House of Commons - Mr Denis MacShane - Standards and Privileges Committee

Mr Denis MacShane - Standards and Privileges Committee Contents

4 Conclusion

Cooperation with the inquiry

41. As the Commissioner says, Mr MacShane cooperated fully during the first part of his inquiry. Once that inquiry was resumed, this cooperation ceased for nearly 3 months. He claimed that the Chair had advised him to respond to the Commissioner's letter through a lawyer, a claim which Mr MacShane has since withdrawn. Members under investigation are free to take advice, if they feel it desirable, but the House requires them to respond to the Commissioner and the Committee's inquiries. Mr MacShane has explained the pressure he was under:[41] he should still have responded to the Commissioner's letters. It was open to him to explain that he was unable to deal with the matter immediately: instead he ignored it.

42. The House of Commons's disciplinary system depends on investigation by an independent person. It is based on the principle that Members will provided the information the Commissioner needs to consider a complaint. In this case, we consider that we have sufficient information to come to a judgement. That does not excuse Mr MacShane's failure to cooperate with the Commissioner's inquiries, which is in itself a serious breach of the Code of Conduct.

Computer Equipment

43. We agree that Mr MacShane's claims for his computer equipment were excessive, and should have been seen as such. We do not believe that any reasonable Member would have considered it proper to have allowed interns to take laptops provided by the public purse away with them at the end of their internship. As the Commissioner found, Mr MacShane's claims for computer equipment did not meet the requirement to ensure that expenditure funded by the IEP was "wholly, exclusively and necessarily incurred on Parliamentary duties."[42] As the Commissioner also found "Mr MacShane was also in breach of the rules in submitting the same invoice twice for a computer he bought in December 2007 for £498.95. I fully accept that this was a mistake on his part and agree with Mr MacShane that it is unfortunate that this was not picked up by the Fees Office at the time."[43]

Claims relating to the European Policy Institute

44. The most serious findings relate to the expenses claims submitted to support Mr MacShane's work in Europe. The Commissioner considers that some of the activities behind those claims were permissible. The claims totalled £12,900; the Commissioner considers that although it is impossible to say what proportion of the claims were outside the rules, it may have been in the order of £7,500.[44] Over the course of the inquiry, Mr MacShane has repaid the entire £12,900 and he has apologised for his actions to the Commissioner and to us.

45. The real mischief of Mr MacShane's actions was that the method he adopted of submitting false invoices, as the Commissioner said, bypassed the checks and controls the House had instituted in a way which enabled Mr MacShane to spend public money as he thought fit. For example, one matter which we consider to be of the utmost gravity is Mr MacShane's use of public money to support European travel.

46. In his most recent letter to the Commissioner Mr MacShane asserted:

The monies I claimed back under the Policy Institute invoices I believed to be a reasonable reflection of the monies that had been spent in relation to parliamentary business. I believe I could have claimed the costs directly if I had kept all the individual receipts for each payment or purchase (if they were given by the supplier). I was aware that claims could be made of up to £250 per month for petty cash under the IEP scheme. I made no such claims, instead estimating and amalgamating all the costs and monies paid for work incidental to my Parliamentary duties in the EPI invoice claimed under the IEP Allowance scheme.[45]

47. We reject the assertion that the expenditure would have been allowable if individual receipts had been kept. As the Commissioner points out, while the House had made provision to support travel to other parts of Europe, there are strict conditions for this, including the requirement to notify the Fees Office in advance. There was no other provision for foreign travel by individual Members. As we discuss below, some of the travel Mr MacShane claimed for might have been covered by the European scheme; much of it would not have been. In any event, it was not so claimed. We consider Mr MacShane's explanation that some of the work was done as the then Prime Minister's envoy to be irrelevant. If the Government could not fund such work, there seems no reason why Parliament should do so, and there is no indication that the Prime Minister or any one in Government expected it to do so.

48. In correspondence with the Commissioner Mr MacShane apologises "for not having fully followed the rules to the strictest interpretation of the letter"[46]. This was not a matter of failure to follow the letter of the rules. Mr MacShane was clearly aware that the rules of the House did not allow expenditure on European travel to be claimed under IEP. On 26 May 1999 he spoke in the House on the debate on the motion to extend Members' ability to claim for European travel:

When I was elected five years ago, I was surprised to discover that one could not make a telephone call to Europe, or send a letter there, or discharge one's duties to constituents if that involved going to Europe. [47]

49. In his evidence to the Commissioner he noted that:

An MP is allowed extended travel to carry out similar travel, attend conferences, carry out research, and stay overnight in the UK but there is no equivalent system for European work beyond three heavily circumscribed trips which I preferred not to claim as they were always held up to press opprobrium when published.[48]

It is impossible to escape the conclusion that Mr MacShane claimed in the way he did to ensure that his use of public funds for his European travel was not challenged.

50. We turn now to the way in which the claims were submitted. Invoices for arbitrary amounts were generated from Mr MacShane's computer on a letterhead which gave an entirely false impression of the body from which they purported to come. They were signed by Mr MacShane himself, or by others on his instruction, with a "nom de plume".

51. The money was paid into a bank account which Mr MacShane himself controlled. The House authorities were in no position to know that the European Policy Institute had no formal existence or that Mr MacShane controlled its bank account.

52. Mr MacShane says it was a pity his impermissible claims were not picked up by the House, but the invoices were submitted in such a way that it was impossible for the House authorities to be aware of the real nature of the services for which he claimed. In the final analysis, Mr MacShane was, as the Commissioner says "sending the invoice to himself and writing his own cheque."[49]

Mitigation

53. In his submission to the Committee, Mr MacShane has taken full responsibility for his conduct, and explained why it occurred:

How did this foolish and wrong behaviour come about? I was as Mr Lyon generously recognises under great pressure in this period. I had lost a daughter in a sky-diving accident in Australia, gone through a wrenching divorce and held the hand of my first daughter's mother, Carol Barnes, as she lay dying from a stroke for a week in 2008.

To overcome these griefs I did what many do and buried myself in work. I accepted extra parliamentary delegation work from the Labour Party. I chaired the All Party Commission on Inquiry into Anti-semitism which was hailed as a model of its kind and changed government policy. I wrote two books and hundreds of articles some of them translated but claimed under the wrong heading as Mr Lyon rightly notes.

Foolishly and wrongly I paid no attention to the administration of my expenses claims. I believe I could have listed all the myriad of receipts for my work on European and anti-semitism issues and been reimbursed for many of them. Instead I used a short-cut which was wrong. I was not required to pay back more than £1,000 under the original Legg inquiries into expenses. I have only ever owned two properties as an MP, the second bought following my divorce. I claimed nothing under the petty cash heading. But I did something so foolish and wrong I am still unable fully to explain to myself my stupidity.[50]

54. We also note Mr MacShane's undoubted expertise on European affairs, and engagement with European matters before the House. We accept that his motivation in making the claims was to maintain that expertise, to promote the work of the All-Party Inquiry and to carry out informal work on behalf of the then Prime Minister.

55. We have considered Mr MacShane's point that some of the money claimed would have been allowable. There are supporting statements but no receipts or invoices or any other contemporary documentation for about £4,500 worth of research and translation services. Mr MacShane told the Commissioner that others who had helped him would prefer not to make formal statements of "modest EPI payments".[51]

56. Mr MacShane himself told the Commissioner that the European Travel Allowance:

did not allow the flexibility of visits and arrangements, often made at short notice that I required. Moreover the European Travel Allowance pays full business class and hotel costs so that, for example, a trip to any remoter European capital can cost £2,000 or more. The Department of Resources can confirm this. Many of the EPI payments made, including for Easyjet travel, came under the £250 limit required for receipts.[52]

Mr MacShane could have arranged 3 visits a year to EU institutions and agencies, EU member states, EU candidate countries and EU applicant countries with proper authorisation from the Fees Office. While the details of his travel are not clear enough to identify which of the trips covered by the IEP claims could have been supported, it is possible that each year a further two of his visits to European capitals would have been allowable. The absolute amount Mr MacShane might have claimed if he had funded his travel appropriately cannot be quantified, but could have been significant. Although the Commissioner notes that charging "according to what I judged to have expended"[53] was not an acceptable basis on which to claim—and we agree—he states that he has no evidence that that at any time Mr MacShane made a personal profit from his claims[54]

The appropriate penalty

57. The Committee is united in agreeing with the Commissioner that Mr MacShane's conduct "fell far below the standards of integrity and probity expected of every Member of the House."[55], and that this is the gravest case which has come to us for adjudication, rather than being dealt with under the criminal law.

58. We have considered our recommendation as to penalty carefully and at length. It could be argued that the offence required expulsion from the House because of the repeated use of invoices generated by Mr MacShane himself, invoices which did not give a true account of the activities which had been claimed for, which gave a wholly misleading impression of the status, and indeed existence, of the EPI, and because of Mr MacShane's responsibility for ensuring that those invoices were signed with a "nom de plume" purporting to come from a General Manager who did not in fact exist. In the event of being expelled, the Member would be free to stand in any subsequent by-election.

59. On the other hand, it could be argued Mr MacShane's behaviour has been investigated by the police, and no action has been taken. The severest penalties recommended in recent decades had been suspensions of three weeks and of a month, for failure to cooperate with the Commissioner and the Committee.[56] Expulsion was an extreme punishment, and the choice of the electorate should be overturned very rarely. In the event of a lengthy suspension, while the Member would not be able to serve the constituency in the House he would still be able to serve constituents through surgeries, and communications with Ministers. The Committee should only recommend expulsion if it were confident that its judgement would be shared by the House.

60. The last Member expelled for a disciplinary offence was Mr Garry Allighan, Member for Gravesend, in 1947.[57] On 3 April 1947, an article, written by Mr Allighan, had been published in the World's Press News, claiming that Members gave information about private meetings to newspapers for either money, under the influence of alcohol bought for them by members of the press or for favourable personal publicity. In the course of the Committee's investigations, it was discovered that Mr Allighan himself was the author of reports being sent to the Evening Standard for the regular payment of £30 per week to the Trans-Atlantic Press Agency, in which Mr Allighan appeared to have the controlling interest.[58] In evidence to the Committee Mr Allighan could not or would not identify occasions on which briefings had been given for pay or other inducements; his evidence was characterised as being "of an evasive and contradictory nature."[59] In the words of Mr Herbert Morrison "He was accusing unnamed members not only of what he was doing but of the thing which he knew he was doing, and which he subsequently denied before the Committee of Privileges."[60] The Committee concluded that not only had Mr Allighan made charges which it regarded as unfounded and constituting a grave contempt, he had misled the Committee, that he had attempted to cast suspicion on others and had given evidence it was unable to accept. It considered this to be an aggravated contempt of the House. It made no explicit recommendation on penalties.

61. The motion that Mr Allighan be suspended for six months was moved by Mr. Morrison for the Government. In explaining the Government's position Mr Morrison said:

I do not underestimate the gravity of the offence.[...] But I do not like the House expelling Members except in cases where there cannot be much doubt about the rightness of the expulsion and where it would be accepted, broadly speaking, all round and fairly generally as the right thing to do. Expulsion is a very serious step. It could be a step open to very great abuse. For example, it would be exceedingly grave if the House expelled a Member because it thoroughly disliked him; either because it did not like his character or a number of things he had done. Once that was started, we could all make lists that might reach a considerable number before we had finished. If we were to abuse this power of expulsion it could become an instrument of danger to the House itself.[61]

An amendment was moved to the effect that Mr Allighan should be expelled. The question that the original wording of the Motion should stand was defeated by 187 to 75. The House subsequently resolved to expel Mr Allighan without a further division.

62. We accept that Mr MacShane is widely acknowledged for his interest in European affairs, and the funds he claimed could be said to have been used in supporting that interest. Those activities may have contributed to his Parliamentary work, albeit indirectly. He has expressed his regret, and repaid the money wrongly claimed. But this does not excuse his behaviour in knowingly submitting nineteen false invoices over a period of four financial years which were plainly intended to deceive the Parliamentary expenses authorities. This is so far from what would be acceptable in any walk of life that we recommend that Mr MacShane be suspended from the service of the House for twelve months. This would mean he lost his salary and pension contributions for this period.

63. We have detailed other breaches of the Code of Conduct: failure to comply with the Code in claims for computer equipment, and claims for activities which were not supported by the expenses scheme. We wish to make it clear that while these are significant, and would have been taken into account in a different case, our recommendation springs principally from Mr MacShane's actions in submitting the EPI invoices which he knew to be false. We also considered his failure to cooperate with the investigation to be significant: lesser breaches of the Code have not contributed to our decision.

41 Appendix 2 Back

42 Appendix 1, paragraph 145 Back

43 Appendix 1, paragraph 146 Back

44 Appendix 1, paragraph 144 Back

45 WE 61 Back

46 WE 61 Back

47 HC Deb, 26 May 1999, col 422 Back

48 WE 55 Back

49 Appendix 1, paragraph 153 Back

50 Appendix 2 Back

51 WE 17 Back

52 WE 17 Back