Select Committee on Standards and Privileges Third Report


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



1. We have considered memoranda by the Parliamentary Commissioner for Standards relating to the complaints by Mr A J Milne, a London solicitor, and Mr Paul Gosling, a journalist, against Mr Keith Vaz, Member for Leicester East. The Commissioner's memoranda are appended to this Report. Her report to us is published in this volume. The evidence annexed to her report, the minutes of the oral evidence we took in the course of our own inquiry, and various items of written evidence which we have received are published in the second volume.

2. This inquiry has taken far too long. If Mr Vaz and other witnesses whom the Commissioner asked for information had answered her questions fully and promptly, the Commissioner would have been able to complete her report in a much shorter time.

3. The Commissioner brought her inquiry to a conclusion after receiving letters from Mr Vaz's solicitors (Bindmans) stating that Mr Vaz did not wish to answer any further questions from her but that he was willing to provide any information requested by the Committee.[6] The Commissioner was unable to complete her inquiries satisfactorily into eight complaints.[7] She upheld one complaint relating to a recommendation for an honour,[8] and did not uphold nine complaints of failures to register or declare interests or breaches of the Code of Conduct.[9] All these complaints, together with the outcome of the Commissioner's inquiry into each one, are set out below:

Alleged failure to register payments and other benefits in the Register of Members' Interests

    1.  That in April or May 1994 Mr Sarosh Zaiwalla gave Mr Vaz £2000 and that Mr Zaiwalla made other cash payments to him regularly from 1994.

    2.  That on at least one occasion Mr Brian Brown (Mr Zaiwalla's bookkeeper) was involved in withdrawing £1000 in cash from the bank, which Mr Brown gave to Mr Vaz, and that this payment was thought to be for Mr Vaz's "office fund".

      —  Not upheld.

    The Commissioner reported that she had not been able, because of the unsatisfactory way in which information was provided to her inquiry by both Mr Vaz and Mr Zaiwalla, to reach a conclusion as to whether Mr Vaz received any registrable benefit of any kind from Mr Zaiwalla.

    3.  That Councillor Mustapha Kamal, of Leicester City Council, made payments to Mr Vaz of £8 per month for four years from around 1987/88 and that he believed that other Labour members of Leicester City Council also made such payments at the request of Mr Vaz.

      —  Not completed.

    4.  That Councillor Piara Singh Clair, of Leicester City Council, told Councillor Kamal that he, Councillor Singh Clair, had made the Sikh business community donate £10,000 to Mr Vaz's 1997 election campaign.

      —   Not upheld.

    5.  That Bipin Jewellers of Leicester provided Mr Vaz with the use of a car during his election campaign.

      —   Not upheld.

    6.   That Mr Vaz had a tenant (Councillor John Thomas) in a property which he owned at 146 Uppingham Road, Leicester; that this tenant was receiving housing benefit, the implication being that Mr Vaz may have received this benefit as rent.

      —   Not upheld.

    7.  That Mr Bakshish Attwal, a Leicester businessman, provided Mr Vaz with cheques made out to Mr Vaz prior to 1997.

      —   Not completed.

Alleged incorrect Register entry

    8.  That Mr Vaz concealed a donation provided by Control Securities Ltd by a Register entry which referred to Control Ltd and that the purpose of that donation was also inaccurately registered.

      —  Not upheld.

Alleged failure to resolve a conflict of interest (in breach of Code of Conduct)

    9.  That Mr Vaz's intention in making a misleading entry in the Register relating to Control Securities Ltd was to conceal a conflict of interest in relation to Mr Vaz's Parliamentary activities concerning the collapse of the BCCI Bank because Control Securities Ltd had an improper financial relationship with BCCI; and that Mr Vaz failed to resolve that conflict in favour of the public interest.

      —  Not upheld.

Alleged failure to declare an interest

    10.  That Mr Vaz was in breach of the rules on declaration of interests when speaking in the House on matters relating to BCCI

      —  Not upheld.

Alleged interference in an Inland Revenue investigation (in breach of Code of Conduct)

    11.  That Mr Vaz agreed to a request from Mr Zaiwalla that he (Mr Vaz) should try to influence the outcome of an investigation into Mr Zaiwalla's tax affairs, contrary to the requirements of the Code of Conduct.

      —   Not upheld.

Alleged lack of openness with Ministers when making a recommendation for an honour (in breach of Code of Conduct)

    12.  That Mr Vaz recommended Mr Zaiwalla for an honour in 1997 without disclosing that he had received financial benefits from Mr Zaiwalla, as required by the Code of Conduct.

      —  Upheld.

Alleged failure to account for funds (in breach of Code of Conduct)

    13.  Since the accounts for a constituency party fund-raising Club, established by Mr Vaz as a Member of Parliament, were not made available to subscribers, contrary to the requirements of the Code of Conduct for openness and accountability, they were not able to assess whether the money had been spent for proper purposes when it appeared that the funds collected were in excess of those distributed.

      —  Not completed.

Alleged soliciting and receipt of payments for help with planning permission or site acquisition in Leicester (in breach of Code of Conduct) and failure to register payments received

    14.  That in 1991/92 Mr Vaz offered, in return for £500, to help Mr Jaffer Kapasi, a businessman in Leicester, obtain planning permission or land acquisition decisions for a mosque.

      —  Not completed.

    15.  That between 1992 and 1996 Mr Vaz received 3 payments from Mr Kapasi in respect of decisions on land acquisition for a religious building.

      —  Not completed.

    16.  That Mr Vaz solicited £500 from each of three religious groups which were seeking to purchase land at discounted prices from Leicester City Council.

      —  Not completed.

Alleged failure to register property under Category 9 of the Register

    17.  That Mr Vaz failed to register one of the two properties he owns in Leicester.

      —   Not completed.

Mapesbury Communications

    18.  That Mr Vaz may have used revenue from Mapesbury Communications Ltd to support his Parliamentary office without disclosing the sources of the company's income.

      —   Not completed.

4. In this case, uniquely, the Commissioner has been unable to complete her investigations because some witnesses have refused to provide her with the information she needed. We have therefore had to take evidence, not to assist us in considering the Commissioner's conclusions, but to enable us to reach conclusions at all on a number of outstanding complaints.

5. We deprecate the behaviour of those witnesses who could have helped the Commissioner but did not do so. They had a duty to give the Commissioner the assistance she needed to do her job. Although we are less well-equipped than the Commissioner to gather evidence, and should not have had to, we felt that if we had not taken inquiries in this case forward it would be much more difficult for the Commissioner to obtain evidence from reluctant witnesses in future cases. If it came to be believed that if a witness prevaricated or procrastinated for long enough the Commissioner and the Committee would eventually lose interest and go away, the entire system which the Committee has put in place for the investigation of complaints would be at risk. We agree with the Commissioner that

    The public interest and fairness demand a clear rebuttal of unfounded allegations. But they equally require the upholding of any complaint supported by relevant and credible evidence.[10]

This is what we have done as far as possible.

6. We have taken oral evidence from Mr Vaz and from —

    Mr Colin Hall, Chairman of the Leicester East Constituency Labour Party;
    Mr Jaffer Kapasi OBE DL MKD, a trustee of the Dawoodi Bohra Jamaat, Leicester;
    Sir Peter Soulsby, formerly Leader of Leicester City Council;
    Mr Brian Brown, formerly a bookkeeper at Zaiwalla & Co;
    Mr Sarosh Zaiwalla, of Zaiwalla & Co., solicitors;
    Ms Maria Fernandes, a director of Mapesbury Communications Ltd, and Mr Philip Conway, of Davenport Lyons, solicitor to the company.

We have also received various items of written evidence.

7. The Commissioner said in her memorandum that, just as Sir Gordon Downey in 1997 had required higher standards of proof for the more serious allegations against Mr Neil Hamilton, she had adopted a stricter standard of proof than the balance of probability, having regard to the seriousness of some of the allegations against Mr Vaz.[11] We have adopted a similar approach. We have treated these complaints in the same way as the recent complaint against Mr John Maxton and Dr John Reid, where we concluded that we needed to be persuaded that the allegations were significantly more likely to be true than not to be true before we could properly uphold them.[12]

8. Although we have not found answers to all outstanding questions, we have been able to reach some conclusions to the required standard of proof.

9. In this Report we consider in turn the complaints which the Commissioner was unable to dispose of and the complaint which she upheld. We also consider certain other allegations which came to light in the course of our inquiry. We conclude with some observations about the conduct of certain witnesses and of the press.


(i)   Payments from Mr Zaiwalla

10. The Commissioner did not uphold the following complaints:

Although she did not uphold the specific allegations, she reported that she had not been able, because of the unsatisfactory way in which information was provided to her inquiry by both Mr Vaz and Mr Zaiwalla, to reach a conclusion as to whether Mr Vaz received any registrable benefit of any kind from Mr Zaiwalla.[13]

11. The allegations are categorically denied by Mr Vaz.

12. There is documentary evidence of a cash withdrawal by Mr Zaiwalla of £1000 in February 1994 which was in some way connected with Mr Vaz.[14] There is also evidence of two relatively small payments.[15]

13. Among the allegations made by the complainant Mr Milne, who was formerly employed by Mr Zaiwalla, were —

    (i)  that in April or May 1994 a cash payment of £2000 intended for Mr Vaz was collected from Mr Zaiwalla's office by a young man from Mr Vaz's office; and that Mr Vaz had failed to register that payment; and

    (ii)  that Mr Zaiwalla had made other payments to Mr Vaz, always in cash and at Mr Vaz's request, which were not registered.[16]

14. Mr Milne's specific allegation is not corroborated, and is not consistent in details with the evidence given by Mr Brown, which we discuss below. Mr Zaiwalla, in his evidence both to the Commissioner and to us, has repeatedly made serious criticisms of Mr Milne's integrity.[17] It is possible that Mr Milne's allegations against Mr Vaz are primarily intended to damage Mr Zaiwalla. Some of the information provided by Mr Milne about Mr Tony Baldry referred to in our earlier report[18] was accurate. It was confirmed voluntarily by Mr Baldry.

15. Mr Milne said he thought the man from Mr Vaz's office who collected the payment was called Mark.[19] In April last year Mr Vaz told the Commissioner that no one called Mark had worked for him in April or May 1994.[20] In February this year Mr Vaz's solicitor told us that someone called Marco had worked for Mr Vaz between 1992 and 1994, but he understood that Mr Milne had identified an earlier employee of Mr Vaz's as "Mark" in a conversation with a journalist.[21]

16. Mr Brown, who was Mr Zaiwalla's bookkeeper at the time, gave evidence to us on oath of a cash payment of £1000 (or possibly £2000) which was given to Mr Vaz in his presence shortly before Zaiwalla & Co. moved to new offices in June 1994.[22] Mr Brown said that Mr Zaiwalla had signed a cheque which he (Mr Brown) had taken to the bank and cashed.[23] He was unable to recall whether he had given the money to Mr Vaz on Mr Zaiwalla's instructions, or whether he had given it to Mr Zaiwalla who had in turn given it in his presence to Mr Vaz.[24] He thought Mr Zaiwalla had suggested that the payment was intended to set up Mr Vaz's office, from which he had inferred that Mr Vaz was a newly elected Member at the time.[25] (In fact Mr Vaz was not a newly elected Member in the spring of 1994: by that time he had been a Member of the House for almost seven years.) He had only seen Mr Vaz once at Mr Zaiwalla's office but had heard that Mr Vaz had been there on a number of occasions.[26]

17. Mr Vaz told us that he had never met Mr Brown and "would not know him in a crowd of two".[27]

18. According to Mr Milne, Mr Brown was sentenced to four years' imprisonment for stealing from Zaiwalla & Co.[28] Mr Zaiwalla said that Mr Brown had been convicted and jailed on two separate occasions for dishonesty, and that he had no doubt that Mr Milne and Mr Brown had colluded with each other in a substantial theft from his office account.[29] We must approach Mr Brown's evidence with particular caution. He sounded truthful. He gave us the one piece of information he had only because he had been asked to, and he said he had no axe to grind against Mr Vaz or Mr Zaiwalla.[30] He is unlikely to be acting in concert with Mr Milne, at whose instigation he was arrested.[31] He places the incident at about the same time as Mr Milne, in April or May 1994, rather than in February, although his description of it is quite different from Mr Milne's.

19. Mr Zaiwalla explained the documentary evidence relating to the cash withdrawal of £1000 in February 1994 by saying on oath that in the autumn of 1993 he had agreed, at Mr Vaz's request, to make a charitable donation of that amount. He believed the beneficiary was an Indian cyclone disaster relief charity. Mr Vaz had reminded him that he had not made the donation he had promised and had told him that representatives of the charity would be calling on him to collect it. He had given the two men—whom he did not know—£1000 in cash because that was what they had asked for. They had asked for cash because the payment was late. He said that a receipt for the payment would have been obtained for audit purposes, but that it had not survived. He denied that he had ever given cash to Mr Vaz.[32]

20. Mr Zaiwalla's explanation gave us considerable difficulty. We find it remarkable that a man in his position should hand over a large sum in cash to two complete strangers and then be unable either to produce a receipt or to recall the identity of the organisation he believed they represented. Nor do we understand the explanation they are said to have given Mr Zaiwalla for wanting the payment in cash.

21. Our confidence in the accuracy of Mr Zaiwalla's recollection is undermined by the inconsistencies in the account he had earlier given to the Commissioner. Mr Zaiwalla initially stated:

    Neither the firm of Zaiwalla and Co. nor I, have at no time made any payments to Mr Vaz MP or his Parliamentary office, nor did Mr Vaz approach either me or my firm to give him any money.[33]

Mr Vaz stated:

    I have never requested, nor received, cash payments of any kind from Mr Zaiwalla.[34]

Mr Zaiwalla subsequently found evidence in his office cashbook of a payment of £250 in January 1993 to Mr Vaz's office account and a payment of £200 in September 1994 for an advertisement in a calendar associated with Mr Vaz.[35] This might be thought to make Mr Milne's general allegation—that there were several cash payments from Mr Zaiwalla to Mr Vaz—more credible, though there is no hard evidence to support it.

22. Mr Vaz agreed that he might well have pressed Mr Zaiwalla to make a charitable donation. He had been active in seeking to persuade leading members of the Asian community in Britain to play more of a part in politics and to contribute to charitable causes. He could not shed any light on the identity of the recipient of the £1000; he told us he might have to write 250 letters to find out who it might have been. He denied that he had ever taken cash from Mr Zaiwalla.[36] An inspection of bank statements for his account established that the £1000 did not go into that bank account.

23. We have taken this matter as far as possible. The evidence we have been given is inconsistent and unsatisfactory. In the absence of firm corroborating evidence that Mr Vaz received either the £1000 of February 1994 or another large cash payment we cannot uphold the complaint.

24. We agree with the Commissioner that Mr Vaz was not required to register the small payments of £250 and £200 from Mr Zaiwalla but that he should have sought advice from the Registrar when the first of the payments was received.[37]

(ii)  Mr Vaz's recommendation of an honour for Mr Zaiwalla

25. The Commissioner upheld the complaint —

She found that the two donations referred to in the previous paragraph created a financial relationship between Mr Vaz and Mr Zaiwalla which Mr Vaz ought to have declared when he recommended Mr Zaiwalla for an honour (to the then Prime Minister in 1996 and to the then Lord Chancellor in 1997). She concluded that this was a breach of Mr Vaz's duty under the Code of Conduct to be "open and frank with Ministers".[38]

26. Mr Vaz's argument was that the payments were not for his personal benefit and did not create a financial relationship which required to be declared when putting forward his recommendation.[39]

27. This case differs from that involving Mr Tony Baldry whom we criticised for failing to declare a loan of £5000 from Mr Zaiwalla when recommending him for an honour. Mr Baldry had received a much larger sum and had put forward a recommendation for an honour within days of receiving the loan.[40]

28. Even if it were just a question of two relatively small payments—neither of which individually met the threshold for registration in the Register of Members' Interests, and the second of which was received almost two years before the first recommendation for an honour—a financial relationship, declarable when making a recommendation for an honour, did appear to exist between Mr Vaz and Mr Zaiwalla. Whilst there is no firm evidence that Mr Vaz benefited from Mr Zaiwalla's £1000 cash payment to a charity, it could have been seen as putting Mr Vaz under some kind of obligation to Mr Zaiwalla. The 1996 recommendation, a copy of which has been shown to us in confidence, was for a high honour, although not for a peerage as alleged by Mr Milne. The Resolution of the House of 22 May 1974 relating to Members' Interests (Declaration) provides that

    In any ... communications which a Member may have ... with Ministers ..., he shall disclose any relevant pecuniary interest or benefit of whatever nature, whether direct or indirect, that he may have had ...

The Code of Conduct states:

    In any activities with, or on behalf of, an organisation with which a Member has a financial relationship, including activities which may not be a matter of public record such as informal meetings and functions, he or she must always bear in mind the need to be open and frank with Ministers, Members and officials.

The obligations on Members are to be interpreted strictly. We consider that Mr Vaz should have disclosed his connections with Mr Zaiwalla when making the recommendations. We agree with the Commissioner. We uphold the complaint. We recommend that no further action be taken. We do not believe that the recommendations were made because of the two small payments.

6  Appendix 1, para. 22. Back

7  ibid, para. 505. Back

8  ibid, para. 503. Back

9  ibid, para. 504. Back

10  ibid, para. 30. Back

11  ibid, paras. 27-8. Back

12  Second Report, Session 2000-01, HC 89, para. 20. Back

13  ibid, para. 504. Back

14  ibid, para. 64. Back

15  ibid, para. 65. Back

16  ibid, paras. 35 and 56. Back

17  eg. Appendix 1, paras. 45-7; Qs 552, 564, 589-90. Back

18  Eighth Report, Session 1999-2000, HC 369. Back

19  Appendix 1, para. 56. Back

20  Appendix 1, para.72. Back

21  Appendix 2 to the Minutes of Evidence. See also Qs 239-50. Back

22  Qs 470-6, 483. Back

23  Q519. Back

24  Qs 477, 516-8, 521, 530-1. Back

25  Qs 468, 479-81, 484. Back

26  Q469, 499. Back

27  Q834; Qs 340-2; Appendix 1, Annex 17. Back

28  Appendix 1, Annex 2A. Back

29  Appendix 5 to the Minutes of Evidence. Back

30  Qs 488, 502. Back

31  Q501; Appendix 1, Annex 2A. Back

32  Qs 540-82, 605, 641-5, 672, 706-9, 751-63, 770-7. Back

33  Appendix 1, para.37. Back

34  ibid, para. 69. Back

35  Appendix 1, paras. 37, 40, 65. Back

36  Qs 218, 254, 802, 823-31. Back

37  Appendix 1, paras. 421-4. Back

38  ibid, paras. 443-7. Back

39  Appendix 3 to the Minutes of Evidence. Back

40  Eighth Report, Session 1999-2000, HC 369. Back

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