(i) Payments
from Mr Zaiwalla
10. The Commissioner did not uphold the following
complaints:
1. That in April or
May 1994 Mr Sarosh Zaiwalla gave Mr Vaz £2000 and that Mr
Zaiwalla made other cash payments to him regularly from 1994.
2. That on at least one occasion Mr Brian
Brown (Mr Zaiwalla's bookkeeper) was involved in withdrawing £1000
in cash from the bank, which Mr Brown gave to Mr Vaz, and that
this payment was thought to be for Mr Vaz's "office fund".
Although she did not uphold the specific allegations,
she reported that she had not been able, because of the unsatisfactory
way in which information was provided to her inquiry by both Mr
Vaz and Mr Zaiwalla, to reach a conclusion as to whether Mr Vaz
received any registrable benefit of any kind from Mr Zaiwalla.[13]
11. The allegations are categorically denied by Mr
Vaz.
12. There is documentary evidence of a cash withdrawal
by Mr Zaiwalla of £1000 in February 1994 which was in some
way connected with Mr Vaz.[14]
There is also evidence of two relatively small payments.[15]
13. Among the allegations made by the complainant
Mr Milne, who was formerly employed by Mr Zaiwalla, were —
(i) that in April or
May 1994 a cash payment of £2000 intended for Mr Vaz was
collected from Mr Zaiwalla's office by a young man from Mr Vaz's
office; and that Mr Vaz had failed to register that payment; and
(ii) that Mr Zaiwalla had made other payments
to Mr Vaz, always in cash and at Mr Vaz's request, which were
not registered.[16]
14. Mr Milne's specific allegation is not corroborated,
and is not consistent in details with the evidence given by Mr
Brown, which we discuss below. Mr Zaiwalla, in his evidence both
to the Commissioner and to us, has repeatedly made serious criticisms
of Mr Milne's integrity.[17]
It is possible that Mr Milne's allegations against Mr Vaz are
primarily intended to damage Mr Zaiwalla. Some of the information
provided by Mr Milne about Mr Tony Baldry referred to in our earlier
report[18] was accurate.
It was confirmed voluntarily by Mr Baldry.
15. Mr Milne said he thought the man from Mr Vaz's
office who collected the payment was called Mark.[19]
In April last year Mr Vaz told the Commissioner that no one called
Mark had worked for him in April or May 1994.[20]
In February this year Mr Vaz's solicitor told us that someone
called Marco had worked for Mr Vaz between 1992 and 1994, but
he understood that Mr Milne had identified an earlier employee
of Mr Vaz's as "Mark" in a conversation with a journalist.[21]
16. Mr Brown, who was Mr Zaiwalla's bookkeeper at
the time, gave evidence to us on oath of a cash payment of £1000
(or possibly £2000) which was given to Mr Vaz in his presence
shortly before Zaiwalla & Co. moved to new offices in June
1994.[22] Mr Brown said
that Mr Zaiwalla had signed a cheque which he (Mr Brown) had taken
to the bank and cashed.[23]
He was unable to recall whether he had given the money to Mr Vaz
on Mr Zaiwalla's instructions, or whether he had given it to Mr
Zaiwalla who had in turn given it in his presence to Mr Vaz.[24]
He thought Mr Zaiwalla had suggested that the payment was intended
to set up Mr Vaz's office, from which he had inferred that Mr
Vaz was a newly elected Member at the time.[25]
(In fact Mr Vaz was not a newly elected Member in the spring of
1994: by that time he had been a Member of the House for almost
seven years.) He had only seen Mr Vaz once at Mr Zaiwalla's office
but had heard that Mr Vaz had been there on a number of occasions.[26]
17. Mr Vaz told us that he had never met Mr Brown
and "would not know him in a crowd of two".[27]
18. According to Mr Milne, Mr Brown was sentenced
to four years' imprisonment for stealing from Zaiwalla & Co.[28]
Mr Zaiwalla said that Mr Brown had been convicted and jailed on
two separate occasions for dishonesty, and that he had no doubt
that Mr Milne and Mr Brown had colluded with each other in a substantial
theft from his office account.[29]
We must approach Mr Brown's evidence with particular caution.
He sounded truthful. He gave us the one piece of information he
had only because he had been asked to, and he said he had no axe
to grind against Mr Vaz or Mr Zaiwalla.[30]
He is unlikely to be acting in concert with Mr Milne, at whose
instigation he was arrested.[31]
He places the incident at about the same time as Mr Milne, in
April or May 1994, rather than in February, although his description
of it is quite different from Mr Milne's.
19. Mr Zaiwalla explained the documentary evidence
relating to the cash withdrawal of £1000 in February 1994
by saying on oath that in the autumn of 1993 he had agreed, at
Mr Vaz's request, to make a charitable donation of that amount.
He believed the beneficiary was an Indian cyclone disaster relief
charity. Mr Vaz had reminded him that he had not made the donation
he had promised and had told him that representatives of the charity
would be calling on him to collect it. He had given the two men—whom
he did not know—£1000 in cash because that was what
they had asked for. They had asked for cash because the payment
was late. He said that a receipt for the payment would have been
obtained for audit purposes, but that it had not survived. He
denied that he had ever given cash to Mr Vaz.[32]
20. Mr Zaiwalla's explanation gave us considerable
difficulty. We find it remarkable that a man in his position should
hand over a large sum in cash to two complete strangers and then
be unable either to produce a receipt or to recall the identity
of the organisation he believed they represented. Nor do we understand
the explanation they are said to have given Mr Zaiwalla for wanting
the payment in cash.
21. Our confidence in the accuracy of Mr Zaiwalla's
recollection is undermined by the inconsistencies in the account
he had earlier given to the Commissioner. Mr Zaiwalla initially
stated:
Neither the firm of Zaiwalla
and Co. nor I, have at no time made any payments to Mr Vaz MP
or his Parliamentary office, nor did Mr Vaz approach either me
or my firm to give him any money.[33]
Mr Vaz stated:
I have never requested,
nor received, cash payments of any kind from Mr Zaiwalla.[34]
Mr Zaiwalla subsequently found evidence in his office
cashbook of a payment of £250 in January 1993 to Mr Vaz's
office account and a payment of £200 in September 1994 for
an advertisement in a calendar associated with Mr Vaz.[35]
This might be thought to make Mr Milne's general allegation—that
there were several cash payments from Mr Zaiwalla to Mr Vaz—more
credible, though there is no hard evidence to support it.
22. Mr Vaz agreed that he might well have pressed
Mr Zaiwalla to make a charitable donation. He had been active
in seeking to persuade leading members of the Asian community
in Britain to play more of a part in politics and to contribute
to charitable causes. He could not shed any light on the identity
of the recipient of the £1000; he told us he might have to
write 250 letters to find out who it might have been. He denied
that he had ever taken cash from Mr Zaiwalla.[36]
An inspection of bank statements for his account established that
the £1000 did not go into that bank account.
23. We have taken this matter as far as possible.
The evidence we have been given is inconsistent and unsatisfactory.
In the absence of firm corroborating evidence that Mr Vaz received
either the £1000 of February 1994 or another large cash payment
we cannot uphold the complaint.
24. We agree with the Commissioner that Mr Vaz was
not required to register the small payments of £250 and £200
from Mr Zaiwalla but that he should have sought advice from the
Registrar when the first of the payments was received.[37]
(ii) Mr
Vaz's recommendation of an honour for Mr Zaiwalla
25. The Commissioner upheld the complaint —
12. That Mr Vaz recommended
Mr Zaiwalla for an honour in 1997 without disclosing that he had
received financial benefits from Mr Zaiwalla, as required by the
Code of Conduct.
She found that the two donations referred to in the
previous paragraph created a financial relationship between Mr
Vaz and Mr Zaiwalla which Mr Vaz ought to have declared when he
recommended Mr Zaiwalla for an honour (to the then Prime Minister
in 1996 and to the then Lord Chancellor in 1997). She concluded
that this was a breach of Mr Vaz's duty under the Code of Conduct
to be "open and frank with Ministers".[38]
26. Mr Vaz's argument was that the payments were
not for his personal benefit and did not create a financial relationship
which required to be declared when putting forward his recommendation.[39]
27. This case differs from that involving Mr Tony
Baldry whom we criticised for failing to declare a loan of £5000
from Mr Zaiwalla when recommending him for an honour. Mr Baldry
had received a much larger sum and had put forward a recommendation
for an honour within days of receiving the loan.[40]
28. Even if it were just a question of two relatively
small payments—neither of which individually met the threshold
for registration in the Register of Members' Interests, and the
second of which was received almost two years before the first
recommendation for an honour—a financial relationship, declarable
when making a recommendation for an honour, did appear to exist
between Mr Vaz and Mr Zaiwalla. Whilst there is no firm evidence
that Mr Vaz benefited from Mr Zaiwalla's £1000 cash payment
to a charity, it could have been seen as putting Mr Vaz under
some kind of obligation to Mr Zaiwalla. The 1996 recommendation,
a copy of which has been shown to us in confidence, was for a
high honour, although not for a peerage as alleged by Mr Milne.
The Resolution of the House of 22 May 1974 relating to Members'
Interests (Declaration) provides that
In any ... communications
which a Member may have ... with Ministers ..., he shall disclose
any relevant pecuniary interest or benefit of whatever nature,
whether direct or indirect, that he may have had ...
The Code of Conduct states:
In any activities with,
or on behalf of, an organisation with which a Member has a financial
relationship, including activities which may not be a matter of
public record such as informal meetings and functions, he or she
must always bear in mind the need to be open and frank with Ministers,
Members and officials.
The obligations on Members are to be interpreted
strictly. We consider that Mr Vaz should have disclosed his connections
with Mr Zaiwalla when making the recommendations. We agree with
the Commissioner. We uphold the complaint. We recommend that
no further action be taken. We do not believe that the recommendations
were made because of the two small payments.
6 Appendix 1, para. 22. Back
7 ibid,
para. 505. Back
8 ibid,
para. 503. Back
9 ibid,
para. 504. Back
10 ibid,
para. 30. Back
11 ibid,
paras. 27-8. Back
12 Second
Report, Session 2000-01, HC 89, para. 20. Back
13 ibid,
para. 504. Back
14 ibid,
para. 64. Back
15 ibid,
para. 65. Back
16 ibid,
paras. 35 and 56. Back
17 eg.
Appendix 1, paras. 45-7; Qs 552, 564, 589-90. Back
18 Eighth
Report, Session 1999-2000, HC 369. Back
19 Appendix
1, para. 56. Back
20 Appendix
1, para.72. Back
21 Appendix
2 to the Minutes of Evidence. See also Qs 239-50. Back
22 Qs
470-6, 483. Back
23 Q519. Back
24 Qs
477, 516-8, 521, 530-1. Back
25 Qs
468, 479-81, 484. Back
26 Q469,
499. Back
27 Q834;
Qs 340-2; Appendix 1, Annex 17. Back
28 Appendix
1, Annex 2A. Back
29 Appendix
5 to the Minutes of Evidence. Back
30 Qs
488, 502. Back
31 Q501;
Appendix 1, Annex 2A. Back
32 Qs
540-82, 605, 641-5, 672, 706-9, 751-63, 770-7. Back
33 Appendix
1, para.37. Back
34 ibid,
para. 69. Back
35 Appendix
1, paras. 37, 40, 65. Back
36 Qs
218, 254, 802, 823-31. Back
37 Appendix
1, paras. 421-4. Back
38 ibid,
paras. 443-7. Back
39 Appendix
3 to the Minutes of Evidence. Back
40 Eighth
Report, Session 1999-2000, HC 369. Back
