Sir Bob Russell - Standards and Privileges Committee Contents


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 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 member—have 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 you—or someone close to you—is 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 you—or a partner or family member—have 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 member—have 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 case—I 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 suitable—including 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 suitable—but 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 like—a 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 costly—it 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 hours—thus 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 Hall—coupled 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 purpose—and 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 company—with named shareholders—rather 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' Interests—as 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 £150,000—that's some commitment!)."

3.  Well before the 2010 General Election I decided to transfer my shareholding to the constituency party—as 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 door—no-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 people—good supporters of mine—who 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 Patron—either 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 waves—and 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 category—for 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; but—if he did—we 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 costs—Sir Bob Russell MP[245]
YearRent UtilitiesPhone Maintenance Total
2002/03 £7,548.75 n/an/a n/a n/a
2003/04 £8,235.00 n/an/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

Utilities—Gas, electricity, rates, water, TV License

Phone—landlines, broadband services

Maintenance—insurance 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 Russell—and the current House authorities—have 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 Hall—namely 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 market—it 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 Commissioner—her successor—to 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 understood—exactly 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 rules—amongst other restrictions—prohibited 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 point—in 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 people—you 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 been—otherwise, 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 you—the 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 funds—in 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 hall—people 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 argument—are 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-tenant—you 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, actually—they 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 fundraising—it'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 post—you 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 2003—and subsequently—that 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 advice—despite giving officials all the relevant information on ownership—but that you were given the right advice, which the department—and the staff responsible at the time—are 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 officials—who were quite senior; one was Head of the Fees Office, the other was someone quite senior—reads 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 2002—if 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 achieve—namely 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 9/11—I 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 company—and your directorship of it—in 2002 you did not specifically refer to your personal shareholding—in 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 transparent—it's all on the record. It's also in the local newspaper, they usually report each year on Members' interests—in 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 shares—they 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 think—if you do think—that it is not conceivable that if the shareholding issue was raised—as the Director-General accepts is entirely possible—the 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 shareholding—am 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 minimis—less 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 Commissioner—can 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 solicitor—someone of a legal bent. Other interpretations can be put.

I come back to the fact that I've given away £25,000—this 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-lease—and to a lesser extent on account of your sister-in-law's much more modest shareholding—you 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 costs—Sir Bob Russell MP
YearRent UtilitiesPhone MaintenanceTotal
2002/03£7,548.75 n/an/a n/an/a
2003/04£8,235.00 n/an/a n/an/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
Utilities—Gas, electricity, rates, water, TV License
Phone—landlines, broadband services
Maintenance—insurance 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 rent—confirming that the information provided by my accountant was correct and they were wrong with their original evidence.[361]

...

My conclusion

1—The 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.

2—I sought advice from the House authorities; I was given advice; I followed that advice.

3—The 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.

4—To 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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Prepared 10 September 2012