report prepared by the previous Committee in the last Parliament
The Commissioner's Report
1. The Committee considered
the memorandum from the Parliamentary Commissioner for Standards
relating to a complaint by Mr Charles Hendry, Member for High
Peak, against Mr George Galloway, Member for Hillhead. The complaint
alleged that Mr Galloway had failed to declare a relevant interest
during his speech in an adjournment debate which he had initiated.
At the time of the debate Mr Galloway had entries in the Register
of Members' Interests as a director of and shareholder in Hawk
Communications International, described as a company established
"to assist democratic development in the Middle East and
the Indian Sub-Continent"
Evidence produced in support of the complaint suggested that
either directly, or through Hawk, Mr Galloway provided public
relations services to the Committee for the Defence of Legitimate
Rights (CDLR) an organisation whose members opposed the policies
of the Saudi Arabian Government. The Commissioner considered
that the evidence provided to him was not sufficient to validate
the allegation that there had been a breach of the rules of disclosure.
He concluded that he had no grounds for challenging Mr Galloway's
version of events and recommended that the Committee should find
2. The Committee accepts
the Commissioner's report and conclusions on the complaint submitted.
However, there were four issues arising from the complaint which
warranted further consideration by the Committee: (1) the accuracy
of Mr Galloway's entries in the Register of Members' Interests;
(2) the use made by the Mr Galloway of post-paid House of Commons
envelopes on behalf of the CDLR; (3) the authentication of tape
recordings supplied as evidence; and, most importantly, (4) the
propriety of a Member acting as an intermediary for financial
transactions between third parties in such circumstances as those
described in this case. We therefore asked Mr Galloway to provide
more detailed information on his financial relationship with Hawk
Communications and with the CDLR. The relevant correspondence
is appended to this report. We also invited Mr Galloway to give
oral evidence which we also publish. As the evidence was an extension
of the Commissioner's inquiry, Mr Galloway was heard in private.
Mr Galloway chose to give this evidence on oath.
Registration of Hawk Communications
3. On 24 January 1994 Mr
Galloway registered an unpaid consultancy in Hawk Communications.
This was presumably anticipatory (the company still being in
the process of formation) as the company's bank account was only
opened on 18 March 1994. In the spring or early summer of 1994
Mr Galloway became a director and shareholder of the company but
he did not register these interests until 16 January 1995. On
14 December 1994, the solicitors for Hawk Communications International
filed dormant company accounts with Companies House and indicated
that the company was being wound up.
However, Mr Galloway did not remove the two entries relating
to Hawk from the Register until 12 March 1996, immediately prior
to the publication of the 1996 edition of the Register. Mr Galloway
assured us that he never received any pecuniary benefit from Hawk
and the Commissioner found no evidence that the company ever traded.
4. In our opinion Mr Galloway
was correct in registering both the directorship and the shareholding
in Hawk Communications even though, in the event, he derived no
actual pecuniary benefit from the company. The relevant rule
which applied in 1994 was that if a company was engaged in any
transaction additional to those required to keep it in being then
it should be considered to be trading and a relevant directorship
and shareholding should be registered.
However, the registration of the consultancy in January 1994
was not accurate, and subsequently Mr Galloway did not keep his
entries in the Register up-to-date. Members are under an obligation
to notify the Registrar within four weeks of any change in their
interests. Accordingly the directorship and the shareholding
should have been registered in the spring of 1994 and not in January
1995 and both entries should have been removed in December 1995,
not in March 1996. It is important that Members ensure that their
entries in the Register are regularly updated.
House of Commons Stationery
5. We were concerned by
evidence we received relating to Mr Galloway's use of House of
Commons stationery. The provision of free stationery and postage
is a privilege which Members enjoy to assist them in their parliamentary
duties. Among the rules which apply to their use is the requirement
that they must not be used for circulars of any description.
We draw the attention of the Administration Committee to the
evidence given to us.
6. The complaint was accompanied
by a transcript of interviews between a freelance reporter and
Mr Al Mass'ari and Dr Al Fagih. The transcript was supported
by a microcassette recording of those interviews. The sound quality
of the microcassette is poor, the conversation only occasionally
distinct. The tape was re-recorded, enhanced and transcribed
on the authority of the Committee. The texts of the transcription
provided with the complaint and the new transcription are appended.
There are significant differences between the two. The transcription
provided with the cassette is no more than a selective summary
to suit the reporter's hostile interpretation of Mr Galloway's
actions. Moreover the microcassette itself is an edited compilation
of extracts from what might have been a series of interviews.
This is very unsatisfactory. It should be noted that in its
inquiries the Committee will always undertake appropriate examination
of any tape over which doubts exist before deciding whether or
not to accept that tape as evidence.
Members acting as financial
7. However, the Committee's
main concern was Mr Galloway's account of his relationship with
CDLR. This raises issues of general principle.
8. Mr Galloway's relationship
with the CDLR was as an individual rather than through Hawk Communications.
He described his role as attempting to "professionalise"
the operation of the CDLR by providing advice on effective campaigning,
identifying professionals whose services would assist in this,
finding administrative staff,
organising travel and accommodation around the UK,
advising on publications
and, in two cases, negotiating the provision of research by academics.
9. Mr Galloway strenuously
maintained throughout his evidence that he received no taxable,
nor registrable, benefit from or for any of these actions.
He also told us that many of the payments were made directly
by Dr Al Fagih, who was "in sole charge of the organisation's
although he also made some payments directly.
Mr Galloway provided evidence that he paid for some of the services
using his credit card and he gave us copies of some of the bills
he had paid by cheque. He said that the credit card statement
and the bills represented the sum total of the payments he had
and that he was reimbursed for this expenditure by Dr Al Fagih
On two occasions he had acted as an intermediary for Dr Al Fagih
in making cash payments to academics for reports they had written
for the CDLR.
Mr Galloway did not keep a record of the payments made to him.
He told us "I had no reason to keep records of the reimbursements
because I was not requiring them for income tax or any other purpose",
and "there is no record of them reimbursing me".
Nor did he hold out any hope of such a record being available
from Dr Al Fagih.
To this extent the evidence before us is incomplete.
10. We note that Mr Galloway
accepted that "the regime which obtains now in the House
is different from and better than that which obtained" at
the time he was acting as the CDLR's intermediary in the provision
of services and that "it would certainly have been better
not if I had kept better accounts, but if I had had nothing to
do with the money at all, that I would have insisted that they
open a bank account and that they sent cheques in the post like
everyone else. That would have been undoubtedly better ...".
11. It is undesirable
for a Member of Parliament to act as an intermediary for third
parties in such circumstances as those described in this case.
In particular it is unacceptable for any Member to be involved
in recycling cash between third parties.
12. It is also highly undesirable
for any Member to act on behalf of any organisation where no full
record is kept of all financial transactions with which the Member
is associated. It is bound to be susceptible to misinterpretation
and risks bringing the House into disrepute. We consider it
to be fundamental to the House's system of declaration and registration
that whenever a Member has a pecuniary relationship with an outside
organisation which requires declaration or registration, the Member
should ensure that this relationship is adequately documented.
13. We are particularly
concerned that Mr Galloway's actions were on behalf of an overseas
interest. Members should act with particular circumspection
in any relationship with a foreign organisation or government
where financial transactions of any kind are involved.
11 March 1997
Report, 24 January 1996, cols. 453-462. Back
Galloway's entries in the Register for January 1994, January 1995
and March 1996 are reproduced in Appendix 8. Back
3: Memorandum submitted by the Commissioner, paragraph 14. Back
3: Memorandum submitted by the Commissioner, paragraph 6, footnote
1. Q.96. Back
4 and 5: replies to letters from the Chairman; Q.2, 90, 95. Back
3, paragraph 6; Q.2, 18, 87, 94, 96, 103. Back
on the Registration and Declaration of Financial Interests, October
1994, paragraph 18. Back
4, 5 and 6; Q.167-174, 202-207. Back
transcription submitted with the complaint appears as Annex B
to Appendix 1, the new transcription appears at Appendix 7. Back
14 Q.211. Back
15 Q.2. Back
16 Q.52-59. Back
18 Q.218. Back
19 Q.219. Back
Q.2-3, 10, 32, 108 and 155. Back
3, Annex E; Q.2. Back
4 and 5: replies to letters from the Chairman of the Committee;
Q.2, 52, 58, 124, 178, 214-15. Back
116-122, 182-185. Back
119, 216. Back
26 Q.32. Back
27 Q.187. Back
28 Q.60-62. Back
29 Q.75. Back