Memorandum from the Director General of
Resources, 13 January 2011
(II) SUBMISSION BY THE DEPARTMENT OF RESOURCES,
HOUSE OF COMMONS
Case of Mr Harry Cohen
Introduction
1. Thank you for inviting the Department of Resources
to comment on the submission which you have received from Mr Harry
Cohen. In this Memorandum I address three issues: what record
exists of any notification Mr Cohen gave of his circumstances
to the Department; the telephone log of 27 March 2009;
and whether Mr Cohen's circumstances were regarded as exceptional.
Mr Cohen also raises concerns about the pensions advice he was
given. As this is a matter for the Trustees to the Members' Pension
Scheme (the PCPF), I have passed Mr Cohen's submission to the
Secretary to the PCPF for him to respond to you directly.[1]
I offer no comment on whether the penalty imposed on Mr Cohen
was proportionate.
What notification of his circumstances did Mr
Cohen give to the Department?
2. Mr Cohen said in his letter to the Commissioner
of 12 May 2009 that he notified the Department about
his renting out of his Colchester home when he first did so in
2001 (at the time he registered the interest); that he did so
again orally on one or two further occasions; and that he did
so in April 2008. In his submission to you,[2]
he implies that there may have been other occasions when the issue
was mentioned to the Department. I shall return later to the April
2008 occasion. As far as the earlier alleged notifications are
concerned, I can confirm that we have again thoroughly checked
our records and can find no records of such discussions.
3. As far as any notification in 2001 is concerned,
there were then no rules on what could properly constitute a main
home, and few Members consulted the Department for advice on their
main home. However, if advice had been sought, I would be surprised
if any member of staff at the time had advised that a home which
was rented out so that it could not be occupied by the Member
could constitute his or her main home.
4. I am also a little puzzled by Mr Cohen's statement
that the 2001 notification to the Department about the rental
occurred at the same time as the registration of the interest.
Registration of interests does not take place in the Department
of Resources but with officials of a different department and
in a different building. Furthermore, registration normally takes
place after the event to which it relates has occurred (in this
case, presumably after the rental had been received). Any advice
as to whether it would be proper to rent out a main home could
be expected to have been sought before the rental took place.
However I do not know when Mr Cohen rented out his property in
2001, and I do not have access to the records which show the date
on which Mr Cohen registered the interest.[3]
5. The 2003 edition of the Green Book tightened
the rules on main homes. It told Members that the location of
their main home would normally be a matter of fact, and that "your
main home will normally be the one where you spend more nights
than any other". Members were also encouraged to contact
the Department in the case of any doubt. The rule about number
of nights spent was from 2003 a cardinal principle for judging
whether a home was a main home. The rule was well known to all
the staff of the Department who dealt with Members on these issues,
and for this reason I cannot believe that any member of the Department
from 2003 onwards would have believed that he or she could properly
give advice that a home which was consistently let out for substantial
periods could constitute a main home. On the other hand, if a
Member had said that he or she was obliged to rent out a main
home for a short period because of a temporary illness, then I
accept that he or she might have been told that this was acceptable.[4]
6. Mr Cohen was a frequent visitor to the Department.
I gather that his demeanour and conversation were generally informal.
I do not doubt that he mentioned his wife's illnesses and the
problems these posed for him. However, that is very different
from a formal request for advice about renting out a main home.
The Commissioner's conclusions that the mentions Mr Cohen made
of his arrangements were neither sufficiently full nor clear to
constitute a request for advice[5]
are regarded by those who dealt with him as an accurate reflection
of Mr Cohen's way of doing business.
7. Mr Cohen has not suggested that he ever wrote
to the Department for advice or that he sought advice from a senior
official of the Department. It would have been reasonable to
expect him to have done so on a matter such as this where to allow
his claims to continue so clearly involved
a. a substantial departure from the rules which
normally prevailed; and
b. a significant amount of money.
If he relied on oral advice from junior officials,
this was at the very least unwise. I am absolutely confident
that senior officials would have recorded any decision they took.
I accept, however, that this was not the universal practice among
more junior officials. In retrospect I very much regret that
departmental officials were not much more scrupulous in taking
notes and recording precisely the advice they offered.
8. It would be wrong for me not to acknowledge
the possibility that a member of staff in the Department might
wilfully have chosen to advise a Member in a way that did not
conform to the rules but which was perceived as helpful to the
Member. The member of staff to whom Mr Cohen spoke in April 2008
did not recall having spoken to Mr Cohen about his Colchester
rental when first questioned,[6]
but did recall the April 2008 conversation when Mr Cohen identified
him as the person to whom he had spoken. That staff member and
Mr Cohen then recall somewhat different versions of their discussions.
The staff member concerned was subsequently sentenced to nine
months imprisonment for offences of obtaining money by deception
during the course of his employment, and the Department can no
longer rely on his veracity, either in respect of his recollection
of the April 2008 conversation or other matters. It is also possible
that he gave Mr Cohen incorrect or misleading advice at some other
time between 2003 and 2008: he was the member of staff in regular
contact with Mr Cohen identified in the report reproduced as an
Appendix to this Memorandum.[7]
Telephone log of 27 March 2009
9. It is most regrettable that the telephone
log of 27 March 2009 did not come to light in time
for it to be made available to the Commissioner and to the Committee.
An inquiry into the reasons for this was instituted by the Clerk
of the House, and its conclusions are attached as an Appendix.[8]
I have no reason to dissent from these. The Clerk has apologised
to Mr Cohen, and I re-iterate that apology.
10. As to what may be deduced from the telephone
log, I do not think Mr Cohen is correct to argue from his circumstances
that the record of the query (see Mr Cohen's paragraph 15) can
only mean that the query should be interpreted as one about renting
out his main home "some of the time". "He rents
out some his main home" seems to me to be much more likely
to be an orthographical error for "He rents out some of
his main home" rather than an attenuated way of saying "He
rents out his main home some of the time" or "He sometimes
rents out his main home". The member of staff who dealt
with this query was new and inexperienced, and is highly unlikely
to have known about Mr Cohen's personal circumstances and therefore
whether or not it was practicable to rent out part of the Colchester
property.
11. If the query is given its most natural interpretation,
then the answer, rather than being entirely contrary to the cardinal
principle about occupation in the Green Book to which I referred
earlier,[9] makes sense
and accords perfectly with the acceptance that a Member could
rent out part of his or her main home without having an
effect on his or her claim for allowances. The rental income
from Mr Cohen's Colchester home was of no concern to the Department
in as much as its level was irrelevant to his claims for allowances.
By contrast, if a Member rented out part of his or her additional
home, then the allowances paid for that additional home would
be abated and what a Member did with that home therefore did concern
the Department.
12. I do not mean to suggest that Mr Cohen was
purporting to ask for advice about circumstances other than his
own—the telephone log occurred two days before the Mail
on Sunday story appeared, and his request to the Department
is likely to have been occasioned by the journalist's notice of
the story the paper intended to run. I understand that this will
have been a stressful time for Mr Cohen, but I am sure that he
would have been asking about his real circumstances. However,
my own reading of the record is that the departmental official
who dealt with the call misinterpreted the query which had been
made, presuming that it was a query about renting out a part of
a main home. I note that when Mr Cohen again contacted the Department
a few days later on 3 April 2009 about his wife's illness
and his ACA claims, he was advised to put his query in writing.
13. The Director of Strategic Projects tells
me that, if he had seen the telephone log of 29 March
before he wrote to the Commissioner, he would of course have disclosed
it to the Commissioner, and that he would have spoken to the official
who made the log entry. He would also have asked whether this
was evidence of advice having been offered that the Department
was indifferent to what Members did with their main home. But
he does not believe that the existence of that entry would have
affected his conclusion about the rules of the House at the time
of Mr Cohen's claims.
Whether Mr Cohen's circumstances were regarded
by the Department as exceptional
14. In Mr Cohen's view, the circumstances in
which he found himself as a result of his wife's episodic succession
of serious illnesses were not normal and therefore the rule which
the Green Book contained from 2003 onwards that a Member's main
home should normally be the one where he or she spent the most
nights should not apply to him. That this rule should apply in
the "vast majority of cases" was restated in the Fifteenth
Report of the Committee on Standards and Privileges of Session
2007-8.[10] Nevertheless,
both the rule and the Committee's subsequent report imply that
exceptions to the normal rule do exist.
15. The Department was prepared to accept that
the Committee might take the view that Mr Cohen's circumstances
were indeed of this exceptional nature.[11]
It was the judgement of the Commissioner, endorsed by the Committee,
that Mr Cohen did not in fact occupy the Colchester property to
the extent necessary for it to constitute a main home for the
purposes of the allowances between April 2004 and August 2008.
Having now studied the facts which have come to light in this
case, the Department has no reason to disagree with that conclusion.
16. Nevertheless, (if, as I think is reasonable,
the assumption is made that Mr Cohen did not in fact fully disclose
all the facts about his letting arrangements to the Department)
it is important to note that the Department did not come to a
contemporaneous judgement (or at the very least, a contemporaneous
judgement based on full knowledge) about whether Mr Cohen's circumstances
were exceptional and therefore whether his Colchester home could
be regarded as his main home during the periods it was let out.
17. As part of his inquiry, the Commissioner
asked the Department to make a retrospective judgement about Mr
Cohen's arrangements. The Department first expressed the view
that it was "difficult to understand how a property which
was rented out could constitute a Member's main home".[12]
When pressed by the Commissioner, the Department expressed the
view that there was a presumption that a Member needed to be able
to occupy a home for it to qualify either as a main or an additional
home for the purposes of allowances (though there were exceptions
such as inability to occupy because of circumstances such as flood
or fire).[13]
18. I therefore partially agree with Mr Cohen's
argument that what the Department said about the rules in response
to the Commissioner was a statement about how officials ought
to have interpreted the rules. The difference between my view
and that of Mr Cohen is as to whether officials were asked for
an interpretation at the time based on a full disclosure of the
facts and, if so, if they interpreted the rules in a different
way from the way they ought to have done.
Conclusion
19. I hope this commentary is useful. I am very
happy to assist your inquiry in any way I can.
APPENDIX
INQUIRY FOR THE CLERK OF THE HOUSE
REPORT BY THE DIRECTOR OF SERVICE DELIVERY,
DIS, 9 July 2009
Complaint from Mr Harry Cohen
1. You asked me to conduct an inquiry into a
complaint from Mr Harry Cohen about the provision of information
to the Parliamentary Commissioner for Standards in connection
with his case, which was reported on in the Seventh Report from
the Committee on Standards and Privileges 2009-10 (HC 310). In
a letter to you dated 4 June, Mr Cohen complains that the Director
of Strategic Projects, was negligent and incompetent, resulting
in inaccurate information being provided to the Commissioner for
Standards.
2. I should say at the outset that, having worked
in the House for nearly 34 years, I know some—but not many—of
the staff in the Department of Resources, certain of whom I have
learned were involved in this particular chain of events. I have
never myself worked in that department and have only general 'lay'
knowledge of the processes by which it works. I assure you, and
Mr Cohen, that I have not allowed any personal considerations
or prior knowledge to affect my investigation of Mr Cohen's complaint.
Background
3. Mr Cohen makes two specific complaints, which
I deal with separately below.
- That the Director of Strategic
Projects was not the right person to correspond with the Commissioner.
Mr Cohen notes that he is not on the Department of Resources
letter heading as an officer with practical responsibility for
the operations of the department and its relations with Members
and says that he was "arrogant to assume this role",
with the result that—in Mr Cohen's case—he presented
"a theoretical attitude of what the Department's position
was, not what it actually was".
- That the Director of Strategic Projects omitted
from his correspondence with the Commissioner an important piece
of evidence and thereby misrepresented the Department's true position
as regards Mr Cohen's Additional Costs Allowance claim. The evidence
referred to here is an EAT (Enquiries and Advice Team) log dated
27 March 2009 which came to light when the police asked to look
at Mr Cohen's expenses records.
The Director of Strategic Projects's
status
4. In respect of the first complaint, I have
spoken to both the Director of Strategic Projects and to the Director
General, Resources, who heads that department. The Director of
Strategic Projects is a senior and very experienced official of
the Department of Resources but is not listed on the department's
headed notepaper because he is not part of the departmental management
team. He was asked by the Director General to take some of the
workload of the Director of Operations during the extremely busy
period last year when the department was dealing with large numbers
of cases and questions and took the lead on all cases involving
the Commissioner's investigations after the Director of Operations
left the House Service, and all ACA cases prior to that. The
Director General, Resources, told me that he had full confidence
in the Director of Strategic Projects carrying out this work and
that the Director of Strategic Projects is "a rational and
sensible interlocutor." I therefore conclude that it was
legitimate for the Director of Strategic Projects to correspond
with the Parliamentary Commissioner on these matters and that
there was no 'arrogance' on his part in assuming the role. Indeed
he did not assume the role—he was asked to carry it out
by the head of the department, who is a member of the House's
Management Board.
The missing EAT log
5. The core of Mr Cohen's complaint is the second
issue noted above: Mr Cohen says that "my complaint is totally
focussed on the omission and failure to refer to the relevant
EAT log." I have looked carefully into this. The background
is that, on 9 June 2009, the Commissioner wrote to the Director
of Operations and said "It would also be useful to know about
any discussions Mr Cohen had with your staff about these matters
in the light of his comment in his letter of 12 May that he contacted
you about his arrangements."[14]
The substantive reply to this was from the Director of Strategic
Projects in a letter dated 14 July,[15]
in which he said
Mr Cohen states that he had a number of conversations
about his arrangements with staff in this Department over a period
of time, the last being during 2008; he also states that he was
told more recently that this arrangement was no longer acceptable.
Mr Cohen is a frequent visitor to the Department
of Resources where he discusses many aspects of his allowances
with a variety of staff, mainly those in the Enquiry & Advice
Team (EAT). Staff have been asked if they recall any conversations
about Mr Cohen's altered arrangements and the rental of his Colchester
home; none of them recall any such discussion. We have no written
correspondence which formalises such an agreement. It would be
helpful to know who Mr Cohen spoke to on these occasions.
The EAT log of telephone calls does show that Mr
Cohen spoke to one of that team on 3 April 2009 concerning his
ACA designation and his wife's ill health. The log is not a complete
record of the conversation as there is limited space available
for comment; however it is clear that Mr Cohen was advised to
detail his arrangement in a letter to the Department. No letter
has been received.
6. As Mr Cohen points out, the EAT log of 27
March was not referred to in this reply.
7. I have spoken to several Department of Resources
staff about how the department responded to the Commissioner's
request to know about any discussions the department had had with
Mr Cohen in the relevant period. It should be noted that this
was a year or more ago, and that all staff were very busy indeed,
over a sustained period. One of the staff I spoke to described
it as "absolutely manic" because there was a limited
number of staff who were sufficiently knowledgeable to deal with
all the demands that were being made of them. What I have learned
is based on their memories and therefore cannot be assumed to
be the complete story; nonetheless I believe that the main elements
are as described in the following paragraphs, though some of the
finer detail may not be precisely as things were at the time.
8. The Director of Strategic Projects delegated
the task of finding out whether there had been discussions with
Mr Cohen to [staff member 1]. He has, however, confirmed to me
that he takes full responsibility for the actions that were taken
and for the statements he had made in his letters to the Commissioner.
[Staff member 1] is a very experienced official in the department.
She carried out the task in two main ways. First, she asked a
member of the team, whom she knew was a regular contact of Mr
Cohen's, whether he could remember speaking to Mr Cohen in the
period in question; he said that he did not recall any questions
on the subject of his ACA claim. She also asked three or four
other staff a similar question; none of them could recall any
such contact. She did not, however, ask all staff who might have
had such a conversation with Mr Cohen; one, she recalls, was on
sick leave at the time and she does not think that she spoke to
some others. I asked her specifically whether she spoke to [staff
member 2] who had recorded the EAT log of 27 March. She thought
that she had probably not done so. That impression has been confirmed
by [staff member 2] who does not remember [staff member 1] asking
her if she had had any conversations with Mr Cohen.
9. As well as asking various members of staff,
[staff member 1] also asked for a search of the EAT log to be
carried out, because any conversations that broadly provided advice
should have been recorded there. Not all calls are recorded on
the EAT log; just those where advice is provided. The ability
to search the EAT database is limited to the EAT team and their
manager, so [staff member 1] asked [staff member 3], one of the
EAT team, to do this for her. He did this under her supervision.
10. Searching on the EAT log brings up results
in reverse chronological order, and displays the records one at
a time. In other words, there is not a single display which shows
a number of EAT records. When [staff member 3] searched the database,
he found the record of the call from Mr Cohen on 3 April that
was referred to in the Director of Strategic Projects's letter
of 14 July—a call which [staff member 3] remembered. Precisely
why the search did not then continue is now unclear in the memories
of both [staff member 1] and [staff member 3]—it may have
been that finding the 3 April record somehow jogged their memories
and was seen to be sufficient—but it is clear that the search
that was carried out was not an exhaustive search for any record
of contact with Mr Cohen over the period in question.
11. I am satisfied that the EAT log in question
was not deliberately suppressed. Indeed, I have been assured
that, had it been found, it would have been referred to in the
Director of Strategic Projects's correspondence with the Commissioner
for Standards, most probably with a rider that the record was
not consistent with departmental policy and observing that the
log was ambiguous—it is unclear whether "he rents out
some his main home" means "he rents out some of his
main home" or "he rents out his main home some of the
time." I asked [staff member 2], who took the call, about
this. She only vaguely remembers the call and does not remember
precisely what the question was. She had been in the department
for only a short time on 27 March and would have asked the advice
of a more experienced member of staff at a nearby desk before
replying to the caller phoning on behalf of Mr Cohen.
Conclusion and recommendation
12. In respect of Mr Cohen's second, and central,
complaint, I conclude that, while some attempts were made to respond
to the Commissioner's request to know about any discussions between
Mr Cohen and Department of Resources staff, these were not comprehensive.
Not all the staff who might have had such a conversation were
spoken to, and the search of the EAT database, which should have
produced the record in question, was not thorough. It is not
for me to judge how material this log is to the Commissioner's
investigation of Mr Cohen's case, but I recommend that (i)
the EAT record of 27 March should now be drawn to the attention
of the Parliamentary Commissioner for Standards and to the Committee
on Standards and Privileges; and (ii) an apology should be made
to Mr Cohen.
1 The Secretary is [***].He was formerly Director of
Operations in the Department, but is no longer a House employee,
though he remains Secretary of the PCPF. Back
2
Paras 18 and 19 Back
3
All that can be deduced from the published record is that this
occurred between the date of the 2001 election and November 2001.I
understand that the Registrar may have more precise information. Back
4
See the Director of Strategic Projects's letter to the Commissioner
of 24 September 2009. Back
5
Para 164 Back
6
The Director of Strategic Projects did not "deny" that
this official had spoken to Mr Cohen as Mr Cohen suggests in para
21 of his memorandum to you.The official denied that he had spoken
to Mr Cohen until prompted by Mr Cohen's identification of him Back
7
See para 9 below, and para 8 of the Appendix. Back
8
Mr Cohen has not pursued with you the issue of the Director of
Strategic Projects's suitability for communicating with the Commissioner,
but that is included for completeness. Back
9
See para 5 above Back
10
HC 1127 para 6.This report is quoted selectively in Mr Cohen's
submission to you. Back
11
See final sentence of Director of Strategic Projects's letter
to the Commissioner of 24 September 2009. Back
12
Director of Strategic Projects's letter to the Commissioner of
14 July 2009. Back
13
Director of Strategic Projects's letter to the Commissioner of
22 July 2009. Back
14
Seventh Report of Standards and Privileges Committee 2009-10,
HC 310, Written Evidence (WE) 16. Back
15
WE 18. Back
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