Examination of Witnesses (Questions 340-359)
ASSISTANT COMMISSIONER
JOHN YATES,
MS CARMEN
DOWD AND
MR DAVID
PERRY QC
23 OCTOBER 2007
Q340 David Heyes: Presumably when
you report to the police authority you will give chapter and verse
on this question of costs?
Assistant Commissioner Yates:
Absolutely. It would be part of their statutory oversight that
they would want to understand how the money was spent.
Q341 David Heyes: So at the end of
it, was it good value for money?
Assistant Commissioner Yates:
That is for others to judge. I think you, Chairman, described
this as a disaster for the police, I take a wholly different view.
I think a disaster for the police would be for me to be before
you today having done a less than thorough job. I think a disaster
for the police would be for me to have my operational independence
compromised, so I do not think it is a disaster at all.
Q342 Chairman: In retrospect though,
going back to March of last year, do you think the public interest
might have been better served by you saying, "Actually this
inquiry is a job for Parliament to get itself stuck into and not
a job for policemen" in the absence of the kind of evidence
we have talked about which would have provided the basis for any
kind of charge?
Assistant Commissioner Yates:
There is the law and the statute and this is a crime, and it is
a crime as I described earlier at the more serious end in terms
of involvement of political funding of parties and involving potentially
buying a vote in the legislative chamber, so I think it is absolutely
proper for the police to conduct these inquiries, absolutely proper
that we should have done it thoroughly, absolutely proper that
we should have provided the analysis of the evidence to the Crown
Prosecution Service and for them to do their part and come to
a decision.
Q343 Chairman: When you came to us
last March and said, "If you take evidence from these people
here it might possibly prejudice what we do and the investigation
and any subsequent charges", of course we listened to that
and we followed your advice and did not because we thought it
would prejudice your investigations, the perverse outcome is that
what you have done has prejudiced our investigations because it
now turns out that we are disabled from doing things we would
have done at that point. Is that not a very funny outcome?
Assistant Commissioner Yates:
It does appear to be, does it not, but we did not know then what
we know now, did we? As I say, we performed our quite proper,
statutory duty of undertaking what was a complex, sensitive investigation,
we did it thoroughly, we did it properly and you can have confidence
in the outcome.
Q344 Paul Flynn: You have said a
number of times when you are going through the investigation that
you never know what you are going to find, but does this not indicate
that you were on a fishing expedition, waiting for the Crown Jewels
to turn up?
Assistant Commissioner Yates:
Absolutely not, absolutely not. We followed lines of inquiry,
we saw witnesses, we followed lines of inquiry and some very interesting
lines of inquiry developed, as we discussed.
Q345 Paul Flynn: I think we all understand
the difficulties both of you are under, have you felt at any point
that either of you were under political pressure?
Miss Dowd: No.
Assistant Commissioner Yates:
On my left I hear no. From here, of course there was political
pressure, but did it make any difference? It would have been inhuman
of me not to have felt pressure around the speculation and the
amount of commentary and the pressure of this Committee—most
unusual—of course there was pressure, but I have assured
you before, and I assure you again, it made absolutely no difference
to the operational decision-making in this inquiry.
Q346 Paul Flynn: You said a part
of the pressure was the line taken by Sir Ken MacDonald, the Director
of Public Prosecutions who ruled himself out of any involvement
in any decision and any future decision which might be taken because
he had an involvement—a very tenuous involvement—with
the wife of the witness, yet the Attorney General refused to rule
himself out. Was that something that you would be concerned about
and something which should be addressed in future investigations?
Assistant Commissioner Yates:
I think that is a matter for the DPP and the Attorney to consider,
I do not think it is one for me to comment on.
Q347 Mr Walker: Assistant Commissioner,
this whole year of your life must have been like chewing a very
large and angry mouthful of wasps, I imagine it was possibly one
of the worst year and a halves you have ever had and I take it
absolutely at face value that you are a committed public servant.
I have two very brief questions. When you interviewed the Prime
Minister, I believe he was interviewed as a witness and not under
caution, why was he interviewed as a witness whereas if peerages
were being handed out it would have been him who was signing them
off, so then technically he could have been interviewed under
caution?
Assistant Commissioner Yates:
You are taking me into the evidence which I do not think is appropriate.
Q348 Mr Walker: Secondly, before
you close your eyes at night to go to sleep, do you think your
involvement in this case has advanced your career, hindered your
career or had absolutely no bearing on your career? I hope it
has not hindered your career. A personal question to you, and
you may not want to answer it, what do you feel?
Assistant Commissioner Yates:
I think that is for others to judge actually.
Q349 Mr Prentice: On the same kind
of theme, given the experience you have had over the past 16,
17 months, does it make you more likely or less likely to follow
up a complaint which may be made in future? Let us say Tony Blair
is going to bring forward his resignation honours list—
Assistant Commissioner Yates:
I think it probably makes me less likely, but I do not think it
would make the police less likely to respond to well-founded allegations
which are made.
Q350 Mr Prentice: This is a question
for all three of you, I suppose. How would you define a commercial
loan?
Assistant Commissioner Yates:
Good point. I think that is a very important point actually, the
absence of a definition. As we have said earlier, the fact you
lend money should be no debarring from receiving an honour, but
people want to know exactly how they should lend it and under
what conditions. At the moment, there is no definition of a commercial
loan, which I know of, the Electoral Commission cannot provide
me with one and I think it is a big gap in the law.
Q351 Mr Prentice: Does anyone else
want to comment?
Mr Perry: I personally would think
whether a loan is commercial or not is going to be fact-sensitive
and there are going to be a number of considerations to look at.
If the parties act in accordance with commonly accepted commercial
practice and in good faith with a profitable return to the lender,
I would have thought that would be something which would probably
be commercial.
Mr Prentice: Yes.
Q352 Paul Rowen: Would that be standard
base rate? Have you got a figure? Could you compare it with other
commercial loans?
Mr Perry: I think it is going
to be dependent on the particular circumstances of any case. Take
a family, for example, who may enter into a family arrangement
but it would nevertheless be commercial even though it was not—
Q353 Paul Rowen: With respect, that
is not a commercial loan, that is a family loan. A commercial
loan is if I go to a HBOS Bank. We had the Chairman of the bank
here the other week and he said in no way could a loan at, say,
2% above base rate be deemed a commercial loan. What would be
your view?
Mr Perry: That is why I think
it is fact-sensitive and it is also something upon which reasonable
people may differ as to whether a particular loan is commercial.
Q354 Chairman: I think what we are
asking you is, why in this particular area did you fail to engage
the law? Because again in the CPS retrospective statement you
repeat the fact that "The relevant offence under the 2000
Act is committed by a failure to report the receipt of a loan
made other than on commercial terms." That seems fairly straightforward.
When we had Lord Stevenson, the Chairman of HoLAC in front of
us a week or so ago, he said he was shocked to discover what was
going on in this area and he said to me, "You try coming
to my bank and getting an unsecured loan with interest rolled
up at one or two points over base and I would have to disappoint
you." If the chairman of HBOS, Lord Stevenson, can worked
out pretty quickly what is a commercial loan and what is not,
and if the law is pretty straightforward, why could you not find
a way in there?
Miss Dowd: I think that is slightly
unfair in that the Electoral Commission have not been in a position
to define what a commercial loan might look like. I think Mr Perry
is right to say it is fact-sensitive and there might well be a
number of factors you take into consideration. If you look further
on in the explanatory statement what we have said is we cannot
exclude the possibility that they were commercial loans, so there
were factors we had to take into consideration and that is the
conclusion we made in relation to them.
Q355 Mr Prentice: What did the accountants
and the auditors say? Because in paragraph 30 which you have just
referred us to, you say, "The loans were made following receipt
of legal advice."
Miss Dowd: That is right.
Q356 Mr Prentice: The accountants
and number-crunchers, auditors, know about these things.
Miss Dowd: I know, but you know
what I am going to say, don't you?
Q357 Mr Prentice: No.
Miss Dowd: It is an area I cannot
stray into, I am afraid.
Paul Flynn: It is a vast area; it is
a sub-continent of an area.
Q358 Kelvin Hopkins: It seems to
me rather odd that the Electoral Commission should be put in this
position of having to make a definition. Given the Electoral Commission
is to an extent in the political sphere and has been under a certain
amount of pressure in recent years, one can understand that there
might be a certain nervousness about making a definition, given
where that could lead to. So the whole thing could have foundered
simply because someone was nervous and they did not want to make
a definition because they would then be right in the firing line.
Assistant Commissioner Yates:
I think there is an absence of guidance as well. Without a definition
there should be some guidance to help people.
Q359 Chairman: You have had the great
privilege, Mr Yates, denied to most of us, in fact denied to almost
everybody, of spending a year or so in the bowels of the political
system. I think it is a system which is on the whole pretty clean
but there are some murky corners of it, one of which is the whole
business of honours and peerages and that is where you have been.
We have discovered that because of these issues about evidential
tests and so on, no charges were able to be brought, what I want
to ask you though is, have you discovered there is a trade in
peerages?
Assistant Commissioner Yates:
I think, Chairman, I have done my job, I have followed the evidence,
I have provided that evidence to the CPS and they have made their
decision and I do not think I should comment further than that.
Chairman: You are denying the nation
the opportunity to learn something about its political system.
Mr Walker: We will have to wait for the
book!
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