Select Committee on Standards and Privileges First Report


THURSDAY 20 FEBRUARY 1997

Mr Neil Hamilton; Mr Rupert Grey (Continued)

Mr Pleming

  1874.  Two points arise from that, if you do not mind me asking. The first one is - again, not wishing to doubt, in any way, what Mr Grey has said - that to have that confirmed by counsel then acting for you would, of course, complete the picture and no doubt we can now arrange for that to be made.

  (Mr Grey)  May I mention that I spoke to Mr Ferguson last night and I warned him that it may be possible that you will want some confirmation in the light of some comments made by previous witness. That appeared to pose no difficulty whatever. He was very adamant about the information he gave you which I have incorporated. .

  (Mr Hamilton)  I am very happy, by the way, to waive any legal professional privilege that attaches to that case.

  (Mr Grey)  I likewise would have no objection to that.

  1875.  The other point is that the conflict of interest is clearly explained. The question of adjournment, rather than withdrawal in some form, would compromise proceedings. I just wanted to be sure that the two elements upon which The Guardian places emphasis were not factors. Funding has been explained. Other points you have mentioned, but an adjournment of more than a month, a lengthy adjournment because of your financial position, may well have been considered favourably by a judge or not, but at least there could not be an application for an adjournment without a full explanation being given. But before the trial was finally aborted, two things had happened according to The Guardian. One is that they had obtained the witness statements from Ms Bozek and Ms Bond. That has been agreed. Also, there is the Heseltine/Robin Butler memorandum. Could we look at that one first. It is the second one. You should have somewhere - maybe not in front of you - but in the core bundle, as it has become called, the second volume at page 494. This is the redacted version of a memo dated 21 October 1994. This is the memorandum which, as you know, was disclosed by the Cabinet Office to The Guardian's lawyers very late in the day. It is paragraph 4: "There is one other development to report." Then there is a reference to the President of the Board of Trade, the memo with which you are now, I am sure, very familiar. We pick it up next to the top, "...I encouraged the President to put this point to Mr Hamilton himself", that is excluding having some other form of financial relationship with Mr Greer, "The President has now done so and Mr Hamilton has given him an absolute assurance that he had no financial relationship with Mr Greer, and the President has accepted this." Two matters arise. That, on its face, in the light of the information we have received, looks to be incorrect, that you did have a financial relationship, and that is obvious to any observer of the papers. Was that a factor in not merely dealing with the conflict of interest, but in pulling the plug completely?.

  (Mr Hamilton)  This document is a note by Sir Robin Butler of a conversation that I had on the telephone with Michael Heseltine, so Sir Robin Butler was not a party to that conversation. The conversation lasted for about ten minutes and it took place in (as I am sure you will appreciate, the morning after The Guardian's article was published) fraught circumstances, as I have described it elsewhere. I was at that time opening an extension to a school in my constituency and outside the locked school gates were the massed ranks of the world's media (probably 50 or 60 journalists, television cameras, sound booms and so on) who had followed me from my home where they had been laying siege to us all day and were to follow me around for the whole of the weekend. The circumstances in which I had existed for 36 hours were, of course, ones of extreme stress which I do not think anybody, unless they had endured the full treatment of the world's tabloid press, could even begin to comprehend. For a week we could not even open the shutters in our house because of the telephoto lenses that were thrust through the hedge and the wall by which we are surrounded. So the circumstances in which this conversation with Mr Heseltine took place were not, how shall we say, ideal. These two lines which purport to be a record of this ten-minute conversation do not give the full picture. What Mr Heseltine was keen to establish was to what extent the note that I had written, the manuscript note that I had written at the invitation of the Chief Whip for the Prime Minister the previous day in case, as was inevitable, he was asked at Prime Minister's Questions about the circumstances of Mr Smith's resignation from the Government and my staying on, which was based closely on the allegations that The Guardian printed, which went something along the lines of, "I deny the allegations that Mr Fayed has made that I received payment either from him directly or through Ian Greer", what Michael Heseltine was seeking to establish, as I understood it from that conversation, was this: that Mr Fayed had a financial relationship with Ian Greer of a general nature, he generally retained Ian Greer to represent his interests, so he put money into the Greer pot, so did I have a financial relationship, as it is described in this note, which could be misrepresented as a means by which Fayed money got into my pocket? That would have been possible, it would have been possible to say that at any rate, if I had had some sort of general retainer relationship with Ian Greer. Even though I might not have done anything for Fayed to advance his interests at any stage, it could, nevertheless, be said that that was a covert means of putting money in my pocket which ultimately derived from Fayed. Now, I was satisfied in my own mind that that was not so, that the receipt on two occasions many years ago of two commission payments from Ian Greer for the introduction of two companies that had no connection whatever with Al Fayed or the House of Fraser or Lonrho could not be described as a financial relationship.

  1876.   But did you deliberately exclude reference to those payments when you spoke to Mr Heseltine?.

  (Mr Hamilton)  I did not mention the commission payments when I spoke to Mr Heseltine.

  1877.  But did you think of them at the time and put them out of your mind, saying, "I don't have to mention these"?.

  (Mr Hamilton)  I did put them out of my mind in the sense that I did not mention them and the reason is a simple one, let us be frank about it. The circumstances in which this conversation took place, as I have described earlier on, were fraught. Politics is a rough game. I knew that I had not taken money from Fayed. I had been told that Tim Smith had done so and that is what prompted his resignation. I did not want to resign from the Government in circumstances where it could be represented by the press that I had done the same as him. There is a point, as we know, we are no doubt going to explore it later on, on the registration of interests whether those commission payments should have been registered or not. I knew that if there were to be another cause for adverse media comment against me (even though in other circumstances it perhaps would not be regarded as the most heinous crime), it could be used as a very big stick with which to beat me and to cause my resignation to take place. It was a matter of timing when to reveal this ultimately - - - .

  1878.  Mr Hamilton, this is not you talking to the press; this is you talking to the President of the Board of Trade, and what you are saying to me is that you deliberately decided to keep back that which you had remembered. It was not a question of having forgotten all about the commission payments. You knew that that could be damaging in opening up another front, I think is a fair way of putting it, because it had not been registered. It had been the subject of some discussion at the time in relation to Michael Grylls, but here you were, from what you have said to me, deliberately misleading the President of the Board of Trade. You explained why you did it; that there was the risk of further damage to you. Just going through this brief conversation, this would be a very damaging document to you in the libel proceedings. Would you accept that?.

  (Mr Hamilton)  It would certainly have been a damaging document. It would have been a hurdle which we would have had to jump, certainly.

  1879.  What I want to explore with you, and it is useful to have your solicitor here at the same time, is whether the decision not merely to seek a long adjournment, but some other way of keeping the battle alive was influenced by the fact that you had this one coming. This would have meant that Michael Heseltine would have been called to give evidence, you would have no doubt answered the way you have been answering my questions, and that would have put you in a pretty difficult light before a jury in a libel action.

  (Mr Hamilton)  Yes, it certainly would have been a difficulty. There is no disguising that.

  1880.  Was that a factor in the decision not to take another course, which is a lengthy adjournment, which could well have been granted by a sympathetic judge, if they exist still, even beyond May of 1997?.

  (Mr Hamilton)  I think I can categorically exclude this as a deciding factor.

  1881.  No, not a deciding factor; a factor.

  (Mr Hamilton)  Well, obviously.

  1882.  Because what Mr Grey has said effectively because of the timing of the documentation is that this was entirely irrelevant. I want to be sure so Sir Gordon is sure that that is correct.

  (Mr Hamilton)  Yes, but obviously we had to consider the document because the document had appeared and we did not ultimately settle with The Guardian until after the weekend. We spent the whole weekend closeted in Mr Grey's offices obviously coping with the consequences of what had developed some days before, but no, I think I can say that this document, although it created a difficulty, would not have prevented us going on with the case were it not for the intended discontinuance by Ian Greer and the circumstances which brought that decision about.

  1883.  So would it be a fair way of summarising that, the Ian Greer betrayal, as you saw it, because of the inadequacies of his financial records, that that would have provided the background to the main problem of conflict that was there created, but this was a factor in the decision to settle with The Guardian? Would that be a fair way of summarising it?.

  (Mr Hamilton)  Yes, but can I just clarify this point about Ian Greer and the betrayal as well?.

  (Mr Grey)  Can I assist in trying to answer that question? Obviously, as regards this document, or more accurately The Guardian bundle which you have drawn our attention to, I cannot now remember when I first looked at it and I suspect it was in the course of the Saturday, by which date all the developments about which we have heard and I have read out before had already taken place and it was quite clear that there were two extremely fundamental problems which outweighed any other problems. The first was the need to raise a substantial amount of money to get the trial up and running, and I had advised that I thought we would almost certainly get an adjournment for at least a fortnight and probably a month, so I agree with you on that point, and I had also considered, insofar as I was able to do so in the relatively short space of time available, as to the impact of the disclosure about the Michael Grylls payments which of course is what brought the pack of cards tumbling down. We were also faced with the fact that we could not disclose that, which is why The Guardian and everybody else drew their own interpretations. The Heseltine memorandum obviously raised a number of questions with me. My problem about advising on it or at least advising on its potential fatal consequences was this, and I am looking at this very much as a lawyer both now and then: that here was a memorandum of a conversation which took place between two people, drawn up by a third party who did not participate in the conversation. I did not know whether he was in the same room at the time the conversation took place. I do not know when that memorandum was drawn up. I did not know how long the conversation had taken, save for Neil's vague recollection in obviously deeply stressed circumstances as to how long it took and, as a lawyer, I wanted to know a great deal more before I could attach any weight to this document. I would obviously have liked to have heard what Michael Heseltine had to say about the subject, but there are no witness statements from him. So I was in a difficult position of either giving any weight or no weight and, for that reason, it did not form a significant part or indeed any real part at all in the decision, or at least in the advice that I gave.

  1884.  Could I turn then to the other point that was mentioned which is the Bozek and Bond statements. They came into your possession, I think, over the weekend or maybe by the Monday morning.

  (Mr Grey)  I did not see them. The problem was getting documents from Carter Ruck where of course they had been served because, as far as The Guardian was concerned, I should perhaps explain this, at the time the conflict arose and I was instructed which was, as I say, about 3.45 on the Friday, the next problem we had was whether and how we should disclose this to The Guardian because the moment they realised this happened of course, the negotiating position if we did decide to try and get out of it would be out of the window, so what we had to do was to try and keep Carter Ruck in the front line as far as the settlement talks were concerned, even though I would be going formally on the record on the Monday, and I could have gone back to court on the Friday, but by the time of that the court was closed, so effectively as far as The Guardian was concerned, Carter Ruck was still acting. This got a little fraught over the weekend with a lot of phone calls between me and Peter Carter Ruck and conversations with The Guardian and indeed conversations between counsel, which are referred to in Sleaze, so there is quite a lot of drama and quite a lot of confusion at the time.

  1885.  I think we can take this quite shortly, that the statements themselves were no more nor less than the documents we have just been looking at on page 494?.

  (Mr Grey)  Oh far, far less.

  (Mr Hamilton)  In fact I did not see Ms Bozek's statement until after we had discontinued.

  (Mr Grey)  I think I did not either. .

  1886.  Well, can we get rid of them and say - - - .

  (Mr Grey)  They were absolutely nothing whatever.

  1887.  I will come back to them of course later, but in terms of the decision to discontinue or however there was to be a compromise, they were not a factor at all?.

  (Mr Grey)  Absolutely not any sort of factor.

Sir Gordon Downey

  1888.  Do you think we could hear that from Mr Hamilton since the decision was obviously Mr Hamilton's? There is a distinction between the reasons which might have led you to give advice and the reasons which Mr Hamilton might have had for deciding ultimately to withdraw.

  (Mr Hamilton)  Yes, because we did not actually know what evidence these new witnesses were going to give. We did not even know their status. In fact Ms Bozek was steadily reduced in stature from a partner in a leading firm of solicitors to a trainee solicitor who was just in articles, so we were in some confusion as to, first of all, how these individuals had appeared on the scene two years after the libel action was commenced and, secondly, who they actually were and, thirdly, what they were going to say.

  1889.  So those statements had no - - .

  (Mr Hamilton)  No bearing whatsoever.

  1890.   - - no bearing whatever on the decision?.

  (Mr Grey)  Sir Gordon, can I add something which I think is possibly relevant? I actually saw them in quite a different light. To me, they were possibly a very good weapon and reason for continuing. Why was it necessary, which is the question I asked, to introduce three new witnesses some two years later? I speculated that it may well be that they were not going to call Al Fayed at all and they had to have somebody else to replace him because he had a reputation for never going to court, so I regarded the potential existence of those witness statements that I had not seen as being potentially valuable, not a problem.


 
previous page contents next page
House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1997
Prepared 8 July 1997