APPENDIX 3
Letter to the Clerk of the Committee on
Standards and Privileges from Mr Geoffrey Bindman, Bindman &
Partners, Solicitors
Because the complaint that he should have declared
a financial relationship when recommending Mr Zaiwalla for an
honour is the only one which the Commissioner has upheld, Mr Vaz
is particularly anxious that his evidence and arguments against
this conclusion should be absolutely clear to the Committee. For
this reason he has asked me to write to you to spell them out
once again. In doing so, I have taken into account the oral evidence
of Mr Zaiwalla and Mr Brown which they have now given to the Committee.
1. The evidence
(a) Both Mr Zaiwalla (paras. 37 to 40) and Mr
Vaz have continually and consistently denied that Mr Zaiwalla
made any payment to Mr Vaz for his personal benefit or for his
office.
(b) The only evidence to the contrary which is
relied on by the Commissioner as establishing that Mr Vaz received
"financial benefits" from Mr Zaiwalla relates to payments
of £250 on 25 January 1993 and £200 in September 1994
alleged to have been made by Mr Zaiwalla or his firm (see para.
328 of the Commissioner's report).
(c) The only evidence for these payments is that
entries for these amounts appear in Mr Zaiwalla's office cashbook,
accompanied by references to Mr Vaz. The entries indicate that
the payments were made by cheque and numbers are given but no
cheques or stubs have been produced. Mr Brown, who according to
his oral evidence to the Committee was employed by Mr Zaiwalla
from 1986 to 1994 mostly as bookkeeper, has claimed no recollection
of any such payment. There is no evidence that either cheque was
presented or cashed (save indirectly in that any advertisement
by Zaiwalla appeared in the calendar).
(d) In his oral evidence to the Committee on
6 February 2001, Mr Zaiwalla says (para. 653) that the first of
these alleged payments, which he had not remembered but was revealed
by a search of his cash books reported by him to the Commissioner
on 10 July 2000, was to Mr Vaz's constituency office, and the
second for the publication of a calendar advertisement. He repeats
the former statement in para. 659. It is far from clear whether
he remembered the payment or was merely drawing inferences from
the cash book entry. However, Mr Zaiwalla says that the payment
would not have been donated to the Labour Party but for community
work for the local Asian community. He also says that he does
not know to whom the cheque was paid but is sure that it was not
made out to Mr Vaz.
(e) The first entry refers to "K. Vaz MP
office account" and to "donation". Mr Vaz has made
it clear that he has no recollection of receiving such a payment
and he has told the Committee (para. 287 of transcript) that every
payment was registered when it was required to be so. In any event
the Commissioner says that she would not regard it as fair to
regard him as having failed to register this payment as a registrable
benefit even if he had in fact received it (para. 312).
(f) The second of these entries refers to a calendar
and to advertising. It can reasonably be inferred that a payment
was made of this amount for advertising in the community calendar
(not "producing" a calendar as the Commissioner says
in para. 443).
(g) Mr Vaz continues to believe that the payment
of £250 recorded in January 1993 is most likely to have been
for advertising in the calendar. He believes that advertising
was being sought at that time and the payment could have been
the first part of the required fee. No advertisement would have
been published until the full payment had been made which could
have been completed by the payment of £200 in September 1994.
An advertisement by Zaiwallas appeared in the 1995 calendar.
This hypothesis is supported by two pieces of evidence—admittedly
far from conclusive:
(i) The Calendar was intended to benefit the
Asian community and Mr Vaz has made it clear that it was not intended
to support his political activities. Mr Zaiwalla has said that
his payment of £250 (if made to an account connected to Mr
Vaz) would have been made for his work for the Asian community.
He says he refused to give a donation to the Labour Party. (paras.
661 to 669 of his oral evidence). His evidence is consistent with
a payment for the Calendar.
(ii) The solicitors for Mapesbury have now said
in their letter to you of 9 February that the price of advertisements
in the Calendar was £250 or, in a few cases in 1995 and 1996,
£400. (Mr Zaiwalla advertised in 1995). The former figure
coincides with the cash book entry in January 1993 and not the
later payment, though the latter is clearly identified as a payment
for advertising.
(h) The Commissioner accepts (para. 435) that
there is no evidence that Mr Vaz offered to recommend Mr Zaiwalla
for an honour in return for benefits received or expected. It
should be borne in mind that this allegation was made by Mr Milne
who also alleged that Mr Vaz had promised to approach the Inland
Revenue on behalf of Mr Zaiwalla. The Commissioner rejected both
allegations.
2. Analysis
(a) The evidence that either of the two alleged
payments were made as claimed by the Commissioner is inconclusive.
While it is accepted that there is a probability that the second
payment was indeed made for advertising in the Asian community
calendar initiated by Mr Vaz, he sought advice on such payments
and acted in accordance with the advice of the Registrar and then
Commissioner. There is a real possibility that the first payment
was made for the same purpose. If not there is no conclusive evidence
as to where it went or for what purpose and it would be unfair
to Mr Vaz to reach any firm conclusion about it.
(b) In any event the Commissioner is satisfied
that neither payment was registrable or if registrable that Mr
Vaz was entitled to assume it was not. (paras. 312 and 316)
(c) It is appreciated that the fact that payments
are not registrable does not preclude, in theory at least, an
obligation on Mr Vaz to declare them in recommending Mr Zaiwalla
for an honour. But it would be a curious anomaly if payments held
to be too small to be registrable were considered big enough to
require disclosure in a recommendation.
3. The obligation to declare a financial
relationship
(a) In paragraph 12 of the Committee's eighth
report on the complaint against Mr Tony Baldry MP the Commissioner
has quoted three passages from the Code of Conduct which identify
the obligation of Members in relation to recommendations for an
honour.
The first of these requires recommendations to be
made on merit. Mr Vaz has made it clear that he did so and there
is no evidence to the contrary.
Nor could it be plausibly inferred from the evidence
that he was influenced by two small payments of which he had no
knowledge or recollection. The recommendation must also be seen
in the context of a longstanding ambition to see more qualified
Black and Asian people in the honours list, or whom Mr Vaz believed
Mr Zaiwalla to be one.
The second requires Members to avoid any conflict
of interest. Again, in the absence of any knowledge or recollection
of the two payments, it cannot be inferred that he preferred any
private interest in recommending Mr Zaiwalla to the public interest.
Thirdly, Mr Vaz fully accepts the obligation to be
open and frank in relation to organisations (or individuals) with
which he has a financial relationship. In this case he does not
agree that he had a financial relationship or any relationship
which required a declaration of payments of which he was unaware.
(b) The Commissioner has stated that the two
payments of £200 and £250 constituted a "financial
relationship" between Mr Vaz and Mr Zaiwalla (para. 443)
and that Mr Vaz received "financial benefits" from Mr
Zaiwalla (para. 503). Even if it were proved that the payments
were indeed made as claimed by the Commissioner in the former
paragraph, it is a distortion of language to claim that such payments
made to a third party created a financial relationship with every
contributor to party funds? Or even to every friend from whom
he or she has received hospitality of any financial value? It
is equally inappropriate to refer to these small sums, not shown
to be paid to Mr Vaz personally, as financial benefits received
by Mr Vaz.
(c) It is entirely reasonable to assume that
the obligation described in the quoted passages requires the Member
to ask himself or herself when considering making a recommendation:
"is there any financial or other relationship which might
influence or appear to influence me in making this recommendation?"
Given the fact that he was not conscious of having received any
benefit from Mr Zaiwalla and even a thorough search of all his
accounts would have revealed no payment, he could not have been
expected to give an affirmative answer. Even if he had thought
of the Calendar and checked whether Mr Zaiwalla had paid for an
advertisement in it (which was a benefit to Mr Zaiwalla), would
it have been reasonable to regard that as a "financial relationship"
or an interest which he should declare given that he had been
told by Sir Gordon Downey that payments below £500 need not
be registered? Surely not.
4. The case of Mr Tony Baldry MP
This is entirely different from Mr Vaz's case:
(a) the payment was a formally agreed personal
loan which plainly created a financial relationship, and conferred
a financial benefit on Mr Baldry;
(b) the amount was substantial;
(c) the loan was made only 12 days before Mr
Baldry made his recommendation in which he did not mention the
loan.
Here an important financial relationship was established;
it could not have been forgotten at the time when the recommendation
was made; and it was obviously of such significance that Mr Baldry
must have known that it created the appearance of a conflict of
interest, even though in fact it may be accepted that Mr Baldry
did not make the recommendation in return for the loan.
5. Conclusion
* There are serious shortcomings in the
evidence on which the Commissioner has based her findings of fact.
Even if they were justified she was wrong to uphold the complaint
because a declaration of interest was not required in that hypothetical
situation.
* The Baldry case is a good example of when
a declaration of interest should be made. A relationship which
could give rise to the appearance of bias or conflict of interest
should be disclosed. But a line must be drawn as a matter of common
sense between such cases and cases involving small donations or
hospitality which might easily be overlooked and which would not
detract from the credibility of the recommendation.
Those who give recommendations obviously must—as
Mr Fort has pointed out—know the person whom they are recommending.
(In this case the recommendation was made to two people, John
Major and Lord Mackay, who already knew Mr Zaiwalla as a supporter
of the Conservative party). In many cases that knowledge will
be the result of exchanges of hospitality or shared support for
particular causes. Honours are regularly recommended for donors
to political parties. Is every act of hospitality or donation
to be disclosed in a recommendation for an honour in every case,
even if the donation is below the minimum level required to be
disclosed by statute or practice?
If that is to be the rule for the future it should
be spelled out in the Code. It cannot be right to apply so strict
a standard on the basis of the current rules as identified by
the Commissioner and the Committee in the Baldry report.
12 February 2001
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