Select Committee on Standards and Privileges Third Report


Memorandum submitted by the Parliamentary Commissioner for Standards
Complaints against Mr Keith Vaz MP



a)  Mr Andrew Milne

1.    Mr Andrew Milne wrote to me on 4 and 8 February 2000 (Annex 1) to complain that Mr Keith Vaz, Member for Leicester East, had failed to register in the Register of Members' Interests a cash payment of £2,000 which was made to him in 1994 by Mr Sarosh Zaiwalla, a London solicitor, with whom, at the time, Mr Milne was in partnership.[95] He said he believed that Mr Zaiwalla had told him that he had also made other cash payments to Mr Vaz which had not been registered. Mr Milne further claimed that after the 1997 general election Mr Zaiwalla told him that he had asked Mr Vaz to exercise his influence in order to have an Inland Revenue investigation into Mr Zaiwalla's tax affairs stopped and that, in that context, Mr Zaiwalla had reminded Mr Vaz about the money which he had paid to him. Mr Milne asked me to investigate Mr Vaz's conduct in relation to these issues.

2.    Mr Milne wrote to me again on 4 April 2000 (Annex 2) alleging that Mr Vaz had also agreed to Mr Zaiwalla's request that Mr Vaz should recommend him for a peerage.

3.    On 16 February 2000, Mr Chris Hastings, a journalist at The Sunday Telegraph, sent me a copy of a document which the newspaper had received following an article they had published the previous week concerning Mr Milne's allegations. The document, which bore no sender's name or address, alleged that the people listed in it had also provided financial and other support to Mr Vaz which had not been registered.

4.    Other articles in The Sunday Times and The Sunday Telegraph published around the same time, following extensive inquiries by the two newspapers in the Leicester area, made allegations against Mr Vaz involving a failure to register payments or other benefits, the gist of which I was subsequently able to confirm by writing to the person or persons quoted as the source of the allegation in question.

5.    By way of background, copies of the relevant newspaper articles are appended to this memorandum.[96]

6.    Further allegations of a similar nature emerged when I wrote to certain witnesses seeking their account and they, in turn, provided information about alleged financial transactions involving Mr Vaz or told me that other people might be able to supply me with relevant information.

7.    In each of the cases mentioned in paragraphs 4 and 6 above I was satisfied, under the terms of paragraphs 67 and 69 of the Code of Conduct, that I had sufficient evidence to justify my "taking the matter further".

b)  Mr Paul Gosling

8.    On 29 February 2000 Mr Paul Gosling, a journalist and former Labour councillor in Leicester, wrote to me (Annex 7) saying that in the course of journalistic enquiries some years previously he had obtained information which he felt he should put before me since he understood that I was investigating complaints against Mr Vaz.

9.    He said that his principal source was the press officer at a company called Ascot which had taken over a business previously trading as Control Securities. Control Securities was landlord and a shareholder in the failed bank BCCI. The press officer had confirmed that the accounts for Control Securities Ltd for the year ending 31 December 1992 showed that £5000 had been paid to what was described as "K.Vaz, election fund".

10.  Mr Gosling said that according to the Register of Members' Interests Mr Vaz had registered a donation from a company called Control Ltd in 1991 for the production of "a report/bulletin for the Asian community into the work of the Immigration and Nationality Department".

11.  Mr Gosling alleged that Mr Vaz had used an inaccurate name for the company to obscure the true identity of the donor and that the purpose of the donation had been inaccurately described, possibly in order to disguise an improper financial relationship between Control Securities Ltd and BCCI. He said that it was especially important that Mr Vaz's financial support from a company linked with BCCI was properly registered because an inadequate entry might have concealed a conflict of interest which ought to have been declared and which could have affected Mr Vaz's parliamentary activities concerning BCCI.


12.  I wrote to Mr Vaz seeking in turn his initial responses both to the formal complaints from Mr Milne (Annex 11) and Mr Gosling (Annex 15A) and to the further allegations which were subsequently made against Mr Vaz, as described in paragraphs 4 and 6 of this memorandum.[97]

13.  At their request, I also wrote, on 7 June 2000 (Annex 28) to Mr Vaz's solicitors, Bindman and Partners, with a composite list of all the allegations against Mr Vaz. To ensure Mr Vaz's solicitors were fully informed I thought it right to include in this list the allegations contained in the document (mentioned in paragraph 3 above) which had been sent to me by The Sunday Telegraph and which I had already put separately to Mr Vaz.

14.  My reasons for adopting this course were:

    —   the fact that the subject matter of almost all the allegations listed in The Sunday Telegraph document was directly relevant to, and might therefore have a bearing on, the complaint by Mr Milne that Mr Vaz had received payments which he had not registered

    —   evidence I had received[98] that a Labour Party internal inquiry established to look into allegations relating to the management of the Leicester City Labour Party had been brought to a premature conclusion before it had had a proper opportunity to consider the allegations

    —   concern that if the allegations included in the list sent to me by The Sunday Telegraph were not at least put to Mr Vaz, and to others named, for their comments they might resurface after I had submitted my memorandum to the Committee.

15.  Subsequently, in the light of Mr Vaz's responses, and of information received from others, I concluded, in accordance with paragraph 69 of the Code of Conduct, that there was insufficient evidence to justify my taking any further the matters raised in the document provided to me by The Sunday Telegraph. Accordingly, those allegations are not set out in this memorandum.

16.  I also received some anonymous letters containing allegations against Mr Vaz, which I have not pursued.

Summary of complaints and other allegations

17.  The following is a summary of all the complaints and other allegations against Mr Vaz which, on the basis of the evidence provided to me, I regarded as requiring further investigation by me.

    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".[99]

    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.

    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.

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

    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.

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

    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.

    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.

    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

    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.

    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.

    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.

    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.

    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.

    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.

18.  The various allegations against Mr Vaz are summarised in tabular form at Appendix 2.

19.  On 21 June 2000 I wrote to Bindmans spelling out the parts of the Code of Conduct and Rules which are relevant to the complaints (Annex 30) and on 26 June I invited Mr Vaz to meet me to answer my questions on these matters. On 29 June, in response to a request from Bindmans, I supplied Mr Vaz with the questions in writing (Annex 32). On 3 July I met Mr Vaz, who was accompanied by his researcher, Mr Keith Bennett, and by Mr Geoffrey Bindman, and we discussed for some two hours matters relating to my investigation of the complaints against him. At the end of the meeting Mr Vaz told me that he wished to provide written answers to my questions.

20.  At Mr Bindman's request I again set out, in my letter of 4 July (Annex 35), the substance of the allegations against Mr Vaz and the documents (which had already been sent to Mr Vaz as they were received by me from witnesses) in which the supporting information could be found, including any information at variance with Mr Vaz's original responses.

21.  Bindmans sent me Mr Vaz's written answers to my questions on 5 July (Annex 36). On 10 July Bindmans wrote again (Annex 37) maintaining that Mr Vaz still did "not know what the case is against him". I wrote to Mr Vaz on 11 July setting out the purpose of the investigation, describing a Member's responsibilities during such an investigation and asking Mr Vaz follow-up questions which flowed from his replies of 5 July (Annex 38). Bindmans replied on 17 July 2000 to these further questions. I wrote to Mr Vaz again on 18 July to put to him further evidence for his comments (Annex 40). Further exchanges of letters between Bindmans and myself took place as I attempted to ensure that I had obtained a complete picture of the events described in the allegations (see Annexes 41 to 52).

22.  After receiving letters dated 4th and 7th December 2000 from Bindmans (Annexes 53 and 55) stating that Mr Vaz did not wish to answer any further questions from me, but that he was willing to provide any information requested by the Committee, I decided to bring my inquiry to a conclusion.

23.  The substance of each of Mr Vaz's detailed replies is set out in relation to each of the allegations in turn, as they are examined in this memorandum. The complete responses are included in full in the relevant annexes.


24.  During my investigation I have written to, telephoned or interviewed the following to obtain information about these allegations:[100]

    Ms Claire Ward MP (a member of a 1994 Labour Party enquiry into matters concerning the running of the Labour Party in Leicester)

    Mr Sarosh Zaiwalla (solicitor)

    Mr Andrew Milne (solicitor, previously a partner at Zaiwalla & Co)

    Mr Jaffer Kapasi (Deputy Lord Lieutenant of Leicestershire).

    Mr Brian Brown (previously an accounts clerk at Zaiwalla & Co)

    Mr Paul Gosling (financial journalist and researcher, previously a member, and one-time auditor for, Leicester East Constituency Labour Party)

    Sir Peter Soulsby (Leicester City Council, previously Leader)[101]

    Mrs P Stuttard}   (Members of Executive Committee of
    Mr R Stuttard }   Leicester East Constituency Labour Party)

    Mr Colin Hall (Chairman, Leicester East Constituency Labour Party)

    Councillor John Thomas (Secretary, Leicester East Constituency Labour Party)

    Mr R Green (Chief Executive, Leicester City Council)

    Mr A Price-Jones (previously Town Clerk, Leicester City Council)

    Councillor Ross Willmott (Leader, Leicester City Council)

    Mr M J Ladha (Head of Corporate Equality, Leicester City Council)

    Mr J Dhesi (Planning Officer, Leicester City Council)

    Councillor Mary Draycott (Leicester City Council)

    The Permanent Secretary, Lord Chancellor's Department

    Rt Hon John Major CH MP

    The Chairman of the Board of the Inland Revenue

    Mr Ian Stephens (Chief Adviser, the Officer for the Supervision of Solicitors)

    Councillor M Kamal (Leicester City Council)

    Mr B S Attwal (B S Attwall and Co Ltd)

    Mr N Virani (Cygnet Property and Leisure plc)

    Councillor Piara Singh Clair (Leicester City Council)

    Mr Ramesh Nanda (Chairman of Asian Business Network) (volunteered information)

    Mr Z Pala (Bipin Jewellers, Leicester)

    Mr Bhupen Dave, Leicester resident

    Shk M Jafferji and Shk M Abdulali (Dawoodi Bohra Jamaat of Leicester)

    Councillor R Kavia (Leicester City Council)
    Lloyds TSB Bank

25.  In addition, I received an unsolicited letter from Mr H Asmal, a resident of Leicester.

26.  I also wrote to the following people to check information provided from other sources:[102]

    Mr H Suterwalla (T R Suterwalla & Sons Ltd)

    Mr G P Hinduja (Hinduja brothers)

    Mr S P Hinduja (Hinduja brothers)

    Mr H Patel (The Regency Hotel, London)

    Mr Shantoo Ruparell

    Mr Raj Loomba (Runku of London plc)

    Mr L Mittal (ISPAT International Limited, London)

    Mr G K Noon (Noon Products, Southall)

    Mr M Madhvani.


27.  The normal standard of proof in disciplinary cases, including allegations of breaches of the Code of Conduct or of the rules relating to the Conduct of Members, would be the balance of probability. However, I have been mindful of the approach adopted by my predecessor in 1997 in the case involving Mr Neil Hamilton and other Members, when he said:

28.  Taking into account my predecessor's view, and having regard to the seriousness of some of the allegations against Mr Vaz, I have decided that in this case I should adopt a stricter standard of proof than the balance of probability.

29.  A feature of this investigation has been that, as my inquiries into the original complaints proceeded, fresh allegations were made against Mr Vaz. This was unfortunate, but, I believe, unavoidable. From the outset of my inquiries, witnesses giving their account in relation to the original complaints either made new accusations against Mr Vaz, drew my attention to information they regarded as relevant, or directed me towards other witnesses who, they believed, might have such information. This has had the effect both of prolonging the inquiry and of causing particular difficulty for Mr Vaz in responding to the various new allegations or items of information as they were brought forward. I have taken these matters fully into account in reaching my conclusions.

30.  I have endeavoured to establish the truth in relation to the complaints against Mr Vaz— a task which serves two distinct purposes. 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.

31.  During the course of my inquiry I have received allegations and counter-allegations from many sources, testifying to serious and unresolved disputes between members of the Leicester East Constituency Labour Party. Indeed, in a letter of 10 July Mr Vaz's solicitor expressed the view that my inquiry was "being used as a vehicle for pursuing a political wrangle in Leicester Labour Party concerning events more than six years old." I have found it necessary to make it clear to many of the witnesses that my inquiry relates only to Mr Vaz's conduct as a Member of Parliament and that I am not concerned with internal Party matters.

32.  The climate of suspicion and mistrust of motives which I have encountered in pursuing my investigation has added to my difficulty in obtaining information. Thus, many of my letters have not been answered the first time, or else my questions have been so narrowly interpreted as to require one or more follow-up letters in order to elicit a full reply.

33.  In the same context, I should draw attention to a continuing problem which has arisen in my dealings with solicitors acting on behalf either of Mr Vaz or of witnesses. I have, for example, frequently been asked to provide the "evidence" in support of questions seeking particular items of information. I have had to point out that such an approach is inappropriate to a Parliamentary inquiry of this sort and that my task is to gather information in a non-adversarial way, both to enable me to build up a complete picture of the facts and to give the Member against whom the complaint has been made every opportunity to give his or her full account of the allegations which have been raised with me.

34.  For completeness, I should mention one further matter. On 9 April 2000 Mr Vaz wrote to me (Annex 20) to say that he had received a racist letter which referred to my inquiry and which he had passed on to the police for investigation. Mr Vaz enclosed a copy of the racist letter.

95   Mr Milne is now practising independently. Back

96   Not printed. Back

97   The appropriate references to the Annexes are given for each of these letters as the various allegations are considered in this memorandum. Back

98   See paragraphs 172 to 177. Back

99   This allegation was not part of Mr Milne's original complaint but was contained in evidence from Mr Brown. Back

100   A complete list of the people mentioned in this memorandum is at Attachment 2. Back

101   Sir Peter and I were, for a period, both members of the Audit Commission. This fact was subsequently raised by Mr Kapasi and Mr Vaz as creating a possible conflict of interest on my part. (See paragraphs 150 and 164). Back

102   See paragraph 3. Back

103   First Report from the Committee on Standards and Privileges, HC 30-I (1997-98).  Back

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