Annex 2
Letter to the Parliamentary Commissioner
for Standards from Mr Andrew J Milne
I write further to my letter dated 4 February
2000.
CASH PAYMENT
I believe that the payment of £2,000 referred
to in my letter dated 4 February 2000 was made in the months of
April or May 1994. You can identify the exact date by an examination
of the Office Account cash book of Zaiwalla & Co. The payment
would be recorded in the "SZ drawings" column as £2,000
"cash". Mr Zaiwalla never drew such a sum of cash for
his own use. Mr Zaiwalla told me that Mr Vaz demanded the money
because he was "in trouble with his bank manager". If
this is true you would be able to link the payment of £2,000
from Zaiwalla & Co to a deposit in Mr Vaz's bank account at
the same time if you were to examine Mr Vaz's bank statements.
I have a vivid recollection of a young man standing
in the reception of our offices who had come from Mr Vaz's office
to collect the money. I believe that his name was "Mark".
I was told that Mr Vaz had insisted on cash. I subsequently tried
to get Mr Zaiwalla to agree not to pay any more money to Mr Vaz.
It was well known that Mr Vaz preyed on middle ranking Asian businessmen
for money on one pretext or another and I felt that we should
not be treated in this way. There is a tradition in India of making
payments to politicians—it is simply expected. I felt that
as professional people we were above this sort of thing. I also
found it insulting that he demanded cash as he did not want his
name associated publicly with payments from Mr Zaiwalla. Subsequently
Mr Zaiwalla told me that Mr Vaz had asked him for money again
and he had refused at my insistence. Mr Zaiwalla told me on several
occasions that Mr Vaz had remonstrated with him telling him that
he should not have told me about the payment of £2,000.
I have a vivid recollection of all these matters
and am disgusted that Mr Vaz has denied the truth of the payment
of £2,000 in the press. I repeat the suggestion in my letter
dated 8 February 2000 that I should take a polygraph test on the
statements above and would be grateful if you will make the necessary
arrangements. I have told the truth in these matters in every
detail and I believe that polygraph tests have now reached the
level of accuracy that it can be scientifically proved that I
am telling the truth. I would also challenge Mr Vaz to take a
polygraph test arranged by you and we will quickly find out who
is telling the truth.
It has caused me particular distress that Mr
Vaz claimed to The Law Society's Gazette that I had made
the complaint against him "maliciously". They published
an article containing this claim and have subsequently been forced
to publish a correction and an apology and The Law Society has
paid me damages for libel in respect of the article.
TAX INVESTIGATION
AND REFERENCE
FOR A
PEERAGE
Mr Zaiwalla had invested US$15 million, which
he had received as his share of the commission paid by the Bofors
company of Sweden for a substantial armaments contract with the
Government of India in the 1980s, in a company which he had set
up called Delta Shipping. Three bulk carriers were purchased in
order to launder the money called Nile Delta, Ganges Delta and
Avon Delta. Mr Zaiwalla subsequently got into a bitter dispute
with the manager of the vessels and they were sold and Mr Zaiwalla
acquired a country estate with the proceeds at Kingston Paddocks,
Little Preston, Sussex, which he nicknamed "Bofors House".
None of this income had been declared by Mr Zaiwalla to the Inland
Revenue and they became suspicious and began an investigation.
The investigation continues today and has been transferred to
Special Compliance Office who deal with the worse cases of taxpayer
fraud. Mr Zaiwalla told me that he estimated that he owed millions
of pounds in income tax which greatly exceeded his net worth.
The money which Mr Zaiwalla received as his
share of the Bofors gun commission was the start of his dealings
with politicians and is the real root of why politicians should
be making their way to the office of an obscure Asian solicitor
for some cash. Previously he had been a fairly ordinary solicitor
with a small office over a bank in Chancery Lane employing two
other solicitors. After he got his share of the Bofors gun commission
he suddenly had more money that he had ever imagined possible
and developed very grandiose ideas about himself. He was desperate
for recognition which basically involved trying to meet politicians
at fund raising events and trying to buy a peerage. He began spending
over £100,000 a year in attending fund raising events, often
taking a large table and placing an advert in the programme, and
giving money to politicians. He would often buy useless items
at Conservative Party fund raising events in the charity auction
just to try to get noticed. He once bought a cricket bat for £5,000
because a politician had signed it and also a small piece of embroidery
by a Cabinet Minister's wife and many other useless items.
It became well known by politicians that Mr
Zaiwalla did manage to meet that he would like to give them some
money and those that did not want to take money themselves would
often arrange for him to contribute to their constituency parties.
The tax investigation was a matter of very great
anxiety and concern to Mr Zaiwalla as it became clear that he
had systematically defrauded the Inland Revenue out of millions
of pounds of income tax in relation to the affairs of his shipping
company and the benefits he had received from it. He had also
taken other commissions and not declared them on his tax return
and had evaded tax on them. In early 1997, Mr Zaiwalla told me
that he was going to ask Mr Vaz for help to try to put pressure
on the Inland Revenue to accept a token settlement. He told me
that he had spoken to Mr Vaz at length about this and Mr Vaz had
agreed to help. At that time the tax investigation was being conducted
by the district inspector though it is currently being conducted
by Special Compliance Office who deal with the worse cases of
taxpayer fraud.
At about the same time he asked Mr Vaz to give
him a reference for a peerage. He told me that Mr Vaz had also
agreed to do this and I believe that I saw a copy of a letter
which Mr Vaz had written to John Major asking that Mr Zaiwalla
should be honoured. Mr Vaz also told me that he had sent such
a reference though was almost hysterical with laughter at the
suggestion of Mr Zaiwalla getting an honour of any description
saying that people like Mr Zaiwalla did not get honours and he
must be "mad" to be persisting in asking virtually everyone
he met to give him a reference for a peerage. Mr Vaz made it very
clear to me that there was no question of Mr Zaiwalla getting
any honour of any description. I do not believe that Mr Vaz should
have given a glowing reference for Mr Zaiwalla in response to
his request for a peerage when he honestly believed that Mr Zaiwalla
was completely unsuitable for any honour whatsoever.
4 April 2000
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