Select Committee on Standards and Privileges Third Report



35.  So far as the complaints against Mr Vaz involving Mr Zaiwalla are concerned, Mr Milne set out the detailed allegations in his letters of 4 February and 4 April 2000 (Annexes 1 and 2), as follows:

36.  The evidence relating to each of these allegations is considered in turn below.

37.  Before I had had an opportunity to seek his account of the matters contained in Mr Milne's first letter, Mr Zaiwalla wrote to me on 8 February (Annex 57), having already seen similar allegations published in a number of Sunday newspapers.[104] Mr Zaiwalla stated:

    "Neither the firm of Zaiwalla & 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."

38.  But Mr Zaiwalla added that he had from time to time—

    "sponsored or taken a table at various Asian social and charity events which Mr Vaz has also supported".

39.  Mr Zaiwalla said he had agreed to make such a charitable contribution, of £1,000, in 1993 or 1994. In addition, in 1998 he had taken a table for £500 at an Asian Business Network Group dinner which Mr Vaz had organised and at about the same time he had sponsored for £500 a charity concert associated with Mr Vaz.

40.  Mr Zaiwalla went on:

    "Besides these events supported by Mr Vaz, I confirm that neither my firm nor I made any payments by cash, cheque, in kind or inferred any financial benefit directly or indirectly either to or on Mr Vaz MP or his constituency party, or his family".

41.  On 14 February Mr Zaiwalla wrote to me again (Annex 58) and provided me with the following more detailed information about payments or donations he had made which involved Mr Vaz in any way:

    (i)  a cheque and counterfoil (015516), dated 23 June 1998, for £500 made out to "The Gala Dinner"; and

    (ii)  a cheque and counterfoil (017164), dated 27 October 1998, for £500 made out to "The Gala Dinner", with "Keith Vaz MP" in the box marked 'details'.

42.  However, Mr Zaiwalla told me in the same letter that he was unable to identify the charity to which he had made a donation of £1,000 in 1993 or 1994, as he had "left it to Mr Vaz to select the cause to be benefited, and the event". But he recollected "vaguely" that the charity in question was an Indian natural disaster appeal fund. He also recalled being contacted by "an Asian organisation" who said that Mr Vaz had told them that he (Mr Zaiwalla) had agreed to make a contribution of £1,000 to the cost of an event which they were arranging.

43.  On 10 March 2000 Mr R Nanda, the Chairman of the Asian Business Network (ABN), wrote to me at the request of Mr Vaz (Annex 177). He said that Mr Zaiwalla had supported two ABN events in 1998. They were:

    —   on 2 July 1998, a Gala Dinner where the guest of honour had been the Home Secretary and at which Mr Zaiwalla had bought a table for £500;

    —   on 17 July 1998 a Gala Dinner at which Anoushka Shankar, the daughter of Ravi Shankar, had performed, where the guests of honour had been the Foreign Secretary and the Chief Executive of Tesco, and at which Mr Zaiwalla had bought a table for £500.

44.  Mr Nanda confirmed that Mr Zaiwalla had not sponsored a third ABN event. I had asked Mr Vaz whether this was the case because of the gap between the date of the second event (17 July) and the date of Mr Zaiwalla's cheque for £500 to "The Gala Dinner" (27 October)—a discrepancy on which neither Mr Zaiwalla nor Mr Vaz had been able to shed any light.

45.  Both at the outset of my inquiries and subsequently, Mr Zaiwalla made a number of attacks on Mr Milne's character, the relevance of which, in Mr Zaiwalla's eyes, was that Mr Milne's complaints against Mr Vaz had to be seen as part of a campaign to damage Mr Zaiwalla.

46.  For example, in his letter of 8 February Mr Zaiwalla claimed that Mr Milne was "wholly discredited", referring to the description by a judge, in court proceedings brought by Mr Zaiwalla, of Mr Milne's conduct as being "unbefitting of a solicitor".

47.  Mr Zaiwalla also sent me a copy of a letter, dated 8 February 2000, which he had written to the editor of the Sunday Telegraph in which he pointed out that he had dismissed Mr Milne in April 1998 for "gross misconduct", a decision subsequently upheld on arbitration and which resulted in a monetary award in Mr Zaiwalla's favour.

48.  On 11 February 2000 I wrote to Mr Brian Brown (Annex 66), who had worked as a bookkeeper in Mr Zaiwalla's office, to ask him whether he had been present at any discussions or meetings between Mr Zaiwalla and Mr Vaz and, in particular, whether he had been involved in any cash payment or other financial transaction from Mr Zaiwalla to Mr Vaz.

49.  In his reply, dated 16 February 2000 (Annex 67), Mr Brown explained that he had worked for Mr Zaiwalla until November 1994 and could not therefore comment on matters after that date. He said:

    "I do, however, recall that a payment of, I think, £1,000 was made to Mr Vaz by Mr Zaiwalla for what I seem to recall was described as being for an 'office fund'. I do not, however, remember the date upon which the payment was made, though it was whilst Mr Zaiwalla's practice was housed at 95a Chancery Lane, which I suppose makes it prior to May 1994. I have been informed by a Sunday Telegraph reporter that a statement by a third party (whom I assume is Andrew Milne) stated that I was initially requested to hand Mr Vaz a cheque which was refused and the payment was requested in cash, which I withdrew from the firm's bank and handed in our envelope to Mr Vaz. This may or may not be the case, I simply cannot be certain, though I suspect that could be the case. I was certainly not involved in any discussions which led to the payment being made nor was I made aware whether the payment was a gift or a loan".

50.  On 16 February 2000 The Sunday Telegraph sent me a transcript[105] of a telephone conversation which took place on 14 January 2000 between Mr Milne and Mr Brown. At the beginning of this conversation, initiated by Mr Milne, Mr Milne told Mr Brown that he was concerned about an approach made to him by The Sunday Telegraph over allegations concerning Mr Vaz. The following exchange then took place:

"AM:I was contacted by them quite recently and I was really rather concerned. I didn't want my name to get into the paper about this sort of thing. It concerns the £2,000 that you handed over to his [Mr Vaz's] assistant.
BB:Well, supposed to have. It's not something that I remember. That's what I told them.
AM:That you had chosen not to remember.
BB:Not that I had chosen not to remember. That I didn't remember.
AM:You certainly did hand over an envelope at some stage.
BB:Or so I am told, but I still don't remember it.
AM:I am quite anxious to get our story straight on this because I have been telephoned a number of times."

51.  Mr Milne told Mr Brown that he had been specifically questioned by The Sunday Telegraph about alleged payments to Mr Vaz by Mr Zaiwalla. The conversation then proceeded as follows:

"AM:I was asked about Mr Vaz, though, which I did find concerning because I do remember you did give him—or someone from his office—an envelope.
BB:Oh yes. I remember that quite vividly, he was up there quite a lot.
AM:They asked me various other names which I found concerning. Do you remember the name of Vaz's assistant who [you][106] actually handed the cash to?
BB:No because it was to him personally.
AM:You handed the £2,000 to Mr Vaz personally?
BB:Well, however much it was, it was to him personally. I don't remember any assistants.
AM:Did Keith say thank you?
BB:I couldn't tell you.
AM:Can't remember that.
AM:Well I was very anxious to get the whole story straight and I was very anxious to find out.
BB:I told them I couldn't help. They asked me about Mr Baldry.[107] I told them I had met him a couple of times.
AM:Was there more than one occasion that you gave cash to Mr Vaz?
BB:I can't remember. There may have been more than one.
AM:But you remember giving him cash on more than one occasion?
BB:Oh, on one occasion, yes.
AM:The Baldry payment was £5,000 but I was having all sorts of things put to me. My recollection with Mr Vaz was that the envelope had £2,000 in cash in it.
BB:It may well have done. And I am sure there was more than one. But er.."

52.  The same subject was then pursued further in the following subsequent parts of the conversation:

"AM:Was there more than one occasion that you gave Mr Vaz cash?
BB:I can't remember.
AM:But you definitely recollect one occasion?
BB:I wouldn't by surprised if there were more than one occasion. You know what they were like down there.
AM:I do. I can remember on one occasion he insisted on cash, which I found very amusing at the time.
BB:I think he always did.
AM:Was there ever an occasion where he took a cheque?
BB:Not to my recollection.
AM:Always cash, so it could not be traced. It's a bizarre, bizarre thing."
"AM:Because you met Vaz on many occasions when he came to the office?
AM:Were you ever present when he asked for cash?
BB:No. Those discussions were private.
AM:So your only recollection is of actually handing it over?
BB:Just going, collecting it, taking it up, getting it done.
AM:Drawing it out of the bank specially, because it would be over the petty cash limit of what we would physically have in the office?
BB:That's right.
AM:So you would need to go cash a cheque?
AM:If they start getting hold of office records, would you have entered in the cash book that it was for Mr Vaz?
BB:Oh no, it would have gone down as 'drawings'.
AM:It would have said 'drawings'?
AM:Well that's something anyway, it would not have been traceable from that point of view?
AM:Can you think of any way that the cash Mr Vaz took would be traceable?
BB:No. A lot just went down to 'drawings'.
AM:The cash you remember giving to Mr Vaz, was anybody else present who they might go and dig up? Any other witnesses?
BB:I doubt it.
AM:Only Mr Zaiwalla.
"AM:Can you remember what he [Mr Vaz] wanted the cash for?
BB:Oh yes, he was starting some fund or something, wasn't he, to help run his office.
AM:On the occasion of the £2,000 which is the only occasion that I specifically remember, Mr Zaiwalla told me that Vaz said his bank manager was after him because he had an overdraft. But I suppose that might equate with running his personal office.
"AM:On the specific occasion you do remember giving Mr Vaz cash, are you sure there are no entries in the firm's books that could be suddenly produced?
BB:I would be very surprised. The only way that could have been done is against an invoice or if he had done it as a loan or something like that. But he didn't. Most of the payments that came out, came out of his drawings.
AM:So Vaz did not receive the money as a loan, it was an outright payment?
BB:No, it wasn't a loan at all.
AM:It was an outright cash in hand, as they say.
BB:Yes, yes."

53.  I telephoned Mr Brown on 8 March 2000 (Annex 68) to say that, having received from The Sunday Telegraph a transcript of a conversation he had had with Mr Milne, I needed to confirm its accuracy with him. I put it to Mr Brown that the transcript indicated that he had seen money which he had collected from Mr Zaiwalla's bank being handed to Mr Vaz. I asked him whether this was correct and Mr Brown said that it was. He added: "Mr Vaz had recently become an MP. He was asking for money from Mr Zaiwalla to help set up his office."

54.  Mr Brown confirmed that the payment to Mr Vaz was definitely a gift, not a loan. I asked him whether he or Mr Zaiwalla had given the money to Mr Vaz, to which Mr Brown replied that he could not be sure. He explained that his usual practice when asked to collect money was to take it into Mr Zaiwalla's room and that Mr Zaiwalla would then give it to the person who was to receive it. However, sometimes when he took the money that he had withdrawn from the bank into Mr Zaiwalla's room, he [ie Mr Brown] would hand it directly to the intended recipient. On the occasion in question he had gone to the bank, drawn out £1,000 in cash and had taken it into Mr Zaiwalla's room where Mr Vaz had collected it either from Mr Zaiwalla or from Mr Brown.

55.  After my inquiries were already under way, I received two further letters from Mr Milne, both dated 4 April 2000.

56.  In the first (Annex 2), Mr Milne enlarged upon his original letter of complaint, stating his belief that a cash payment of £2,000 to Mr Vaz was made in April or May 1994 and suggesting that I could identify the exact date by examining Mr Zaiwalla's office account cash book. He said that Mr Zaiwalla never drew such a sum of cash for his own use. Mr Milne added that he had "a vivid recollection" of a young man (whose name, he thought, was Mark) standing in the reception area of Mr Zaiwalla's premises, having come from Mr Vaz's office to collect the money. According to Mr Milne, Mr Zaiwalla had subsequently told him that Mr Vaz had "asked him for money again", but he had refused—at Mr Milne's insistence.

57.  In his second letter of 4 April (Annex 2A), Mr Milne enclosed a transcript of his conversation with Mr Brown, a copy of which had already been sent to me by The Sunday Telegraph.[108] Mr Milne said he believed the occasion referred to by Mr Brown on which he claimed to have given money to Mr Vaz represented a separate payment from that which formed the substance of Mr Milne's complaint. Mr Milne repeated his clear recollection that Mr Vaz had not personally been present to collect the £2,000 cash payment, but that it had been handed over to someone acting on Mr Vaz's behalf.

58.  Mr Milne added: "Mr Brown was arrested at my instigation in late 1994 and was sentenced to four years in prison for theft from the firm [ie Zaiwalla and Co.] I had not spoken to him since the moment of his arrest in 1994 until the telephone conversation" [in January 2000].

59.  I interviewed Mr Zaiwalla on 24 May 2000; he was accompanied by his barrister, Mr Edward Garnier QC MP, and his solicitor, Mr Edward Colquhoun (Annex 61).

60.  At the beginning of the interview, Mr Garnier raised Mr Zaiwalla's concern that Mr Milne's allegations, which might prove to be unsubstantiated, could nonetheless be repeated in the press. He said Mr Zaiwalla believed that Mr Milne was—

    "running a campaign of vilification against Mr Zaiwalla and he is really not too bothered whether his allegations are found to be true or not, so long as he can cause damage on the way".

61.  Mr Zaiwalla told me he had still been unable to trace any record of the £1,000 cash donation to a charity suggested by Mr Vaz in 1993 or 1994. The relevant extract from the transcript is as follows:

    "MS FILKIN: What happened then was that instead of sending off a cheque to this charity, or indeed sending the cheque to Mr Vaz for him to put into the charity, what happened then? Because two people arrived.
    MR ZAIWALLA: That is absolutely right. What possibly happened is that the payment was not made in time by us. I do not know who phoned up, whether Mr Vaz phoned me or somebody else and they said 'You haven't paid' and I said, 'We will pay'. It is true that two people arrived and I asked who they wanted the cheque to be made out for. I was a bit upset that they wanted cash. On the spur of the moment I agreed to pay them cash.
    MS FILKIN: How did you verify that they were genuine?
    MR ZAIWALLA: I think Mr Vaz must have phoned me up to say that I had not paid and why had I not paid and the organisers of the charity or charity event would be contacting me to obtain payment for which I had made a commitment.
    MS FILKIN: But these two people who turned up out of the blue and said they wanted £1,000 and they did not want it in a cheque, they wanted it in cash.
    MR ZAIWALLA: No, I would have trusted them because I knew they were coming.
    MS FILKIN: Because Mr Vaz told you they were coming?
    MR ZAIWALLA: Mr Vaz must have said—I am speaking of years ago now.
    MS FILKIN: Yes, of course.
    MR ZAIWALLA: Mr Vaz may have telephoned me or he had telephoned me, I am not too certain about it, to say I had not paid. The late payment happens quite often. I would have said 'Where is the invoice and I can pass it on?'. They would say because we were late, or something like that, they wanted cash for immediate disbursements and things like that and I remember calling Brian Brown to write a cheque. I signed the cheque and Brian Brown was able to go down and collect it. He would have handed over the cash against a receipt. I expect Brian Brown to have done that.
    MS FILKIN: You have no record of that in your company. It would not have gone through your company accounts, your tax returns.
    MR ZAIWALLA: It would certainly be in the cashbook as £1,000 given for an event. It would be debited to marketing. We would designate sponsorship as marketing. I think we have checked and there is no record of the requisition slip, cheque requisition slip or the cheque ..."

62.  Mr Zaiwalla also confirmed during the interview that the cheque dated 27 October 1998 for £500 to 'The Gala Dinner' related to the event organised by the Asian Business Network on 17 July 1998. When I asked why Mr Vaz's name appeared on the counterfoil, Mr Zaiwalla replied "... It was because it was Keith Vaz's event for me. For example, if someone asks me to sponsor something I would make a note that I had done so at that person's request."

63.  At the end of the interview I asked Mr Zaiwalla if he would check his firm's records again in order to establish whether they contained any further information which would assist my inquiry. He agreed to do so.

64.  Mr Zaiwalla wrote to me following our meeting on 24 May enclosing a copy of extracts from his office cashbook for 9 February 1994. These showed that, on that date, a cheque had been drawn (no. 11369) for £1,000 and that in the 'narrative' column the reference "Cash (K Vaz)" appeared (Annex 62).

65.  On 10 July, following a further search of his records, Mr Zaiwalla wrote to me again (Annex 63) with the following further information—

    (i)  extracts from the office cashbook for 25 January 1993 showing a cheque drawn by Mr Zaiwalla for £250 (no. 9551); in the 'narrative' column "K Vaz MP office account"; and in the 'description' column "donation";

    (ii)  extracts from the office cashbook for 29 September 1994 showing a cheque for £200 drawn by Mr Zaiwalla (no. 12275); in the 'narrative' column "Wildberry (K Vaz Calendar)", and in the 'description' column "advertising".

66.  Mr Zaiwalla explained that the second item related to a payment by him for advertising placed in a calendar "which was connected with Mr Vaz".[109]

67.  I wrote to Mr Zaiwalla on 17 July (Annex 64) to ask him to let me have copies of all his cashbook entries for April and May 1994, any further entries which had come to light and confirmation that the records had been fully checked and that they contained no further mention of Mr Vaz.

68.  Mr Zaiwalla wrote to me on 18 July 2000 (Annex 65) confirming that his records had been fully checked and providing the cash book records for April and May 1994.

Mr Vaz's response

69.  In his original response to this part of the complaint by Mr Milne, Mr Vaz said, in letters dated 7 and 16 February 2000 (Annexes 12 and 13):

And he added:

    "I do not know anyone called Mr Brown in connection with Mr Zaiwalla."

70.  I wrote again to Mr Vaz on 22 February 2000 to give him an opportunity to comment on Mr Brown's account, as set out in his letter to me of 16 February. In a letter dated 29 February 2000 (Annex 15), Mr Vaz initially declined this offer.

71.  But in a letter dated 13 March 2000 (Annex 17), Mr Vaz stated:

    "I do not know Mr Brian Brown, I have never met Mr Brian Brown, I have never spoken to Mr Brian Brown, I have never received any envelope containing cash or anything else from Mr Brian Brown or anyone else. This is a malicious falsehood, for which not a shred of evidence has been produced."

72.  In a subsequent letter, dated 11 April 2000 (Annex 22), Mr Vaz, referring to Mr Milne's allegation that someone named Mark from Mr Vaz's office had collected a cash payment on his behalf, said that while his current assistant was called Mark, no one of that name had worked for him in April or May 1994.

73.  In a letter dated 16 February, Mr Vaz responded to Mr Zaiwalla's statement that he (Mr Vaz) had encouraged Mr Zaiwalla to increase his involvement in the Asian business community by lending his financial support to Asian causes or projects. Mr Vaz said:

    "It is highly likely that I suggested to Mr Zaiwalla that he made a contribution to a charity or event as he describes... Members of Parliament are often approached for support and pass these requests on. ... Neither I nor any member of my office would be involved in collecting or processing such donations. ... In the end it would be up to him to decide whether to make a donation or not. It is his money and his decision."

74.  In a letter to Bindmans dated 11 July 2000 (Annex 38), I invited Mr Vaz to comment on the further information provided by Mr Zaiwalla from his cashbook records relating to two payments, one of £250 to Mr Vaz's office account in January 1993 and the other of £200 to a publisher, Wildberry, for a calendar linked to Mr Vaz.

75.  In response, Mr Vaz, in a letter from Bindmans dated 17 July (Annex 39), said:—

    "You refer to Mr Zaiwalla's 'cash books', though you have not forwarded me a copy of the extract, nor have you given me a copy of the transcript of the comments made by Mr Zaiwalla. Mr Zaiwalla is responsible for his own accounts."

76.  I wrote again to Bindmans on 3 October 2000 (Annex 45) to seek a clear answer from Mr Vaz as to whether he had received the £250 donation which Mr Zaiwalla said he had made to Mr Vaz's office account in January 1993.

77.  In response, in a letter dated 2 November 2000 (Annex 50), Bindmans replied:—

78.  In the same letter, in response to my specific question in a letter dated 18 July (Annex 40) as to whether Mr Vaz had an office account, Bindmans replied:

    "There is no evidence that the two payments attributed to Mr Zaiwalla were paid to Mr Vaz personally and Mr Zaiwalla himself has denied that he made any such payments. Mr Vaz has made it clear that he did not receive any such payments and has said where, to the best of his knowledge, they went. Are you suggesting that he should produce all his bank accounts to enable a search to be made for any possible entries which would contradict his assertions? If not, I cannot see what further answer you require. In any case the amount of the payments seems to be below any registrable amount".

79.  In the earlier letter from Bindmans, dated 17 July 2000, Mr Vaz also commented on the issue of the calendar for which Mr Zaiwalla claimed his £200 donation had been intended.[111]

104   Not printed. Back

105  A transcript of the same conversation was subsequently sent to me by Mr Milne (Annex 2A). Back

106  This word is missing from the transcript. Back

107  This is a reference to Mr Tony Baldry, Member for Banbury, a complaint against whom was the subject of the Committee's Eighth Report of Session 1999-2000, HC 369.  Back

108   See paragraph 50. Back

109   These calendars are described more fully later in this memorandum (See paragraphs 96 to 100). Back

110   See paragraph 100. Back

111   See paragraphs 96 to 100. Back

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