78. George, you said that you accept the present system
of registration and the obligation on Members of the House to
be frank about their business interests when they speak in the
House or when they otherwise are engaged in parliamentary activities.
You accept that entirely?
(Mr Galloway) Indeed I voted for it, yes.
79. Could I just get some of the facts absolutely straight
and we may be going slightly over some of the ground we have already
covered, but I do not think there has been complete clarity. When
did you actually establish Hawk? Can you remember the date when
Hawk was incorporated or founded?
(Mr Galloway) If it was in the Register of January
1994, as Mrs Taylor said, then it must have been in 1993.
80. And let us get it absolutely straight, the various
shareholders. You were a shareholder?
(Mr Galloway) Yes.
81. And there was this Mr Al Fagih.
(Mr Galloway) No, Al Fagih is the director of
CDLR. There was Mr Al Masri, M-A-S-R-I, who is now the Serjeant
at Arms in Gaza. Then Amineh Abu- Zayyad, who is my partner, common-law
wife, in that awful parlance, and Mohammed Sarwar who is a councillor
in Glasgow and who quite soon might be a Member of this House.
82. So there were four shareholders?
(Mr Galloway) And a fifth one, Ann Pettifor.
83. And they each contributed £1,000 to the capital
of Hawk? Is that right?
(Mr Galloway) Yes.
84. And they were all directors of the company, were
they, or were only some of those shareholders directors?
(Mr Galloway) I think all of them were directors.
85. And that was established some time in 1993 on that
basis and the shareholding did not subsequently change in any
(Mr Galloway) No.
86. George, if all of those five people each paid £1,000
into the company, presumably at some stage the company had £5,000
in its bank account. Is that right?
(Mr Galloway) Not exactly because some paid their
£1,000 in kind. Some paid it in some of the costs involved
in Palestine. Some paid it in some of the costs involved in the
stationery and in other expenses in setting the company up, legal
expenses, for example, in setting the company up. I think the
amount that went into the bank was around £3,000.
87. Did Hawk keep accounts?
(Mr Galloway) Yes, insofar as it had any accounts
to keep, the bank account of what went in and what went out. The
Companies House requirements for registering - that is the point
I made earlier to Sir Archibald - if a company traded or not,
were complied with, and it did not trade in terms of the regulations
of Companies House.
88. Yes, but I had in mind that since you had a rather
complicated system of paying in the issued share capital of the
company, it would have been particularly necessary to keep accounts
and you would have wanted to make absolutely clear how much had
been paid out in other respects in Palestine or in kind because
clearly it would be necessary to maintain equity between the shareholders
and to make sure that other people already had contributed £1,000
in value, so you would have kept accounts for that, would you
(Mr Galloway) Yes, but that was not difficult.
There were only five of us and we were all close, but I have a
very large bundle of receipts from the trip to Palestine and for
the stationery and the rest and I have the bank account which
shows money going in and money going out and a resultant balance
of zero and we filed nil accounts at Companies House.
89. George, you have said that you believe in making
a frank disclosure of the position and you have just explained
what the position was. In the light of those answers to me, your
actual declaration in the Register of January 1994 was anything
but frank, was it not? What you actually registered was political
consultant (unpaid) to Hawk Communications International Ltd,
a communications company recently established to assess democratic
development in the new Palestinian entity. There are already two
things which are very deceptive about that. One is that you say
you are a political consultant unpaid when you were a director
and shareholder, and surely your interest should have been registered
for what it was, as a director or shareholder; and the second
thing is that you imply that this business is a separate business,
a pre-existing business and that maybe you have just begun to
register your interests in this business in January 1994, but
you do not indicate at all that what has happened is you have
created this business.
(Mr Galloway) I do not know how deceptive that
is, especially about a business which actually never did any business.
90. Wait a moment, George, you have already given testimony
this afternoon that you hoped that the business would be a success,
that you hoped it would make a profit, that it was run commercially,
that you were not against profit, that profit would have been
distributed. Clearly you had not made any profit before you started
but you were hoping it would be profitable. You say "unpaid"
which implies that you stand to gain no remuneration.
(Mr Galloway) I was unpaid and have been unpaid.
91. It rather implies you expect no remuneration, but
why do you call yourself a political consultant to the company
when you are actually a shareholder and director of the company?
(Mr Galloway) I do not have that Register in front
of me. I would be surprised if it did not say that I have a shareholding
in the company -
Mrs Taylor: It does in the next one, in January 1995.
92. A year later you make a much franker declaration
which is much more in accordance with the letter and spirit of
the rules, but what I am trying to probe is why, when you first
made an entry in the Register, it was such a very unfrank mention
of your relationship with this company?
(Mr Galloway) I am sorry that you feel that way.
It certainly was not intended to be unfrank. It was a declaration
at the very earliest opportunity. It would have been made after
discussion with the officials in the office. I cannot really tell
you why the form of words that is in there -
93. George, are you suggesting that the Registrar advised
you to translate shareholder and director into political consultant
unpaid? Surely these are two very different roles in life, are
(Mr Galloway) Yes, I expect they are.
94. I wonder whether I could come in because there is
another point related to this because, in fact, the entries are
under completely different headings in the two years. In January
1994 they are under miscellaneous and unremunerated interests
and there is no reference at all under remunerated directorships
and registerable shareholdings. By 1995 there are entries under
remunerated directorships and registerable shareholdings and,
perhaps understandably in those circumstances, miscellaneous and
unremunerated interests have disappeared, so to speak.
(Mr Galloway) Presumably I had none, I had no
miscellaneous and unremunerated interests. I suppose the only
explanation I can give is that at that very early stage of the
company's life I was unclear as to what the business that would
be generated would be, or even a very clear idea of where the
company wanted to go. But in 1995, during the intervening 12 months,
no business had been transacted, so it was not as if I had in
the course of that 12 months begun to receive remuneration or
anything like that. I really do not recall the discussions I had
with the Clerks at the time, but I do remember going to see them
about the registration. Does one fill in a form and choose one's
headings oneself or does the clerk place these under -
Chairman: Most people who are Members are able to answer
straightforwardly. I have had nil returns for 17 or 18 years for
reasons that everybody here understands. As I understand it, people
do initially choose what answers to give to what questions on
the form, but if they are in any doubt they would normally consult
the Registrar, which is presumably what you did.
95. I think the procedure is that after every Parliament
we are sent a form but for updating purposes we are just invited
to send in additional information.
(Mr Galloway) I think that is probably what happened,
that I sent in this additional information and it has been placed
as miscellaneous and unremunerated because I made it clear I was
unremunerated, as I was at that time and have been subsequently.
96. There are two things which I find difficult to accept
that you have now told the Committee. One is that you thought
that by January 1995 the company had been in existence for more
than a year and had not traded, whereas that was not the position
in 1994 and that that is somehow the explanation for the difference
in the way in which you have registered this relationship. I would
have thought it might have been more plausible if you had said
that by January 1995 you realised this company was never going
to make a profit and so you therefore registered it as an unremunerated
interest. In actual fact, you have got it unremunerated in January
1994, a few months after you have established the company, at
a time when you have told us you did expect to make a profit.
The second thing I find very difficult to accept from what you
have just told us is you said in 1994 you did not have any very
clear idea as to what the company's role was. The shorthand writer
will correct me if I have mis-stated or summarised badly what
you have just said, but you have actually given a sort of summary
of the business plan in January 1994. You said it was a communications
company recently established to assist democratic development
in a new Palestinian entity, which was a very precise role for
the company. At the time you said your explanation for a rather
peculiar way of registering the interests was because the company
did not have a role, but that is surely contradicted by the explanation
you actually gave at the time.
(Mr Galloway) I re-state my point that I do not
see that the difference is large enough for you to claim that
it is deliberately unfrank. As a matter of fact, you might hold
to my credit that in January 1995, despite the fact this company
was not trading - and I will remind you, it is not required to
register an interest in a company which is not trading, I could
have left it off the Register altogether, but I did not precisely
for reasons of frankness and clarity - I registered it even though
it was not trading while there was no requirement for me to do
97. George, had you not registered it in 1995 and had
I challenged you with that then the answer you have just given
might have been relevant to the question I had asked. In actual
fact, I have not challenged your entry for 1995, I have challenged
your entry for 1994.
(Mr Galloway) But the same answer goes, I did
not need to register it in 1994 because it was not trading. It
had only just been set up.
98. But the rules say that where you have either a financial
interest or the possibility of a financial interest you should
register. Therefore, you set up a company which you have already
told us this afternoon it was intended to trade and you were quite
right to register it. I am still looking for an explanation from
you as to why you decided, instead of saying you were director
and shareholder - a very classic thing to say, explicitly provided
for in the form which many other people use in their registrations
- you somehow wanted to attenuate your connection with the company
by saying "political consultant (unpaid)", which is
very extraordinary. Supposing every Member of Parliament who is
actually a director and shareholder decided to call that a political
consultant (unpaid), we should essentially in the House of Commons
be changing our use of vocabulary.
(Mr Galloway) I think that we have already established
that it was not a question of filling in a form. At the beginning
of Parliament one filled in a form. This was an update and therefore
would have taken the form of a letter from me. I do not know what
stage the company was at in January of 1994. I do not know, for
example, if I had then formally been registered as a director,
although I am not going to argue that point with you because I
simply do not know. But I really do not think one can be properly
accused of a lack of frankness in registering a company that there
was no requirement, according to the rules at the time, to register.
Chairman: The Clerk has just reminded me of one of
the bank statements with which you have provided us, which is
the opening statement for Hawk Communications when between £2,000
and £3,000 appears to have been paid in. This was only opened
on 18 March 1994.
99. So you registered that because it was something in
(Mr Galloway) Thank you.
100. It does imply, however, that that is an existing
company, does it not?
(Mr Galloway) It could be an existing company,
but I had not even opened a bank account yet. I think what this
illustrates is that the whole operation was in its embryonic stage.
101. Can you just remind us of another date, George?
When did Hawk cease to function? When was it actually wound up?
(Mr Galloway) I think in the Autumn of 1995.
102. Because Mr Al Mass'ari is still referring on the
tape to Hawk existing in the Autumn, is it, or is it August of
1995 that is the latest reference to that? It is very shortly
after that time.
(Mr Galloway) He is certainly being led in that
103. You say he has been led in that direction. That
was not actually the position. Hawk really was not working at
that time, do you think?
(Mr Galloway) It never traded. It was moribund
and then it was wound up, as Companies House can confirm.
104. Can we move on because you have given testimony
this afternoon that Hawk had nothing to do with Al Mass'ari or
the CDLR. That is right, is it, really?
(Mr Galloway) Yes.
105. But you did at one point want to bring the two things
together and there were all these discussions you have described.
(Mr Galloway) We had one discussion of a evening
and a follow-up discussion on the telephone the next day.
106. And did Hawk prospect for any other kind of business?
Did you propose its services to anybody else in the course of
(Mr Galloway) Only the - I do not know if you
would call it "prospecting" - but only the approach
to the Westminster Foundation for Democracy. That is the only
one I can recall.
107. And there your prospective client would have been
the Westminster Foundation for Democracy? You would have said,
"This is a service we can perform which is in accordance
with your purposes. Would you like to pay us to do that?"
(Mr Galloway) Yes, I do not know if "client"
would be the exact relationship, but we asked for a grant from
the Westminster Foundation for Democracy to produce that and that
we would distribute those leaflets in the Palestinian territories.
108. Could we just move on to your relationship with
CDLR and Mr Al Mass'ari? You said earlier on that you did not
receive anything which could be called taxable expenses. What
is your definition of taxable expenses?
(Mr Galloway) It is more a question of what the
Inland Revenue's is and what the House authorities' definition
is, but a taxable expense would be an expense which was in effect
a reward, while an untaxable expense is the simple reimbursement
of monies expended on work. For example, as all of us do, we have
all of us travelled to places to make speeches and we are reimbursed
by the people to whom we have made the speech for our costs involved
in getting there. If they were adding, you know, £100 on
top or if they were saying, "Why don't you have dinner in
the best hotel in town before you start and have a sumptuous breakfast
the next day", it might begin to move into the area of taxability,
but rather like the old saying goes, "if it looks like a
duck and walks like a duck, the chances are, it is a duck".
I was very clear that the simple reimbursement of monies expended
by me in pursuit of political activity did not constitute a taxable
expense. That was endorsed by Sir Gordon Downey after consultation
by him with the Inland Revenue.
109. Now, you received quite a lot of expenses which
were not taxable. Among them was the reimbursement of the expenses
that you have listed on your letter dated 27 January to our Chairman,
the expenses for various basically flights and subsistence. Did
you yourself undertake any of those flights?
(Mr Galloway) Some of them.
110. So some of them were expenses that you had incurred?
(Mr Galloway) Not the flights; the hotel bills.
111. But not the flights?
(Mr Galloway) No.
112. Did you undertake any travel at all for CDLR?
(Mr Galloway) I certainly went to Oxford University
once and I drove to various places with them in the car, but I
never flew anywhere at their expense.
113. And you never went abroad at their expense?
(Mr Galloway) Never.
114. Al Mass'ari in the tape talked about you receiving
£1,000 to £1,500 a month. Is that correct?
(Mr Galloway) No, it is not correct.
115. How much do you think you received a month?
(Mr Galloway) Well, I received only this figure,
which is in the letter of 27 January. Where the confusion is -
116. Well, when you say "this figure", you
have got to add up those expenses that are listed on your Visa
(Mr Galloway) Yes, this is all I received.
117. - and the advertisements, is that right, at the
bottom of the page?
(Mr Galloway) Yes. This letter sums all of the
expenses that I received.
118. So that adds up to about £5,000, just more
(Mr Galloway) I am sorry, I should have tallied
it up myself.
119. So you received this amount of money in cash?
(Mr Galloway) Yes.
120. From Dr Al Fagih.
(Mr Galloway) Yes, between May of 1995 and the
beginning of 1996.
121. And most of them you paid with your Visa card?
(Mr Galloway) All of them I paid.
122. Including the Refreshment Department?
(Mr Galloway) Yes.
123. It is slightly curious. Your letter does not sort
of make that clear, but it does not list it as one of the Visa
outgoings anyway. You have already said that you never kept any
accounts of these other receipts or the disbursements?
(Mr Galloway) No, no more than if I travel to
speak to the Brighton Labour Party and they give me the train
fare back do I keep an account of that.
124. Why do you think Dr Al Mass'ari thought that you
were receiving between £1,000 and £1,500 a month?
(Mr Galloway) Well, it is not clear from the transcript
what he really thought. He does mention that figure more than
once, but he also qualifies that over and over again by saying,
"This included..." and he goes on to adumbrate a whole
number of things which are supposedly included, including bodyguards
and hotels and meetings of various kinds and other services, so
he appears at some stage in the transcript to be saying that I
received that amount of money, but what he is really, I think,
saying, although it is hopelessly wrong, and that is because he
has nothing to do with money or organisation, is that that is
the sort of sum he thought my work was costing, not that I was
receiving, but was costing, and in that he has the figures entirely
wrong because if you were to tally up all the academics who were
paid either directly by Al Fagih or by me, tally up the cost of
the people who swept the headquarters regularly for bugs, the
sum is far more than that, but those sums were never paid to me;
they were paid directly by Al Fagih to the people involved.
125. I see. The slight problem with that, George, is
that it is quite clear that Al Mass'ari felt that there was a
sort of budget he had for PR or communications work and that there
was, therefore, a trade-off between the extent to which he could
employ you, and he was obviously well disposed to you, and the
extent to which he could employ Pat and John, which is the Monaco
agency, and on page 8 of the clean text, if you like, the latest
text that we have, he says, if you look about three-quarters down
that page where he talks about John and Pat having a professional
contract: "£2,000 per month, that is their contract.
So Saad said, OK. I will offer them £1,000; we cannot afford
£2,000. Because George was roughly £1,000 a month; something
like that. I think so. Or £1,500. Then we have a total of
£2,500. And so we have the two PR groups doing different
sides." There is a clear indication that you were sharing
in that budget and if he was going to have you, it had to be at
the expense of cutting back John and Pat which somewhat goes against
your testimony to us that he had no idea about money and so forth.
(Mr Galloway) I think it is clear enough he had
no idea about money or about numbers. A man who can confuse hundreds
of envelopes with 15,000 envelopes is a man who is not very good
at numbers, but the most important point I would make in response
to what you are saying is that he, and he says so 18 times in
this transcript, had nothing to do with money. Saad Al Fagih was
the one who controlled the organisation and expenditure and he
was the only one who paid money out.
126. That is quite clear.
(Mr Galloway) So any ideas that Al Mass'ari had
about who was costing what, whose work was costing what are merely
guesses on his part. He was not involved in any way, as has been
made clear by him and Al Fagih, in these financial affairs. Now,
I repeat myself, that what I think is being alluded to there is
the cost of the work that I am doing, not the amount of money
that was given to me, but the amount of money which is being expended
by the organisation in relation to work being assisted and generated
127. Well, that does not make sense of his remarks, does
it, because if this was money being expended which would have
been expended anyway on bodyguards or academics or anything which
you were not involved in, then in no sense was there a trade-off
between your coming on board and the existing PR contract. This
paragraph clearly makes it plain, I think, that there was a choice
that they could make within their budget of having more of you
and less of John and Pat or the reverse, so if there were expenditures
which would have gone on anyway which were unrelated to that,
what Al Mass'ari is saying does not make sense. The other thing
is I do not want you -
(Mr Galloway) Can I respond to that point?
128. Yes, of course.
(Mr Galloway) I do not think that anything in
this transcript in the mouth of Al Mass'ari can be said to be
clear or plain because a number of things are said and they are
contradicted elsewhere. Secondly, it is not for work that would
have been done otherwise. That was going to be done anyway. A
lot of this work was being generated by me. For example, I was
the person who suggested to them that they should hire academics
to produce academic work to give themselves some weight in British
public opinion. So that was not work that would have been done
otherwise. I not only came up with the idea of producing these
books but even came up with the suggestion as to what shape they
would be, what size they would be, even which colour they would
be. So the work that I was suggesting and was then being done
would not have been done otherwise. It was in that sense being
generated and driven by me, but the money for it was not being
given to me. I will give you another example. I was the one that
suggested their offices might be bugged, as indeed they were more
than once, and I was the person who suggested that we find a private
detective who would sweep the place.
129. But you did not pay them, did you?
(Mr Galloway) No.
130. You did not hire or pay them?
(Mr Galloway) I generated the work.
131. So in the case of the academics sometimes you were
the conduit by which they were paid and sometimes you were not.
(Mr Galloway) Twice.
132. Nevertheless, the issue we do have is that Al Mass'ari
obviously was conscious of a budgetary constraint on using you.
That is quite clear, is it not, from this tape?
(Mr Galloway) I do not think it is clear, no.
133. From the sentence I have just read out?
(Mr Galloway) It is not clear because, in fact,
the figures bear no relationship to the true position in any case,
so it cannot be clear.
134. It would be clear if, in fact, you were being paid
£1,000 to £1,500 a month and in actual fact you are
saying it is much less than that. This text is incomprehensible,
is it not?
(Mr Galloway) It is largely incomprehensible,
but that might be because it is a compilation of several different
tapes with all the other caveats that I have made already. But
he himself says in the same transcript several times that I was
not being paid anything personally. We could go through them and
I can draw your attention to the line numbers, if you like.