Select Committee on Standards and Privileges Eighth Report


EIGHTH REPORT

COMPLAINTS FROM MR MOHAMED AL FAYED, THE GUARDIAN
AND OTHERS AGAINST 25 MEMBERS AND FORMER MEMBERS:
SECOND FURTHER REPORT: MR NEIL HAMILTON

  The Committee on Standards and Privileges has agreed to the following Report:

  1. On 3 July 1997 the Committee published its First Report[1], together with the report of the Parliamentary Commissioner for Standards on allegations made against twenty-five Members and former Members. On 1 August we published our Seventh Report[2] containing our findings on twenty-four of those Members and former Members. We have now completed our proceedings in respect of Mr Neil Hamilton.

  2. In our First Report we drew attention to the right of those Members criticised to submit a written statement to the Committee rebutting or challenging any findings of the Commissioner. Mr Hamilton's submission has already been published.[3] We asked the Commissioner to provide us with briefing on the main points raised by Mr Hamilton. A written summary of the Commissioner's comments is appended.[4] Mr Hamilton made an oral statement to the Committee on 14 October 1997, the text of which is published together with this Report. Also appended are representations from Mr Al Fayed's solicitors[5] and from The Guardian[6] seeking, on behalf of witnesses, a comparable right of reply to Mr Hamilton's statement. After careful consideration the Committee concluded that these replies would not be necessary to enable it to reach its conclusions.

  3. The procedures used by the Commissioner and the reasons for their adoption are published in the Committee's First Report.[7] In his submission Mr Hamilton made a number of objections to the manner in which the Commissioner's inquiry had been conducted. We do not find Mr Hamilton's objections valid in terms of our remit from the House. We accept the Commissioner's description of the approach he adopted:

    "This was a parliamentary inquiry and there was no attempt to replicate the procedures of a court action. The proposed procedures were shown in advance to the previous Select Committee and to complainees. The approach was inquisitorial, not adversarial. Its sole purpose was to arrive at the truth, not to achieve a "conviction"."

  4. The Commissioner's findings on Mr Hamilton were as follows:

        (i)    The evidence that Mr Hamilton received cash payments directly from Mr Al Fayed in return for lobbying services is compelling; and I so conclude. The amount received by him is unknown but is unlikely to have been less than the total amount received by Mr Smith. There is no evidence to indicate that Mr Hamilton received cash from Mr Al Fayed indirectly through Mr Greer.

        (ii)    The way in which these payments were received and concealed fell well below the standards expected of Members of Parliament.

        (iii)    There is insufficient evidence to show that Mr Hamilton received Harrods vouchers.

        (iv)    The hospitality Mr Hamilton received from Mr Al Fayed at the Ritz and elsewhere was intended, and accepted, as part of his reward for lobbying. It was not, as it should have been, registered.

        (v)Mr Hamilton failed to register two introduction payments from Mr Greer in relation to NNC (National Nuclear Corporation) and UST (United States Tobacco), some of which he took in kind. There is insufficient evidence to show that the UST payment was a disguised consultancy fee.

        (vi)    Mr Hamilton did not register hospitality received from UST in 1989; on balance, it would have been better had he done so.

        (vii)    Mr Hamilton deliberately misled the President of the Board of Trade about his financial relationship with Mr Greer.

        (viii)  Mr Hamilton failed to register a consultancy fee from Strategy Network International on the spurious grounds that an interest acquired and disposed of within four weeks was non-registrable.

        (ix)    Mr Hamilton persistently and deliberately failed to declare his interests in dealings with Ministers and officials on the issues of House of Fraser and Skoal Bandits and, in some cases, was positively misleading about the status of his representations.

        (x)Mr Hamilton accepted a commission payment for introducing a constituent to Mr Greer, as well as a consultancy fee for representing that constituent's interests. Both these actions were unacceptable, the latter additionally so because it created a conflict of interest for Mr Hamilton in representing his other constituents.

        (xi)    The allegation that Mr Hamilton accepted a paid consultancy from Mobil Oil in return for asking Parliamentary questions is not substantiated.[8]

In his written statement Mr Hamilton apologised for his error of judgement in failing to register two commission payments and the SNI consultancy and for failing to register his hospitality at the Ritz hotel in Paris. He also apologised for his failure to declare the UST commission and the Ritz hospitality when making representations to Ministers.[9] However, in both his written and his oral statements[10] he contested many of the Commissioner's findings. In particular he has consistently denied that he received any cash payments from Mr Al Fayed.

  5. We have carefully examined Mr Hamilton's representations. Essentially, these repeat the evidence he gave to the Commissioner for Standards. We do not consider that Mr Hamilton has brought forward relevant new evidence.

  6. Our conclusions are as follows:

        (i)      When it investigated a complaint against Mr Hamilton's failure to register his stay at the Ritz Hotel in Paris in the previous Parliament,[11] the Select Committee on Members' Interests did not elicit the detailed evidence on Mr Hamilton's relationship with Mr Al Fayed and the campaign managed by Ian Greer Associates which the Commissioner's inquiry has now established. The relationship was essentially a business relationship in which Mr Hamilton advocated Mr Al Fayed's cause. He received material benefits. The visit should have been registered and Mr Hamilton must have known that it should have been.

        (ii)      We examined the evidence relating to the information which Mr Hamilton gave to the then President of the Board of Trade, Mr Heseltine. Mr Hamilton never gave away more information about his relationship with Mr Greer than he had to. The Commissioner's finding that Mr Heseltine was "deliberately misled" appears to us to be justified.

        (iii)    We accept the Commissioner's findings on Mr Hamilton's failures to declare his interests when dealing with Ministers and officials.

        (iv)    We recognise the force of the Commissioner's criticism of Mr Hamilton's acceptance of a commission payment for introducing a constituent to Mr Greer as well as a consultancy fee for representing that constituent's interests. Such actions do not appear to us to be contrary to the present rules of the House. We do not agree with the Commissioner's interpretation of the rules in this instance. We noted in our Seventh Report[12] that we consider it to be inappropriate for a Member to receive a fee for introducing a constituency company to another company or organisation.

        (v)      The Commissioner found a variety of occasions, most of which are now admitted by Mr Hamilton, when he failed to register his interests. We draw attention to paragraph 813 of the Commissioner's report-

              "In addition to the stay at the Ritz (dealt with earlier) the main allegations against Mr Hamilton under this heading [alleged non-registration of interests] are considered below:

              (i)    In 1989 Mr and Mrs Hamilton spent a few days as guests of Mr Al Fayed on the estate of Balnagown Castle. This was clearly a benefit of substantial value and should, in my view, have been registered. Mr Hamilton regarded it as "private hospitality": but this is a concept not recognised by the Register and, given the lobbying he was conducting at the time on Mr Al Fayed's behalf, the benefit could certainly have been thought to affect his conduct as a Member.

              (ii)  Mr Hamilton acknowledged receiving two Harrods hampers - one in 1988 and one in 1989. By today's standards these would be registrable, but I am inclined to think that this may not have been the accepted position at the time.

              (iii)  Unlike most, if not all, other lobbyists, IGA regularly paid commissions to Members who introduced new business. In 1987/88 Mr Hamilton received an introduction commission of £4,000 and a consultancy fee of £7,500 in relation to the National Nuclear Corporation. He registered the latter but not the former, on the grounds that the introduction payment was ex gratia and unexpected. In my view there is no doubt that the introduction commission should have been registered since it might have been thought to affect Mr Hamilton's conduct as a Member. This was also the view of the Select Committee on Members' Interests at the time and, although the Committee recognised that the categorisation of the Register was unsatisfactory, they did not see this as a justification for a failure to register such payments.

              (iv)  In 1989 Mr Hamilton received an introduction fee from IGA of £6,000, which had been agreed in 1988, in respect of US Tobacco (UST). Since this was his second such fee, it could no longer be argued that it was wholly unexpected. It should, in my judgement have been registered during 1989 and, in any event, in January 1990 after the Registrar had specifically reminded Members at the end of 1989 of their obligation to declare single payments.

              (v)  Also in 1989 Mr Hamilton enjoyed a three night stay at a hotel in New York at the invitation of UST. This, I think, was a marginal case, since he was on Select Committee business and his accommodation would have been paid for anyway. Nevertheless, the benefit could still have been thought to affect his conduct as a Member and would have been better registered.

              (vi)  It has been suggested that the payment relating to UST was, in fact, a consultancy fee and not an introduction payment. The evidence to the inquiry of Mr Walter, the former UST executive was not conclusive on this point. But this is not an important distinction if, as is the case, the payment was registrable in either event.

              (vii)  In 1990 Mr Hamilton received £667 from Strategy Network International for a month's consultancy work before becoming a Minister. He suggests that this would have been disregarded, as being de minimis, in 1990 and that, in any case, he resigned his appointment within the four-week period allowed for the registration of a new interest. In my view it is spurious to argue that an interest acquired and relinquished within four weeks is non-registrable; and the amount involved was far from negligible. I conclude that it should have been registered."

Cumulatively this list of omissions adds up to a casualness bordering on indifference or contempt towards the rules of the House on disclosure of interests.

  7. Mr Hamilton's conduct fell seriously and persistently below the standards which the House is entitled to expect of its Members. Had Mr Hamilton still been a Member we would have recommended a substantial period of suspension from the service of the House. These conclusions are justified by paragraph 6 alone.

  8. The most difficult issue is that of the alleged payments to Mr Hamilton by Mr Mohamed Al Fayed. Having regard to the nature of the alleged transactions and the conflict of evidence there can be no absolute proof that such payments were, or were not, made. The principal evidence upon which the Commissioner based his findings is contained in paragraph 789 of the Appendix to the First Report. There is no oral evidence independent of Mr Al Fayed and those who were working with him at the time. Mr Hamilton has consistently denied that he took "cash for questions" or was paid for lobbying services. He questioned at length the credibility of witnesses who gave evidence on this matter. We have considered whether it is within our remit to carry out our own investigation. Such an investigation would have involved taking evidence from those witnesses who gave evidence to the Commissioner and also reassembling and reassessing a considerable body of material. The Committee would have become engaged in the details of inquiry which the appointment of the Commissioner was meant to avoid, with no certainty that we could take the matter any further than he had done. Detailed investigation was by the Commissioner. His terms of reference were:

    "To enquire into allegations of misconduct against Mr Neil Hamilton and other Members of Parliament with a view to establishing whether there has been any breach of House of Commons rules, in the letter or in the spirit, and to report the findings to the Select Committee on Standards and Privileges."

We are satisfied that the Commissioner has carried out a thorough inquiry which took the evidence presented to him fully into account. The Committee did not arrive at a practicable way of reaching a judgement which adds to or subtracts from the Commissioner's findings.

  9. As we have said in our Seventh Report,

    "We recognise that, in practice, the powers of the House to punish non-Members are limited. In a future report we shall offer advice to the House on appropriate penalties and sanctions for Members, former Members and other persons involved in unacceptable behaviour.".[13]

  10. This report is the final report dealing with allegations made in the media in the summer of 1996 on the conduct of Members. Its scale and scope were wholly unlike anything envisaged by the House when it created the new system for examining complaints against the conduct of Members and appointed a Commissioner for Standards. Indeed it is important to remember that the Commissioner's inquiry did not arise from a specific complaint but from a statement made to the House by the Speaker and from the request by our predecessors that he should "investigate as a matter of urgency the serious allegations about the conduct of Members referred to by Madam Speaker in the House on 14 October". Unlike our normal procedure where the onus is on a complainant to submit evidence supporting any complaint to the Commissioner, the Commissioner was given the task of defining the allegations and assembling the evidence. The amount of that evidence was very considerable. Over sixty witnesses provided evidence, thirteen oral hearings were held and some fourteen thousand pages of documents were submitted. The Commissioner was asked by the previous Committee not only to investigate but where possible to reach conclusions and then report to the Committee.

  11. The scale and nature of this inquiry, analogous in some ways to that of a tribunal of inquiry, have highlighted the need for the Committee to assess its own role in relation to inquiries conducted by the Commissioner for Standards. Although some guidance was provided by the Select Committee on Standards in Public Life[14] and by the Nolan Committee[15] there is no agreement on whether there could be an appeal against the Commissioner's findings or conclusions by the Select Committee except in consideration by the House. The Committee will examine this matter further.


1  First Report, HC (1997-98) 30-I and II. Back

2  Seventh Report, HC (1997-98) 240. Back

3  Memoranda of Evidence, HC (1997-98) 30-IV. Back

4  Appendix 1. Back

5  Appendix 3. Back

6  Appendix 4. Back

7  First Report, HC (1997-98) 30-I, pp.10-11, 132-3. Back

8  HC (1997-98) 30-I, pp.129-30. Back

9  HC (1997-98) 30-IV, p.xxv. Back

10  HC (1997-98) 30-IV, pp.vi-xxviii; Ev. pp.1-21. Back

11  Select Committee on Members' Interests, First Report, HC (1994-95) 460. Back

12  HC (1997-98) 240. Back

13  HC (1997-98) 240, paragraph 26. Back

14  Especially in its First Report, HC (1994-95) 637, pp.xix-xxii. Back

15  Cm 2850-I, First Report of the Committee on Standards in Public Life, pp.43-45. Back


 
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Prepared 6 November 1997