The Guardian article of 20 October 1994.

  Fayed is lying, as are Bromfield, Bond and Bozek.

  375.

  (b)   "I was undertaking a lot of expensive work."

  The amount of "work" was not great. It amounted in all to a few hours a year. The reference to "expensive work" is incomprehensible. Is Fayed implying that, in addition to Greer allegedly paying me, I was paying others? The suggestion is ludicrous.

  376. His explanation for allegedly making payments to me is even more ludicrous - "that he felt embarrassed to turn me down". Fayed is a tough businessman. Did he not ask me the nature of the "expensive work"?

  Is it really credible that a man who could pull off the fantastic coup which had eluded Rowland's grasp for years - the takeover of HoF - and defeated Rowland into the bargain, could have been so easily gulled?

  377. Peter Hordern was available to assist generally and Greer had regular contact with him (e.g., see Greer's fax of 11 February 1987).

  Michael Grylls and Dale Campbell-Savours were also carrying out a great deal of "work" for him - apparently for nothing. Why would he need to pay me such huge sums of money?

  378. He "remembers" very clearly the amounts allegedly paid on various dates and much other detail volunteered to flesh out his allegations. But he suffers a very curious total amnesia in relation to the precise purpose of his alleged cash payments:

  "I cannot now remember the specific activities he undertook each time he visited me to ask for money."

  379. Who were the "other MPs and Government Ministers" I am alleged to have spoken to, when and what about? Why is there no contemporaneous note of any such meetings or conversations? Why was none of this reported to anyone else - even Greer, Hordern or Webb?

  380. In particular, what "work" could I possibly have carried out to justify the two alleged payments on 2 and 18 June 1987 - when I was, like all other MPs, fighting a General Election and Parliament was dissolved?

  381. He twice mentions in this paragraph that, "on each occasion when he and I were alone", I asked him for money. Yet this allegation is contradicted by Bond who says that "on several occasions . . . prior to a meeting with Mr Hamilton, Mr Al-Fayed would make a remark that he was coming for his money."

  382. Paragraph 5:

  "In the autumn of 1994, when I discussed the payments I had made to Neil Hamilton with (Peter Preston) I believe I mentioned that I paid Mr Hamilton £2,000 per question. This was simply a rough guess on my part . . . ."

  This is at least the third refinement of this allegation.

  383. In his witness statement, he ascribed to Greer the statement that the "going rate" was £2,000 a question.

  Preston says that Fayed mentioned £2,000 "as far as I recollect" (curiously vague considering this was the most sensational detail of the story from which this Inquiry ultimately derives).

  To the Sunday Times in January 1994 he said that the "going rate" was £1,000.

  In his interview with Hencke on 18 October 1994 Fayed confirmed the £2,000 figure and, when Hencke told him that Smith and I had asked 17 PQs, Fayed said it was "probably right" that we had been paid £34,000.

  To Brian Hitchen on 25 September he said that I had been paid £50,000 for 17 PQs, i.e., £3,000 per question.

  These statements are all lies.

  384. Paragraph 6:   The dates when payments of cash were made were 2 June 1987, 18 June 1987, 8 July 1987, 18 February 1988, 19 July 1988, 4 October 1988, 25 January 1989, and 27 July 1989 . . . no specific payment related directly to a particular action by him. I understood them to be payments (additional to any made by Mr Greer) to cover all of Mr Hamilton's activities.

  If Greer was the middle-man who engaged the services of MPs why would Fayed need to make "payments (additional to any made by Mr Greer)"?

  385. This allegation is nonsensical as he cannot identify a single act on my part to which these alleged payments relate (see above).

  The pattern of alleged payments is incomprehensible and is analysed in detail at page 27 et seq. above.

  2 June 1987 was in the middle of the General Election. 18 June was immediately afterwards, with Parliament barely returned. On 4 October 1988 Parliament was in Recess and had been for over two months. What Parliamentary activity was it possible for me to undertake for these alleged payments?

  Another payment was allegedly made on 8 July. What frenetic burst of "expensive work" (additional to alleged payments of £2,000 per PQ from Greer) justified three identical payments of £2,500 within a five week period, for a substantial amount of which Parliament was either not in existence or not sitting.

  386. Paragraph 7:

  "I made special payments at two other times (apart from regular fees paid) to Ian Greer for payment to Neil Hamilton and Tim Smith. The first of these was in May 1987 when I gave Ian Greer two cheques for £12,000 and £6,000 to enable him to pay Neil Hamilton for their Parliamentary work. I was specifically asked by Ian Greer for this money to pay Messrs Hamilton and Smith and I paid it to him for that reason. These two cheques were not paid to Ian Greer to pay to Conservative candidates in the 1987 General Election. . . . Secondly, I made a payment of £13,333 to Ian Greer in February 1990. Mr Greer told me that this was, again, for services rendered by MPs including Mr Hamilton and for which he had to pay."

  Fayed's allegation relating to the cheques for £12,000 and £6,000 was exploded by Michael Cole, acting as a "spokesman for Mr Al-Fayed" (See paragraphs 53-56 above).

  He admitted that these cheques were paid to Greer as contributions to 1987 election fighting funds. Neither I nor Smith benefited in any way from this money, which I understand is fully accounted for by Greer in the list of payments made.

  387. Cole's admission is supported by the letter from Greer to Ali Fayed dated 28 May 1987:

  "I spoke to you last week and you kindly said you would speak to Mohamed about the possibility of helping one or two Conservative candidates during the election campaign. I think a cheque for £6,000 would be sufficient. If you are able to help perhaps you would be kind enough to make a cheque out to Ian Greer Associates. I will let you have a note after the election is over of whom was assisted."

  388. The contemporaneous documentation (including returned cheques) and accounts flatly disprove Fayed's assertion that these sums were paid to Greer for onward transmission to Tim Smith and me to pay for PQs at £2,000 a time.

  389. There would be no point in inventing an elaborate charade of this nature if Fayed and Greer were in cahoots to make secret cash payments to MPs. Still less is it likely that Greer would try to deceive Fayed as to the destination of the money by inventing a series of bogus payments, as in the account of the 26 election fighting fund contributions, which could easily be exposed.

  390. If Greer were as dishonest as Fayed asserts he could easily have siphoned off these payments for himself. The detailed nature of the accounts demonstrates the opposite - that it is Fayed who is dishonest, in lying about the nature of these payments.

  391. Paragraph 8:

  "I can therefore confirm that cash payments were made to Mr Hamilton in two ways: firstly in face to face meetings and secondly through Ian Greer."

  This is a lie.

  392. Paragraph 9:

  "On other occasions I gave Mr Hamilton Harrods gift vouchers . . . When Mr Hamilton came to see me he would broadly hint that he wanted to `go shopping'. I responded to these hints by giving him Harrods gift vouchers. On 15 December 1988 I gave Mr Hamilton £3,000 of gift vouchers, on 16 February 1989 I gave him £1,000 of gift vouchers, on 20 February 1989 I gave him £1,000 of gift vouchers and on 21 November I gave him £3,000 of gift vouchers."

  This is a pack of lies. Fayed partially retracted this allegation in his oral evidence and put the blame on D J Freeman for having allegedly misunderstood his instructions.

  393. Paragraph 10: The Ritz invitation

  "At Mr Hamilton's request, he and his wife stayed for six nights . . . at the Ritz Hotel."

  Fayed is lying when he says that I requested the stay at the Ritz. The documentation is unambiguous. Ian Greer wrote to me and other MPs on 3 April 1987 to convey Fayed's invitation to my wife and me to visit the Duke of Windsor's villa in Paris, staying at the Ritz.

  A fax from Greer to Fayed dated 7 April 1987 says:

  "Visit to Paris.


  I will talk to you about this separately. I know, however, that you are anxious for it to be organised quickly."

  394. On 9 April the DTI announced the appointment of Inspectors to investigate the Fayed takeover of HoF. On the 10 Greer wrote to all the invitees to say that, in the circumstances, it would be inappropriate for the visit to go ahead but

  "Hopefully, when the enquiry has been completed we will be able to look once more at Mohamed's kind suggestion."

   Furthermore, the D J Freeman letter of 5 December 1994 refers to:

  " . . . Mr Al-Fayed's offer to Mr Hamilton to visit the Ritz in Paris . . . "

  396. It is absolutely incontrovertible, therefore, that the invitation came from Fayed. Sometime before the Summer recess when I met Fayed we talked about what we would be doing over the summer. I told him (inter alia) that I was going to stay with friends in Normandy and Alsace in September. He suggested that I take up the postponed offer to see the Windsors' villa and stay at the Ritz.

  397. Bearing in mind Greer's intimation that the MPs' visit would be on again after the DTI Inquiry had been completed I would hardly then have invited myself. Both the original and the renewed invitation came from Fayed.

  398. Fayed now says that we overstayed our welcome. But the length of our stay was largely determined by Fayed himself.

  The peg on which the visit hung was the villa not the hotel. We had no control over the timing of the visit to the villa. We arrived on the Sunday; we expected to visit the villa on the Monday or Tuesday and then depart a day or so later. The visit to the villa did not take place, to the best of my recollection, until the Thursday and we departed on Saturday morning. Had the visit taken place earlier in the week we would have departed earlier.

  399. Paragraph 11.

  "Mr Hamilton asked if he and his wife could stay at the Ritz a week or so later . . . "

  This is a lie.

  I did not "ask if I and my wife could stay at the Ritz a week or so later". We stayed a week in Normandy with friends, then drove from Paris to Alsace for a week. Having been away for three weeks, we had no desire to detour via Paris on our way home.

ANALYSIS OF WITNESS STATEMENT OF (B) PETER PRESTON

  400. Paragraph 3:

  Preston contrives to make it look as though he prised the story out of Fayed:

  " . . . During that conversation, almost in passing, Mr Al-Fayed told me that, just prior to the 1992 election Tim Smith MP had been in to see him to ask him for money for the Conservative election campaign . . . I was interested in Mr Al-Fayed's reference to Mr Smith and said so . . . "

  401. I have no idea whether Smith did ask Fayed for money for the Conservative Party, but I cannot see why that should appear suspicious in itself to Preston. Preston was wrong in thinking Smith was "Deputy Party Treasurer" (see his article in The Guardian 21 October 1994). He was not appointed to this position until after the election.

  402. Fayed then went on to make his original allegation that he paid Greer who paid Smith and me £2,000 for each PQ. Preston is not sure about the sum:

  "as far as I recollect Mr Al-Fayed mentioned the figure of £2,000 per question."

  403. It was no accident that Fayed told Preston his pack of lies. It was obviously pre-meditated. This was the first time he and Preston had met. Fayed approached Preston:

  "I was contacted by Mr Al-Fayed through intermediaries."

  Fayed had a copy of my Ritz bill ready to hand:

  "I was shown details of Neil Hamilton's Ritz bill . . . "

  Preston thought Fayed was going to help him with The Guardian's false and defamatory story about Prince Bandar bin Sultan funding the Conservative Party. But clearly Fayed's main purpose was to drip-feed Preston with a different story.

  404. Paragraph 5:

  Contrary to Preston's assertion, neither Hencke nor Mullin put to me the allegation that I had taken cash for questions. Had they done so I would certainly have referred to it in my letter to Preston of 1 October 1993.

  405. I did not know at that time the exact nature of the story Hencke was intending to write. It is clear from my letter that I thought it was likely to be a link between the Ritz stay and Greer potentially lobbying me to help Fayed with his case against the DTI in the ECHR or possibly for a re-opening of the HoF Inquiry.

  406. There is no suggestion in this letter of my being aware of the possibility of a "cash for questions" story. As the purpose of the letter was to warn of legal action if anything defamatory were published it is inconceivable that I would have neglected to mention so astonishing an allegation, had it been made to me.

  407. Preston says that:

  "I had initially failed to recollect . . . " my stay at the Ritz.

  This is nonsense. I was inveigled into seeing Hencke by false pretences. Hencke had rung me early in the morning at home to ask if I could talk to him urgently on a matter which he did not wish to discuss on the phone. He gave me no indication that I was the subject of the conversation, still less that he was in the process of putting together a damaging story about me.

  408. I was surprised also that, when I met him for tea on the Terrace, he was accompanied by John Mullin, whom I did not know. It was clear from the menacing nature of the initial questions that I had been duped into a meeting unawares and they were bent on mischief about me. Consequently, I immediately drew in my horns until I had a better idea of their objectives.

  409. I certainly would not have confirmed, in these circumstances, any fact which might be used unfairly against me. I did not trust Hencke to report fairly anything I said. I did not know how much information he had. The interview might have been no more than a fishing expedition. Any sensible person in my position would have given away as little as possible, as it was clear that any story they might be working on would be written as a hatchet-job.

  410. My first concern was to probe Hencke's knowledge and restrict his power to make mischief. I was prepared to put the facts which he did know into context, but not to provide extra material for him to distort or pad out a hostile story. Hence, once I was satisfied that Hencke had the bones of the Ritz visit I was prepared to explain something about it.

  411. It is interesting that Preston notes a distinction between me and Smith - that Smith was nervous. We now know that he had good reason to be.

  412. Preston completely failed to see the truth because Fayed had failed to tell him the truth and had sent him off on a wild goose chase which he uncritically followed.

  413. His witness statement is silent about direct payments from Fayed, as is The Guardian article of 20 October 1994. Preston, in spite of his reputation as a brilliant journalist did not have the critical acumen to enquire whether Fayed had made payments to anyone directly. He was gullible enough to swallow Fayed's lies whole and missed the true story.

  Smith had been paid not by Greer by directly by Fayed.

  I had been paid neither directly by Fayed nor indirectly via Greer. Hence I had nothing to be nervous about.

  414. Paragraph 7:

  Preston does not say why Fayed was not prepared to be identified as the source of the story in October 1993. His reticence contrasts starkly with his statement published in the Guardian on 20 October 1994 that he was acting "out of public duty" in making his allegations.

  415. Paragraph 10:

  Greer was unwise in his choice of words in explaining that a good lobbyist can persuade an appropriate MP to put down a PQ if desirable in the interests of his client. But the fact is that this is a commonplace.

  416. Hencke of course, procured a Labour front bench MP and the Liberals to ask questions in the House on the night of 20 October 1994. Thus he was able to cloak his allegations with Parliamentary privilege, secure greater publicity for his article and ensure that it would be most widely disseminated. Greer would certainly have envied the "power and prestige" which enabled him to secure such parliamentary activity at a moment's notice!

  417. There is no reason whatever for automatically interpreting Greer's boast in a way which implies payment of MPs - any more than if Hencke boasted of his parliamentary exploits. The expertise is in knowing someone who will take an interest in the subject or be sympathetic to the viewpoint of the inquirer and will do what he is asked. Journalists do this all the time.

  418. Paragraph 12:

  It is absurd of Preston to claim that the documents at pages 9-21 of his witness statement in any way corroborate Fayed's allegation that Greer or he paid me "cash for questions."

  419. Those documents are as follows:

  (a)   Letter from me to Fayed dated 28 January 1988 sympathising with him over the invasion of his privacy involved in the DTI Inquiry. I referred to my own similar personal experiences in my 1986 BBC libel action (which are even more strongly reinforced by my current experience).


  (b)   Letter to Lord Young, Secretary of State for Trade and Industry dated 28 January 1988.


     This letter expresses disappointment over the DTI's lack of action in respect of the Lonrho subsidiaries Blorg/Contango alleged amethyst fraud.


  (c)   Extract of House of Commons Order Paper 27 May 1988 - 2 PQs by me asking what are the costs of the DTI HoF Inquiry and when the Inspectors might report.


  (d)   Letter from me to Fayed dated 1 September 1988 saying that I had been updated on meetings with the DTI and suggesting that Fayed, Greer and I might "get together shortly" when I was in London.


  (e)   Letter from me to Fayed dated 12 March 1989 responding to a letter from Royston Webb.


  (f)   Unsigned letter dated 21 March 1989 on House of Commons writing paper purporting to be written by me to Douglas Hurd. It was never sent. This letter was drafted by IGA and typed on their machine. I do not recollect seeing it before it was reproduced in The Guardian on 20 October 1994.


     It was not on my "personalised" notepaper as claimed in the article - my name was simply typed on an ordinary piece of HoC writing paper which did not originate with me. It was obviously a draft for my consideration. I presume that the injunction "NOT TO BE RELEASED UNDER ANY CIRCUMSTANCES WITHOUT THE PERMISSION OF IAN GREER" was put on it to stop it being released to the Press until the contents had been agreed (which they never were) and the letter posted (which it never was).


  (g)   Fax dated 29 March 1989 from Greer to Fayed which reports that I had agreed to put down four PQs.


     It also said "believe it will be possible to put more questions down next week." None was put down by me.


     It also said "believe letter possible from Neil to Chairman of CAA." None was sent by me.


     The language "'believe possible'" hardly reinforces Preston's theory that I was Greer's puppet. The clear inference is that I would consider the matter but no more. I was a supporter of Fayed but not a cipher.


  (h)   Fax dated 4 April 1989 from Greer to Royston Webb enclosing the four PQs to be asked by me.

  Not one of these documents in any way substantiates Preston's allegations. In fact letter (a) makes very clear that one reason why I sympathised with the Fayeds was my own battle with the BBC. Similarly, letter (e) also refers to the Fayed/Lonrho libel action. Furthermore, letter (a) indicates my own views on competition policy, which have never varied i.e., that mergers and takeovers should generally not be interfered with unless there were a major reduction in competition.

  Much of the rest of the material is anti-Lonrho rather than pro-Fayed. I was quite consistent in my opposition to Lonrho, which was at that time the owner of The Observer which had mounted vicious attacks on Margaret Thatcher (orchestrated, as I thought at the time, by Tiny Rowland).

  420. Paragraph 13

  " . . . I then agreed that I would send a short facsimile to Ian Greer, Neil Hamilton and Tim Smith informing them that we were about to write an article."

    This fax did nothing of the kind. It gave no indication whatever when sent at 4.13 p.m. that the story had already been written and within six hours would be on the streets.

  Hencke merely said:

  " . . . I am working on the story of your association with Mr Al-Fayed in the Harrods campaign against Lonrho. I have many of the documents involved in that campaign. If you would like to comment, I can be reached . . .".

  421. The fax contained nothing to indicate the serious nature of the allegations which The Guardian were about to make about me nor the prominence which Preston had decided to give them.

  422. Preston clearly had no interest in what I might have had to say about them and the fax was sent merely to give a spurious appearance to his readers and the world at large that the story had been properly researched and that The Guardian had been fair to me by providing me with an opportunity to respond to the allegations.

  For him to pretend otherwise is worse than dissembling; it is an outright lie.

  423. Paragraph 15.

  Preston emphasises that he does not dissent from The Guardian's 1990 criticisms of Fayed as a liar - both in the course of his HoF bid and before the DTI Inspectors:

  "There is simply no question of The Guardian in October 1994 `rehabilitating' Mr Al Fayed or `forgetting' what it had published about him four years previously . . . ".

  He said that when he first met Fayed in July 1993:

  "I formed my own view of him."

  He does not state what that view was.

  424. Fayed told him that I had stayed at the Ritz for a week and had not declared it; and that Greer, Smith and I were parties to a "cash for questions" agreement. Preston went on to say:

  "Both of these points were supported by documents provided to The Guardian. . . . "

  The Guardian had no documents other than those listed above, none of which in any way supports such an assertion.

  425. Preston then said that Mullin and Hencke had done:

  "extensive background work, talking to other sources over: a period of about 15 months."

  Absolutely no evidence has been provided to support these assertions. Hencke has produced no notes whatsoever of any background work apart from the notes of his 10-12 minute interview with Fayed 36 hours before publication. Mullin produced his brief notes of my interview with him and Hencke.

  426. It is inconceivable, if such background work had been done, that no documentary evidence had been collected. The Guardian must have realised that there was a very high probability of writs being issued and they were issued within hours of publication.

  If there were notes of interviews and "extensive background research" there was a clear duty to preserve them. Their absence can be explained by only two theories - deliberate destruction or deliberate lying.

  427. Preston has no justification whatever for saying

    " . . . by the time Mr Al Fayed was prepared to go on the record The Guardian had all the evidence it needed to publish . . . " (the allegation that Greer and I were parties to a "cash for questions" agreement). (paragraph 16).

  Preston accepted that his principal source, Fayed, was tainted as a liar. He knew also that Fayed had particular and fresh motives to damage the Government and me in particular. In addition to the damning DTI Inspectors' Report Fayed had:

  (i)   as recently as 18 September 1994, lost his final appeal to the ECHR concerning the fairness of the report and the circumstances in which its conclusions about his conduct had been arrived; and

  (ii)   neither Fayed's application for British citizenship nor that of his brother, Ali, had been granted.

  428. Paragraph 16:   Preston is either a complete dupe or disingenuous, therefore, in saying that:

  "He did not strike me as having any particular sinister motive in telling me what he had told me and, indeed, did not seem to think it much of a story. . . . I cannot speak for Mr Al Fayed's motives, although I did muse about them in an article published in The Guardian published on 21 October 1994. . . . "

  If Fayed did not think it much of a story, why was he at first so concerned to preserve his anonymity as well as that of the Ritz and Harrods?

  Did Preston not wonder what was the catalyst which led Fayed to lift his embargo on identification?

  Preston says:

  "He was far more interested in telling me a number of other things about various other people, some of whom were members of the Government."

  Clearly, Fayed's intention was to damage the Government as an act of revenge. I presume that Preston refers here to Fayed's stories about Michael Howard and Jonathan Aitken.

  429. Preston had particular reason to doubt Fayed's veracity and motives for making the allegations, not least because, even on Fayed's version of events, he was a willing participant in or instigator of the corrupt practices he purported to describe - a fact which Preston and The Guardian chose not to criticise. Furthermore, the outrage which Fayed affected to have felt (and to which he alluded in the words "MPs could be rented like taxis") was obviously insincere since his own story indicated that he had been only too willing to take advantage of the alleged practice and had not considered these matters worth mentioning until his various ambitions had been frustrated.

  430. Paragraph 17:

  Preston says that, if I had come back to him with "a substantial response" to the deliberately uninformative (and, given his intentions, deceptive) fax Hencke sent me, he would have considered it "and, if necessary, held off from publication".

  431. This is disingenuous. By the time the fax was sent (4.13 pm), about three hours before The Guardian for the following day was printed, the story and the features and cartoons which accompanied it had been written or drawn and the decision to publish had been taken.

  There was no indication of urgency in the fax, nor the serious nature of the allegations which were made, nor the prominence which they were given, nor that an article was to be published the next day and that the fax therefore required an urgent response.

  432. At this point Preston had only Fayed's word to rely on. He had not produced his story about the cheques for £12,000, £6,000 and £13,333. Nor his story about direct payments of cash and gift vouchers, nor his story about cash in brown envelopes.

  433. The only factual justifications he had produced as at the date of publication have been demonstrated to be utterly false - a £50,000 fee to IGA and fees varying from £8,000 to £10,000 per month depending on the number of questions asked. Both of these allegations could easily have been exploded if they had been put to Greer, which they never were.

ANALYSIS OF WITNESS STATEMENT OF (C) DAVID HENCKE

  434. Paragraph 3:

  " . . . Fayed had made payments to certain MPs, namely Neil Hamilton and Tim Smith at the behest of Ian Greer in return for asking questions . . . "

  The language here is rather ambiguous and could mean either that Fayed alleged either (a) that he had made payments directly on Greer's advice or (b) that Greer had made such payments with money provided by Fayed. I assume the allegation is the latter as that would be consistent with Preston's witness statement, which makes no allegation consistent with (a).

  The article of 20 October 1994 is clear. The contrasting vagueness of Hencke's witness statement arises because he had to change his story when it became clear that the facts did not support it.

  435. Paragraph 4:

  Lobbying is a predatory business, with no shortage of competitors prepared to put the knife into someone in order to grab their business.

  Hence, Andrew Gifford of GJW was apparently prepared to give evidence for The Guardian to the effect that it was highly reprehensible to make commission payments to MPs for introducing new business whilst simultaneously paying Greer a commission payment for business that he had referred to him!

  [Gifford also appeared on Channel Four's "Dispatches" programme to attack Greer. He failed to declare that he owns part of Fourth Estate, the company which published "Sleaze," a hatchet-job account of Fayed's allegations, written by Guardian journalists. The programme was timed to coincide with publication of the book. The Guardian owns 50 per cent of the shares in Fourth Estate and Gifford owns 14 per cent].

  436. Hencke makes a claim that Greer lobbied for controversial clients, such as US Tobacco over Skoal Bandits. But this product was no more controversial than any other tobacco product. Even anti-tobacco campaigners admitted that Skoal Bandits were less toxic than cigarettes. US Tobacco set up a manufacturing plant in the UK (at East Kilbride) largely because of the grants which the Scottish Office were prepared to give.

  437. IGA was quite a fastidious lobbying company compared with certain other industry leaders. For example, whereas IGA turned down the opportunity of handling an account for the Libyan Government, GJW had no qualms about accepting it!

  438. I am at a loss to understand what Hencke means in saying:

  " . . . he had allegedly provided certain benefits, including providing facilities to MPs."

  439. Paragraph 5:

  Hencke claims to have interviewed "probably 12-15 people" for background to his story. None of them is named and no notes of any such conversations have been disclosed. The quality of the information so derived is indicated by the two erroneous allegations cited.


  (a)   My wife and I did not "obtain free air tickets for (the trip to the Ritz) from British Airways." We drove in our own car, travelling by ferry from Portsmouth-Cherbourg and on the return Calais-Dover. Hencke never bothered to put this allegation to me.


  (b)   Whilst it is true that Andrew Smith is a long-standing friend it is not true that he "used to stay regularly with the Hamiltons." He has stayed with us only twice in the 13 years we have lived in Cheshire - only for one night because he had some other cause to be in the North West.


  (c)   It is not true that I broke off from my own election campaign to speak for Smith in Cynon Valley (where he was the Conservative candidate) in the 1992 election. I have spoken in hundreds of constituencies since my election in 1983. I probably had a better record than most Cabinet Ministers - in my last year as a Minister I spoke for about 80 of my colleagues. I visited Cynon Valley (which was less than 10 miles from where I was born and fought my first constituency) and spoke to the Conservatives there on Friday 21 June 1991. I issued a Press Release of my speech, a copy of which I still have.

  Hencke has never bothered to put these allegations to me.

  440. Paragraph 7:

  It is astonishing that Hencke cannot remember the date on which Mullin and he saw Tim Smith. He himself describes it as "a dramatic meeting" and considering its importance his failure to take any contemporaneous note illustrates his slapdash methods and his lack of concern for accuracy.

  441. I know nothing about Hencke's meeting with Smith. However, it is interesting that he claims to have asked Smith.


  " . . . whether or not he had received £2,000 cash in a brown envelope for asking questions . . . "

  He certainly never put such a question to me. Nor was such an allegation made against Smith in The Guardian of 20 October 1994, which alleged that he was paid £2,000 a time by Greer for PQs.

  The first time that any such allegation was made against me was on 27 September 1996.

  442. Paragraph 8:

  Hencke again claims that he took no notes of his meeting with me on the terrace of the House of Commons, which I find incredible. He is either lying or exceptionally slapdash. His account of our conversation seems rather fantastic.

  443. I would hardly, in one breath, say that I had stayed at the Ritz for only a night or two and then, without being faced with some contradictory documentary proof, in the next breath go

  "into graphic detail about his stay."

  On account of my distrust of Hencke I am sure that I did not volunteer any information until I knew what his object was and what he had been told. Once it seemed that he knew a fair amount about it I filled in the details to put matters in perspective.

  444. Hencke says that, when he asked me why I did not "declare" (sic) the stay in the Register I

  "did not explain why . . . "

  He then contradicts himself by saying

  "He may have mentioned that in his view it was not registrable or that he had overlooked it."

  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 of 20 October 1994. I would certainly have referred to such an allegation in my letter to Preston of 10 October 1993 if he had put it to me. I would certainly have remembered such a preposterous suggestion that anyone in his right mind would consider it worth paying £2,000 a time for written PQs.

  445. Paragraph 9

  Hencke points out that Smith was nervous, as he had cause to be, considering he had been paid by Fayed and failed to register it. I would have been nervous had I been in his position. But I was not - and Hencke tacitly admits this. It does not seem to have occurred to him to wonder why our reactions were so different.

  446. Paragraph 10:

  As a matter of fact Greer was not responsible for my visit to the Ritz. He had sent out the abortive invitations of April 1987. But my visit was arranged between me and Fayed personally; Greer was not involved in any way.

  447. Paragraph 13:

  Hencke refers to a number of inaccuracies in my letter to Preston of 1 October 1993. This is truly a case of the pot calling the kettle black. However, there is all the difference in the world between, on the one hand, the preparation of an article at leisure, with the victim kept unaware of what is in store for him and, on the other, having to respond in haste to a perceived immediate threat of a damaging but inaccurate article from a hostile journalist. In these circumstances one is dependent on memory and hasty research about matters many years old.

  447A. This is a case in point. Hencke's article of 25 October 1994 takes me to task for having said in my 1 October 1993 letter that:

  (i)   I had taken no part in any HoF/Fayed matters since the summer of 1988.

  I had, of course, asked 4 PQs in April 1989 - but they were not listed under HoF or Fayed in the indexes to Hansard, which I had consulted to try to discover the facts, my papers relating to these matters having been long since destroyed. The questions related to Dr Marwan.

  Alex Carlile showed me these PQs (which had, with other papers, been given to him by The Guardian as part of their plot to have their allegations raised in the House on the night of publication) when I met him at about 9 pm. After the lapse of four and a half years I could not remember who Marwan was, so it is not surprising that I did not pick this up when I quickly searched the Hansard indexes. There was no indication that this PQ had anything to do with HoF of Fayed.


  (ii)   I genuinely believed that there was no bill for my stay at the Ritz. I could not remember receiving one. Hencke had refused to show me the document he falsely claimed to possess when we had met in July 1993. Hence I believed that he was lying.


  (iii)   It is hardly surprising that I could not remember exactly when IGA were engaged but I was right in saying that my first connection with HoF pre-dated both the Fayeds and Greer's involvement.

  448. The article is a typical Hencke hatchet-job. He puts the worst possible construction on my innocent errors committed in haste whereas he puts the most favourable possible construction on the uncorroborated lies concocted at leisure by a man his own editor had castigated as a liar, which description he has confirmed in the course of his witness statement.

  449. Paragraph 15:

  Hencke can hardly be surprised that IGA included me in "a carefully selected group" to be targeted on behalf of ECOCON. The project purportedly in question was the privatisation of the Insolvency Service; as Corporate Affairs Minister I was responsible for the Service.

  450. What this reveals is not sharp practice on IGA's part but on that of the journalists. It was obvious that any lobbyist would have included me in such a list on account of my position. This bogus proposal was designed deliberately to put me in the firing line. It would have been suspicious if IGA had mentioned trying to use me in connection with a project wholly unconnected with my ministerial responsibilities.

  451. As to Greer's "admitting that he could arrange to have questions tabled in the House by certain MPs", one could say the same thing about Hencke. He is clearly very close to Alan Williams MP and he set up Opposition MPs to do his bidding on the night of 20 October 1994. His assertion that Greer's comment on the clandestine tape-recording proved Fayed's allegation is absurd and demonstrates either his stupidity or malice.

  452. Paragraph 18:

  If the "cash for questions" story had been circulating it was only because Fayed had put it into circulation, and not because there was a genuine problem. Fayed was the anonymous "prominent businessman" upon whose false information the Sunday Times entrapment exercise was based.

  453. Paragraph 19:

  It is absolutely incredible that Hencke felt able to put his name to this story on the basis of a 10-12 minute meeting with Fayed. Hencke obviously did nothing more than take rapid dictation. There was hardly time for a pleasantry, let alone any critical questions from him.

  454. Michael Cole is the in-house PR man at Harrods. It is again absolutely incredible that a so-called investigative journalist should rely so implicitly on a PR man paid to act as his master's voice. Even so a mere 20 minute chat with him prior to his audience of Fayed would scarcely provide time to whet the appetite of a serious journalist.

  455. Hencke deliberately sent me very late in the day after the die was cast a misleading fax which was designed to minimise the possibility that I would contact him to discover that The Guardian was imminently about to publish this devastating story.

  456. By contrast he deliberately set up Alex Carlile to raise the matter in the Commons. His notes of his discussion with a "Liberal Party press officer" are incoherent but Carlile's name is clear. Hencke also fed Carlile the documents which are attached to his witness statement.

  457. The notes of his audience of Fayed show Hencke at his most laughably incompetent and gullible. Fayed's assertions, which Hencke gulped down, are demonstrably wrong:

  (i)   Fayed contacted Greer not vice versa.


     The alleged quotation about renting MPs like London taxis is preposterous.


  (ii)   IGA were paid no fee of £50,000. They were paid an annual retainer of £25,000.


  (iii)   The £2,000 per PQ allegation is also preposterous.


     Smith and I did not ask 17 PQs. Smith asked 26 PQs and I asked eight.


     IGA was not paid £8,000 or £10,000 monthly. The figure was £2,083.33.


  (iv)   We did not ring up the hotel whilst in France to ask to come again.


     Fayed did ask us to stay.

  458. Hencke's much vaunted documents proved nothing whereas the documents disclosed during the course of the libel proceedings positively disprove all the main allegations which were printed.

  459. It is incredible that Hencke does not remember whether Fayed mentioned Harrods gift vouchers. If Preston had told Hencke about them, it is curious that Preston makes no mention of them in his witness statement. I was completely at a loss to understand what Fayed meant in comment reported in The Guardian of 20 October 1994:

  "He's been to Harrods with his wife shopping free."

  I speculated publicly at the time on whether this meant an up-market trolley-dash! I knew nothing of the gift voucher allegation until I read The Guardian's Defence in mid-December.

  460. Hencke says he was particularly struck (as he was meant to be) by Fayed's assertions (a) that Greer approached him (and not vice versa) and (b) that "Greer personally had chosen Neil Hamilton and Tim Smith as the MPs who would ask the questions."

  (a)   Fayed was lying about who approached whom. The initiative came from Lord King, following a conversation with Ali Fayed.


  (b)   It is the job of a lobbyist to know who might be the best sympathetic MP to approach in order to raise a matter. Hence, Hencke approached Alan Williams MP to enlist the aid of the Labour Party on the 20 October 1994.

  Greer mentioned my name and Smith's (together with Michael Grylls) because we were the officers of the Trade and Industry Committee; the DTI was the relevant Department. Greer knew me very well from before my election to Parliament in 1983. He was not on terms of personal friendship with Smith and I do not believe that he "touted" the names of any MP, in Hencke's pejorative description.

  461. Paragraphs 21 and 22:

  Hencke admits that the full text of the article was written

  "by early afternoon so that the lawyers could see it."

  This exposes the sham of his sending me the misleading fax at 4.13 pm. He was not, in the words of the fax:

  " . . . working on the story . . . "

  At 4.13 pm the story had already been completely written several hours earlier. Hencke and Preston had no intention of warning me about this devastating story - they gave notice only to those on the Opposition front benches who could magnify the effect of what they had written in conspiracy with Fayed.

  462. None of the inaccurate detail printed in the article had previously been put to me - for the good enough reason that it had not been provided by Fayed until hours before publication. The only issue Hencke had raised with me in our meeting in July 1993 was The Ritz and I had asked to see the bill he falsely claimed to have.

  I was genuinely incredulous that such a document existed as I had completely forgotten about it. I had not even bothered to look through it when I signed it, thinking it merely a formality for internal accounting purposes.

  463. I had never tried to deny or hide being an activist in support of Fayed and most of my activities were a matter of public record or had been carried out in concert with others (e.g., the visits to Ministers with various MPs).

  Hence it is dishonest of Hencke to assert that the fact of his receiving these anodyne documents either justified drawing the conclusions he did or his failure to put detailed allegations to me before publication so that he could take my comments into account. It has taken us weeks of painstaking work during the libel action to piece the story together; it was manifestly unreasonable to take the approach which Hencke and Preston did in denying us the opportunity to search our memories and provide any response at all, still less a considered one.

  464. Hencke says that Greer was the only one to reply to his fax and that:

  "I recollect the only thing he said in his reply really was that he would sue."

  This is, again, completely inaccurate. Greer's fax was as follows:

  "We received your fax at 16.16 hours and have given attention to it.


  We will certainly consider a response to any questions which you wish to fax us. We would obviously expect to hear from you during normal office hours (9.00 am - 6.00 pm)."

  465. Hencke ignored this fax and made no attempt whatever to contact Greer. This is not surprising as the story had already been set up and the paper was about to print. He was not interested in writing an objective article. Also, contrary to Hencke's assertion, "the only thing he said in his reply really" was to request the opportunity to respond to any questions and not a threat to sue.

  466. As is evident from a legion of examples Hencke is a stunningly inaccurate and reckless individual. If he is one

  "of The Guardian's best reporters" (Preston witness statement paragraph 4) the worst must be lamentable indeed.

  467. Paragraph 23:

  Hencke describes how he and Preston, having denied their victims notice of their intentions, primed Opposition MPs to help them in their dirty work.

  Preston spoke to a Liberal Press officer and also gave documents to the Liberals, which Alex Carlile showed to me (but would not let me copy). Carlile was beaten to the mark by Labour's Stuart Bell, who had been primed as a result of Hencke's giving advance notice to Alan Williams MP. Carlile subsequently adopted Fayed's allegations and made a complaint against me to the Members' Interests Committee, notwithstanding his having called Fayed a "perjurer" in the House in 1990 and, hence, having good reason to doubt Fayed's veracity.

  468. Paragraph 25(i):

  Hencke said: "I had fairly and squarely put the allegations to (Greer and Hamilton) in July 1993."

  This is a plain lie. It was not until much later that Fayed clothed the bare bones of his own lies with the detail which The Guardian printed.

  Hencke went on to say:

  "I thought that it was essential to at least warn them that The Guardian was about to publish an article about them . . . "

  The fax gave no such warning. In fact the impression given by the words used was deliberately misleading - the fax implied, by saying that Hencke "was working" on the story and by the absence of detailed allegations, that publication was not imminent.

  469. Paragraph 25 (ii):

  Hencke says he knew Fayed had lied to the DTI Inspectors and:

  "I was suspicious of some of the allegations that Mohamed Al-Fayed had made to Peter Preston . . . "

  Which allegations did he disbelieve and why?

  470. What other background work convinced him that Fayed was telling the truth about me? The information he set out in paragraph 5 was substantially wrong and never checked with me.

  The documents prove nothing in themselves as Hencke himself admitted:

  "Nothing in the paperwork shows that Hamilton was doing any of this for money." (See document entitled Rough Draft).

  471. I understand Hencke's point that

  "Fayed would hardly want to incriminate himself for bribing Members of Parliament."

  But at that stage he had not done so. He had attempted to incriminate Greer and constructed his allegations to make himself appear an innocent dupe in the hands of "pin-striped parasites".

  At this point Fayed's story was that Greer had told him it was the "done thing" to bribe MPs "like London taxis" to ask PQs at £2,000 a time. He constructed his lies so as to try to avoid any personal accusation of wrongdoing, which was why it was necessary to implicate Greer.

  472. Fayed paid Smith, not Greer, who knew nothing of it. The original Fayed allegations were exploded by documentary evidence of invoices and cheques. It was only at this point, after he had seen the relevant references in the Statements of Claim, that Fayed invented his lies about direct payments to me. Even then he tried to avoid self-incrimination by claiming that every single alleged payment was at my request.

  473. Paragraph 25 (iii):

  Hencke knew about the ECHR judgment and knew that Fayed wanted to expunge the DTI Inspectors' criticism. He knew that his source of information was tainted not only by previous dishonesty but also because of his reason to seek revenge on the Government.

  Hencke did not need "incontrovertible evidence" of my stay at the Ritz. I had never sought to hide it and was quite happy to justify my position publicly. I did not lie to Hencke. He lied to me - (a) implicitly in inveigling me into a meeting under the pretext that it was not about me personally and (b) explicitly in saying that he possessed a copy of the Ritz bill.


 
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