Written evidence received by the Parliamentary
Commissioner for Standards
1. Letter
to the Commissioner from Mr Daniel Ellis, 6 November 2011
I am writing to draw your attention to the Member
of Parliament for Colchester, Bob Russell and what on the face
of it appears to be a serious breach of the rules (The Green Book)
relating to the expenses of Elected Members.
I believe that the evidence enclosed shows that Bob
Russell was the largest shareholder (30% of overall shareholding)
in Magdalen Hall Company Limited. Other shareholders include several
Liberal Democrat Colchester Borough Councillors, one of whom is
Bob Russell's sister in law.
Further, it is my understanding that at least two
of the Directors are current Lib Dem Colchester Borough Councillors,
one retired Lib Dem Colchester Borough Councillor and one Director
that appears to be Bob Russell's Parliamentary Secretary, [name].
It is my understanding from the evidence supplied
in relation to Mr Russell's Incidental Expenses Provision claims,
that Mr Russell claimed circa £780 per calendar month for
renting his constituency office, Magdalen Hall.
The original lease indicates that the building was
sublet through Colchester Liberal Democrats but the more recent
IEP claims indicate that the rent was paid directly to Magdalen
Hall Company Limited.[154]
It is my reading of the above that Mr Russell
used public money to rent an office, directly or indirectly from
a company that he, his sister in law, Lib Dem councillors and
others own.
All versions of the Green Book are clear on the rules
relating to constituency offices. They state that a Member of
Parliament must avoid any arrangement which may give rise to an
accusation that they or someone close to them is obtaining an
element of profit from public funds. They further state that:
"The allowances must not be used to meet the
costs of leasing accommodation from:
· Yourself
· A close business associate or any organisation
in which you, or a partner, or a family member have an interest
· A partner or family member (which includes
relatives by blood or marriage)
I believe Mr Russell transferred all of his shares
in the Company on 5th June 2010 and the arrangement was then printed
in the Colchester Gazette on 29th June 2010.[155]
I further believe that whether or not Mr Russell
profited from the transfer of the shares is irrelevant as the
arrangement has been in place for some time. Rules are in place
for a reason and I believe the Green Book is clear on this issue
and on that basis, I find it difficult to see how Mr Russell has
not broken the rules.
Given the fact that this arrangement has been in
place for some time and the very large sum of public money involved,
I would like to formally request an investigation and should you
share my view that the rules have been broken, then appropriate
action is taken. For your information I have also sent a version
of this letter to the IPSA.
Should you have any questions, please do not hesitate
to contact me.
November 2011
2. Enclosure
to Mr Daniel Ellis's letter of 6 November 2011: Companies House
Annual Return for the Magdalen Hall Company Limited, 2010

Shareholding: 8
10 ordinary shares held as at 10/01/2010
Name: [Sir Bob Russell's sister-in-law]
Shareholding: 23
500 ordinary shares held as at 10/01/2010
Name: Robert Edward Russell
3. Enclosure
to Mr Daniel Ellis's letter of 6 November 2011: Companies House
Annual Return for the Magdalen Hall Company Limited, 2011

Shareholding: 8
10 ordinary shares held as at 2011-01-10
Name: [Sir Bob Russell's sister-in-law]
Shareholding: 23
0 ordinary shares held as at 2011-01-10
500 shares transferred on 2010-06-05
Name: Robert Edward Russell
4. Enclosure
to Mr Daniel Ellis's letter of 6 November 2011: Articles of Association
of Magdalen Hall Company Limited
MAGDALEN HALL COMPANY LIMITED
This updated copy of the Articles of Association
of the Company incorporates the amendments made by special resolutions
passed on 29 July 2005 and 23 July 2011
The Companies Act 1985 (as amended by The Companies
Act 1988)
PRIVATE COMPANY LIMITED BY SHARES
ARTICLES OF ASSOCIATION OF MAGDALEN HALL COMPANY
LIMITED
[Material not relevant to the inquiry]
Private company
4 The Company is a private limited company within
the meaning of the Companies Act 1985 and accordingly no shares
or debentures of the Company shall be offered to the public
Shares
5 (a) Shares which are comprised in the authorised
share capital with which the Company is incorporated shall be
under the control of the directors who may (subject to paragraph
(d) below) allot, grant options over or otherwise dispose of the
same only to such persons and/or organisations as identified in
Article 8 below
(b) After the first allotment of shares by the directors
any further shares proposed to be issued shall first be offered
to the Colchester Liberal Democrat Party ("Lib Dem Party")
The offer shall be made by notice specifying the number of shares
offered, and limiting a period (not being less than 14 days) within
which the offer, if not accepted, will be deemed to be declined
(c) If the Lib Dem Party decline the offer, such
further shares proposed to be issued shall then be offered to
the members of the Company in proportion as nearly as may be to
the number of the existing shares held by them respectively unless
the Company shall by special resolution otherwise direct. The
offer shall be made by notice specifying the number of shares
offered and limiting a period (not being less than 14 days) within
which the offer, if not accepted, will be deemed to be declined
After the expiration of that period, those shares so deemed to
be declined shall be offered to the persons who have within the
said period accepted all the shares offered to them and to persons
who are members of the Lib Dem Party ("the CLD members")
and unless the Company shall by special resolution otherwise direct,
such further offer shall be made in like terms and in the same
manner and limited by a like period as the original offer
Any shares not accepted pursuant to such offer or
further offer as aforesaid or not capable of being offered as
aforesaid except by way of fractions and any shares released from
the provisions of this Article by such special resolution as aforesaid
shall be under the control of the directors, who may (subject
to paragraph (d) and Article 8 below) allot, grant options over
or otherwise dispose of the same to such persons, on such terms,
and in such manner as they think fit, provided that, in the case
of shares not accepted as aforesaid, such shares shall not be
disposed of on terms which are more favourable to the subscribers
therefore than on the terms on which they were offered to the
members of the Company
(d) In accordance with Section 91of the Companies
Act 1985 Sections 89(1) and 90 of the said Act shall not apply
to the Company
(e) The directors are generally and unconditionally
authorised for the purposes of Section 80 of the Companies Act
1985 to exercise any power of the Company to allot and grant rights
to subscribe for or convert securities into shares of the company
up to the amount of the authorised share capital with which the
Company is incorporated at any time or times during the period
of five years from the date of incorporation and the directors
may, after that period, allot any shares or grant any such rights
under this authority in pursuance of an offer or agreement so
to do made by the Company within that period. The authority hereby
given may at any time (subject to the said Section 80) be renewed,
revoked or varied by ordinary resolution
6 The lien conferred by Regulation 8 in Table
A shall attach also to fully paid up shares
Regulation 8 in Table A shall be modified accordingly
7 The liability of any member in default of a
call shall be increased by the addition at the end of the first
sentence of Regulation 18 in Table A of the words 'and all expenses
that may have been Incurred by the Company by reason of such non-payment'
Transfer of shares
8 The right to transfer shares in the Company
shall be subject to the following restrictions
(a) Any shareholder ("the proposing transferor")
proposing to transfer any shares shall give a notice in writing
("the transfer notice") to the Company that he wishes
to transfer the same at a price to be agreed with a prospective
purchaser or at their fair value. The transfer notice shall constitute
the Company the agent of the proposing transferor for the sale
of the shares comprised in the transfer notice The Company shall
offer the shares first to the Lib Dem Party The offer shall specify
the number of shares offered and limit a period (not less than
14 days) within which the offer, if not accepted, will be deemed
to be declined If the Lib Dem Party declines to purchase the shares
the Company shall offer the shares secondly to the members of
the Company and to the CLD members If after 4 weeks (or such longer
period as the directors consider appropriate) no person has purchased
the shares, the Company shall offer the shares to any friend and
supporter of the Lib. Dem party, provided that such friend and
supporter is acceptable to the directors of the Company. In every
sale the sale price shall be determined in accordance with paragraph
(e) of this article Except under paragraph (e) of this article
a transfer notice once received by the Company shall not be revocable
without the prior consent of the Directors The Company will not
accept transfers to any person, company or organisation other
than under the provisions of this paragraph or under the provisions
of Article 9 or 10
(b) The Company shall inform the proposing transferor
of the name and address of the persons who have offered to purchase
the shares and of the price offered Subject to paragraph (e) of
this article, the proposing transferor is responsible for agreeing
the price for each share with the prospective purchaser(s) In
the event that the proposing transferor and a prospective purchaser
have agreed a price for the shares, the proposing transferor shall
be bound upon payment of the agreed price to transfer those shares
to such prospective purchaser
(c) In a case where the price has been agreed
between the proposing transferor and the
purchaser the purchaser shall provide appropriate
instruments of transfer for execution by the proposing transferor
In such a case the purchase shall be completed at a time and place
to be appointed by the Company not being more than 8 weeks after
the date on which the proposing transferor was informed of the
names and addresses of the prospective purchasers in accordance
with the provisions of paragraph (b) of this article In the case
where the fair value has to be ascertained in accordance with
paragraph (e) the purchase shall be completed at a time and a
place to be appointed by the Company not being more than 4 weeks
after the price has been so ascertained For the purpose of determining
the right to any distribution by the Company the proposing transferor
shall be deemed to have sold such shares on the date of completion
of the purchase
(d) If the proposing transferor, after having
become bound to transfer any shares to a purchaser or prospective
purchaser, fails to do so, the Directors may authorise some person
to sign an instrument of transfer on behalf of the proposing transferor
in favour of the purchaser or prospective purchaser and the Company
may receive the purchase money and shall, on receipt of the purchase
money, cause the name of the purchaser or prospective purchaser
(as applicable) to be entered in the register as the holder of
the shares and shall hold the purchase money on trust for the
proposing transferor The receipt of the Company for the purchase
money shall be a good discharge to the purchaser or prospective
purchaser, who shall not be bound to see to its application, and
after his name has been entered into the register the validity
of the proceedings shall not be questioned by any person
(e) After receipt by the proposing transferor
of a notice given by the Company under paragraph (0) of this article
the proposing transferor shall use his best endeavours to agree
with the prospective purchaser the price for each share but, in
the event of failure to agree within 4 weeks of receipt by the
proposing transferor of such notice given by the Company, then
the fair value for such shares shall be determined by the auditors
for the time being of the company or (if the proposing transferor
shall require) by some other chartered accountant to be nominated
by the President for the time being of the Institute of Chartered
Accountants in England and Wales who shall act as an expert and
not as an arbitrator, and whose determination as to the fair value
of the shares which the proposing transferor wishes to sell shall
be conclusive, and such fair value shall be the price payable
for the shares, and in fixing such price such auditors or chartered
accountant shall have power to determine how the costs of fixing
the fair value of such shares shall be borne.
(f) In the case where the fair value has to be
ascertained in accordance with paragraph (e) then the proposing
transferor shall have the right to revoke his transfer notice
and any prospective purchaser shall have the right to withdraw
his application to purchase and there will be no obligation on
either party to proceed with the transaction unless that party
signifies to the Company his consent to proceed. For this purpose
the proposing transferor or the prospective purchaser shall be
deemed to have so signified his consent if he does not, within
2 weeks of being notified by the Company of the price so determined,
inform the Company in writing that he no longer desires to sell
or purchase the shares as the case may be
(g) The Company may require a prospective vendor
to pay to the Company a fee as a contribution towards the costs
reasonably incurred or to be incurred of circulating shareholders
and CLD members with details of the proposed sale
Gifts of shares
9 A member who desires to transfer some or all of
his shares to another person as a gift shall give notice to the
Company in writing, stating the number of shares to be transferred
and the name and address of the intended transferee The directors
may refuse to register a transfer to a person whom they consider
to be unsuitable. The directors shall appoint a sub-committee
of three directors to consider the acceptability of the intended
transferee If the sub-committee so decides, the Company shall
inform the transferor and intended transferee that it will refuse
to register the transfer The transferor or the intended transferee
may appeal against the refusal and in that case the appeal shall
be determined by the members at the next annual general meeting
of the Company The directors who formed the sub-committee may
speak but not vote on any motion at the annual general meeting
concerning this appeal
Estates of deceased persons
10 If the personal representatives of a deceased
member wish to transfer some or all of the shares previously held
by the deceased, they shall give notice in writing of their intention
to the Company and all the provisions of article 9 shall apply
to the proposed transfer
Notice of refusal
11 For the purposes of articles 9 and 10 above any
notice of refusal by the Company to register a transfer shall
be sent to the transferor not more than 60 days after the date
of receipt by the Company of the notice of intention to transfer
the shares If the Company purports to issue such a notice after
more than 60 days it shall have no effect
Redeemable shares
12. Subject to the provisions of the Act shares may
be issued which are to be redeemed or are to be liable to be redeemed
at the option of the Company or the holder, provided that the
terms on which and the manner in which any such redeemable shares
shall or may be redeemed shall be specified by special resolution
before the issue thereof Regulation 3 of Table A shall not apply
to the Company
General meetings and resolutions
13 Every notice convening a general meeting shall
comply with the provisions of Section 372(3) of the Companies
Act 1985 as to giving information to members in regard to their
right to appoint proxies, and notices of and other communications
relating to any general meeting which any member is entitled to
receive shall be sent to the directors and to the auditor for
the time being of the Company
14 Four persons entitled to vote upon the business
to be transacted, each being a member or a proxy for a member,
shall be a quorum
Appointment of directors
15 (a) The number of the directors may be determined
by ordinary resolution of the Company but unless and until so
fixed there shall be no maximum number of directors and the minimum
number of directors shall be four Regulation 64 in Table A shall
not apply to the Company Firstly the Chairman of the Colchester
Liberal Democrat Party and secondly the Treasurer of the Lib Dem
Party shall be ex officio Directors of the Company and shall resign
as Directors on leaving such offices, provided that if the Chairman
or Treasurer of the Lib Dem Party does not wish to serve as director
of the Company the Executive of the Lib Dem Party may appoint
a fit and proper person to act in his place The Executive of the
Lib Dem Party shall have the right to revoke the appointment of
such a director at any time and notice shall be given in writmg
to the Company of such appointment or revocation forthwith
(b) All other directors shall be required to retire
by rotation and accordingly Regulations 73 to BO in Table A shall
apply to the Company
16 Any appointment or removal of an alternate director
may be made by letter, cable, telex, telegram, facsimile or radiogram
or in any other manner approved by the directors. Any cable, telex,
telegram, facsimile or radiogram shall be confirmed as soon as
possible by letter but is a valid appointment in the meantime
Accordingly Regulation 68 in Table A shall not apply to the Company
A Director who is also an alternate director shall not be entitled
in the absence of his appointor to a separate vote on behalf of
his appointor in addition to his own vote.
Powers of directors
17 In addition to and without prejudice to the generality
of the powers conferred by Regulation 70 of Table A the directors
may mortgage or charge all the undertaking and property of the
Company including the uncalled capital or any part thereof, and
to issue debentures, debenture stock and other securities whether
outright or as security for any debt, liability or obligation
of the Company or of any third party.
18 A director may not vote as a director in regard
to any contract or arrangement in which he is interested or upon
any matter arising there from and if he shall so vote his vote
shall not be counted and he shall not be reckoned in estimating
a quorum when any such contract or arrangement is under consideration,
and Regulations 94 to 97 in Table A shall be modified accordingly
A director shall not be deemed to have an interest in any matter
solely because he is an officer or member of Colchester Liberal
Democrats or a member of the Company
19. Any director or member of a committee of
the directors may participate in a meeting of the directors or
such committee by means of conference telephone or similar communications
equipment whereby all persons meeting in this manner shall be
deemed to constitute presence in person at such meeting
Single member company
20. If at any time, and for as long as, the company
has a single member all provisions of these Articles shall (in
the absence of any expressed provision to the contrary) apply
with such modification as may be necessary in relation to a company
with a single member
The seal
21 The seal, if any, shall only be used with the
authority of the directors or of a committee of directors The
directors may determine who shall sign any instrument to which
the seal is affixed and unless otherwise so determined it shall
be signed by a director and by the secretary or second director
The obligation under Regulation 6 of Table A relating to the sealing
of share certificates shall apply only if the Company has a seal.
Regulation 101 of Table A shall not apply to the Company
22. Annual Accounts will not be subject to an audit
unless the members in General Meeting request it or the Directors
at any time deem it necessary
5. Enclosure
to Mr Daniel Ellis's letter of 6 November 2011: Details of Mr
Bob Russell MP's claims for his constituency office

Transaction No. 0000001558813
Claim Ref. No. 356356
MP Bob Russell
Financial Year-2008:09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 22/04/2008
Additional Detail OFFICE RENT
Transaction No. 0000001553499
Claim Ref. No. 363021
MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 22/05/2008
Additional Detail OFFICE RENT
Transaction No. 0000001549057
Claim Ref.
No. 368115 MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 19/06/2008
Additional Detail OFFICE RENT
Transaction No. 0000001543756
Claim Ref. No. 374693 MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 23/07/2008
Additional Detail OFFICE RENT
Transaction No. 0000001539932
Claim Ref. No. 379410 MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 20/08/2008
Additional Detail OFFICE RENT
Transaction No. 0000001535400
Claim Ref. No. 384085
MP Bob Russell Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 22/09/2008
Additional Detail OFFICE RENT
Transaction No. 0000001531168
Claim Ref. No. 388004
MP Bob Russell Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 17/10/2008
Additional Detail OFFICE RENT
Transaction No. 0000001525946
Claim Ref. No. 393943
MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE) Expenditure
Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD Amount £780.42
Claim process date 20/11/2008
Additional Detail OFFICE RENT
Transaction No. 0000001520935
Claim Ref. No. 398829
MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD Amount £780.42
Claim process date 18/12/2008
Additional Detail OFFICE RENT
2009
Transaction No. 0000001516707
Claim Ref. No. 404013
MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 21/01/2009
Additional Detail OFFICE RENT
Transaction No. 0000001511717
Claim Ref. No. 409137
MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 20/02/2009
Additional Detail OFFICE RENT
Transaction No. 0000001505905
Claim Ref. No. 414607
MP Bob Russell
Financial Year 2008-09
Allowance Type Office running costs (IEP/AOE)
Expenditure Type General Running Costs
Payee MAGDALEN HALL COMPANY LTD
Amount £780.42
Claim process date 20/03/2009
Additional Detail OFFICE RENT
Transaction No. 0000001591021
Claim Ref. No. 436378
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE)
Expenditure Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 21/07/2009
Additional Detail OFFICE RENT
Transaction No. 0000001591035
Claim Ref. No. 441610
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE) Expenditure
Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 21/08/2009
Additional Detail OFFICE RENT
Transaction No. 0000001591042
Claim Ref. No. 445469
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE) Expenditure
Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 18/09/2009
Additional Detail OFFICE RENT
Transaction No. 0000001612934
Claim Ref. No. 449903
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE) Expenditure
Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 20/10/2009
Additional Detail OFFICE RENT
Transaction No. 0000001612948
Claim Ref. No. 455441
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE) Expenditure
Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 19/11/2009
Additional Detail OFFICE RENT
Transaction No. 0000001612952
Claim Ref. No. 461197
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE) Expenditure
Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 21/12/2009
Additional Detail OFFICE RENT
2010
Transaction No. 0000001376682
Claim Ref. No. 465216
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE)
Expenditure Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 21/01/2010
Additional Detail OFFICE RENT
Transaction No. 0000001369579
Claim Ref. No. 470559
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE)
Expenditure Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 25/02/2010
Additional Detail OFFICE RENT
Transaction No. 0000001363948
Claim Ref. No. 474554
MP Bob Russell
Financial Year 2009-10
Allowance Type Office running costs (IEP/AOE)
Expenditure Type Accommodation costs
Payee MAGDALEN HALL CO
Amount £780.42
Claim process date 19/03/2010
Additional Detail OFFICE RENT
6. Enclosure
to Mr Daniel Ellis's letter of 6 November 2011: Extract from an
article in the Daily Gazette, 29 June 2010
COLCHESTER MP Bob Russell claims £780 expenses
a month to rent an office from a company he has shares in, it
has been revealed.
Newly-released MPs' expenses covering the last eight
months of 2009 reveal for the first time how much politicians
claim to rent offices.
They show Lib Dem Mr Russell claimed £780.42
a month to rent half of Magdalen Hall, his constituency base,
in Wimpole Road.
The taxpayers' money goes to Magdalen Hall Company
Limited, a company in which Mr Russell is the largest shareholder.
The company was formed in 2002 to facilitate the
purchase of the former St Mary Magdalen Church, by Colchester's
Lib Dems, for £100,000.
Party members were called on to make donations to
buy the hall and were given shares in return, with Mr Russell
putting up more of the cash than anyone else.
[Name], a leading Lib Dem, insisted the company had
never paid out any dividends and Mr Russell had never profited
from being a shareholder.
He said: "He has not made a penny out of that
investment. He has not sold any shares."
A leading estate agent has stated the £9,365-a-year
rent is an appropriate market rent.
The money goes towards paying off the mortgage, any
renovation or building work and other expenses.
Some other expenses, including electricity and phone
bills, are claimed separately.
Last year the company had accumulated a surplus of
about £2,000, which it paid corporation tax on and which
has been set aside.
Half of the converted church is used by Colchester
Lib Dems.
Mr Russell and three staff work through his casework
and hold constituency surgeries in the other half.
The figures show Mr Russell claimed £19,444.84
in expenses over the last eight months of last year.
Shareholders could make a loss, profit or break even
if they sold Magdalen Hall.
It is understood even if they did sell it, they would
re-invest the money in a new base.
[Material not relevant to the inquiry]
Mr Russell declined to comment.
29 June 2010
7. Letter
to the Commissioner's office from Mr Daniel Ellis, 28 November
2011
Thank you for your letter dated 17th November with
regards the above complaint.[156]
I can confirm that the IPSA has concluded its investigation
into the complaint which I made to them regarding the expenses
arrangement of Mr Bob Russell MP ([reference number]). In line
with your instructions, I would like to request that the Parliamentary
Commissioner investigates this matter.
As requested I can further confirm that my complaint
relates to the Member of Parliament for Colchester, Bob Russell
and his expense claims in relation to renting a constituency office,
Magdalen Hall. I have drawn to the Parliamentary Commissioner's
attention, what I believe to be a breach of the rules as set out
in the Green Book (all versions since 2003 copies of which
already submitted) and have submitted evidence of the expense
claims relating to Magdalen Hall for the time period 2008-2011.
However, I suspect that this arrangement may have been in place
for a longer period of time, possibly going
back as far as the initial lease of the building (enclosed[157])
in 2002. I am certain that the Parliamentary Commissioner will
be able to check the records which I have been unable to locate
in relation to the period 2002-2008 to confirm whether or not
the rules were complied with. I therefore intentionally did not
specify a time period in my initial complaint as to leave the
Parliamentary Commissioner the flexibility to investigate this
matter fully.
I note your point in relation to the Committee on
Standards and Privileges and welcome this complaint being brought
to the attention of the Committee as soon as possible in order
to progress the investigation that I believe is warranted in this
case.[158]
Can you please confirm to me in writing when you
are formally investigating this matter. Should you have any questions
in the meantime, please do not hesitate to contact me.
28 November 2011
8. Letter
to Mr Bob Russell MP from the Commissioner, 7 December 2011
I would welcome your help on a complaint which I
have received from Mr Daniel Ellis about the arrangements you
made for the rent of your constituency office in Colchester for
which you made claims against parliamentary expenses.
I enclose a copy of the complainant's letter of 6
November with his enclosures and his subsequent letter of 28 November
with his enclosures to that letter.[159]
On receipt of his initial letter, my office informed the complainant
that, if he had also made a complaint to the Independent Parliamentary
Standards Authority (IPSA), then I would consider the matter once
IPSA's process had concluded. I confirmed with the Compliance
Officer on 5 December that IPSA's consideration of the matter
had been concluded.[160]
I have therefore considered the complaint in relation to the arrangements
for your claims against parliamentary expenses up to the end of
2009-2010 under the House of Commons rules. These rules were then
replaced by the rules which IPSA administer.
In essence, the complaint is that you made claims
against parliamentary allowances for the rental of your constituency
office from 2002-03 to 2009-10 when that accommodation was owned
by a company in which you and a family member held shares.
The Committee on Standards and Privileges has agreed
that, in as much as it is necessary for my consideration of this
complaint, I should be able to consider matters which go back
more than seven years.
The 2002 Code of Conduct for Members of Parliament
provided as follows:
"No improper use shall be made of any payment
or allowance made to Members for public purposes and the administrative
rules which apply to such payments and allowances must be strictly
observed."
The 2005 and 2009 editions of the Code of Conduct
for Members of Parliament provided as follows:
"14. Members shall at all times ensure that
their use of expenses, allowances, facilities and services provided
from the public purse is strictly in accordance with the rules
laid down on these matters, and that they observe any limits placed
by the House on the use of such expenses, allowances, facilities
and services."
The Green Book published in April 2002 set out the
rules then applying in relation to claims made under the Incidental
Expenses Provision (IEP) to pay, among other things, for office
and surgery accommodation. In his introduction to that edition
of the Green Book Mr Speaker said:
"Members are reminded that they are responsible
for ensuring that the use of their allowances is above reproach."
Paragraph 4.3.1 described expenditure allowed under
the IEP as follows:
"The IEP may be used to meet the following
expenses:
· accommodation for office or surgery
use or for occasional meetings;
· equipment and supplies for the office
or surgery
· work commissioned and other services
· certain travel and communications".
Under the heading 'Examples of expenditure allowable
under incidental expenses provision' it stated:
"Office and Surgery accommodation
NB: By the end of March 2003 all arrangements
for Members' offices will be required to conform with new guidance
issued in January 2002, and available from the Fees Office. You
are required to lodge copies of all leases with the Department
of Finance and Administration and to keep them updated."
The letter of 22 January 2002 (a copy of which I
enclose[161])
included a section headed "Restrictions on leasing"
as follows:
"You should avoid any leasing arrangement
which may give rise to an accusation that youor someone
close to youis obtaining an element of profit from public
funds.
The allowances should not be used to meet the
costs of leasing accommodation from:
· yourself. If, however, your office
or surgery is in a building which you own or lease for other purposes,
you may charge the additional costs to your allowances.
· a close business associate, or any
organisation in which youor a partner or family memberhave
an interest.
· a partner or family member (which includes
relatives by blood and by marriage).
If the accommodation is leased from a political
party or a constituency association you should ask an independent
valuer to assess the rent in order to ensure that it is being
leased at no more than a market rate."
The Green Book for June 2003 reflected this guidance
in a new section to this part of the Green Book dealing with principles
and propriety. Paragraph 5.12.1 set out the principles as follows:
"You are advised to ensure that arrangements
for your office and surgery premises are above reproach and that
there can be no grounds for a suggestion of misuse of public money.
You must avoid any arrangement which may give
rise to an accusation that youor someone close to youis
obtaining an element of profit from public funds; or that public
money is being diverted for the benefit of a political organisation."
Paragraph 5.12.2 on propriety included the following:
"The allowances must not be used to meet
the costs of leasing accommodation from:
· Yourself (...)
· A close business associate, or any
organisation in which youor a partner or family memberhave
an interest
· A partner or family member (which includes
relatives by blood and by marriage.)
Exercise particular care if the accommodation
is leased from a political party or a constituency association.
You must ask an independent valuer to assess the property in order
to ensure that it is being rented at no more than the market rate...."
Paragraph 5.12.6 noted the documents required as
follows:
"You must lodge a copy of the following with
the Department of Finance and Administration
· A copy of your lease
· A copy of a recent independent valuation
(required only if you lease from a political organisation or if
you sublet part of the premises)
· A copy of any agreement for cost sharing
(required only if you share with another Member, with a Member
of a devolved body or a MEP)
· A copy of any agreement for services
with your constituency association or other party political organisation.
You must also inform the Department of any alterations
to the terms of these."
Similar provisions were included in subsequent editions
of the Green Book, namely in April 2005 and July 2006.
The Green Book published in March 2009 included the
following fundamental principle:
"Members must ensure that claims do not rise
to, or give the appearance of giving rise to, an improper personal
financial benefit to themselves or anyone else."
The allowance for office expenses was revised under
a new heading Administrative and Office Expenditure. Paragraph
2.2.4.1 dealt with arrangements for Member's constituency offices
as follows:
"If the accommodation is leased from a political
party or a constituency association, you must ask an independent
valuer to assess the property in order to ensure that it is being
rented at no more than the market rate. See also the following
heading on agreements for accommodation and services in combination.
You must seek advice from the Registrar of Members' Financial
Interests if the premises are provided rent free or at a rental
below market rates."
There was a similar provision in the revised edition
of July 2009.
I would welcome your comments on this complaint in
the light of this summary of the relevant rules. In particular,
it would be helpful if you could let me know:
1. What was the arrangement which you had with your
constituency party for the use of the property in Colchester (Magdalen
Hall, Wimpole Road) and why it was decided that the property should
be owned by Magdalen Hall Company Ltd;
2. The ownership arrangements for this company, in
particular, when you and any member of your family acquired shares
in this company, the proportion of the shares you held in the
company from 2002-03 to 2009-10, whether you paid for those shares,
and whether you made at any time any return on those shares;
3. Whether you transferred your shareholding (which
appeared to be 500 shares) on 5 June 2010 and if so, what the
reason was for doing so;
4. Whether you or any member of your family still
hold any shares in the company;
5. What are the current ownership arrangements for
the property and whether you continue to share the premises;
6. What accommodation you had within the property
for your constituency office during the period from 2002-03 to
2009-10 and whether I could see the plan referred to in the lease;
7. How far that accommodation was separate from the
party offices;
8. What proportion of the total accommodation your
constituency office occupied;
9. What claims you made from 2002-03 to 2009-10 for
your use of the constituency office against your parliamentary
expenses;
10. How you identified the costs which fell to the
constituency office as opposed to the party's office, and whether
I could see a copy of any independent valuations of the property
which were carried out to assess the market rent;
11. If, and if so when, you lodged the original copy
of your lease with the Department of Finance and Administration,
whether the lease was revised at any time from 2002-03 to 2009-10
and, if so, how and whether those revisions were lodged with the
Department;
12. Whether you lodged with the Department a copy
of any independent valuation and any agreement for any services
you received from your constituency party;
13. Whether at any time you had a discussion about
the arrangements for your constituency office with the Department
of Finance and Administration or its successor, the Department
of Resources.
Any other points you may wish to make to help with
this inquiry would, of course, be most welcome.
I enclose a note which sets out the procedure which
I follow.[162]
I am writing to the complainant to let him know that I have accepted
his complaint. In due course I will publish on my parliamentary
webpages that I am conducting this inquiry and the general category
in which it comes. I will not be commenting further on its progress.
It would be very helpful if you could let me have
a response to this letter within the next three weeks, or earlier
if that is convenient. If there is any difficulty about this,
or you would like a word about the process, please contact me
at the House.
I would be most grateful for your help on this matter.
7 December 2011
9. Enclosure
to the Commissioner's letter of 7 December 2011: Letter to Members
from the Head of the Fees Office, 22 January 2002
Constituency Offices
This letter sets out revised guidance on the arrangements
for Members' offices and surgeries outside Westminster. It will
be incorporated in the Green Book (Parliamentary Salaries, Allowances
and Pensions) in due course. It supersedes all other guidance
and advice. Members will be expected to conform with this by the
end of March 2003.
The guidance which follows is designed to protect
Members against allegations that the allowances provided for their
Parliamentary duties may have been diverted to other purposes
or used for the benefit of the Member. They reflect the expectation
of greater accountability from those in public life. The main
accountability rests with Members themselves to ensure that public
money is used and accounted for properly.
As always, we will be available to help and advise
in cases of difficulty.
Principles
Arrangements for Members' offices and surgeries should
be above reproach. Members are advised to ensure that there can
be no grounds for a suggestion of misuse of public money. They
are reminded of the requirement of the Code of Conduct that no
improper use is to be made of payments or allowances made to them
for public purposes. This implies that Members should so arrange
their affairs that they themselves, their family, friends or close
business associates do not derive inappropriate private benefit
from funds paid and received for parliamentary purposes. Business
arrangements with political organisations should be carefully
scrutinised to prevent any suggestion that the allowances are
being diverted for their benefit.
Members should also bear in mind that when submitting
a claim they are required to certify that the monies are for expenses
wholly, exclusively and necessarily incurred in the performance
of their Parliamentary duties.
Buying property
You may not buy office or any other accommodation,
either outright or via a mortgage etc, from your Office Costs
Allowance or Incidental Expenses Provision.
Restrictions on leasing
You should avoid any leasing arrangement which may
give rise to an accusation that you or someone close to you
is obtaining an element of profit from public funds.
The allowances should not be used to meet the costs
of leasing accommodation from:
· yourself. If, however, your office or
surgery is in a building which you own or lease for other purposes,
you may charge the additional costs to your allowances.
· a close business associate, or any organisation
in which you or a partner or family memberhave
an interest.
· a partner or family member (which includes
relatives by blood and by marriage).
If the accommodation is leased from a political party
or a constituency association you should ask an independent valuer
to assess the rent in order to ensure that it is being leased
at no more than a market rate.
Information required by the Fees Office
You may wish to seek the Fees Office's advice on
any leasing arrangements before they are concluded. You must in
any case lodge a copy of your lease with the Fees Office for record
keeping. You must also inform the Fees Office of any alterations
to the terms of this.
[Material not relevant to the inquiry]
Service Agreements with Constituency Associations
Service agreements and arrangements made with constituency
or party organisations whereby staffing facilities and accommodation
are provided to a Member, must be for actual, not nominal, services,
and the service charges must accurately reflect the levels of
service provided. Such arrangements and charges must be set out
in writing as between the parties and lodged with the Fees Office
for record keeping. Any subsequent changes must be notified in
writing immediately to the Fees Office.
[Material not relevant to the inquiry]
Obtaining Advice
Members are very welcome to seek advice on these
difficult issues from the Fees Office at an early stage. Our advice
is given on a confidential basis.
Mr Speaker's Approval
Mr Speaker has considered and approved the guidance
to Members contained in this letter.
22 January 2002
10. Letter
to the Commissioner from Mr Bob Russell MP, 12 December 2011
Further to my letter of Saturday's date,[163]
I write with the following for your concurrent consideration.
Within the local Party membership we have a Barrister
and an Accountant; the latter was the Constituency Party Treasurer
for much of the time relating to the subject of the complaint.
The Barrister has carefully gone through all the
documentation provided by you, a good two hours! Her conclusion
is that the complaint relates to the role of payments made by
the Fees Office and whether I secured any personal financial advantage.
She knows the latter is untrue.
Further, that the complaint relates to payments by
the Fees Office to Magdalen Hall Company Limited. According to
the Constituency Party Treasurer, however, payments were paid
directly by BACs to Colchester Liberal Democrats irrespective
of what the House published records may say.
I therefore respectively ask, please, that before
anything further is done that a quick phone call is made to the
Fees Office to confirm that the payments were made to Colchester
Liberal Democrats and not to Magdalen Hall Company Limited
as claimed. This is what the former Treasurer has advised me from
his recollection. I have a sub-lease from Colchester Liberal Democrats,
not from Magdalen Hall Company Limited.
My Office Manager is coming to the House of Commons
on Thursday. She can bring the file containing documentation which
confirms that at all times I have acted in accordance with the
requirements made on me by the House authorities.
The bottom line for me is: have I had a personal
financial benefit from the arrangements? No.
[Material not relevant to the inquiry]
Thank you for your consideration.
12 December 2011
11. Letter
to the Commissioner from Sir Bob Russell MP, 8 January 2012
As requested, herewith my response to the Complaint
which has been lodged with you. My Office Manager and I have this
weekend concluded many hours of our time, since the Complaint
was notified to us, putting together a response to matters dating
back ten years.
At the outset, I submit a letter from the then Parliamentary
Commissioner for Standards ([name]) dated 23rd April 2002 which
I hope you will agree confirms that I closely followed the advice
given at the time and that approval was given for what took place.[164]
Other documentation I enclose also supports my strong
rebuttal that I have knowingly done anything which I should not
have done.
I shall deal with your various questions, as numbered
in your original letter to me, in the order set out. However,
before I do so I wish you to consider the following preamble so
as to put this complaint into context.
a) the person who has made the complaint is a
leading member of another political party [material not relevant
to the inquiry]
b) the complaint is the latest in a series of
"dirty tricks" made against me by several individuals
in the same political party in Colchester which variously include
a complaint to IPSA; a Freedom of Information Act request to the
House of Commons authorities; a spoof YouTube which defames me;
numerous letters to the Colchester Daily Gazette from fictitious
names and addresses; and a "stalker photographer".
c) I consider that the complaint is vexatious,
with the purpose of seeking to discredit me in the eyes of the
electorate.
d) the complaint has been
an unwelcome distraction, taking up time which my office and I
would otherwise be using for my Parliamentary duties and assisting
my constituents.
I must stress that the arrangements at my constituency
offices have not resulted in any personal financial advantage
to me or anyone associated with me. The reverse is the caseI
have made a considerable personal financial contribution towards
the operation of my constituency office to the overall benefit
of both the public purse and my constituents.
I repeat my previous invitation to you to visit my
constituency office in Colchester to see for yourself what the
situation is.[165]
From 1997 to 2001 I rented first floor offices in
a three-storey office block in Colchester Town Centre (ironically,
from a company owned by a former Treasurer of the same political
party of the person who has made the complaint!). It was a happy
arrangement, but the landlord's business grew and we agreed that
I would vacate shortly before the 2001 General Election (by going
slightly early he waived a requirement in the lease which would
have required me, as a legitimate expense to be charged to the
Fees Office, to undertake redecoration).
The experience of those four years was that, if re-elected,
I wanted to have offices which were more suitableincluding
the necessity of being Disability Discrimination Act compliant
which was not the case with the offices I had rented previously.
Unfortunately, when we looked around it was a case
of "what we could afford was not suitable, what was suitable
we could not afford."
For the next year my constituency office was a window-less
former washing machine repair workshop and basement which clearly
could not be considered as a permanent base for the local MP.
With the assistance of a Councillor who ran his own property management
business, we searched for something suitablebut nothing
ticked the boxes we were looking for.
Then, by good chance, the former St Mary Magdalen
Church Hall in Wimpole Road came on the market. Think of the church
hall in the BBC TV comedy programme "Dad's Army" and
you will understand what it was likea 1906 building, providing
in effect an empty shell which we could convert to my tailor-made
requirements so that (i) my staff and I could have proper working
conditions to operate from, and (ii) I could have facilities to
welcome constituents to the regular Advice Bureaux I hold (more
than 400 have since been held at Magdalen Hall, some 5,000 individual
appointments.).
Magdalen Hall is located to the east of Colchester
Town Centre (10-minute walk) on a secondary through-route. It
has two off-street parking places and limited two-hour parking
opposite for visitors. Bus stops are less than five minutes away.
It is thus ideally located for myself, staff and my constituents.
Between 1997 and 2001 I held Advice Bureaux for residents
at my first floor offices. The experience was that it should be
a lot better. In the 18 months or so before Magdalen Hall had
been converted to allow me to hold Advice Bureaux there, we hired
a room at Castle Methodist Church. While this was pleasant, it
was costlyit was also inconvenient inasmuch that we did
not have a photocopier, telephone or reference books, and files
had to be carried back and forwards. My Advice Bureaux generally
last in the region of four hoursthus we are talking of
a hire fee of £46 per session, at least 50 per year. This
totals a minimum of £2,300 a year (which would have to be
found from my allowances, already stretched and inadequate) whereas
there is in effect zero extra cost to holding them at Magdalen
Hallcoupled with the greater flexibility, security, efficiency
and confidentiality that applies. I attach a room hire fee from
the Church which confirms the current hire charge.[166]
At current rates, based on the 400 Advice Bureaux I have held
at Magdalen Hall, this equates to a "saving" of circa
£18,500.
I mention this because this was a key reason why
I wanted accommodation that was fit for purposeand cost-effective.
The whole operation was to ensure penny for penny, pound for pound,
that I maximised the allocation for constituency office purposes
provided by Parliament. I believe that over the years I have achieved
that.
I answer your questions as follows:
1. Read in conjunction with the above, I hope
I have set the scene which resulted in the decision to purchase
the former St Mary Magdalen Church Hall. Legal advice, I recall,
was that the building should be acquired by a companywith
named shareholdersrather than a constituency political
party with a fluctuating membership. Thus individuals, not necessarily
members of Colchester Liberal Democrats, purchased shares. I think
we all considered this to be more of a "donation" than
an "investment"! I would hazard a guess that there are
probably around 60 individuals; certainly there was no suggestion
of a dividend or making a profit.
2. I was the largest single share-holder, with
just under a third of those issued.[167]
I paid for these shares outright to enable the premises to be
purchased so that the objectives I set out in the preamble could
be achieved. I have never made any return on those shares, nor
did I ever expect or intend to. My ownership of shares in Magdalen
Hall Company Limited was published every year in the Register
of Members' Interestsas follows:
"Registrable shareholdings (a) Magdalen Hall
Company Limited: company formed to facilitate the purchase of
the former St Mary Magdalen Church Hall, Colchester, by Colchester
Liberal Democrats."
My sister-in-law (Councillor [name]) has two single
shares valued at £250 each. (As an aside, Councillor [name])
has worked as a volunteer in my office on a virtually full-time
basis throughout my time as an MP, providing me and my constituents
with support which if she was paid would be in excess of £150,000that's
some commitment!)."
3. Well before the 2010 General Election I decided
to transfer my shareholding to the constituency partyas
a donation. It was something which had always been in the back
of my mind. I owe a lot to my political party, without whom I
would never have become MP for my home town. I did not receive
anything in return for the donation. What triggered my decision,
rather than awaiting my eventual departure from the House of Commons
(on defeat or retirement), was when I read information from the
then fledgling IPSA which made me think that perhaps this was
as good a time as any other for me to donate them ahead of the
changeover. Please note: I had since 2002 to 2010 acted in accordance
with the advice given by the former Fees Office and with the approval
of the then Parliamentary Commissioner for Standards, along with
separate legal advice given to (a) Colchester Liberal Democrats
and (b) myself; this is the period to which the complaint relates.
4. Other than Councillor [name], my sister-in-law,
No.
5. The arrangements are exactly the same in January
2012 as they were since 2002 when the building now known as Magdalen
Hall was purchased and converted into my constituency offices.
6. The accommodation arrangements were exactly
the same throughout the period to which the complaint relates;
the plan referred to in the lease is enclosed.[168]
7. The portion of the building operated by Colchester
Liberal Democrats is accessed by the side door. The portion of
the building occupied as my constituency offices is accessed by
the front door. I do not have keys to the side doorno-one
in the constituency party has keys to my door. I have a sub-lease
from Colchester Constituency Liberal Democrats. There is a door
(lockable from my side) from my half of the building into the
half used by the constituency party because we have shared toilet
facilities and kitchen. (I raised £4,500 through personal
fund-raising to pay for the provision of toilet facilities for
those with disabilities so that I could offer my constituents
fully-compliant DDA premises).
8. As the layout of the building confirms, approximately
50-50 split with shared toilet and kitchen facilities.
9. All claims for office costs associated with
Magdalen Hall have previously been approved by the former Fees
Office, and placed in the public domain, which confirm that utility
costs and Business Rates were shared 50-50 as required in the
lease arrangements (agreed by the former House authorities) I
have as the holder of a sub-lease from the constituency party.
10. This answer (and the italic sentence in
parenthesis at the end of this paragraph) should be read in
conjunction with my answer to the previous question, plus please
find enclosed the supporting documentation relating to independent
valuations which confirm that the rent I am paying is in accordance
with the market rent.[169]
(This was also the subject of another complaint made about
a year ago to IPSA whose Compliance Officer, on investigation,
dismissed it).
11. Yes, following on from my answer to the previous
question plus documentation enclosed which deals with this.
12. Yes, as with the answers to the previous
two questions.
13. Absolutely! I would never have ventured out
on this arrangement ten years ago if there was any hint that what
I was doing was improper. I have a clear conscience. I have not
made any financial gain out of the arrangement; indeed, all those
who generously made donations to enable Magdalen Hall to become
a reality have not made a penny either. What we have here is a
group of peoplegood supporters of minewho have assisted
me in providing fit-for-purpose offices for myself and my staff,
for the overall benefit to my constituents and maximising the
value of the resources provided by the public purse for MPs to
fund offices in their constituencies.
As previously notified by me to you, the rent was
paid by BACs directly by the Fees Office to my landlord, Colchester
Liberal Democrats.[170]
Not a single penny has come to me.
I hope that the above, and the enclosed documentation,
provides you with the necessary information to rebut what is clearly
a politically motivated complaint. You are most welcome to visit
Magdalen Hall. Do not hesitate to contact me if there are any
matters you wish to have clarified.
Thank you.
8 January 2012
12. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Table of questions
Parliamentary Commissioner for Standards
Questions re: Constituency Office
| REQUEST
| ENCLOSURES |
| 1. What was the arrangement which you had with your constituency party for the use of the property in Colchester (Magdalen Hall, Wimpole Road) and why it was decided that the property should be owned by Magdalen Hall Company Ltd
| Correspondence to Fees Office :
31st January 2002[171]
13th May 2002[172]
Also explained in my letter
|
| 2.The ownership arrangements for this company, in particular, when you and any member of your family acquired shares in this company, the proportion of the share you held in the company from 2002-03 to 2009-10 , whether you paid for those shares, and whether you made at any time any return on those shares.
| Lease[173] and acceptance correspondence from Fees Office[174]
Correspondence from Party Treasurer ([initials]) confirming no dividends associated with shares[175]
|
| 3. Whether you transferred your shareholding (which appeared to be 500 shares) on 5 June 2010 and if so, what the reason was for doing so.
| Correspondence from Party Treasurer ([initials]) confirming details of donation of shares to value of £25,000[176]
|
| 4. Whether you or any member of your family still hold any shares in the company.
| My sister-in-law holds two shares
|
| 5. What are the current ownership arrangements for the property and whether you continue to share the premises.
| Explained in my letter
|
| 6. What accommodation you had within the property for your constituency office during the period from 2002-03 to 2009-10 and whether I could see the plan referred to in the lease.
| Map of Hall[177]
|
| 7. How far that accommodation was separate from the party offices.
| Explained in my letter
|
| 8. What proportion of the total accommodation your constituency office occupied.
| Explained in my letter
|
| 9. What claims you made from 2002-03 to 2009-10 for your use of the constituency office against your parliamentary expenses.
| Explained in my letter they are in the public domain.
|
10. How you identified the costs which fell to the constituency office as opposed to the party's office, and whether I could see a copy of any independent valuations of the property which were carried out to assess the market rent.
| ...and 11.
Copy of amended and revaluation of lease[178]
FOI requests to IPSA and Resources Dept by Mr Ellis[179]
|
11. If, and so when, you lodged the original copy of your lease with the Department of Finance and Administration, whether the lease was revised from any time from 2002-03 to 2009-10 and, if so, how and whether those revisions were lodged with the Department.
| As with 10, also explained in my letter
|
12. Whether you lodged with the Department a copy of any independent valuation and any agreement for any services you received from your constituency party.
| Valuation [name of company] 2010[180]
|
13 Whether at any time you had a discussion about the arrangements for your constituency office with the Department of Finance and Administration or its successor the Department of Resources.
| See 1 and explained in my letter
|
Additional:
Amendment to payment of rent from Magdalen Hall Company
Ltd to Colchester Liberal Democrats in 2004:
E-mail [name] 29th March 2004[181]
Correspondence to Fees Office with form to correct
29th March 2004[182]
E-mail Department of Resources 3rd January 2012[183]
Correspondence from Party Treasurer [name] over incorrect
rent payments from Fees Office[184]
[Material not relevant to the inquiry]
8 January 2012
13. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to a
senior official in the Fees Office from Mr Bob Russell MP, 31
January 2002
Further to our meeting on Monday, and our telephone
conversation on Tuesday, as a result of your advice I have decided
to step down as a director of the members company which owns the
headquarters building of my constituency party. Although you said
there was no requirement for me to do so I appreciate your thought
that by relinquishing this position I would remove the scope for
criticism or complaint which someone might be minded to make.
I am also grateful to you and [the Head of the Fees
Office] for confirming that the arrangements for my MP's constituency
offices comply with what is set out in the letter from [the Head
of the Fees Office] dated 22nd January.[185]
I will make arrangements for you to be supplied with
a copy of my lease with the constituency party. 1 confirm that
the rent I will be paying for my office space will be as assessed
by an independent valuer.
Your assistance is appreciated. While I was confident
that all was OK I was anxious that this should be confirmed in
the light of difficulties others have experienced elsewhere. Many
thanks.
31 January 2002
14. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to a
senior official in the Fees Office from Mr Bob Russell MP, 13
May 2002
Further to our correspondence of some months ago,
I am now relieved to say that I have at long last moved into my
new constituency accommodation in Colchester! It has taken a long
while for the respective solicitors and others to negotiate the
sale and purchase because of the need for approval from the Charity
Commission and the Diocese authorities.
We took possession on 1st May and my staff and I
spent the Bank Holiday Weekend moving from our previous premises
at [address] to [new address], which fortunately is only about
400 yards away. We are now operating from our new base.
As requested I enclose for your files a copy of my
Lease for that part of the former St Mary Magdalen Church Hall
which I am renting from the Constituency Party. I went to a different
firm of solicitors to the one used by the local party in order
that there could be no question of a conflict of interest.
I hope that the Lease, taken with what was said in
our previous correspondence and the meeting which I had with you,
meets with your approval.
Do not hesitate to get in touch if you have any queries.
My extension at the House of Commons remains on [number]but
my constituency telephone number has changed
to: [number]. Thank you
13 May 2002
15. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to Mr
Bob Russell MP from the Assistant Secretary to the Speaker's Advisory
Panel (an official in the Fees Office), 21 May 2002
Thank you for your letter to [an official in the
Fees Office] dated 13 May enclosing a copy of your new office
lease.[186]
I am writing to confirm that the lease meets our
approval.
I hope that you are now settled into your new offices.
Please contact me if you have any further questions.
21 May 2002
16. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to Mr
Bob Russell MP from the Parliamentary Commissioner for Standards,
23 April 2002
Thank you for your letter of 19 April.[187]
I have read the correspondence which you had with
my predecessor about the transactions which have taken place relating
to the sale and purchase of the former St Mary Magdalen Church
Hall. I am glad to hear that the transaction has been concluded,
to the satisfaction of the local parish and community.
Now that the arrangements for your shareholding in
the new company have been concluded we have included this information
in the Register, together with a description of the business of
the new company as required by the Rules. I hope that you are
content with the wording of this entry, a copy of which I enclose;
please let us know as soon as possible if you would like it
changed.
[Material not relevant to the inquiry]
The attached revised print out of your Register entry
will appear in the next updated looseleaf Register, unless you
inform us of any further amendments. I hope you find this satisfactory.
23 April 2002
RUSSELL, Bob (Colchester)
[Registration not relevant to the inquiry]
Registrable shareholdings
(a) Magdalen Hall Company
Limited; company formed to facilitate the purchase of the former
St. Mary Magdalen Church Hall, Colchester, by Colchester Liberal
Democrats.
[Registration not relevant to the inquiry]
23 April 2002
17. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Draft letter
to the Fees Office from Mr Bob Russell MP, 29 March 2004

29 March 2004
18. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to Colchester
Liberal Democrats from a firm of chartered surveyors, 23 March
2010
You have asked me to give my opinion concerning the
rental value of part of the building known as Magdalen Hall, which
is let by Colchester Liberal Democrats to the MP for Colchester,
Mr Bob Russell and used as his constituency offices.
As you know, I have made various visits to the property
from time to time, the latest in September 2009. The opinion expressed
in this letter is based on my inspection of the building at that
time together with information which you have provided concerning
the lease to Mr Russell.
I understand that the rent currently being paid for
Mr Russell's part of the building is £9,365 per annum and
that this figure has remained unchanged for the past three years
or so. I also understand that the lease from Colchester Liberal
Democrats to Mr Russell is for a period of 15 years from May 2002
with provision for 'upwards only' rent revisions every 3 years.
In my opinion the current market rental for the part
of Magdalen Hall let to Mr Russell (taking into account the rent
revision provisions in the lease) would not be less than £9,365
per annum.
No doubt you will let me know if you require any
additional information concerning this matter and 1 understand
that a copy of this letter may be forwarded to the House of Commons
authorities on behalf of Mr Russell.
22 March 2010
19. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to PPERA
Section, Liberal Democrats from Hon. Treasurer Colchester Liberal
Democrats, 14 July 2010
I enclose our normal report for last month.[188]
There is one substantial donation from Bob Russell, MP and I think
that some additional explanation would be helpful. The gift is
of shares in a private company, Magdalen Hall Company Ltd.
Some years ago, after Bob was elected as the MP for
Colchester, a number of members of our party set up this company,
which acquired premises to be used as the permanent headquarters
building of the Colchester Liberal Democrats; part of the building
was used as the MP's constituency office and this is still the
current situation.
Bob Russell provided a substantial part of the funds
which the company needed for the property purchase and has held
500 shares[189]
(which was just under a third of the issued share capital).[190]
The company has never paid any dividends and Bob has not derived
any personal benefit from his shareholding.
The company lets Magdalen Hall to the Colchester
Liberal Democrats and there is a sub-lease from the association
to Bob Russell. Thus there is no direct link between the company
and Bob himself. However he felt that it would be right to terminate
his interest in the company in order to avoid any possible claim
that he could benefit indirectly from public funds as the result
of the premises belonging to the company being used as the MP's
office, with the rent paid out of public funds.
The value of the shares in Magdalen Hall Company
Ltd. has been shown as £25,000 but please note that this
is a provisional value. We have to agree the market value with
HM Revenue & Customs for capital gains tax purposes and if
this figure is different we shall have to submit an amendment
later.
14 July 2010
20. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to Mr
Bob Russell MP from the Head of Information Rights and Information
Security, 3 October 2011
A request for information asking for copies of leases,
valuations and agreements for services in respect of your constituency
office for 2004-2010 has been submitted to the House of Commons
under the Freedom of Information Act 2000.
We have considered this request in accordance with
the provisions of the Freedom of Information Act, as we are bound
to do. We enclose the information which is held by the House of
Commons and which we intend to disclose: copies of the two sub
lease agreements and an independent valuation. No services other
than rent have been provided, therefore no agreements are held.
We intend to respond by 21 October 2011.
If you have any questions about this, please contact
me before the above date.
3 October 2011
21. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: Letter to Mr
Bob Russell MP from Company Secretary, Magdalen Hall Company Limited,
21 December 2011
I have been asked to provide information concerning
dividends.
I confirm that no dividends have been paid by Magdalen
Hall Company Ltd on any of its shares since the company was set
up. As far as I am aware no shareholder has obtained any financial
benefit as the result of owning shares in the company.
21 December 2011
22. Enclosure
to Sir Bob Russell MP's letter of 8 January 2012: E-mail to Sir
Bob Russell MP from an official in the Department of Human Resources
and Change, 3 January 2012
Many congratulations on your knighthood.
Further to last week's request to [the Director-General of the
Department] for information regarding your constituency office
rent,[191] please find
below the relevant details:
1. Can you please let me know the Bank Account Number which the
former Fees Office paid the rent for my constituency office into?
Between July 2002 and March 2004, payments were made
to:
Sort code: [...]
A/C Number: [...]
Payee: Magdalen Hall Company Ltd
With effect from April 2004, payments were made to:
Sort code: [...]
A/C Number: [...]
Payee: Colchester Lib Dems Business Account
This arrangement continued until August 2010, when
the final rent payment (covering the period to 6th May 2010) was
made.
2. Can you please provide with an annual Statement
of how much rent was paid by the former Fees Office for my constituency
office (from 2002 until 2010)?
Annual schedule of rent payments:
2002/2003: £7,548.75 (payments commenced
in July 2002, backdated to May 2002)
2003/2004 £8,235.00
2004/2005 £8,235.00
2005/2006 £8,235.00[192]
2006/2007 £8,235.00
2007/2008 £10,499.08 (including arrears
for rent increase effective from April 2006)[193]
2008/2009 £9,365.04
2009/2010 £9,365.04
2010/2011 £931.37 (to 6th May 2010)
3. Can you confirm that all payments were made by BACs directly
and none was paid to me or via me?
I can confirm that all payments were made directly
to either Magdalen Hall Company Ltd or Colchester Lib Dems.
No payments were made directly to you.
I trust this information is helpful. Please let me
know if you have any queries or require any further information.
3 January 2012
23. Letter
to Sir Bob Russell MP from the Commissioner, 17 January 2012
Thank you for your further letter of 8 January, received
here on 11 January, responding to my letter to you of 7 December
about this complaint.[194]
I was grateful to you and to your staff for preparing this response
and the supporting material.
Before I write to the Department to invite their
advice on the matters raised by this complaint and for any further
information they may be able to provide, I would be grateful if
you could confirm, or otherwise modify, my understanding of your
evidence as below, which also draws on the additional documentation
from Companies House and the Land Registry enclosed with this
letter: [195]
1. According to the Land Registry on 30 April 2002
Magdalen Hall Company Ltd purchased the property Magdalen Hall.
As you say in your letter of 8 January, the building is divided
approximately 50-50 between your constituency office and the offices
of Colchester Liberal Democrats, which both have separate access
arrangements but share toilet and kitchen facilities.[196]
According to the Land Registry the purchase price of the property
was £100,000 and it was funded in part by a loan.
2. According to Companies House records, in December
2002 you owned 100 of the total 244 shares in Magdalen Hall Company.
As you say in your letter of 8 January, you were the largest single
shareholder.[197]
According to the Companies House records there were 41 other shareholdings,
none of which exceeded more than 10 shares and the price paid
for the shares was £50 each. I assume, therefore, that in
2002 you paid £5,000 for your shares. According to the Companies
House records over the course of the years further shares were
issued and the number of shares you held increased. As you say
in your letter of 8 January, in 2010 you donated your shareholding
to the Colchester Liberal Democrats. The value of these then 500
shares, as stated in the letter of 14 July 2010 from the Hon Treasurer
of the Colchester Liberal Democrats, was £25,000 and the
party registered this donation with the Electoral Commission.[198]
The Company Secretary has confirmed in his letter of 21 December
2011 that since the company was set up no dividends have been
paid by Magdalen Hall Company Ltd on any of its shares.[199]
According to Companies House records your sister-in-law's shareholding
was two at 16 December 2002 and ten by 10 January 2011, the current
market value of which, on the basis of the valuation of your shareholding,
I assume to be £500.
3. You have provided a copy of your agreement to
sublease part of Magdalen Hall from your constituency party from
30 April 2002.[200]
The email of 3 January 2012 to you from the Department of Human
Resources and Change shows that you made claims from 2002-03 to
2009-10 from your parliamentary expenses for the cost of renting
your constituency office space.[201]
From April 2002 the annual rent charged was £8,235 rising
to £9,365 from 1 May 2005. That email also states that the
House authorities made these payments for your constituency office
rent directly to Magdalen Hall Company Ltd between July 2002 and
March 2004, and after that to the constituency party. The email
you have provided of 19 March 2004 to your office staff states
that you had agreed at a party executive meeting that it would
be correct procedure for the payment of rent to be made to the
constituency party and not to the company.[202]
Your letter of 29 March 2004 (with handwritten additions) says
that the change in payment arrangements was at the request of
the constituency party and had been described to you as a tidying
up operation.[203]
That letter also sets out that Magdalen Hall Company Ltd owned
the building and that they leased the whole building to the constituency
party who in turn sub-leased your office area to you.
4. I have taken from your evidence, including your
letters of 31 January and 13 May 2002, that you consulted the
then Fees Office at that time about your arrangements.[204]
Following advice you received in a meeting and subsequent telephone
conversation with the Fees Office you decided to step down as
director of the company, even though it appears that the advice
you received was that there was no requirement for you to do so.
From your letter of 31 January 2002 it appears that the Fees Office
officials had confirmed to you that the arrangements for your
constituency office complied with the letter issued by the House
on 22 January 2002 which informed Members that from the end of
March 2003 new rules would take effect preventing them from leasing
office accommodation from themselves, or any organisation in which
the Member or a family member had an interest.[205]
The letter of 21 May 2002 from the House authorities to you states
that the lease which you had provided to them for your office
space had met their approval.[206]
5. On the basis of a letter from a House official
on 3 October 2011, relating to a freedom of information request,
I assume that no services were provided to you by your constituency
party and that is why the Department therefore held no agreements
for such services.[207]
6. According to the property valuers in their letter
of 23 March 2010 (which formed part of the freedom of information
request), at that time you were not being charged more than the
market rate.[208]
The valuers also note in that letter that they had made various
visits to the property from time to time, the latest of which
had been in September 2009. As the freedom of information response
makes no reference to any other valuation, I assume that no earlier
valuations were lodged with the House authorities.
In light of this summary of your evidence I would
be grateful if you could:
i confirm or otherwise modify this summary of
your evidence;
ii let me know whether, in addition to your initial
purchase of shares in Magdalen Hall Company Ltd, you purchased
any further shares and if so, how many and what you paid; or whether
the company assigned you additional shares without cost to you
and if so, how many and when were such shares assigned to you;
iii confirm specifically what you told the House
authorities, in 2002 or at any other time, about these arrangements,
in particular, in addition to discussing your directorship, whether
you informed the Department that you were the largest single shareholder
in the company which owned the property and that your office was
to be rented from your constituency party who in turn would lease
the property from that company.
You referred at the outset of your letter to a letter
from the then Parliamentary Commissioner for Standards of 23 April
2002, which you included with your bundle.[209]
I have asked the Registrar of Members' Financial Interests here
to check the papers in respect of your registration interests
and I enclose copies of relevant earlier correspondence.[210]
As you will see, the exchanges were about the registration of
your shareholding in the company formed to facilitate the purchase
by Colchester Liberal Democrats of what was to become Magdalen
Hall. As you will also see, there was no reference in this correspondence
to your intended use of part of the property for your constituency
office.
It would be very helpful if you could let me have
a response to this letter within the next week. Once I have your
response I hope I will be in a position to write to the Department.
Thank you again for your help on this matter.
17 January 2012
24. Enclosure
to the Commissioner's letter of 17 January 2012: Letter to the
Parliamentary Commissioner for Standards from Mr Bob Russell MP,
12 November 2001
Several years ago, before I was elected Member of
Parliament for Colchester, I was invited to became a Patron of
the St Stephen's Church Centre project in the area which I represented
on Colchester Borough Council. The project involved the development
of a single new Church building complex following the amalgamation
of three parishes. I have remained a Patron since becoming an
MP.
I should point out that I am not a member of this
Church and I have not been involved in the detailed operations
of the project; my role, with other Patrons, has been one of civic
and public endorsement in their fund-raising and applications
for grants.
The good news is that the new Church has now been
completed and the inaugural service was held a few weeks ago.
The second and final phase is the conversion of the adjoining
former church into a church hall.
MPs, of course, find themselves holding various honorary
positions such as President, Vice-President and so on with a variety
of organisations in their constituency and more widely. Clearly
it would be a nonsense if each and every one had to be registered
with you.
However, in this case I write to seek your advice
and guidance please as to whether I should declare in the Register
of Interests the fact that I am a Patron of the St Stephen's Church
Centre in Colchester? My reason for this is that in order to fund
the second phase of the complex the Parochial Church Council is
planning to raise the necessary money by selling a former church
hall (previously the hall for one of the amalgamated parishes)
about half-a-mile away.
This hall is currently being advertised for sale
and Colchester Liberal Democrats have made a bid. I, of course,
am a member of the Party. Further, in order to help fund the purchase
(if the bid is successful) it is planned to issue 120 £1,000
shares. I have said I will have 25 shares.
Noting that I am both a Patron of the St Stephen's
Church Centre (the seller) and a Member of Colchester Liberal
Democrats (the hopeful buyer) and a potential shareholder, would
you deem it necessary for me to Register my figurehead position
of a Patroneither at this stage, or subsequently if the
sale is concluded in the way I hope it is?
The Charity Commissioners and Chelmsford Diocesan
Board of Finance will need to be satisfied that the "best
value" has been achieved in the sale of the redundant church
hall, hence the reason for the sale on the open market.
Should you have any queries my telephone number at
the House of Commons is extension [...]. My constituency office
telephone number is [...].
Thank you for your assistance in this matter.
12 November 2001
25. Enclosure
to the Commissioner's letter of 17 January 2012: Letter to Mr
Bob Russell MP from the Parliamentary Commissioner for Standards,
23 November 2001, with Extract from Register, 23 November 2001
Thank you for your letters of 24 October[211]
and 12 November.[212]
I apologise for the delay in replying to them.
[Material not relevant to the inquiry]
Secondly, I turn to your query about your involvement
with the St Stephen's Church Centre in Colchester. You raise the
general matter of Members registering various honorary positions
which they may hold. Our advice in such cases is that, while there
is no obligation to register interests which are completely unremunerated,
Members should bear in mind the main purpose of the Register,
and if he or she considers that an unremunerated interest might
be thought by others to influence his or her actions, then it
is advisable to register that interest in Category 10 (Miscellaneous
and unremunerated). I attach a copy of the relevant section of
the Guide to the Rules for your information. With this advice
in mind therefore, I would advise you to register your position
as Patron of the Church Centre under Category 10 and we have included
this in your entry.
You state in your letter that it is intended that
you will own 25 £1,000 shares in Church Centre project. Shareholdings
in companies or organisations which are either (a) greater than
1% of the issued share capital, or (b) less than 1% but greater
than £25,000 in nominal value should be registered in Category
9 of the Register. If the share allocation is already agreed and
imminent I would advise you, in the interests of transparency,
to add this entry now, as follows:
Category 9 Registrable shareholdings
(a) St Stephen's Church Centre, Colchester.
Please could you confirm as soon as possible that
you are content for this entry to be made.
I am grateful to you for setting out so fully the
details of this rather unusual transaction. I would be more than
happy to have a discussion with you about how you should handle
any issues which might arise in the light of how this transaction
might be perceived. Please get in touch with me if you would like
to do this.
23 November 2001
RUSSELL, Bob (Colchester)
[Registration not relevant to the inquiry]
10. Miscellaneous and unremunerated interests
Patron of the St. Stephen's Church Centre, Colchester.
23 November 2001
26. Enclosure
to the Commissioner's letter of 17 January 2012: Note by the Parliamentary
Commissioner for Standards of a telephone conversation with Mr
Bob Russell MP, 27 November 2001
Mr Russell rang in response to my letter.[213]
[Material not relevant to the inquiry]
As for the shareholding, he said he would wait until
that was agreed and signed. He said it was not currently agreed
and it might all fall through so he would not wish to put it in
the register and then have to take it out again. As soon as it
was agreed he would make an entry. I transferred him to [name]
to change his current draft entry, to take account of his instructions.
He said he would write to me on Friday to confirm this telephone
conversation setting out what he was intending to do. I thanked
him.
27 November 2001
27. Enclosure
to the Commissioner's letter of 17 January 2012: Letter to the
Parliamentary Commissioner from Mr Bob Russell MP, 30 November
2001
[Material not relevant to the inquiry]
As discussed with both you and [name], I will write
further in respect of my Party's pending purchase of the former
St Mary Magdalen Church Hall, Colchester, once the precise details
about my involvement are confirmed. This relates to inclusion
in the Register under "Category 9(a) Registrable shareholdings".
I should have pointed out in our phone conversation
that the Category 9(a) building where I hope to have a shareholding
(if all goes well with the purchase) is not the St Stephen's Church
Centre but rather the former St Mary Magdalen Church Hall, which
will have a different name if the purchase is successful.
[Material not relevant to the inquiry]
30 November 2001
28. Enclosure
to the Commissioner's letter of 17 January 2012: Letter to the
Parliamentary Commissioner from Mr Bob Russell MP, 19 April 2002
Thank you for your letter of introduction of 5th
April.[214]
Welcome! Your letter was somewhat timely because I knew that in
the coming few weeks I would be writing to you to make two Amendments
in my Register of Interests.
Last year I was in contact with your predecessor
about the substantive entry about which I now write, the background
of which will be on file. It has taken all this time for matters
to be concluded!
I would in particular draw your attention to the
letter which [the Commissioner] wrote
to me on 23rd November concerning the need to place the relevant
entry in the Register of Members Interests.[215]
I now write to formally register the following:
Category 9 Registrable shareholdings
(a) Magdalen Hall Limited
In my letter to [the Commissioner] of 30th November
I explained that my then proposed shareholding was in respect
of the former St Mary Magdalen Church Hall and not the St Stephen's
Church Centre.[216]
The purchase of St Mary Magdalen Church Hall is now
completed hence my reason to write to you at this point.
It has been decided to retain a flavour of the name
by calling it "Magdalen Hall"
and for the members company which owns it to be called "Magdalen
Hall Company Limited". Subsequent to my earlier correspondence
it was decided, in order to attract interest from as much of the
wider membership as possible, to reduce the value of each share
from £1,000 to £250. My shareholding is thus 100 shares
at £250.
I trust the above meets with your approval in accordance
with the guidance given by [the former Commissioner], and that
accordingly this entry can be placed against my name in the Register
of Members Interests.
In view of your previous position I hope that you
will find this matter to be one of personal interest. Certainly
the local community, particularly that associated with the Parish
of New Town and The Hythe, are delighted that the much-loved St
Mary Magdalen Church Hall will continue to be a visible part of
the community, albeit with a different type of community use.
We are hoping to have a small ceremony at which the Church hands
over the keys, with the Rector giving prayers for the Hall's past
and its future.
[Material not relevant to the inquiry]
I hope that all the above meets with your approval.
Please do not hesitate to contact me if there are any matters
which you need to clarify. My phone numbers are [...] in the constituency
and extension [...] at the Commons. Thank you.
19 April 2002
29. Letter
to the Commissioner from Sir Bob Russell MP, 22 January 2012
Thank you for your letter dated 17th January, forwarded
from the House to my constituency office which I read on Friday
evening following a day when I held a four-hour Advice Bureau
in the morning and attended three events in the constituency in
the afternoon.[217]
My Office General Manager and I have again devoted
several hours over a second weekend to gather the necessary information
so I can respond to the issues you raise. I believe that what
now follows answers these. Taken with my previous submission,
I trust you will accept that this provides compelling evidence
of rebuttal to the vexatious complaint made by a political opponent.
I answer your points in the order you list them:
1. everything you set out is correct.
2. there is a serious misunderstanding of
the facts; I can understand how this has arisen. While it is true
that in 2002 I purchased 100 shares in Magdalen Hall Company Limited
(to assist in the purchase of the former St Mary Magdalen Church
Hall to house my constituency office), these were each valued
at £250, thus £25,000 in total. Therefore it is not
correct to assume that I paid £5,000. In 2009 the Company
decided to sub-divide each £250 share into five shares of
£50. Thus, in my case, while the number of shares was increased
from 100 to 500 the total value remained at £25,000.
This is the same explanation for the increase of
two shares to ten shares in the name of my sister-in-law.
I enclose a copy of the notice issued to shareholders for the
Annual General Meeting of Magdalen Hall Company Limited, held
on 25th July 2009, at which the decision was taken for the sub-division
of the shares.[218]
I have not acquired further shares.
I enclose a letter from my accountant [name] with
a letter he has received from HM Revenue & Customs, dated
12th January 2012, confirming that the valuation of each share
in Magdalen Hall Company Limited has been accepted at £50.[219]
This is further evidence that I have made no personal
financial gain from the arrangements relating to Magdalen Hall
Company Ltd and my sub-lease from Colchester Constituency Liberal
Democrats of that part of Magdalen Hall which I occupy as the
constituency office for myself and my staff.
It is my understanding that the thinking behind
converting each £250 share to five shares of £50 was
in preparation of seeking new subscribers (widening the involvement
to those who otherwise might not be in a position to donate to
the higher value share issue) to what is a not-for-profit company,
in effect a community co-operative, with a view to extending the
kitchen and providing an entrance foyer to the constituency office
at the side. However, this has been put on hold pending clarification
of the condition of the building where these new works would be
undertaken (there is evidence of structural movement in the north-east
corner). If these improvements are carried out it would not involve
any change in my sub-lease with the constituency party although
my staff and I would have the benefit of having improved kitchen
facilities at nil extra cost to me as my sub-lease is for the
use of these shared facilities.
3 everything you set out is correct, but I feel further
comment might be helpful.
I have no recollection as to why, initially, the
rent for my office was paid to Magdalen Hall Company Ltd rather
than to the Constituency Party which is what should have been
the case. A new Treasurer [name] pointed this out and arrangements
were made to rectify the situation. At all times, as previously
stated, the rent was not paid via me but was paid directly by
the Fees Office.
4 this is broadly correct, save for the following.
I never became a Director of Magdalen Hall Company Ltd. This had
been a proposal, (a) reflecting my position as the largest shareholder,
and (b) so that "my half of the building would have a voice".
However, in view of the advice of the Fees Office I decided not
to. This is further evidence of my openness at all times with
the House authorities. You correctly observe that I consulted
with, and followed the advice of, the Fees Office about the arrangements.
5 everything you set out is correct.
I would add that neither did I offer services to
the constituency party. Each half of the building operates as
separate entities.
As an aside, throughout the time my constituency
office has been located at Magdalen Hall the cleaning has been
carried out by volunteers, thus providing a further saving to
the public purse of what could be a legitimate charge on my office
costs. For about the past four years a family friend of more
than 50 years from church youth club days (now retired) spends
an average of two hours each week unpaid undertaking
cleaning duties and general maintenance work at Magdalen Hall.
Assuming a weekly cost of £20 if provided by a commercial
contractor, this equates to £1,000 a year split 50/50
this is worth a saving of £500 a year in voluntary cleaning
for my constituency office, money which is used to help fund the
general operating costs which I already subsidise.
6 everything you set out is correct. I have no knowledge
of any other valuations.
Dealing now with the rest of your letter, I continue
as follows:
i As set out above, I
confirm everything that I submitted in my earlier communication
to which I have added clarifications and additional information
in response to your questions (I do not think there is anything
which I need to "modify" to what I have stated previously).
ii I can confirm that I have not purchased any additional
shares in Magdalen Hall Company Limited, nor has the Company assigned
me additional shares without cost to me.
iii Looking back to conversations which occurred
10 years ago, I do not have written evidence that I told the House
authorities that (a) I would be the largest single shareholder,
and (b) that my constituency office would be rented from my constituency
party on a sub-tenancy to their tenancy with Magdalen Hall Company
Limited but they most certainly knew that the latter was
the case.
Indeed, you acknowledge this in your letter to me
of 17th January 2012[220]
when, at Paragraph 4, you say: "From your (my) letter of
31 January 2002[221]
it appears that the Fees Office officials had confirmed to you
that the arrangements for your constituency office complied with
the letter issued by the House on 22 January 2002[222]
which informed Members that from the
end of March 2003 new rules would take effect preventing them
from leasing office accommodation from themselves, or any organisation
in which the Member or a family member had an interest. The letter
of 21 May 2002[223]
from the House authorities to you (me) states that the lease which
you (I) had provided to them for your (my) office space had met
their approval."
As the whole purpose of the exercise was to secure
a constituency office to replace the window-less former workshop
and basement my staff and I were then operating from, I can state
with absolute confidence that the House authorities were fully
aware of what I was seeking to achieve! It is simply inconceivable
that this was not so. This would have been mentioned
whenever conversations took place specifically when the
advice was given that it would be better that I did not become
a Director of the company.
This was a saga which dragged on for months because
of the need to get approval from the Chelmsford Diocesan Board
of Finance and the Charity Commission on the one hand and securing
financial and legal agreements relating to the future use of the
building on the other.
The House authorities were of considerable assistance
in ensuring that matters progressed so yes, they were
definitely aware that my constituency office was to be located
at Magdalen Hall. The payment by them of the rent when I moved
in during May 2002 again provides clear evidence that they knew
this was the case.
Subsequently, following approval by the local Authority
for the conversion works at Magdalen Hall, the Fees Office also
had the layout showing the area of the building used as my constituency
office. This is further evidence that the House authorities were
fully in the picture as to the reason for the acquisition of the
former St Mary Magdalen Church Hall to be my constituency
office. Magdalen Hall is in the New Town Conservation Area.
Moving now to your substantive final paragraph (page
3 of your letter of 17th January, commencing: You referred at
the outset), I acknowledge that (ten years later) a fresh set
of eyes looking at the written words from 2002 could reach a conclusion
different to that which was the clear understanding of all parties
involved at that time principally myself and the House
Authorities, also the two Parliamentary Commissioners of Standards
who were in post during the course of progressing the move of
my constituency offices to Magdalen Hall. It would, however, be
a wrong conclusion.
Your observation "there was no reference in
this correspondence to your (my) intended use of part of the property
for your constituency office" is correct. With hindsight,
what a pity this was not spelt out in black and white. But all
parties knew that this was the case as I have explained in the
opening paragraph of this section: iii
It is the context of everything else that was going
on involving two former Parliamentary Commissioners for
Standards and individuals in the Fees Office that I invite
you to accept that it was common knowledge by all involved what
the purpose of the exercise was: namely the acquisition of a building
for my constituency office.
While I cannot prove that I verbally told the House authorities
that I would be the largest shareholder in the then proposed company,
they were certainly aware that I was a "large" shareholder
because of my discussions with them reference whether I should
or should not be a Director.
The then Parliamentary Commissioner for Standards
[name] was told by me in a letter dated 12th November 2001 that
I intended to purchase shares valued at £25,000.[224]
The intention at that point was that the shares would be valued
at £1,000 each. It was subsequently decided to issue shares
at a value of £250. This clearly shows me as being a "large"
shareholder.
Following advice from [the Commissioner] in a further letter from
her, dated 23rd November 2001, in due course I registered in the
Register of Members' Interests my subsequent acquisition of my
shareholding in accordance with "Category 9(b) Registrable
shareholding".[225]
I do not have a total memory recall of my conversation
with [the Commissioner] on 27th November 2001,[226]
but in respect of mentioning the large number of shares I was
proposing to buy in order to facilitate the purchase of Magdalen
Hall I am absolutely certain that I would also have mentioned
the purpose of the exercise namely to provide a constituency
office. It is inconceivable that I did not.
It is in this context, therefore, that I invite you
to accept (at least on the balance of probability if nothing else)
that [the Commissioner] was fully in the picture as to what was
proposed and to also accept that when her successor [...]
wrote to me on 23rd April 2002[227]
I had no reason to believe that this was anything other than an
endorsement of what I had previously notified to [the Commissioner]
and discussed with her. In summary, a green light to what had
been discussed intensely over several months with the House authorities
to allow me to have my constituency office at Magdalen Hall.
I hope you will also accept that throughout I sought to "dot
every i and cross every t".
In conjunction with what I said in my letter to you of 8th January,[228]
I state:
a) my strong rebuttal that I have knowingly done
anything which I should not have done;
b) at all times I closely followed the advice given
and that approval was given for what took place;
c) the arrangements have not resulted in misuse of
public funds; and
d) there has been no personal financial gain to me.
Accordingly, I hope this politically motivated complaint will
be rejected. Thank you.
22 January 2012
30. Enclosure
to Sir Bob Russell MP's letter of 22 January 2012: Letter to Mr
Bob Russell MP from Mr Bob Russell MP's accountant, 18 January
2002
I enclose a copy of a letter just received from your
tax office.[229]
You will note that the value at the date of the transfer to CLD
has now been confirmed at £50 per share, ie the same as you
paid for the shares initially (taking account of the subdivision
of shares in 2009). This is as I expected.
You will remember that we used this as a provisional
value for the gift when it was reported to the Electoral Commission,
via Lib Dem HQ.
At some point we ought to make another report the
Commission, to indicate that the amount is now confirmed; as no
change is required to the provisional value, I don't think this
will cause any wavesand I can't believe that it will have
any bearing on the current inquiry. However I shall wait to hear
from you about this before I get in touch with HQ on this point.
No doubt you will let me have your comments.
18 January 2002
31. Letter
to the Director-General of Human Resources and Change from the
Commissioner, 25 January 2012
I would welcome your advice and help on a complaint
I have received against Sir Bob Russell MP in respect of the arrangements
he had for leasing his constituency office in Colchester from
2002 to 2010.
In essence, the complaint is that Sir Bob Russell
made claims against parliamentary allowances for the rental of
his constituency office from 2002-03 to 2009-10, when that accommodation
was owned by a company in which he and a family member held shares.
I enclose the relevant correspondence.
You will note from the papers submitted by Sir Bob
that he has already been in touch with the Department asking for
information about payments made for the rent of his constituency
office.[230]
But it would also be helpful, if it were available, if you could
provide me with the following:
1. a summary of all the payments made for each
financial year from 2002-03 to 2010-11 for the use of Sir Bob's
constituency office, broken down by categoryfor example,
rent, utilities, telephones, maintenance;
2. confirmation that the Department does not
hold and did not receive an independent valuation of the market
rent for Sir Bob's share of the Colchester premises from any time
from 2002 to March 2010 (Sir Bob has included with his documentation
a letter from an independent valuer, dated 23 March 2010);
3. any documentation in addition to that already
submitted by Sir Bob of relevant contacts between him and the
Fees Office from 2002 to 2010 in relation to this property;
4. an explanation of why the House made rental
payments to Magdalen Hall Company Ltd between July 2002 and March
2004 when Sir Bob's lease had been with his constituency party,
who were paid directly after March 2004.
The questions which I will need to resolve are:
1. Whether Sir Bob Russell was within the relevant
Green Book rules, from May 2002 to 6 May 2010, in making claims
for the rental of a property owned by a company in the circumstances
which he describes and in which he held substantial shares and
in which his sister-in-law held more modest shares.
2. Whether the 50/50 apportionment of the cost
between the constituency office and the political party's office
was fair and reasonable, taking account of the lease and the accommodation
provided respectively to each.
3. Whether Sir Bob Russell met the requirements
of the rules in submitting a copy of the lease to the Department
(as appears to be the case) and whether he should also have submitted
in 2002, and again in 2005 when the rent was increased, an independent
valuation of the property assessing the market rent.
I would welcome any information the Department may
hold, as well as your comments and advice, on any of these matters.
In particular, it would be helpful to know:
a) whether you have, at this remove, any information
to confirm that, when the House authorities wrote to the Member
on 21 May 2002 to confirm that "the lease meets our approval",[231]
the Department was aware that the property was owned by a company
in which the Member had a substantial shareholding (as well as
his sister-in-law's two shares) and of the circumstances in which
the company was created. (You will see from his letter of 22 January
2012 that Sir Bob considers that the House authorities were "certainly
aware" that he was a large shareholder because of his discussions
with them about whether or not he should be a Director.)[232];
b) if the authorities were aware of the full
circumstances of the ownership of Magdalen Hall Company Ltd, including
the Member's substantial shareholding, in 2002 or subsequently,
how this approach was at the time considered to be consistent
with the relevant Green Book rules, and whether that remains the
Department's view;
c) whether you think the House authorities should
have asked Sir Bob for an independent rental valuation in 2002
and again in 2004 given that they were aware he was leasing his
offices from his constituency party.
Any other points you may wish to make to help me
with this inquiry would be most welcome. I would be very grateful
if you could let me have a response to this letter within the
next three weeks.
Thank you for your help with this matter.
25 January 2012
32. Letter
to the Commissioner from the Director-General of Human Resources
and Change, 21 February 2012
Thank you for your letter of 25 January in which
you seek advice on a complaint you have received against Sir Bob
Russell MP about his constituency office arrangements.[233]
I am sorry I have not been able to respond sooner.
It might first be helpful to set out some background.
The arrangements which are under scrutiny began in 2001/02, when
Sir Bob entered into arrangements with others for the purpose
of acquiring a church hall to serve both as a constituency office
for himself and as offices for the local Liberal Democrat party.
At about the same time, the then Head of the Fees Office issued
new guidance which affected the arrangements that were being set
up. But the transactional records and most of the correspondence
relating to the period between 2002 and 2004 have properly been
destroyed under the House's Authorised Records Disposal Practice,
and the few records that remain in this instance might support
more than one explanation. I must therefore express extreme caution
about drawing inferences from this period.
On 22 January 2002, the Head of the Fees Office wrote
to all Members setting out restrictions on leasing office accommodation
where the costs were being met by the Fees Office.[234]
With effect from April 2003:
· Members were not allowed to rent from
themselves or close associates or family;
· the lease must be lodged with the Fees
Office; and,
· if leased from a political party or constituency
association, there must be an independent rent valuation.
Sir Bob met a manager in the Fees Office in late
January 2002 and followed this up with a letter on 31 January,
confirming that a copy of his lease would be supplied, and that
he would provide an independent valuation.[235]
We have on file a further letter from
Sir Bob dated 13 May 2002 (enclosing the lease), and a reply from
the Fees Office to the effect that the lease was acceptable.[236]
We also have records of the payments
we made, and to whom they were made.
With the caveat that, from this limited information base we cannot
answer a number of your questions with any certainty, I now address
them in turn:
1. I enclose a summary of payments made in respect
of the use of the constituency office, broken down where possible
into categories. For 2002/03 and 2003/04, only rent costs are
shown. Fuller records are available from the 2004/05 financial
year.[237]
2. I can confirm that we do not hold an independent
valuation from 2002. I cannot at this distance say for certain
whether or not such a valuation was supplied. We do, of course,
hold the valuation of March 2010.[238]
3. I enclose copies of documentation held by the
Department in respect of Sir Bob's constituency office (including
circular letters sent to all Members).[239]
4. The immediate reason for paying Magdalen Hall
Company Ltd direct between July 2002 and March 2004 appears to
have been the written instruction dated 4 July 2002 from Sir Bob.[240]
Given the lapse of time since then, it is not possible to say
whether there had been other contact with Sir Bob about it, or
whether consideration had been given to the appropriateness of
the arrangement. The sublease gave no indication as to whom the
rent should be payable to, and it is not unusual for rent to be
paid to a third party such as a management company. Sir Bob wrote
again in March 2004 requesting that payments be made direct to
Colchester Liberal Democrats, an action described as a "tidying
up operation".[241]
You will wish to note that, although Sir Bob's letter
of 23 March 2007 requested that an arrears payment should be made
to Magdalen Hall Company Ltd and indicates that rent was paid
monthly to them, that particular payment and all future payments
continued to be paid directly to Colchester Liberal Democrats.[242]
I now turn to the issues you raise later in your letter (using
your numbering):
a) You have asked what knowledge the House authorities had
about Sir Bob's, and his sister-in law's shareholdings. Sir Bob's
letters of 31 January 2002 and 13 May 2002 and the Department's
reply of 21 May 2002 are the only ones on file that relate directly
to the issue of the ownership of Magdalen Hall.[243]
While Sir Bob refers to standing aside from a directorship in
January 2002,1 can see nothing that in itself suggests that Sir
Bob held shares (or at least shares with other than a nominal
value). It is entirely possible that the substantial personal
shareholding was disclosed at the meeting in January 2002, but
it is difficult to see how Sir Bob could then have been led to
understand that "the arrangements for my MP's constituency
offices comply with what is set out in the letter from [the Head
of the Fees Office] dated 22nd January". One possible explanation
is that the arrangements complied as of that date,
but would cease to comply when the full force of the arrangements
took effect in April 2003. I think it very unlikely that the shareholding
of Sir Bob's sister-in-law would have been discussed. There is
no reference to her involvement in the company in any of the correspondence
we hold and I am not in a position to shed any further light on
this.
b) The Green Book rules were updated in June
2003 to reflect the guidance that had been provided to Members
in the Department's letter to all Members of 22 January 2002.
As you will note, Members had until the end of March 2003 to ensure
that their constituency office arrangements complied with the
guidance. Had the Department been conscious of the ownership of
Magdalen Hall Company Ltd in June 2003, I believe we would have
ruled that the arrangement did not comply with the Green Book,
and would have approached Sir Bob accordingly. This was an issue
which was active at the time: in addition to the 2003 Green Book,
two circulars were issued to all Members (on 17 January 2003 and
20 March 2003) reminding them of the tighter rules.[244]
c) We had asked for a valuation in 2002, and
Sir Bob had undertaken to supply one. As noted above, it is possible
that he did so; butif he didwe have no record of
it, having disposed of most of our records from that period. It
would of course have been wise to seek a valuation in 2004 or
2005 if one had not been supplied in 2002; but we cannot now determine
whether that was the case.
Finally, a comment on two specific aspects. First,
the 50/50 apportionment of costs relating to the premises seems
reasonable on the basis of the information available. Secondly,
regardless of whether or not a valuation was provided at an earlier
stage, the 2010 valuation confirms that the rent was at that time
at or below the market rate. In the light of that, the rent paid
on the office over the years strikes me as reasonable.
Please let me know if you require further assistance.
21 February 2012
33. Enclosure
to the Director-General's letter of 21 February 2012: Summary
of costsSir Bob Russell MP[245]
Year | Rent
| Utilities | Phone
| Maintenance
| Total |
2002/03 |
£7,548.75
| n/a | n/a
| n/a |
n/a |
2003/04 |
£8,235.00
| n/a | n/a
| n/a |
n/a |
2004/05 |
£8,235.00
| £2,352.20
| £934.34
| £441.97
| £11,963.51
|
2005/06 |
£8,235.00 | £1,993.98
| £703.54
| £362.80
| £11,295.32
|
2006/07 |
£8,235.00 | £1,840.70
| £1,385.61
| £996.85
| £12,458.16
|
2007/08 |
£10,499.08 | £1,626.17
| £1,715.52
| £157.50
| £13,998.27
|
2008/09 |
£9,365.00 | £3,369.28
| £1,687.42
| £2,397.71
| £16,819.41
|
2009/10 |
£9,365.00 | £3,131.37
| £1,103.65
| £113.90
| £13,713.92
|
2010/11* |
£931.47 | £0.00
| £219.96
| £0.00
| £1,151.43
|
*to 6th May 2010
UtilitiesGas, electricity, rates,
water, TV License
Phonelandlines, broadband services
Maintenanceinsurance premiums,
decorating, security, general maintenance
21 February 2012
34. Enclosure
to the Director-General's letter of 21 February 2012: Letter to
a senior official in the Fees Office from Mr Bob Russell MP, 4
July 2002
I regret that I was not able to make contact with
you this week in respect of the payment of rent for my new office
accommodation in Colchester. I have therefore decided that it
would perhaps be better all round if I was to write.
I would be obliged if you could please set up a Monthly
Standing Order in the sum of £686.25p, payable to Magdalen
Hall Company Limited.
Details are: [...]
Sort Code: [...]
Account Number: [...]
It is requested that payment is made on the 1st of
each month.
Payment in arrears is due for May, June and July.
The Company Secretary has asked that I approach you for the above
quarter to be paid as soon as possible please.
We have still not heard from the Council what the
Business Rates will be. I will contact you in due course once
this information is known with a view for a Standing Order for
this to be created as well.
I trust that the above meets with your approval.
Do not hesitate to contact me should you have any queries. My
extension number in the Commons is [...]. My constituency office
telephone is [...].
Thank you.
4 July 2002
35. Enclosure
to the Director-General's letter of 21 February 2012: Letter to
Members from the Head of the Fees Office, 17 January 2003
MEMBERS' ALLOWANCES
I am writing to give you important information about
1. Rules on constituency office accommodation
[Material not relevant to the inquiry]
Rules on constituency office accommodation
My letter of 22 January 2002 set out new guidance
on constituency office accommodation, which had been approved
by the Speaker.[246]
You are required to supply us with copies of key documents relating
to offices financed from the allowances, including leases, any
agreement to sublet premises which you lease (if you have not
been able to end subletting arrangements), and service agreements
with constituency parties etc. Please supply these documents promptly
if you have not already done so, as you will be expected to conform
with the new guidance by the end of March 2003. Additional
copies of my letter are available from [name].
[Material not relevant to the inquiry]
17 January 2003
36. Enclosure
to the Director-General's letter of 21 February 2012: Letter to
Members from the Head of the Fees Office, 20 March 2003
Rules on the arrangement for Members' Constituency
offices
I am writing to remind you of the need to review
the arrangements for your constituency office accommodation. I
wrote to you on 22 January 2002[247]
to explain the new rules for constituency
office accommodation, and my letter of 17 January 2003 contained
a reminder.[248]
All Members are expected to conform with the new guidance by the
end of this month. If you have not already done so please may
I ask you, as a matter of urgency, to turn your attention to this
as soon as possible?
If you do not have a constituency office please let
us know.
Principles
You are advised to ensure that arrangements for your
office and surgery premises are above reproach and that there
can be no grounds for a suggestion of misuse of public money.
The attached letter explains that you should not lease from close
business associates or from family members. Particular care is
also needed if you
· Lease from a constituency association
· Share an office
· Sublet (which should only be done if unavoidable)
· Use your home as an office
Allow others to use your office on an occasional
basis
Again, the attached letter sets out the measures
which are required.
Documentation required
You are now asked to supply us with copies of key
documents relating to offices financed from the allowances. You
must lodge a copy of the following with the Department of Finance
and Administration. Please also inform the Department of any alterations
to the terms of these.
a copy of your lease
· a copy of a recent independent valuation
(required only if you lease from a political organisation or if
you sublet part of the premises)
· a copy of any agreement for cost sharing
(required only if you share with another Member, with a Member
of a devolved body or a MEP)
· a copy of any agreement for services with
your constituency association or other party political organisation.
If you have any questions about this please ring
[name] or [name].
20 March 2003
37. Enclosure
to the Director-General's letter of 21 February 2012: Letter to
the Fees Office from Mr Bob Russell MP, 29 March 2004[249]
I have been requested to ask the Fees Office to amend
the Bank details for the present Direct Debit
payable to Magdalen Hall Company Limited.
Please amend your records so that in future the payment
of £686.25 per month is made to the following:
[...]
Sort Code: [...]
Account Number: [...]
Account Name: Colchester Liberal Democrats Business Account
Magdalen Hall Company Limited (shares are held by
members and supporters of Colchester Liberal Democrats) owns the
building which houses both my constituency offices and rooms used
by Colchester Constituency Liberal Democrats. The Company leases
the whole building to the Constituency Party, who in turn sub-lease
my office area to me. The Constituency's Executive
Committee has requested that payment from the Fees Office should
go to the Constituency Party and not Magdalen Hall Company Limited.
This has been described to me as a tidying
up operation. The same person is Treasurer of both the Company
and Constituency Party.
Thank you for your assistance.
29 March 2004
38. Enclosure
to the Director-General's letter of 21 February 2012: Letter to
the Department of Finance and Administration from Mr Bob Russell
MP, 23 March 2007
Reference the rent for my Constituency Office, paid
monthly to Magdalen Hall Company Limited:
I would be most grateful if, from the new financial
year starting on 1 April 2007, the monthly rent is increased (from
the current £686.25p) to £780.42p an annual rent of
£9,365.
The monthly payment for the current financial year
should have been increased 12 months ago, but for whatever reason
it was not. Fortunately I believe I have sufficient left in my
Office Costs Allowance to cover the shortfall I owe.
I would be most grateful if you could please make
a payment of £1,134.04p (ie 12 months x £94.17p) to
Magdalen Hall Company Ltd.
I would welcome confirmation that the new monthly
rental of £780.42p will commence from April 2007.
I would also welcome, please, a statement showing
how much is now left in my OCA.
Thank you.
23 March 2007
39. Enclosure
to the Director-General's letter of 21 February 2012: Letter
to the Director-General of Human Resources and Change from Mr
Bob Russell MP, 30 March 2010
Thank you for your letter of 17th March[250]
in which you seek specific further information in respect of my
AOE claims submitted since April 2009 in respect of Office Rentals.
I respond to the 3 points as listed:
1 I am not sure what is meant by the observation
that the Constituency Office lease you hold on file "contains
elements that are incomplete." However; in the hope that
this deals with your request I enclose a copy of the original
Lease dated 30th April 2002 which has been freshly signed (30th
March 2010) by myself, and (for the Landlords) the current Chairman
of Colchester Liberal Democrats and [name] who signed the original
Lease.[251]
I regret to say that [name] is deceased and [name] has moved away
from Colchester.
2 I cannot recall that I had requested an
increase in my Constituency Office rent. Can you please provide
me with a copy of the request to which you refer? Thank you.
3 I enclose a valuation from chartered surveyors
[name of company] which confirms that the rent which I have claimed
for my office accommodation is not greater than the current market
rental for Colchester.[252]
I also enclose a letter from the Chairman of Colchester Constituency
Liberal Democrats.[253]
I hope that the above, and the enclosures, answer
the points about which you have written to me.
30 March 2010
40. Enclosure
to the Director-General's letter of 21 February 2012: Letter
to Mr Bob Russell MP from Quality Assurance
Manager, Department of Resources, 11 May 2010
We wrote to you recently and asked you to provide
us with documentation to support your AOE claims submitted since
April 2009.
Thank you for your letter dated 30
March 2010 and the enclosed copy of the original lease for your
constituency office, which you have had resigned, and the independent
valuation confirming that £9,365 per annum is a reasonable
market rent for your use of part of the building.[254]
Having reviewed your documentation,
the constituency office lease provided supports an annual rent
of £8,235. We therefore require supporting evidence from
your Landlord to confirm the rental increase to £9,365 per
annum which you claimed during 2009/10 [Green Book, para 2.2.5].
I enclose a letter dated 23 March 2007 you submitted requesting
an increase in your office rent to £9365 per annum.[255]
We would be grateful if you could submit the required
documentation by 27 May 2010.
Please do not hesitate to contact me on the above
number if you wish to discuss this matter.
11 May 2010
41. Letter to the Director-General
of Human Resources and Change from the Commissioner, 22 February
2012
Thank you for your letter of 21 February with your
advice and comments about the complaint against Sir Bob Russell
MP in respect of the arrangements for his constituency office.[256]
I was most grateful for this response and for the
enclosures. I am now consulting [the former Head of the Fees Office]
in case he can recall any contacts he had with Sir Bob in 2002
and will show him your letter with other relevant documents. Subject
to his response, I propose then to pass your letter and any response
from [the former Head of the Fees Office] to Sir Bob Russell.
In the meantime, could you help me in identifying
the relevant evidence to show that, as recorded in your letter,
in 2002, the department did ask Sir Bob Russell to provide a valuation?
A reply on the valuation point in the next week would
be much appreciated. I am very grateful for your help on this
matter.
22 February 2012
42. Letter
to the Commissioner from the Director-General of Human Resources
and Change, 27 February 2012
Thank you for your letter of 22 February in which
you seek relevant evidence to show that Sir Bob Russell was asked
for a valuation for his constituency office.[257]
The Department's letter of 22 January 2002 set out
the new arrangements for constituency offices, including the requirement
for an independent valuation if the accommodation was leased from
a political party or constituency association.[258]
This was followed by a meeting and telephone conversation with
a senior manager in the Department. Sir Bob then wrote on 31 January
2002 that his office space would be "assessed by an independent
valuer".[259]
My inference from this was that the Department had asked him to
carry out an independent valuation.
Further letters were sent to all Members by the Department
in January 2003 and March 2003 reminding them, inter alia, of
this requirement.[260]
27 February 2012
43. Letter
to a former Head of the Fees Office from the Commissioner, 22
February 2012
I am writing to you to ask if you could help me with
an inquiry I am making into a complaint against Sir Bob Russell
MP that he was in breach of the then rules of the House in respect
of the arrangements he had for his constituency office in Colchester
because that property was owned by a company in which he had a
substantial shareholding. The arrangement was initiated in 2002
when you were Head of the Fees Office in the House of Commons
and, according to the evidence from Sir Bob Russell and the House
authorities, you were consulted at the time. I am hoping that
you might be able to recall the terms of that consultation although
I appreciate that it is now quite some time ago.
In essence, the complaint is that Sir Bob Russell
made claims against parliamentary allowances for the rental of
his constituency office from 2002-03 to 2009-10, when that accommodation
was owned by a company in which he and a family member held shares.
The circumstances which my inquiry have established
are that on 30 April 2002 a company called the Magdalen Hall Company
Ltd purchased a property, Magdalen Hall, in Colchester. At that
time, Sir Bob Russell owned 100 of the 244 shares in the company,
for which he paid £25,000. He was by far the largest shareholder.
His sister-in-law held 2 shares. The property was to be leased
to the Liberal Democrat constituency party, with half of it being
sub-leased by the party to Sir Bob Russell for use as his constituency
office and the rest being used by the constituency party. Sir
Bob Russell would then claim for his rent and costs against his
parliamentary allowances.
Sir Bob Russell's evidence is that he consulted the
then Fees Office in 2002 about his proposed arrangements. In a
letter of 31 January 2002 which Sir Bob sent to an official in
the Fees Office, and of which I enclose a copy, he recorded his
decision to step down as a Director of the company.[261]
The letter says that this followed a meeting and subsequent telephone
conversation with her. The letter also notes that he was grateful
to that official and to you for confirming that "the arrangements
for my MP's constituency offices comply with what is set out in
the letter from [the Head of the Fees Office] dated 22nd
January". That letter of 22 January 2002, of which I enclose
a copy, provided that by March 2003 Members would not be permitted
to use their allowances to meet the costs of renting constituency
offices from themselves or from any organisation in which they,
or a partner or family member, had an interest.[262]
Subsequently, on 21 May 2002 an official to the Speaker's Advisory
Panel wrote to confirm that the lease which Sir Bob Russell had
sent the Department with a letter of 13 May met the Department's
approval.[263]
I enclose copies of these letters. There is no evidence that,
with the lease or separately, Sir Bob Russell provided an independent
valuation of the market rent, (as required under the rules when
leasing accommodation from a constituency association) although
he may have done so. From July 2002 to March 2004 the House authorities
made rental payments for Sir Bob Russell's constituency office
directly to the Magdalen Hall Company. After that, at Sir Bob
Russell's request, the House authorities made the payments to
the Liberal Democrat constituency party.
I consulted the House authorities about this matter.
I enclose a copy of my letter to them and of their response of
21 February.[264]
The question I am seeking to resolve is whether Sir Bob Russell
was correct in saying in his letter of 31 January 2002 that you
had confirmed that the arrangements for his constituency offices
complied with your letter of 22 January 2002 and that your confirmation
and the approval given for his lease in the letter of 21 May 2002
was given in knowledge of all the circumstances, in particular
in knowledge of the substantial shareholding which Sir Bob Russell
had in the Magdalen Hall Company Ltd and the modest holding of
his sister-in-law. The question I have to consider is how such
an arrangement was consistent with the new provisions in your
letter of 22 January 2002 which came into force the following
March.[265]
It would be very helpful, therefore, to know whether
you have any recollection of the events described in this letter
and, in particular, if you could confirm:
1) That you did indeed agree that Sir Bob Russell's
arrangements for his constituency offices complied with your letter
of 22 January 2002;[266]
2) If so, what was the reasoning for this and
whether you recall that in coming to your decision you were aware
of the arrangements for the ownership of the property in which
the constituency offices were to be located, namely Sir Bob Russell's
substantial shareholding in the company which owned the property
and the much lesser shareholding of his sister-in-law;
3) Whether you had any recollection of the Department
receiving an independent valuation of the market rent for the
constituency offices used by Sir Bob Russell in this property.
I enclose a note which sets out the procedure I follow
for witnesses.[267]
It would be most helpful if you could give me a response to this
letter within two weeks. If there is any difficulty about that,
or you would like a word about the process, please contact me
at the House.
I would very much appreciate any help you can give
me on this matter.
22 February 2012
44. Letter
to the Commissioner from a former Head of the Fees Office, 3 April
2012
I am sorry that I was not able to reply sooner to
your letter of 22nd February 2012, regarding your inquiry into
a complaint against Sir Bob Russell MP.[268]
Thank you for providing comprehensive background information,
as well as copies of correspondence relating to the complaint.
If indeed I was consulted, although the Member's
letter is unclear on this point (letter to [a senior Fees Office
official] dated 31st January 2002[269]),
I have no recollection of this However, I am certain that if the
full extent of the Member's involvement with the Magdalen Hall
Company Ltd had been fully disclosed at the time, to myself or
[the Fees Office official], (i.e. that he continued to be a majority
owner even although he was standing down as a director, and that
his sister in law also had a small shareholding) it would not
have been seen as complying with the new rules which were coming
into force at the end of March 2003.
I cannot recall either approving or confirming the
lease (letter from the Assistant Secretary to the Speaker's Advisory
Panel dated 21 May 2002 to Bob Russell MP[270]),
but it could not have been granted in full knowledge of all the
circumstances of the Member's involvement with the Magdalen Hall
Company.
Unfortunately I have no recollection of the Department
receiving an independent valuation of the market rent for his
constituency office.
3 April 2012
45. Letter
to Sir Bob Russell MP from the Commissioner, 16 April 2012
I last wrote to you on 12 March[271]
to let you know that, in the light of the reply which I had sought
and received from the House Authorities about this complaint in
respect of the arrangements for your constituency offices, I had
written to the former Head of the Fees Office and needed to await
a reply from him. I am glad to say I have now had a response and
am sorry that this has all taken much longer than I had hoped.
I enclose a copy of my letter to the House Authorities
of 25 January and to the former Head of the Fees Office of 22
February, together with their responses of 21 February and 3 April
respectively.[272]
As you will see, the Department reports that the
transactional records and most of the correspondence relating
to the period between 2002 and 2004 have been destroyed and that
the records that remain might support more than one explanation.
It therefore expresses "extreme caution" about drawing
inferences from this period. The Department notes that it was
"entirely possible" that your substantial personal shareholding
in Magdalen Hall Company Limited was disclosed at your meeting
with a manager in the Fees Office in January 2002, but it finds
it difficult to see how you could then have been led to understand
that the arrangements complied with the letter from the Department
of 22 January 2002. It notes that one possible explanation was
that the arrangements complied as of that date, but would cease
to comply when the full force of the arrangements
took effect in April 2003. The Department notes that your letter
of 31 January 2002 did refer to you standing aside from the directorship.[273]
But it sees nothing that in itself suggests that you held shares
in the company, or at least shares with other than a nominal value.
It thinks it very unlikely that the shareholding of your sister-in-law
would have been discussed. The Department concludes that "had
the Department been conscious of the ownership of Magdalen Hall
Company Ltd in June 2003, I believe we would have ruled that the
arrangement did not comply with the Green Book, and would have
approached Sir Bob accordingly."
In his letter to me of 3 April, the former Head of
the Fees Office says that he has no recollection of being consulted
(as suggested in your letter of 31 January 2002), but he is "certain
that if the full extent of the Member's involvement with the Magdalen
Hall Company Ltd had been fully disclosed at the time" to
himself or to a colleague in the Fees Office, namely that you
continued to be a majority owner even though you were standing
down as a director and that your sister-in-law also had a small
shareholding "it would not have been seen as complying with
the new rules which were coming into force at the end of March
2003".[274]
The former Head of the Fees Office cannot recall
either approving or confirming the lease which was approved in
the letter of 21 May 2002 from the Assistant Secretary to the
Speaker's Advisory Panel, but he considers that "it could
not have been granted in full knowledge of all the circumstances
of the Member's involvement with the Magdalen Hall Company."[275]
The Department's letter notes that it had asked for
a valuation in 2002 and that you had undertaken to supply it,
but it has no record of such a valuation, having disposed of most
of their records from that period. The former Head of the Fees
Office has no recollection of the Department receiving an independent
valuation. Your letter to me of 22 January 2012, of course, recorded
that you had no knowledge of any valuations other than the one
taken undertaken in 2009.[276]
I would be grateful for your comments on these responses.
In particular, it would be helpful to have your response to the
following issues:
1) whether, in the light of the advice now received
from the Department and the former Head of the Fees Office, you
accept that the arrangements you had for leasing your constituency
office, both before and after the change in the payment arrangements
in March 2004, were in fact a breach of the rules of the House
on such leasing arrangements which came into force at the end
of March 2003. If you do not accept their advice, it would be
helpful to have your reasons;
2) whether, taking account of the responses,
you accept that, contrary to your initial recollection, you must
not after all have provided the Department with the details of
your and your sister-in-law's ownership of shares in the Magdalen
Hall Company Ltd, or whether you believe you did provide that
information and, if so, it would be helpful to have any reasons
why you think the Department came to a different view then about
your lease than it and the former Head of the Fees Office do now
having seen all the evidence now available;
3) whether, in the light of your letter of 22
January 2012[277]
and the Department's evidence, you accept that you did not in
fact provide the requested valuation in 2002, or at any time before
2010, as required under the rules since you were sub-leasing your
office from your constituency party.
There is one other point arising from the evidence
on which I would also welcome your comments:
(a) I note that in the version of your letter
of 29 March 2004[278]
provided by the House authorities with their letter of 21 February
2012[279]
you describe the share ownership arrangements for Magdalen Hall
Limited Company as follows: "shares are held by members and
supporters of Colchester Liberal Democrats". However, in
the version of that letter which you had provided with your letter
of 8 January 2012 (which had a number of manuscript amendments)
there is no such reference to the share ownership arrangements.[280]
It would be helpful to know why that additional information about
the share ownership arrangements was added to the final version
of your letter which was sent to the House authorities and why
your explanation of who held the shares did not identify your
own shareholding or that of your sister-in-law.
I hope that we are now nearing the end of this inquiry.
I am minded to prepare a memorandum to the Committee on Standards
and Privileges on this matter, although you should draw no inferences
from that. Subject to your response, I may need to consult present
or former members of the House Authorities further, or arrange
for a formal interview so that I can ask you further about any
remaining points.
I appreciate that this has taken far longer than
either of us would have wished to reach this stage, and I again
apologise for that. It would be most helpful if you could let
me have a response within the next two weeks, but if you do need
longer, please let me know.
I am most grateful for your help and for your patience
on this matter. Thank you.
16 April 2012
46. Letter
to the Commissioner from Sir Bob Russell MP, 18 April 2012
Thank you for your letter of 16th April, the content
of which dismays me.
I am satisfied that all times I proceeded with the
advice given me by both the
House Authorities and your two predecessors dating back
more than ten years! I am satisfied that I
have complied with both the letter and spirit of the advice so
given.
My Office General Manager has come across the enclosed
letter, dated 13th May 2002[281],
which clearly confirms what I have previously indicated was the
subject of numerous conversations namely that the whole
point of acquiring Magdalen Hall was as a constituency office.
In addition, in bold type across the bottom of the page, it states
that Magdalen Hall is my new constituency address!
The fact that the whole exercise was to acquire premises
for my constituency office is also made clear in a letter, dated
21st May 2002, to me from the Assistant Secretary to The Speaker's
Advisory Panel.[282]
A copy of this is enclosed.
We have also found a copy of a letter dated 12 November
2001, from me to [the Commissioner], which spells out the then
proposal of share issue and my intended stake.[283]
While this letter does not say that I hoped to move my constituency
office into the building, (which was the purpose of the exercise)
in subsequent conversations (telephone and personally)
I can state with absolute confidence this would have been made
clear.
I find it contrary to natural justice to be required
to prove my innocence when proof of guilt is not there.
I now feel it necessary to seek legal advice. I shall
reply to your further questions once I have done so; point by
point.
18 April 2012
47. Letter
to Sir Bob Russell MP from the Commissioner, 26 April 2012
Thank you for your letter of 18 April which I regret
reached me only on 25 April.[284]
There are three questions which I am seeking to resolve.
First, whether your claims from parliamentary resources for the
rent of your constituency office were within the rules of the
House as they came into force at the end of March 2003, since
the building was owned by a company in which you and your sister-in-law
held shares. The facts of the ownership and leasing arrangements
are, I think, quite clear. The judgment, on which I have taken
advice from the House Authorities, is whether these arrangements
were within the rules. I have come to no conclusion on this. I
await your response to the first of the points set out in my letter
of 16 April.[285]
The second question is whether the Fees Office had
full knowledge of the ownership arrangements for the property
at the time they considered your arrangements and the terms of
the lease in 2002. Point 2 of my letter of 16 April is intended
to help me on that issue. This is a judgment I will need to make
on the balance of probabilities, taking account of all the evidence
I have received, including your own.
The third question is whether you did not in fact
provide the requested independent rental valuation in 2002 as
required under the rules when sub-leasing from a constituency
party. I have your letter of 22 January 2012 and the comments
from the Department to help me resolve that.[286]
I asked you about this in point 3 of my letter of 16 April.
I am grateful to you for enclosing copies of your
letter of 13 May 2002 to the Fees Office and the letter of 21
May 2002 to you from the Assistant Secretary to the Speaker's
Advisory Panel both of which you had already provided
with your letter of 8 January 2012.[287]
Thank you also for your further comments on (and copy of) the
letter you sent to the former Commissioner ([name]) on 12 November
2001 which I had originally sent to you with my letter of 17 January
2012.[288]
In view of what you say in your letter about your
contacts with officials in the Fees Office and the former Parliamentary
Commissioner for Standards, I have decided that I should take
evidence from the former member of staff in the Fees Office to
whom you wrote ([name]) and from the former Commissioner ([name]).
I will write to you again when I have their responses.
In the meantime, it is, of course, open to you to
decide not to let me have your response to my letter of 16 April
until after I have sent you the responses from the two
additional witnesses. It is, of course, open to you to take such
legal advice as you wish. I am also happy to confirm your understanding,
which you will find at paragraph 11 of the Procedural Note which
I sent you with my first letter of 7 December that: "What
is asked of the Member is to give a full and truthful account
of the matters which have given rise to the complaint: there is
no question of them being required to prove their innocence."[289]
I am most grateful for all your help with this inquiry, which
I do appreciate. I will be back in touch as soon as I hear from
the additional witnesses.
26 April 2012
48. Letter to a former Parliamentary
Commissioner for Standards from the Commissioner, 26 April 2012
I would be grateful for any help you can give me
with an inquiry I am conducting into a complaint against Sir Bob
Russell MP in respect of the arrangements he made for his constituency
offices from 2003 to 2010, against which he claimed parliamentary
expenses.
In essence, the complaint is that Sir Bob Russell
made claims against parliamentary allowances for the rental of
his constituency office from 2002-03 to 2009-10, when that accommodation
was owned by a company in which he and a family member held shares.
Sir Bob Russell has told me that he consulted you
in 2001 when you were Parliamentary Commissioner for Standards
about the registration requirements of the property, which was
to be purchased on behalf of the Colchester Liberal Democrats
by a company in which he planned to take a substantial shareholding.
I enclose copies of the relevant correspondence from the file
held by the Registrar of Members' Financial Interests.[290]
I sent these documents to Sir Bob Russell on 17 January
2012 with the following comment: "As you will see, the exchanges
were about the registration of your shareholding in the company
formed to facilitate the purchase by Colchester Liberal Democrats
of what was to become Magdalen Hall. As you will also see, there
was no reference in this correspondence to your intended use of
part of the property for your constituency office."
[291]
In his response of 22 January,[292]
Sir Bob Russell wrote the following:
"The then Parliamentary Commissioner for Standards
([name]) was told by me in a letter dated 12th November
2001 that I intended to purchase shares valued at £25,000.
[293]
The intention at that point was that the shares would be valued
at £1,000 each. It was subsequently decided to issue shares
at a value of £250. This clearly shows me as being a "large"
shareholder.
Following advice from [the Commissioner] in a further
letter from her, dated 23rd November 2001, in due course I registered
in the Register of Members' Interests my subsequent acquisition
of my shareholding in accordance with "Category 9(b) Registrable
shareholding".[294]
I do not have a total memory recall of my conversation
with [the Commissioner] on 27th November 2001, but in respect
of mentioning the large number of shares I was proposing to buy
in order to facilitate the purchase of Magdalen Hall I am absolutely
certain that I would also have mentioned the purpose of the exercise
namely to provide a constituency office.[295]
It is inconceivable that I did not.
It is in this context, therefore, that I invite you
to accept (at least on the balance of probability if nothing else)
that [the Commissioner] was fully in the picture as to what was
proposed and to also accept that when her successor ([name])
wrote to me on 23rd April 2002 I had no reason to believe that
this was anything other than an endorsement of what I had previously
notified to [the Commissioner] and discussed with her.[296]
In summary, a green light to what had been discussed intensely
over several months with the House authorities to allow me to
have my constituency office at Magdalen Hall."
Sir Bob Russell returned to the point in a letter
to me of 18 April: "We have also found a copy of a letter
dated 12 November 2001, from me to [the Commissioner], which spells
out the then proposal of share issue and my intended stake.[297]
While this letter does not say that I hoped to move my constituency
office into the building, (which was the purpose of the exercise)
in subsequent conversations (telephone and personally) I can state
with absolute confidence this would have been made clear."
I appreciate that this is now all a very long time
ago. But I would be very grateful if you could let me know whether
you recall the attached correspondence and your note of a telephone
discussion with Sir Bob Russell; whether you recall any other
relevant discussions with Sir Bob Russell about this matter; and
whether you recall if he told you in conversation at any time
that the property was to be used both by his constituency party
and by himself as a constituency office. If you can recall any
action which you took following Sir Bob Russell's letter and any
telephone conversation, that too would be most helpful, in particular
whether you passed on orally or otherwise to your successor or
to the Fees Office any information about this matter.
I enclose a note which sets out the procedure which
I follow in seeking evidence from witnesses.[298]
I will be copying your response to Sir Bob Russell for any comments
he may wish to make on it. This letter, and your response, should
not be disclosed to others, but in due course, your letter would
be published, either on my parliamentary webpages or as part of
the evidence I submit to the Committee on Standards and Privileges
and which they would then publish with their report.
I very much hope that it might be possible for you
to let me have a response to this letter within the next two weeks.
If there is any difficulty about this, or you would like a word
about the process please contact me at the House. In any event,
I look forward to hearing from you.
26 April 2012
49. Letter
to the Commissioner from a former Parliamentary Commissioner for
Standards, received 4 May 2012
Thank you for your letter of 26 April.[299]
I am sorry I do not recall the detail of conversations
with Sir Bob Russell in 2001. However as my note of that telephone
conversation demonstrates I made notes of all my conversations
with MPs.
However had Sir Bob Russell mentioned anything material,
other than the shareholding, it is likely that I would have recorded
it.
4 May 2012
50. Letter to a former senior
official in the Fees Office from the Commissioner, 26 April 2012
I would be grateful for any help you can give me
with an inquiry I am conducting into a complaint against Sir Bob
Russell MP in respect of the arrangements he made for his constituency
offices from 2003 to 2010, against which he claimed parliamentary
expenses.
I attach a note which sets out the procedure I follow
in requesting help from witnesses.[300]
I will wish to make your response to this letter available to
Sir Bob Russell during the course of my inquiry. This letter and
your response should not be disclosed to others, but, in due course,
it will either be published on my webpages or as part of the evidence
submitted to the Committee on Standards and Privileges along with
its report. In any published document I will refer to your role
in the Fees Office, but not your name and address.
In essence, the complaint which I am considering
is that Sir Bob Russell made claims against parliamentary allowances
for the rental of his constituency office from 2002-03 to 2009-10,
when that accommodation was owned by a company in which he and
a family member held shares.
Sir Bob Russell's evidence is that his constituency
office was from 2002 based in a former church hall which he shared
with his constituency party (who used half of the property while
he used the other half). This property was owned by a company
specifically established to buy this property for the Colchester
Liberal Democrats in which Sir Bob Russell held the largest number
of shares in that company costing £25,000. His sister-in-law
also held a small number of shares.
Sir Bob Russelland the current House authoritieshave
provided some written evidence about his contacts with the Fees
Office as these arrangements were set up. I enclose the relevant
correspondence. As you will see, some of the letters refer to
yourself. You will see in particular a letter of 31 January 2002
addressed to yourself which states: "I am also grateful to
you and [the Head of the Fees Office] for confirming that the
arrangements for my MP's constituency offices comply with what
is set out in the letter from [the Head of the Fees Office] dated
22 January."[301]
The question I am to resolve is whether these arrangements
were in accordance with the rules introduced in April 2003 and
presaged in a letter of January 2002 informing Members of the
new rules.[302]
The new rules prevented Members using allowances to meet the costs
of leasing accommodation from themselves or a partner or family
member or from any organisation in which they or a partner or
family member had an interest.
Sir Bob Russell has said that as well as correspondence,
he had meetings and "numerous" conversations with yourself
and the then Head of the Fees Office [name].
In his evidence to me, Sir Bob Russell has said:
"Looking back to conversations which occurred
10 years ago, I do not have written evidence that I told the House
authorities that (a) I would be the largest single shareholder,
and (b) that my constituency office would be rented from my constituency
party on a sub-tenancy to their tenancy with Magdalen Hall Company
Limited but they most certainly knew that the latter was
the case.
...
As the whole purpose of the exercise was to secure
a constituency office to replace the window-less former workshop
and basement my staff and I were then operating from, I can state
with absolute confidence that the House authorities were fully
aware of what I was seeking to achieve! It is simply inconceivable
that this was not so. This would have been mentioned whenever
conversations took place specifically when the advice
was given that it would be better that I did not become a Director
of the company.
...
The House authorities were of considerable assistance
in ensuring that matters progressed so yes, they were
definitely aware that my constituency office was to be located
at Magdalen Hall. The payment by them of the rent when I moved
in during May 2002 again provides clear evidence that they knew
this was the case.
Subsequently, following approval by the local Authority
for the conversion works at Magdalen Hall, the Fees Office also
had the layout showing the area of the building used as my constituency
office. This is further evidence that the House authorities were
fully in the picture as to the reason for the acquisition of the
former St Mary Magdalen Church Hall to be my constituency
office. Magdalen Hall is in the New Town Conservation Area."
I consulted the House authorities. In their reply
of 21 February[303],
which I enclose, the Director-General says:
"(a) You have asked what knowledge the House
authorities had about Sir Bob's, and his sister-in law's shareholdings.
Sir Bob's letters of 31 January 2002 and 13 May 2002 and the Department's
reply of 21 May 2002 are the only ones on file that relate directly
to the issue of the ownership of Magdalen Hall.[304]
While Sir Bob refers to standing aside from a directorship in
January 2002, I can see nothing that in itself suggests that Sir
Bob held shares (or at least shares with other than a nominal
value). It is entirely possible that the substantial personal
shareholding was disclosed at the meeting in January 2002, but
it is difficult to see how Sir Bob could then have been led to
understand that "the arrangements for my MP's constituency
offices comply with what is set out in the letter from [the Head
of the Fees Office] dated 22nd January". One possible
explanation is that the arrangements complied as of that date,
but would cease to comply when the full force of the arrangements
took effect in April 2003. I think it very unlikely that the shareholding
of Sir Bob's sister-in-law would have been discussed. There is
no reference to her involvement in the company in any of the correspondence
we hold and I am not in a position to shed any further light on
this.
(b) The Green Book rules were updated in June 2003
to reflect the guidance that had been provided to Members in the
Department's letter to all Members of 22 January 2002.[305]
As you will note, Members had until the end of March 2003 to ensure
that their constituency office arrangements complied with the
guidance. Had the Department been conscious of the ownership of
Magdalen Hall Company Ltd in June 2003, I believe we would have
ruled that the arrangement did not comply with the Green Book,
and would have approached Sir Bob accordingly. This was an issue
which was active at the time: in addition to the 2003 Green Book,
two circulars were issued to all Members (on 17 January 2003 and
20 March 2003) reminding them of the tighter rules."[306]
I have also consulted the then Head of the Fees Office
[name] about this evidence.[307]
His response was as follows:[308]
"If indeed I was consulted, although the Member's
letter is unclear on this point (letter to [Fees Office official]
dated 31st January 2002)[309],
I have no recollection of this. However, I am certain that if
the full extent of the Member's involvement with the Magdalen
Hall Company Ltd had been fully disclosed at the time, to myself
or [the official], (i.e. that he continued to be a majority owner
even although he was standing down as a director, and that his
sister in law also had a small shareholding) it would not have
been seen as complying with the new rules which were coming into
force at the end of March 2003.
I cannot recall either approving or confirming the
lease (letter from the Assistant Secretary to the Speaker's Advisory
Panel dated 21st May 2002 to Bob Russell MP[310]),
but it could not have been granted in full knowledge of all the
circumstances of the Member's involvement with the Magdalen Hall
Company."
I appreciate that this is now all a very long time
ago. But it would be very helpful if you could let me know whether
you have any recollection of the correspondence you had with Sir
Bob Russell in 2002; whether you have any recollection of any
meetings or telephone conversations with him about this matter;
and, if so, whether you can recall him telling you about the ownership
arrangements of the company which was to buy Magdalen Hallnamely
that he was to have a substantial shareholding in the company,
with a lesser shareholding for his sister-in-law. Finally, it
would be helpful to know if you have any recollection of why you
recommended to him that he should not be a director of this company.
It would be very helpful indeed if you could let
me have a response to this letter within the next two weeks. If
you need a little longer, or would like to discuss the process,
please contact me at the House.
26 April 2012
51. Letter
to the Commissioner from a former senior official in the Fees
Office, 8 May 2012
I write in reply to your letter of 26 April 2012
regarding the above.[311]
As you say, this happened a very long time ago and
I must admit that I do not recall in detail my dealings with Sir
Bob at that time. However, as far as I can recall:
I met Sir Bob once and spoke to him on the telephone
on at least one occasion.
We discussed his intention to move his constituency
office and I can confirm that I was aware that the new location
would be Magdalen Hall.
I am not sure that Sir Bob made clear the exact nature
of the ownership of the property. I am inclined to think that
he did not, as the standard advice that we were giving at that
time was that whilst renting from companies in which they had
a major stake was not explicitly against the rules as they stood
in January 2002 it would be when the new rules came into force.
I am sure that we never discussed the shareholding
of his sister-in-law.
It was standard advice that Members should not hold
an executive position in companies with which they conducted parliamentary
business.
8 May 2012
52. Letter
to Sir Bob Russell MP from the Commissioner, 14 May 2012
I last wrote to you on 26 April[312]
when I let you know that I had decided that I should take evidence
from a former member of staff in the Fees Office [name] and a
former Parliamentary Commissioner for Standards [name], both of
whom you had identified in your evidence as having dealt with
matters arising from the acquisition of Magdalen Hall.
I have now received their responses. I enclose copies
of the letter from the former Commissioner of 4 May[313]
and from the former member of the Fees Office of 8 May[314],
together with my letters to them of 26 April[315]
asking for their help with this inquiry.
I would welcome any comments you may wish to make
specifically in response to the evidence in these letters, either
separately or as part of the response to my letter to you of 16
April.[316]
In any event, I would be grateful if, taking account as necessary
of this additional evidence, you could let me have your response
to the questions which I put to you in that letter.
I appreciate that it has necessarily taken a few
weeks for me to receive this additional evidence from the witnesses
and that you will wish to take account of that evidence in your
response to my letter of 16 April. It would, however, be very
helpful if you could let me have your response now within the
next two weeks.
Subject to your response, I would hope that that
would bring us near to the end of this inquiry. When I have your
response, I will need to consider whether it would be helpful
in concluding the inquiry to invite you to an interview. I will
consider that further, and if necessary let you know about the
procedure, when I receive your response.
I am most grateful for your continuing help on this
matter.
14 May 2012
53. Letter
to the Commissioner from Sir Bob Russell MP,
8 June 2012
My attention has been drawn to the following:
Standard of Proof
1 When considering allegations
against Members, the Commissioner and the Committee normally require
allegations to be proved on the balance of probabilities, namely,
that they are more likely than not to be true. Where the Commissioner
and the Committee deem the allegations to be sufficiently serious,
a higher standard of proof will be applied, namely, that the allegations
are significantly more likely than not to be true.
1 In light of the above I am astonished that
this investigation is now in its eighth month. The Complaint is
vexatious and was made by a political opponent. It has now taken
around 100 hours of my time, and that of my Office Manager, dealing
with matters in response to your questions meaning that it has
long passed the point of causing a serious distraction
to one where it has become an obstruction to my work and
duties as a Member of Parliament.
2 In my holding response to your letter of
16th April, in view of the line you were taking, I said that I
would need to seek legal advice.[317]
I have done so. I am advised that the key points to be considered,
particularly in view of what is set out in "Standard of Proof"
above, are Outcomes and Process.
Outcomes:
Have I had a personal financial benefit from the
arrangements in the establishment of the Company which owned the
premises where I leased space for my constituency office? NO.
Have I used public funds for purposes other than
that for which they were intended, namely the rent for my constituency
office? NO.
Process:
It is not my fault that the House Authorities have
destroyed all the records from the period in question, but what
documentation that has survived (notably from my records) clearly
shows that during the period I sought advice, at every stage,
from the autumn of 2001 to the spring of 2002 so as to comply
with the rules and regulations, existing and proposed. It would
have been folly of me to have done otherwise.
I sought advice
I was given advice
I followed that advice
Had I been given different advice I would have
followed that different advice!
3 Outcomes are clearly 100 per cent factual.
Process is inconclusive, but I know that my recollection from
that period (where establishing my constituency office occupied
much of my time) is that I followed the advice I was given.
4 My Secretary from that time, now re-designated
as my Office Manager [name], vividly recalls how particular I
was in seeking advice from the House authorities and only proceeding
on that advice. She is prepared to testify to this effect.
5 I have already provided you with substantial
rebuttals to the vindictive allegations. This further extensive
letter from me provides additional compelling reasons in support
of my position.
6 Putting "outcomes" and "process"
together, the evidence fails both tests set out in the "Standard
of Proof". I therefore invite you to strike out this vexatious
complaint before even more of our time is wasted on pursuing someone's
political vendetta.
7 I will, however, address (in order of each
letter), what you say in your letters of (a) 16th April, (b) 26th
April and (c) 14th May.[318]
8 What you have gathered from people's memories
of a decade ago is much less reliable, frankly, than my memory
and that of my Office Manager. At that time we were living and
breathing our future office arrangements where we have
been now for ten years. Is it seriously suggested that those whom
you have contacted have a more accurate memory recall? What else
can they recall, without being prompted, from every other dealing
they had with each MP from a decade and more ago?
9 I would further point out that such "fishing
trips" are not reliable as evidence as a Home Affairs Select
Committee inquiry, on which I sat, concluded in respect of how
Police had gathered evidence in historic sex abuse enquiries.
The same applies to the responses you have obtained for which
there is no supporting documentation. This is completely unfair
on me and, I repeat, I went to great lengths to ensure
that at every stage I sought advice and followed it.
10 Even the memories of those who have been
contacted by you, and what records exist, confirm that
I sought advice. Why, then, would I not follow that
advice?
Responses to your letter and Questions of 16th
April[319]
11 I have previously said it would be "inconceivable"
that in my discussions with the Fees Office I had not mentioned
the intention that Magdalen Hall would be my constituency office.
Actually, a more accurate word would be "Impossible"
that this was not mentioned! Why else would I be having discussions
with the Fees Office? They would have had absolutely no interest
otherwise!
12 The confirmation by the Fees Office that
it was "entirely possible" that my substantial personal
shareholding in Magdalen Hall was made known to them by me provides
further contemporary evidence that I was at all times open and
frank with the proposals relating to my new constituency office
and it was because of such advice given at that time that I did
not proceed with the original intention of being a Director. For
what other reason did the Fees Office offer such advice if I had
not discussed the matter with them?
13 Ten years on, the Department is seeking
to distance itself from the advice it gave me at the time. I am
saddened by this. The Department was fully conscious of the ownership
of Magdalen Hall Company Limited this was the reason why
I sought their advice!
14 The Department has known throughout what
the position was. My ownership of shares was declared annually
in the Members' Register of Interests. There was no personal financial
benefit to me. I did not hide anything. I was open and transparent
at all times.
15 I conclude that it is perhaps unlikely
that I would have mentioned that my sister-in-law had shares in
Magdalen Hall Company Limited, and looking back I am not sure
if at the time I even knew she did. I did not know the names of
everyone who had voluntarily put money into the project to help
me have a constituency office. Others (notably a retired legal
executive) were responsible for that side of things.
16 In any event, this is de minimis.
My sister-in-law's shares represent less than half of one per
cent of the share value.
17- In the paragraph at the top of Page 2 the words
"majority owner" (of shares) are used. This is not
true! I was never the "majority owner". A "major
owner" is not the same as "majority" and thus the
completely wrong impression is given. My stake represented less
than 25 per cent of the shares in this not-for-profit
company. That said, it does not alter the fact that the evidence
shows that I did seek the advice of the Fees Office regardless
of what the former Head of the Fees Office has told you.
18 In the second paragraph on the same page
the former Head of the Fees Office states that he cannot recall
either approving or confirming the lease which was approved in
the letter of 21st May 2002 from the Assistant Secretary to the
Speaker's Advisory Panel.[320]
Well, someone in his Department must have done! How else could
matters have proceeded without such approval?
19 His Department was in full knowledge of
all the circumstances of my involvement! Ten years later, to argue
otherwise, is a travesty of what I know to be the truth.
20 The third paragraph on Page 2 perhaps
more than anything else provides supporting
evidence to my case (and dramatically weakens the jogged memory
recall without any documentary evidence to support the counter
view) of the truth of what occurred more than ten years ago.
21 Reference the Department's valuation request
of 2002, and my honest comment (my letter to you dated 22nd January
this year[321])
that I could not recall submitting this at
the time, my Office Manager's opinion is that it is highly unlikely
that I did not do as requested as I was very particular as to
the step-by-step deliberations.
22 But let's deal with the former Head of
the Fees Office's observation that he has no recollection of the
Department receiving an independent valuation (all records from
that time having been destroyed). If that is the case, then it
raises serious questions about the operation of his Department
and his stewardship of it.
23 Let's assume that I did not submit a valuation
in 2002. This then prompts the following questions to them:
(i) Why did the Department not send me a
reminder?
(ii) Is it seriously suggested that I plucked
a figure from the air for the rent to be claimed, and then submitted
this to the Department without any verification?
(iii) Why did the Department pay the rent
for my constituency office (year after year!) without the verification
to justify this?
(iv) If there was no independent valuation,
why was this not noticed at any time by the Department's Internal
Auditors?
(v) If there was no independent valuation,
why was this not noticed at any time by the External Auditors?
24 Turning now to your three questions on
Page 2:
1) No, I do not accept that I was in breach of
the Rules of the House. I sought advice from the House authorities;
and followed all the advice I was given. At no point have I received
a personal financial benefit, something which the Department was
fully aware was the case and which subsequent events have
confirmed. I refer you to my section on Outcomes on the first
page of this letter to stress this again.
2) I am absolutely convinced that the Department
was fully aware of my share ownership in Magdalen Hall Company
Ltd, a not-for-profit mutual formed purely to facilitate a constituency
office for myself. It is not my fault that the Department has
destroyed all the documentation from that time. Reference the
shares owned by my sister-in-law, I refer you to Paragraph 16
where I point out that this is de minimis as these represent
less than half of one per cent of the share value.
3) I refer you to Paragraphs 22 and 23.
25 Reference your question (a) at the top
of Page 3. I am simply not in a position to respond to this with
any informed authority, not just because I do not understand the
significance (if any) between the phrasing and content of the
two letters from which you quote but (i) the arrangements for
forming Magdalen Hall Company Ltd were conducted by people with
legal knowledge of such things rather than myself, and they sought
people to donate money to achieve this outcome; and (ii) the arrangements
for acquiring Magdalen Hall were always with the sole intention
of providing me with a constituency office fit for purpose for
myself, my staff and my constituents. The House authorities were
aware of my share ownership and the purpose of what was proposed,
as I have already explained.
26 I conclude my response to your letter
of 16th April by again stressing that the arrangements have not
resulted in a single penny financial advantage to me or, indeed,
anyone else as clearly outlined in Paragraph 2.
Responses to your letter and questions of 26th
April[322]
27 Having carefully read all the points you
refer to, I believe that I have responded above in great detail
to all of them in the spirit of "a full and truthful account
of the matters which have given rise to the complaint."
Responses to letter and questions of 14th May[323]
28 The responses from [the
former Commissioner] and [the former Fees Office official] clearly
confirm that I contacted both of them to discuss matters relating
to my proposals for my new constituency office and the arrangements.[324]
29 [The former Fees Office
official]'s recollection is one with which I concur other than
that, in the third bullet point, I am confident that I would have
certainly explained the status of Magdalen Hall Company Limited;
namely in effect a not-for-profit mutual company to which I would
have no financial benefit. It formed part of the
conversation which led her to advise me that it would be prudent
not to be a Director.
30 [The former Commissioner]
states that she does "not recall the detail of conversations"
with me. I am not surprised. This took place more than ten years
ago. I am bound to observe that the fact her note (relatively
brief) did not mention the purpose of my shareholding in Magdalen
Hall Company Limited namely as my new constituency offices
does not mean that I failed to mention this. As the contemporary
recollection of [the former Fees Office official] confirms, I
fully explained to her that the intention of acquiring Magdalen
Hall was to move my constituency office there. Thus it is inconceivable
that, noting all my conversations with others, I did not mention
this to [the then Commissioner] as well. The balance of probability
is that I did; I would have had no reason not to.
Conclusion
31 The clear resolution of Parliament is
that no Member should derive personal financial gain from the
funds received from the public purse to carry out his or her duties
as a Member of Parliament.
32 The rebuttal to the malicious
complaint made against me by a political opponent is that I did
not make any financial gain from the arrangements for my constituency
office.
I hope that you will now be able to reject the complaint.
Thank you.
8 June 2012
54. Letter
to the Commissioner from Sir Bob Russell MP, 28 June 2012
[Material not relevant to the inquiry]
[My Office Manager] cannot bring any new material
evidence to that which you already have which emphatically
proves that not a penny of public money was used inappropriately
nor did I gain financially. What I was saying in my previous letter
is that she could vouch for the lengths I went to in seeking advice
from the House authorities, advice which I followed to the letter!
The record shows that the length of time taken to
investigate this politically motivated malicious complaint does
not rest with me or my office. Indeed, in excess of 100 hours
has already been expended by us in dealing with this matter which
we would otherwise have spent more productively.
I look forward to meeting you at your office at 4pm
on Thursday 5th July.
28 June 2012
55. Agreed
note of interview with Sir Bob Russell MP, 5 July 2012
Present:
John Lyon (Parliamentary Commissioner for Standards)
(JL)
Sir Bob Russell MP (BR)
Rt Hon Alistair Carmichael MP (AC)
Notetaker
Introduction
JL Thank you for coming in, and thank you also
for your correspondence.
BR Well, this has been going on for 8 months
now.
JL Yes. Thank you Mr Carmichael for accompanying
Sir Bob. This is the notetaker. She will take a note of our discussion
and show it to you, Sir Bob, so you can comment, if necessary
on its accuracy. The note will be included in the memorandum I
will submit to the Committee and you can expect it to be published
with the Committee's Report.
I wrote to you on 2 July to set out the procedure
and to give you the main areas I suggested we cover.[325]
Other matters may arise during the course of the interview. If
you would like a break at any time, please say so. Are you ready
for me to go ahead?
BR Yes.
The facts
JL May I start by confirming with you the key
facts? There will be opportunities for you later to comment on
any of them. In 2001 you needed to find suitable accommodation
for your constituency office. Magdalen Hall, then called St Mary
Magdalen Church Hall, was for sale. It was surplus to the Church's
requirements following a review of its parish arrangements. You
were a patron of the St Stephen's Church Centre project which
oversaw this review.
BR Yes.
JL The Colchester Liberal Democrats established
Magdalen Hall Company Limited to buy the Church Hall.
BR That came subsequently. The decision was that
the constituency party wanted to do it. The advice we were given
was that it should be a company that acquired it.
JL So the constituency party wanted a headquarters?
BR Yes.
JL You wanted a constituency office, and they
wanted a headquarters?
BR That was secondary. You have to understand
the political landscape: I was a breakthrough, the only Liberal
Democrat in the East of England. For four years I rented offices,
but then I couldn't find suitable rented accommodation. The Church
Hall came on the marketit was too big for me.
JL So they did you a favour?
BR People clubbed together. I wasn't really aware...it
was done by people more versed than me in these things. It was
a consequence.
JL You bought £25,000 worth of shares in
the company.
BR Yes.
JL Your sister-in-law bought £500 worth.
BR Look, there's a question of terminology here.
This was a mutuality.
JL We will come to that. But am I right on the
fact of the shareholding?
BR Yes.
JL The total number of shares bought at that
time was 244, which raised capital of £61,000. You owned
a little over 40% of the shares. You were the largest single shareholder.
The next largest shareholders owned approximately 4% of the shares.
BR But I was not a majority shareholder.
JL Yes, that's correct: you were a major shareholder.[326]
Magdalen Hall Company Ltd bought the Hall for £100,000 in
April 2002. The shareholders provided some of the capital for
the purchase. The company took out a loan to meet the cost of
purchase and presumably the cost of the necessary building works
to change its use.
BR There was a hell of a lot to do. It was like
the church hall from Dad's Army.
JL Magdalen Hall Company Ltd leased the whole
building to the constituency party. It sub-leased half of it to
you. You share the kitchen and lavatory.
BR Yes, that's right.
JL You had a number of contacts with the House
authorities about these arrangements. First, you wrote to the
then Parliamentary Commissioner for Standards on 12 November 2001
about your position: first as patron of the St Stephen's Church
Centre; second as a Member of the Liberal Democrats who planned
to buy the church hall, and third as a potential shareholder helping
to fund the purchase. After a letter of 23 November 2001 from
the Commissioner and a telephone conversation with her on 27 November,
you wrote to the Commissioner on 30 November to register your
position as patron of the Church Centre.[327]
On 19 April 2002 you wrote to the then Parliamentary Commissionerher
successorto register your shareholding.[328]
BR Yes, and it's appeared in the Register year
after year.
JL As it happens, in none of your letters to
the Commissioners did you refer to the use of the building as
your constituency office, as opposed to its use as a party office.
BR But...
AC Is this accepted as a fact?
BR It was taken as read.
JL Did you write it in the letter?
BR Okay, I acknowledge that. But it was known
and understoodexactly as people do not spell out that they
are going to a football match between Arsenal and Spurs. It is
taken as read that it is a football match.
JL In your letter of 31 January 2002 to the Fees
Office you told them that, following a meeting and telephone conversation,
they had confirmed that the arrangements for your constituency
offices complied with the new rules.[329]
These rulesamongst other restrictionsprohibited
a Member claiming against parliamentary allowances for leasing
accommodation from any organisation in which the Member or a member
of that Member's family had an interest. Your letter noted that,
as a result of the officials' advice, you had decided to stand
down as a director of the Company, although the rules did not
require it.
BR I hadn't taken up a directorship at that pointin
fact, I never did.
JL No mention was made in your letter to any
discussion or advice about your personal shareholding.
BR In my letter to the Fees Office official?
Well, I wouldn't rehearse a whole conversation in a letter. Look,
I need to say at this point that all this is taking place at the
same time as I'm having meetings with the Head of the Fees Office,
writing letters to peopleyou have to take it in context.
JL The new rule had been notified to Members
in a letter of 22 January 2002 and Members were expected to comply
by 1 April 2003.[330]
Reminder letters were sent to all Members from the Fees Office
on 17 January 2003 and 20 March 2003.[331]
BR Yes.
JL On 13 May 2002 you sent your lease to the
Fees Office.[332]
BR Yes.
JL On 21 May 2002 the House authorities wrote
to give you their approval to the terms of the lease.[333]
Nearly two years later, on 29 March 2004, you wrote to the Fees
Office asking them to send payments for the rental of your constituency
office to Colchester Liberal Democrats and not to Magdalen Hall
Company Ltd, as they had up to then.[334]
BR Yes, and that letter was supplied by me to
you. The Fees Office have destroyed their records. This demonstrates
how open I've beenotherwise, no one would have known about
it. I can only assume that the House authorities wanted payment
to be made in that way.
If you look at my letter of 31 January 2002, in the
second paragraph, it says "I am also grateful to you and
for confirming that the arrangements for my MP's constituency
office comply with what is set out in the letter from [the Head
of the Fees Office] dated 22nd January".[335]
I followed what they said.
JL You had yourself added to the first draft
of your letter of 29 March 2004 more information about the share
ownership of the company, saying shares were held by Members and
supporters of the constituency party.[336]
As it happens, you made no specific reference in the letter to
your own shareholding or that of your sister-in-law.
AC That was already on the record.
BR I would say they were mostly people wanting
to help me.
JL The rent paid from May 2002 to March 2006
was £686.25 a month. On 23 March 2007 you asked the Fees
Office to pay for a retrospective rental increase to £780.42
a month backdated to April 2006, which was implemented.[337]
From April 2002 to March 2010 you claimed just over £96,000
for your constituency office costs, of which just under £70,000
was for rent.[338]
That's what the Director General told us in his letter, which
I sent to youthe Fees Office did have that record.
On 30 March 2010, in response to their request of
17 March, you provided to the Fees Office a further copy of your
lease and of an independent rental valuation.[339]
It's a matter of fact that neither you nor the House authorities
have any record of any earlier rental valuation having been sent
to them.
On 5 June 2010 you transferred your entire shareholding
in Magdalen Hall Company Ltd to the Colchester Liberal Democrats.
No dividends were paid by Magdalen Hall Company Ltd on any of
its shares during the period when you owned shares.
BR No, it's a not-for-profit mutual.
JL We'll return to that. Is that a fair summary
of the facts?
BR Yes.
Main issues
JL I'd like to ask you now about the application
of the rules to your shareholding in Magdalen Hall, and then about
your contacts in 2002 and 2004 with the Fees Office and in 2001
and 2002 with the Commissioners. So, Magdalen Hall. Am I right
in concluding that you were well aware in early 2002 of the new
rules promulgated by the Fees Office in their letter to all Members
of 22 January 2002?[340]
BR Absolutely.
JL You have the Fees Office letter there. What
was your understanding of the paragraph on the new restrictions
on leasing office accommodation when you read it at the time?
BR I can only draw your attention to my meeting
with the Fees Office official. I wrote to her on 31 January 2002,
and here's the crucial paragraph: "I am also grateful to
you and [the Head of the Fees Office] for confirming that the
arrangements for my MP's constituency office comply with what
is set out in the letter from [the Head of the Fees Office] dated
22nd January".[341]
We have a situation here: I have a meeting, that letter is the
subject of the discussion, the director is there, I comply with
the advice. Ten years on, to put a different interpretation on
that, when the letter was the subject of a meeting...
JL So you had seen the letter of 22 January before
the meeting, and you were aware of the arrangements that were
going to be made.
BR I had the meeting to interpret the rule.
JL You didn't interpret it yourself?
BR Not in the way that you are interpreting it.
I interpret "interest" to mean that you plan to sell
the shares, to try to make a profit.
JL Is it your view, therefore, that a shareholding
is not an interest?
BR That's what I had a meeting to discuss.
JL And before that meeting, you had no view?
BR I had a meeting to discuss it.
AC I am a solicitor. The term "interest"
has resonance as a term of art...
JL May I stop you there? This is not the occasion
on which I should debate this with you. I am here to discuss these
matters with Sir Bob.
AC But your question comes with an inference.
In legal terms...
JL I am not a lawyer. Sir Bob is not a lawyer.
AC For someone who is not a lawyer, the term
"interest" has a different meaning.
BR And that's why I wrote my letter. Parliament's
intention was that no Member should gain financially from public
funds. I had no gain from public fundsin fact, I am £25,000
worse off. I'm not complaining about that: it was my choice. That's
why I had the meeting; it was very important for me to get all
my ducks in a row. If the Fees Office official and the Head of
the Fees Office had said to me, "You shouldn't do that",
I wouldn't have done it.
JL Are you saying that you thought there was
a question about your arrangements?
BR Look, this proves that I went to extreme lengths
to ensure that what I was doing was right. A lot of work went
into it. You've got to read the rules with the interpretation
of what Parliament intended: that no Member should gain from the
public purse. I have not.
JL Thank you. Turning to your letter to me of
8 June,[342]
is it your argument that Parliament intended to allow a Member
to lease from an organisation in which he or she had an interest,
provided that the Member made no profit?
BR Yes, absolutely.
JL What do you say to the argument that, while
there is indeed a reference in the related section of the rules
to not making a profit from your arrangements, they are separate
statements? The rules state that Members should not use allowances
to meet the costs of leasing accommodation from any organisation
in which they have an interest. Is your argument that the restriction
on leasing is modified by the rule that Members must not make
a profit from their arrangements?
BR Yes, 100%! If I had not had a conversation
with the Fees Office, this would be a valid question. This isn't
my interpretation of the rules; it's theirs.
AC Have you agreed this as a key fact?
JL This is a question of what was said; it is
not a key fact. I will come to my conclusions at the end of my
inquiry, taking account of all the evidence I have received.
BR Look, I've got this letter of 31 January 2002
that proves that the Fees Office agreed.[343]
JL But the question is whether you gave the Fees
Office all of the relevant information.
BR I am totally clear that I dotted every i and
crossed every t at every step.
JL Did you consider in 2002, or at any time up
to 2010, finding another way to support the project?
BR Had I known that, ten years later, a political
opponent would try to make mischief, I could have given the money
to the constituency party. Others felt that the ownership of the
building should be separate from the party. This has all happened
because I put in a chunk of money. Bearing in mind that the Fees
Office had assured me in January 2002 that everything was fine,
I had no reason to think differently.
JL Was there any benefit to yourself in being
a shareholder, rather than a donor?
BR I had the joy of going to the annual meeting.
No, there was no benefit whatsoever. In fact, I don't even know
how often the directors met.
JL Do not the shareholders at least have rights
to a return of their capital, assuming there are sufficient assets
in the company and the directors can find a suitable purchaser
for their shares?
BR In theory, I'm sure you're right. But this
is like buying the local scout hut, the local church hallpeople
were giving money to a community asset. It was like putting money
in a tin.
JL But you had shares.
BR Yes, it was a legal company. These people
were helping me to provide the best possible constituency offices.
It actually saved public money: I could hold my Advice Bureaux
in my own offices instead of renting a church hall. I couldn't
have done that in an ordinary office block.
JL Could you in 2002 have made a donation, as
eventually you did in 2010?
BR That's a reasonable question in 2012. But
at the time it wasn't an issue. I'd liken it to people putting
money into the local scout hut.
JL If the property were to be sold, would not
the shareholders stand to benefit from any capital gain arising
from the sale?
BR Yes, if there was a profit.
JL I appreciate that this is a theoretical question.
But if you are a shareholder, is there not a potential benefit
for you? Shareholders stand to benefit; a donor does not.
BR Yes, there was a potential. But that was never
the intention. The intention was to provide me with the best possible
constituency offices. I myself raised £5,000 to provide a
disabled toilet. The theme here is people giving, not taking.
JL You have explained in your letter to me of
8 January why you decided to divest yourself of your shares by
donating them to the party.[344]
You said that information from the fledgling IPSA made you think
it was right to donate them ahead of the changeover.
BR Yes, and I'm so glad I did. If not, you and
I would be having a very different conversation now.
JL And am I right in concluding that under the
IPSA rules you would have had to divest yourself of them anyway?
BR You've made the case for me.
JL The IPSA rule came into effect in May 2010.
You transferred your shares in June.
BR We're dealing with volunteers here. I made
the decision before the election. But by the time all the paperwork
was done, it was June.
JL These rules were sent round in March 2010.
BR I understand that the complainant has complained
to IPSA as well.
JL Yes, I appreciate that. Others might say that
that you transferred your shareholding when you did because you
knew it was contrary to the IPSA rules. What do you say to that?
BR The arrival of a new charging system was a
good opportunity to do what could have been done at any time up
to then. It was just a trigger.
JL Thank you. The full property was leased by
the Liberal Democrats from a company in which you had a shareholding.
You took out a sub-lease from the Party. Have you considered at
any time whether the fact that you did not lease the property
directly from the company meant that the restrictions on leasing
did not apply? After all, the rules prohibited leasing from an
organisation in which the Member had an interest. It does not
mention sub-leasing.
AC Bob's not making that argumentare you,
Bob?
JL I appreciate that. But I wanted to raise this
possible argument with him.
BR Look, I didn't make a profit.
JL So your argument is that, since you didn't
make a profit, the rule didn't apply?
BR Exactly.
JL Do you accept that the company had an interest
in having you as a sub-tenantyou were an utterly reliable
tenant, at least between General Elections, whose business was
fully compatible with the head leaseholder with whom you shared
some facilities? You could say it was a match made in heaven.
BR I was quite flattered, actuallythey
took out "key employee" insurance to cover me. Without
me, they would have been left without a tenant. There was no guarantee
that the party would hold the seat, or that my successor would
want to keep the lease. It was a political earthquake for a Liberal
Democrat to win in Essex. My support comes from across the political
divide, from people who are not members of the party.
JL You have told me of the unsatisfactory condition
of your constituency office before 2002.
BR To be clear: we're talking about the period
between the May 2001 election and when we moved to Magdalen Hall.
JL Did the party also have unsatisfactory accommodation
before moving to Magdalen Hall?
BR They didn't have offices.
JL Did the constituency party itself pay rent
to the Magdalen Hall Company Ltd for their share of the property?
BR I have no idea.
JL Did the constituency party pay over your rent
to the Magdalen Hall Company?
BR I sincerely hope so! I have no reason to doubt
that they did. The constituency party engages in its own fundraisingit's
completely separate in that sense.
JL You will see from my letter of 7 December
that the new Green Book which first came into force in March 2009
makes no specific reference to the leasing restrictions.[345]
You were still required to provide an independent valuation and
to ensure that claims did not give rise, or give the appearance
of giving rise, to an improper personal financial benefit. Do
you consider therefore that the question of the ownership arrangements
no longer applied from March 2009 until the IPSA restriction of
May 2010?
BR It was seamless. It made no difference to
me. As far as I was concerned, I was doing the public purse a
favour. I'd liken it to a family doctor using his own money to
enhance his surgery. My arrangements were beneficial to the public
purse, because I could hold my Advice Bureaux there.
JL I see from your letter of 8 June that you
described the company as a "not for profit mutual".[346]
Given that it had shareholdings and could distribute a profit
if it so wished, is this not in fact a private company limited
by shares, which is the terminology used in the articles of association
which I sent you on 7 December?[347]
BR That's factual. You've got to deal with the
reality here, not what might have happened.
JL Does a company like this not have legal obligations?
BR There's the annual return to Companies House,
yes.
JL The articles of association contain a developed
set of rules for buying and selling shares. The articles suggest
it is a private company, not a mutual.
BR Lots of voluntary organisations set up companies
for their own purposes.
JL If you had wanted to ensure that there was
no return on the investment, you could have set up a company limited
by guarantee.
BR I accept that. But the reality is that it
was a not-for-profit mutual. I can't argue with the law. It was
people in the party who negotiated the purchase.
AC Can we just be clear? You're saying that...
JL If I may? [To Sir Bob] As I understand
your evidence, your argument is that the rule restricting leasing
was modified by the rule that Members should not profit from their
arrangements; that is, the rule on leasing did not apply if the
Member did not make a profit. A Member could lease from an organisation
in which he or she had an interest, provided that the Member made
no profit.
BR Yes, that's right.
JL You've told me why you discussed this in 2002.
BR I wasn't aware that the letter from the Fees
Office was coming. I would have had the meeting anyway. Then the
letter came, and it formed part of the discussion.
JL So you were aware of the letter before you
had the meeting? Members receive a lot of postyou might
not have seen it.
BR I think I must have been. I can't remember.
All I know is, I refer to it in this letter on 31 January, so
I must have had it then.[348]
JL Given the importance of these matters to your
plans for your constituency office, why did you not set out the
issues in writing?
BR The letters refer to me having my constituency
office at Magdalen Hall.
JL Before meeting the Fees Office at the end
of January, why didn't you think to set out the arrangements in
writing?
BR We're talking about this with the benefit
of ten years' hindsight. I was calling people, having meetings,
writing letters. This letter of 31 January does what you've said.
It does.[349]
JL But it does not mention your shareholding?
BR That's why the Fees Office official told me
to step down.
JL The Green Book says in the Speaker's introduction
in 2003and subsequentlythat Members themselves are
responsible for ensuring their use of allowances is above reproach.
In the new Green Book of March 2009, one fundamental principle
is that individual Members take personal responsibility for all
expenses incurred. You say in your letter of 8 June that you sought
advice, were given advice and followed that advice.
BR Absolutely.
JL Is it your argument that as long as the Member
follows advice the Member cannot be in breach of the rules?
BR I would say that if the Fees Office give you
advice and you follow it, that's one thing. If they give you advice
and you don't follow it, that's another thing.
JL What if their advice is wrong? Can there be
a breach if the Member follows that advice?
BR No.
JL So is it your argument that the Fees Office
make the rules?
BR No, Parliament makes the rules. The intention
was that Members should not profit from their arrangements. The
substance is that I am not in breach of the rules.
AC We're talking here about the Head of the Fees
Office at the time. It's not a case of asking a junior official.
BR This letter of 22 January 2002 is from the
Head of the Fees Office.[350]
JL What I've heard you say is that the Fees Office
interpret the rules. If the Fees Office say that something is
okay, a Member cannot break the rules.
BR We're talking about the top man here.
JL So if the top person says you can do it, it
must be within the rules?
BR How else can a Member proceed?
AC Of course he's responsible. But having taken
advice, that responsibility is backed by the top man.
JL And if he gets it wrong?
BR If advice is wrong, then it's wrong. But how
could a Member tell the Head of the Fees Office that he was wrong?
If he had told me it would be a breach of the rules, I wouldn't
have done it. The letter of 31 January confirms that.[351]
JL You wrote that letter.
BR [Referring to letter of 29 March 2004]
What must have happened is that the new Treasurer asked us to
rearrange the payments. My secretary did the drafting. My handwritten
notes clarify it.[352]
JL The Fees Office didn't write the letter of
31 January 2002. So, as I understand it, your argument is not
that you were given the wrong advicedespite giving officials
all the relevant information on ownershipbut that you were
given the right advice, which the departmentand the staff
responsible at the timeare now going back on?
BR Yes, and I am saddened that they are doing
so.
JL The Director-General said in his letter to
me of 21 February that had the Department been conscious of the
ownership of Magdalen Hall Company Ltd in June 2003, he believes
they would have ruled that the arrangement did not comply with
the Green Book.[353]
Why do you think he is wrong?
BR I know what he said. I know he is wrong. My
memory of something I was so close to at the time is superior
to his.
JL Do you not think that the advice from officialswho
were quite senior; one was Head of the Fees Office, the other
was someone quite seniorreads oddly, given what the new
rule appeared to be saying?
BR I can't comment on why they gave that advice.
I can only say what they told me.
JL Your interpretation centres on the argument
that you would not make a profit. Did you press officials on their
advice or think of adding that to your letter?
BR No. The letter confirmed it.
JL And the advice didn't surprise you, for the
reason that you weren't going to make a profit?
BR My recollection is that it was a straightforward
meeting. You're putting these questions to me ten years later
because of a politically motivated complaint. An interpretation
is being put on things which didn't arise at the time.
JL The words are there: "allowances must
not be used to meet the costs of leasing from [...] any organisation
in which you have an interest". You're saying that the Fees
Office said that your arrangements were fine as long as you did
not make a profit.
BR If they said it was fine, it must have been.
JL But that depends on you giving them the full
facts on which to base their advice. The question is: did you
tell them that you were a major shareholder in the company? You
say you did; they say you couldn't have done.
AC "Couldn't have done" is hearsay.
Bob's credibility can be judged against the letter of 31 January
2002if it was not correct, the Fees Office would have written
back.
BR I'll tell you why I am certain that they knew.
You can see from this letter to [the Fees Office official] that
she advised me to step down as a director: "as a result of
your advice I have decided to step down as a director".
JL That relates to you being a director.
BR They knew I was a major shareholder. That
was the point.
JL Do you accept that being a director is not
the same as being a shareholder?
BR Of course you're right. But in the context
of the discussions we were having, it would have been known. It
would be amazing if the Commissioner was the only one to whom
I didn't mention that it was going to be my constituency office.
JL Neither the use of the property as your constituency
office nor your shareholding was, in itself, a problem. A Member
may have a shareholding, provided it is registered. The problem
is the combination of the two. In your letter to me of 22 January
you say it is "inconceivable" that the House authorities
were not fully aware of what you were seeking to achievenamely
to secure a new constituency office.[354]
But that of course was entirely within the rules. How would you
describe the likelihood of them also being fully aware of your
shareholding in the company buying the property?
BR The Fees Office? I had this conversation with
them.
JL How would you describe the likelihood that
they were not aware of your shareholding?
BR Zero. Our conversations were about acquiring
the church hall and me putting the money in.
JL Do you have a clear recollection that you
told them?
BR I would have said it to numerous people. A
series of things started on 9/11I couldn't forget that
date. We moved in on the first Saturday of May 2002. The time
factor here is seven months. I had numerous meetings and phone
calls, including with the Fees Office.
JL So you told them before January 2002?
BR Yes, it was part of the process. The Hall
hadn't been purchased then.
JL I have noted that when you wrote to the House
Authorities in 2004 you added to the letter information about
the ownership of the property company including that party members
and supporters held shares, but made no reference to your own
personal shareholding. Does this not suggest that it is possible
that when you referred to the companyand your directorship
of itin 2002 you did not specifically refer to your personal
shareholdingin the same way as you did not refer to it
in your 2004 letter?
BR No, I can't accept that. I'd draw your attention
to my entry in the Register of Interests. I couldn't have been
more transparentit's all on the record. It's also in the
local newspaper, they usually report each year on Members' interestsin
most years, it was my only entry.
JL The register entry refers to the party office,
not the constituency office.
BR I'm a tenant, so it wouldn't be relevant.
JL You have suggested that you must have referred
to the ownership arrangements because that was the purpose of
your discussions. But was not the "whole purpose of the exercise",
as you say in your letter of 22 January, to secure a new constituency
office?[355]
Is it not possible that that is what the discussion was about
and such a discussion could well have been held without mentioning
your personal shareholding?
BR There were a whole series of conversations,
weren't there? You can't take one letter, one meeting, in isolation.
I was making sure that all my ducks were put in a line, and this
was a very important duck.
AC I need to leave now. I think it would be wise
to reconvene next week.
JL I think we should be able to finish this today.
BR So do I. I'd be happy to come back after voting.
But I will stay for another ten minutes.
[AC left the room]
JL You say in your letter of 31 January 2002
that the Fees Office advice was that there was no requirement
to step down as a director, but that to do so would remove the
scope for criticism or complaint. Why do you think that it is
possible that the Fees Office would have given that cautious advice,
but not advised you also to divest yourself of your shareholding
had they been aware of it?
BR I have no idea. I can't second guess them.
All I know is that I went to great lengths to seek advice, because
I was patron of the new church. I thought I went to extreme lengths
to ensure that everything was fine. I think it is fine. I know
the motive of the complainant: he wants my job.
JL The then Head of the Fees Office says he is
certain that if the full extent of your involvement in the company
had been known, your arrangements would not have been seen as
complying with the new rules. The then official in the Fees Office
says she is inclined to think you did not make clear the exact
nature of the ownership of the property as the advice they were
giving at the time was that this would be against the new rules
once they came into force. The Director-General says now that,
while it is entirely possible that your substantial personal shareholding
was disclosed, it is difficult to see how you could then have
been led to understand that your arrangements complied with the
rules. Can you help me on why you think it is more likely than
not that the two officials would have failed to give you this
advice had they known of your shareholding at the time?
BR It puzzles you and it puzzles me. If it wasn't
for the 2002 letter...
JL May I interrupt you? It would be possible
to write that letter if you'd overlooked to mention your shareholding.
You could have said that the Liberal Democrats were buying the
Hall, that people were being invited to buy sharesthey
would have said that that was within the rules.
BR It's inconceivable that I wouldn't have mentioned
it. Inconceivable! Impossible! Why would I not? What's in it for
me?
JL Sometimes people overlook things. People make
mistakes.
BR I am absolutely convinced that I mentioned
it. It was such an important part of my life: I would not have
fouled it up. I went to extreme lengths to take advice. I can't
explain why their memories differ from mine. I had a meeting.
JL It all depends on you telling them about your
shareholding.
BR The letter is simply to say thank you for
the meeting. A four paragraph account won't have every detail
of a conversation.
JL Why do you thinkif you do thinkthat
it is not conceivable that if the shareholding issue was raisedas
the Director-General accepts is entirely possiblethe advice
would have been that it was alright for now, but not after April
2003?
BR Because it would have been a pointless exercise
to do it for about 9 months. If they'd said that, either the project
wouldn't have gone ahead or we would have found another way to
do it.
JL Perhaps you were given that advice but forgot
it?
BR No, I couldn't have done. I've got a good
memory.
JL On your sister-in-law's shareholdingam
I right that you believe that you were not aware of this at the
time, as you say in your letter of 8 June?
BR I can't remember. I may or may not have known.
I do now. I may have known about it at some stage. There are people
on the list I may know, but they're not all friends of mine. I
must say that my sister-in-law has given over £150,000 worth
of free volunteering to me over the years. She is in my office
from 10 until 4 most days. She's a local councillor. She wouldn't
dream of doing anything untoward.
JL Let me assure you that I am not investigating
her.
BR Anyway, as I think I say in one of my letters,
it is legally de minimisless than 0.5%.
JL Am I right in thinking that you weren't aware
of the full list of shareholders?
BR No, I wasn't. I think perhaps they sent me
fortnightly updates. They were people of influence in the community.[356]
JL Just briefly on the rental valuation. Why
do you think that you must have provided one?
BR Because the Fees Office would have asked for
evidence. The Hall might not have existed.
JL You sent them a lease.
BR There are a lot of con-merchants out there.
There must have been a valuation for them to have paid the rent.
If not, why wasn't I chased for one? The internal audit would
have picked it up. There had to have been one: it's as simple
as that.
JL But it doesn't follow that you sent it.
BR If I didn't, why were they paying the rent?
Anyway, we then got a reputable local firm of surveyors to do
one.
JL In 2010.
BR I think there may have been one before then.
JL Turning to your contacts with the Parliamentary
Commissionercan you help me on why you attach importance
to your belief that you told the Commissioner not only of your
shareholding, but also that the property was to be your constituency
office?
BR It's inconceivable that I wouldn't have done.
JL There's no record of you doing so.
BR Her note of our conversation is only a summary.
I'd never seen it before you sent it to me.
JL The Commissioner is responsible for registration,
but not for the expenses regime. Given that, would you nevertheless
have expected the Commissioner to have advised you on whether
your arrangements were within the terms of the expenses Green
Book?
BR I don't know. I'd assume that the Commissioner
should require a registrable interest to be registered.
JL But the fact that it was your constituency
office was not relevant to your register entry.
BR But you're asking if I told her. I told everyone.
JL What would you expect her to do?
BR I don't know.
JL You've said that the Fees Office were responsible
for giving advice and for carrying out an audit, and that the
Commissioner should have picked this up.
BR It's information. I wouldn't have thought
it was relevant to the Commissioner. I'm telling the Commissioner
I'm using my own money to purchase a constituency office, to confirm
whether it's okay.
JL But what you register is your shareholding.
Overall, do you think you should accept any responsibility for
the way your constituency office arrangements were made?
BR My responsibility was to ensure that what
I was doing was correct. I was satisfied that it was correct then,
and I'm satisfied now. I know that the person who has lodged the
complaint, or the person behind it, is a trainee solicitorsomeone
of a legal bent. Other interpretations can be put.
I come back to the fact that I've given away £25,000this
must be the first example of a Member being investigated for giving
away their own money. I've had no personal financial gain. I'm
satisfied that I took advice from the Fees Office. I'm satisfied
that I conveyed what I was doing to the Commissioner. I can't
find fault with what I've done. I've given my staff and my constituents
a better office than if I had rented one commercially. I've given
a better service to my constituents. My conscience is totally
clear. I know what's behind this complaint. I honestly can't see
what I've done wrong.
The bottom line is: have I gained financially? No.
Have I misused public funds? No, I haven't. Therefore I don't
think that the complaint is justified.
It's not my fault that the Fees Office have destroyed
their records. What records I have confirm beyond reasonable doubt
that I sought advice, took advice, and followed advice. It's unfair,
ten years on, to say "you shouldn't have done that".
The case is not substantiated by evidence. The evidence
puts me on the right side of the rules.
Conclusion
JL Thank you. Just to sum up, may I put to you
the key allegations to see if you have anything more you want
to say on them?
First, the allegation is that from 1 April 2003 Members
were not permitted to lease property from an organisation in which
they or a family member had an interest and, by your shareholding
from April 2003 to June 2010 in the company which owned the property
in which you had a sub-leaseand to a lesser extent on account
of your sister-in-law's much more modest shareholdingyou
were clearly in breach of the rules.
BR I do refute that. It would be different if
I still had the shares, but this complaint came 18 months later.
My interpretation of "interest" is something which brings
me financial gain.
JL Second, the allegation is that it is more
likely than not that you did not give the Fees Office information
about your own personal shareholding before they agreed to the
sub-lease on the property and that your arrangements complied
with the new rules.
BR I totally refute that. My letter of 31 January
2002 confirms the opposite.[357]
It says "thank you for confirming that my arrangements comply
with the rules."
JL And you say that you must have told them of
your shareholding.
BR Yes.
JL Third, the allegation is that it is more likely
than not that you did not lodge with the Fees Office an independent
rental valuation for your constituency office in 2002, as required
when Members lease office from their constituency party.
BR Well, I can't prove I did. I know I must have
done because I was claiming rent. The only other possible conclusion
is that the Fees Office paid rent without the documentation, and
the internal audit and the external audit didn't spot it.
JL So it follows that you sent it to the Fees
Office?
BR Yes.
JL Thank you. If anything else occurs to you,
please do send it to me.
Concluding section
JL Thank you. The notetaker will now prepare
a note of our discussion and show it to you so you can comment,
if necessary, on its accuracy. As you know, you can expect the
note to be included with the memorandum I will prepare for the
Committee and it would then be subsequently published with the
report. Do you have any questions?
BR I just wanted to mention my then secretary,
who is now my office manager. All she could have told you was
that I went to great lengths to ensure that I complied with the
rules. She can vouch for that.
JL Thank you, and thank you for coming in.
Interview finished at 5.25 pm.
5 July 2012
56. Letter
to the Commissioner from Sir Bob Russell MP, 11 July 2012
Last week the Prime Minister, speaking in the House
of Commons about the Inquiry into matters relating to the Banks,
stated:
Frankly, what matters more than
the process is the substance and getting on with it.
The same applies to looking at the malicious complaint
made against me by a political opponent.
The facts are quite simple:
1 The House of Commons has stated that no
Member of Parliament should gain financially
from the receipt of public money provided to assist him or her
with their constituency office costs. That is the clear intention
of the Parliamentary rules.
2 All the evidence shows that I have not
gained a single penny from the arrangements for my constituency
office.
3 All the evidence shows that every penny
I received from the Fees Office was used for the purpose for which
it was provided.
Just about everything else relating to what has happened
since the complaint was made can be described as "process".
None of it alters the three clear statements of Fact numbered
above.
I therefore trust that this malicious complaint can
now be disposed of with the contempt it deserves.
11 July 2012
57. E-mail to the Commissioner's
office from an official in the Department of Human Resources
and Change, 18 July 2012
From 2003, the House was paying £686.25 each
month (£8235pa) in respect of office rent at Magdalen Hall.
As you showed,[358]
an instruction was received in February 2006 to increase the rent
to £9365 and backdate it to 1st May 2005. A payment
of £1130 was made but the regular payments remained at the
reduced level of £686.25.
The payments continued at this level throughout the
2006/2007 financial year and it was only in April 2007 that the
regular monthly payments were finally increased to £780.42
(£9365 pa). A backdated payment of £1134.04 was made
to cover the shortfall. (The maths here doesn't quite work out:
£94.17 *12 = £1130.04 but the additional £4 was
paid).
I have updated the spreadsheet to show the extra
payment in Feb 2006.
It is therefore the case that the rent increase was
effective from May 2005 (as you indicated) rather than April 2006.
Summary of costsSir Bob Russell MP
| | |
| | |
| | |
Year | Rent
| Utilities | Phone
| Maintenance | Total
|
| | |
| | |
2002/03 | £7,548.75
| n/a | n/a
| n/a | n/a
|
2003/04 | £8,235.00
| n/a | n/a
| n/a | n/a
|
| | |
| | |
2004/05 | £8,235.00
| £2,352.20 | £934.34
| £441.97 | £11,963.51
|
2005/06 | £9,365.00
| £1,993.98 | £703.54
| £362.80 | £12,425.32
|
2006/07 | £8,235.00
| £1,840.70 | £1,385.61
| £996.85 | £12,458.16
|
2007/08 | £10,499.08
| £1,626.17 | £1,715.52
| £157.50 | £13,998.27
|
2008/09 | £9,365.00
| £3,369.28 | £1,687.42
| £2,397.71 | £16,819.41
|
2009/10 | £9,365.00
| £3,131.37 | £1,103.65
| £113.90 | £13,713.92
|
| | |
| | |
2010/11* | £931.47
| £0.00 | £219.96
| £0.00 | £1,151.43
|
| | |
| | |
* to 6th May 2010
| | | |
|
| | |
| | |
UtilitiesGas, electricity, rates, water, TV License
| | |
Phonelandlines, broadband services
| | | |
Maintenanceinsurance premiums, decorating, security, general maintenance
| |
18 July 2012
58. Extracts
from letter to the Commissioner from Sir Bob Russell MP, 1 August
2012
...
I feel that in the interests of natural justice it
should [...] be stressed that Officials from that period were
recalling from memory what may or may not have happened when I
sought their advice in the period from late 2001 through to when
my constituency offices opened in May 2002 whereas I (as the person
most directly involved in the whole process) have a much firmer
grip on what occurred, backed up by contemporary correspondence
which supports my recollection.
The jogging of people's memories, with their acknowledgement
of their less than clear definitive declaration of whether they
are 100 per cent correct, is not fair on me. Would those who have
been asked to recall what happened a decade ago in respect of
the MP for Colchester be able to have memory recall with their
dealings with other individual MPs?
The Director-General, writing to you on 21st
February [reference], stated that what he was saying was subject
to the caveat that "from this limited information base we
cannot answer a number of your questions with any certainty."[359]
Quite!
Perhaps the accuracy of some aspects of their memory
recall is put further in doubt when, in your letter to me of 19th
July,[360]
you inform me that the House authorities have told you of an error
in their part [reference] in respect of the date of the backdating
of an increase in the rentconfirming that the information
provided by my accountant was correct and they were wrong with
their original evidence.[361]
...
My conclusion
1The House of Commons has ruled that no MP
should make a personal financial gain from the receipt of public
funds. I have not done so. Every penny has been used for the purposes
for which it was intended, namely the running costs of my constituency
office. Far from making a financial gain, I have contributed £25,000
of my own money so that I can have a fit-for-purpose constituency
office, which is of benefit to my constituents and in terms of
value-for-money is better for the public purse than if I was renting
a commercial office.
2I sought advice from the House authorities;
I was given advice; I followed that advice.
3The House authorities have destroyed most
of the records from that time, upwards of ten years ago. What
contemporary documentation that does survive, mainly provided
by myself, confirms that I sought advice. It is not acceptable
to natural justice for people, ten years on, to seek to distance
themselves from what was the case at that time and which they
acknowledge they cannot be entirely accurate with their recollections.
4To the best of my knowledge and belief I
have complied with both the spirit and the letter of the rules
and regulations.
1 August 2012
154 WE 5 Back
155
WE 6 Back
156
Not included in the written evidence Back
157
Not included in the written evidence Back
158
This is a reference to the Commissioner needing to seek the consent
of the Committee for an inquiry going back more than 7 years. Back
159
WE 1-7 Back
160
Not included in the written evidence Back
161
WE 9 Back
162
Not included in the written evidence Back
163
Not included in the written evidence Back
164
WE 16 Back
165
Sir Bob Russell invited the Commissioner to visit his office in
Colchester in a letter of 10 December (not included in the written
evidence). The Commissioner replied on 14 December (not included
in the written evidence) to say that if, as he read the relevant
evidence, he thought it would help to visit he would take up the
invitation. In the event, this was not necessary. Back
166
Not included in the written evidence Back
167
Sir Bob Russell confirmed in his letter of 22 January 2012 that
his shareholding was 100 of 244 shares, or around 40% of the total. Back
168
Not included in the written evidence Back
169
WE 18 Back
170
WE 10 Back
171
WE 13 Back
172
WE 14 Back
173
Not included in the written evidence Back
174
WE 15 Back
175
WE 21 Back
176
WE 19 Back
177
Not included in the written evidence Back
178
Not included in the written evidence Back
179
WE 20 and material not included in the written evidence Back
180
WE 18 Back
181
Not included in the written evidence Back
182
WE 17. For the final version of this letter, see WE 37. Back
183
WE 22 Back
184
Not included in the written evidence Back
185
WE 9 Back
186
WE 14 Back
187
WE 28 Back
188
Not provided by Sir Bob Russell Back
189
See WE 29. In 2009 the Magdalen Hall Company decide to sub-divide
each share into five shares. Sir Bob Russell's shareholding therefore
increased from 100 to 500. Back
190
Sir Bob Russell confirmed in his letter of 22 January 2012 that
his shareholding in 2002 was 100 of 244 shares, or around 40%
of the total. Back
191
Not provided by Sir Bob Russell Back
192
See WE 57 for a corrected figure. Back
193
See WE 57: in fact the rent increase took effect from May 2005. Back
194
WE 11 and 8 Back
195
Not included in the written evidence Back
196
WE 11 Back
197
WE 11 Back
198
WE 19 Back
199
WE 21 Back
200
Not included in the written evidence Back
201
WE 22. See also WE 57. Back
202
Not included in the written evidence Back
203
WE 17 Back
204
WE 13 and 14 Back
205
WE 9 Back
206
WE 15 Back
207
WE 20 Back
208
WE 18 Back
209
WE 16 Back
210
WE 24-28 Back
211
Not enclosed with the Commissioner's letter of 17 January 2012 Back
212
WE 24 Back
213
WE 25 Back
214
Not enclosed with the Commissioner's letter of 17 January 2012 Back
215
WE 25 Back
216
WE 27 Back
217
WE 23 Back
218
Not included in the written evidence Back
219
WE 30 Back
220
WE 23 Back
221
WE 13 Back
222
WE 9 Back
223
WE 15 Back
224
WE 24 Back
225
WE 25 Back
226
WE 26 Back
227
WE 16 Back
228
WE 11 Back
229
Not included in the written evidence Back
230
WE 22 Back
231
WE 15 Back
232
WE 29 Back
233
WE 31 Back
234
WE 9 Back
235
WE 13 Back
236
WE 14 and 15 Back
237
WE 33 Back
238
WE 18 Back
239
WE 35 and 36 Back
240
WE 34 Back
241
WE 37. This is the final version of the draft at WE 17. Back
242
WE 38 Back
243
WE 13-15 Back
244
WE 35 and 36 Back
245
See WE 57 for a revised summary provided on 18 July 2012. Back
246
WE 9 Back
247
WE 9 Back
248
WE 35 Back
249
This is the final version of the draft at WE 17 Back
250
Not provided by the Director-General Back
251
Not included in the written evidence Back
252
WE 18 Back
253
Not included in the written evidence Back
254
Not included in the written evidence Back
255
WE 38 Back
256
WE 32 Back
257
WE 41 Back
258
WE 9 Back
259
WE 18 Back
260
WE 35 and 36 Back
261
WE 13 Back
262
WE 9 Back
263
WE 14 and 15 Back
264
WE 31 and 32 Back
265
WE 9 Back
266
WE 9 Back
267
Not included in the written evidence Back
268
WE 43 Back
269
WE 13 Back
270
WE 15 Back
271
Not included in the written evidence Back
272
WE 31, 32, 43 and 44 Back
273
WE 13 Back
274
WE 44 Back
275
WE 15 Back
276
WE 29 Back
277
WE 29 Back
278
WE 37 Back
279
WE 32 Back
280
WE 17 Back
281
WE 14 Back
282
WE 15 Back
283
WE 24 Back
284
WE 46 Back
285
WE 45 Back
286
WE 29 and 32 Back
287
WE 14, 15 and 11 Back
288
WE 24 Back
289
Not included in the written evidence Back
290
WE 24-28 and 16 Back
291
WE 23 Back
292
WE 29 Back
293
WE 24 Back
294
WE 25 Back
295
WE 26 Back
296
WE 16 Back
297
WE 24 Back
298
Not included in the written evidence Back
299
WE 48 Back
300
Not included in the written evidence Back
301
WE 13 Back
302
WE 9 Back
303
WE 32 Back
304
WE 13-15 Back
305
WE 9 Back
306
WE 35 and 36 Back
307
WE 43 Back
308
WE 44 Back
309
WE 13 Back
310
WE 15 Back
311
WE 50 Back
312
WE 47 Back
313
WE 49 Back
314
WE 51 Back
315
WE 48 and 50 Back
316
WE 45 Back
317
WE 46 Back
318
WE 45, 47 and 52 Back
319
WE 45 Back
320
WE 15 Back
321
WE 29 Back
322
WE 47 Back
323
WE 52 Back
324
WE 49 and 51 Back
325
Not included in the written evidence Back
326
In commenting on this note, Sir Bob Russell asked that the note
should highlight the error, in earlier correspondence, in referring
to him as the majority shareholder rather than a major shareholder.
The reference is made in the letter of 3 April 2012 from the retired
Head of the Fees Office (WE 44) and referred to by me in my letter
to Sir Bob Russell of 16 April 2012, forwarding the former Fees
Office official's letter to Sir Bob Russell (WE 45). Back
327
WE 24-27 Back
328
WE 28 Back
329
WE 13 Back
330
WE 9 Back
331
WE 35 and 36 Back
332
WE 14 Back
333
WE 15 Back
334
WE 37 Back
335
WE 13 Back
336
WE 17 Back
337
The Department of Human Resources and Change provided revised
evidence on 18 July 2012 (WE 57). The rent increase took effect
from May 2005. Back
338
See WE 57. The total claims were just over £97,000, of which
just over £70,000 was for rent. Back
339
WE 18 Back
340
WE 9 Back
341
WE 13 Back
342
WE 53 Back
343
WE 13 Back
344
WE 11 Back
345
WE 8 Back
346
WE 53 Back
347
WE 4 Back
348
WE 13 Back
349
WE 13 Back
350
WE 9 Back
351
WE 13 Back
352
WE 17 Back
353
WE 32 Back
354
WE 29 Back
355
WE 29 Back
356
In commenting on this note, Sir Bob Russell said that the fortnightly
updates were: "On donations. Not names. The people in
charge were people of influence in the community." Back
357
WE 13 Back
358
Not included in the written evidence Back
359
WE 33 Back
360
Not included in the written evidence Back
361
WE 57 Back
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