Select Committee on Standards and Privileges Third Report


(ii)  The allegations relating to the Inland Revenue investigation of Mr Zaiwalla's tax affairs

80.  In his letter of 9 February 2000, Mr Zaiwalla told me he had never discussed with Mr Vaz the Inland Revenue investigation into his tax affairs and he confirmed this when I interviewed him on 24 May.

81.  In his letter of 4 April (Annex 2), Mr Milne went into further detail concerning the allegation relating to Mr Vaz's alleged approaches to the Inland Revenue on Mr Zaiwalla's behalf. He said:

    "In early 1997, Mr Zaiwalla told me that he was going to ask Mr Vaz for help to try to put pressure on the Inland Revenue to accept a token settlement. He told me that he had spoken to Mr Vaz at length about this and Mr Vaz had agreed to help."

Mr Vaz's response

82.  Mr Vaz strongly denied, in his letters dated 7 February and 11 April 2000, ever having discussed Mr Zaiwalla's tax affairs with him and he added that he had "not written to, spoken to, or communicated in any way with, anyone from the Inland Revenue about this matter, nor was I asked to do so, nor did I promise to do so."

83.  I wrote on 12 April 2000 to the Chairman of the Board of the Inland Revenue to ascertain whether Mr Milne's allegation concerning Mr Vaz's role in the investigation of Mr Zaiwalla's tax affairs could be substantiated (Annex 183). The Chairman, Mr Nick Montagu, replied (Annex 184):

(iii)  The allegation relating to Mr Vaz's role in recommending Mr Zaiwalla for a peerage

84.  In his letter of 4 April (Annex 2), Mr Milne told me he thought the alleged approach by Mr Zaiwalla seeking Mr Vaz's assistance in recommending him for a peerage had taken place at around the same period as the alleged agreement by Mr Vaz to make representations to the Inland Revenue on Mr Zaiwalla's behalf (ie early 1997).

85.  Mr Milne added:

86.  In his letter to me of 17 April 2000 (Annex 60), denying Mr Milne's allegation relating to attempts by Mr Vaz to obtain a peerage for him, Mr Zaiwalla said:

    "I confirm that I had no conversation at all concerning honours with Mr Vaz, as allegedly reported in The Sunday Telegraph.[112] On one or two occasions at public events Mr Vaz had praised the work I was doing and had jocularly said 'Lord Zaiwalla' and that was all. I was aware that he joked with other Asians too in a similar way.

    Mr Vaz has not come, and never came, into my office, as alleged or at all, 'brandishing a letter of recommendation that he promised had been sent to John Major'.

    Neither did Mr Vaz at any time promise me a 'place on the Honours List', as the libellous report published in The Sunday Telegraph alleges.

    I had no contact whatsoever with Mr Vaz around the time of the 1997 General Election, and there had been, at any time, no discussions between Mr Vaz and myself about Mr Major's resignation Honours List.

    As I have previously advised you, some time in 1993 or 1994, I had received from Mr Vaz what I believe to be a standard letter enclosing a copy of his letter to Mr Major, stressing the need for more Asian faces to be included in the future Honours List and purporting to enclose a list.

    My correct recollection is that in that letter, Mr Vaz had said that he would, or had, sent a list of recommendation of suitable candidates for honours in which list would have included my name."

87.  On 12 April I wrote to Mr Rajeev Syal, a journalist on The Sunday Telegraph, to request a transcript of a conversation between Mr Syal and Mr Zaiwalla on this subject, extracts from which had been published in the newspaper on 9 April 2000. Mr Syal supplied me with a copy of the transcript on 20 April 2000 (Annex 4A ).

88.  During the course of the conversation with Mr Syal (which took place in December 1999), Mr Zaiwalla was asked whether he had requested Mr Vaz to recommend him for an honour. The exchanges then proceeded as follows:

"SZ:You know Keith used to keep telling me, as he used to tell everybody else, 'Mr Zaiwalla, Lord Zaiwalla'.
SZ:I'm going to recommend you to the honours. But I know that Keith said that to practically everybody I know (tails off).
RS:He's a bit of a charmer.
SZ:Of course he is. For example, whenever I met him he would say 'Lord Zaiwalla' or 'Lord Loomba, Lord Noon'[113] (tails off)."

89.  When I interviewed Mr Zaiwalla on 24 May 2000 he responded to my questions about the allegation against Mr Vaz relating to honours as follows:

    "MS FILKIN: On 12 April, I wrote to you about The Sunday Telegraph article which mentioned a tape recording of remarks you made about an honour. You replied on 17 April saying you have had no conversation concerning honours with Mr Vaz, other than when joking. You say that Mr Vaz never brought a letter into your office which he had sent to Mr Major, and you have had no discussion with Mr Vaz about honours. You also say in another letter that you have received copy of a standard letter which Mr Vaz wrote to Mr Major in 1993-94 saying that more Asian honours were needed and that he had included your name in an attached list. Did you ever discuss this letter and this list with Mr Vaz in any way?

    MR ZAIWALLA: May I first of all say that over the years I have received lots of communications from Mr Vaz—what I would call circular communications, literally at the rate of one a month about what he is doing for the Asian community, what he is doing for Leicester. I was on his mailing list so I received a lot of these things. I remember some time in 1992-93 or 1993-94—I cannot recollect now—I received one of those circular letters where my name was written "Dear So and So" and had enclosed a letter which he had written to John Major, where he made a sort of appeal that there should be more Asians on the Honours List, as on the attached list—but there was no list attached. I very clearly remember that. I do not know whether I should say this, but I suspected he was just doing a PR exercise on me or public relations; anyway there was no list attached.

    MS FILKIN: But it was a letter from him to you.

    MR ZAIWALLA: No it was a letter he—

    MS FILKIN: It was a circular letter.

    MR ZAIWALLA: It was a circular letter which he had put out which had enclosed a letter from him to John Major and I think there was John Major's reply saying he had taken note, thanking him for the letter and saying he was very concerned about the situation; a standard sort of letter from the Prime Minister. It did not impress me at all. That is all that happened... Vaz has never come to the office with any letter, as The Sunday Telegraph alleged, and I have had no conversation with Mr Vaz. The only conversation which I have ever had—it was not a conversation, it was more of a monologue— and this is Mr Vaz's style; if he sees me, or Mr Raj Loomba or Mr K N Noon he would say 'Here comes Lord Noon or Lord Zaiwalla' and things like that, and I would be very embarrassed and I would not respond to that. That was again what I would call a PR exercise from Mr Vaz in what he considered to be his Asian constituency."

90.  I put it to Mr Zaiwalla that he appeared to have been more specific in his remarks to The Sunday Telegraph, implying that Mr Vaz had made a positive commitment to recommend Mr Zaiwalla for an honour:

    "MS FILKIN: Let me be precise about that. Has he ever, off the cuff or in any other situation, said what you have just said to me, that he said he was going to recommend you for an honour?... did not take it seriously as you are saying to me. Has he ever said that to you?

    MR ZAIWALLA: I have heard him saying that to others in the group and it is possible that he may have said it to me because he repeats himself so often, saying that, and to an intelligent mind it is quite obvious that he is just saying it. I have heard him saying it so often.

    MS FILKIN: So you are not denying that he said it to you?

    MR ZAIWALLA: ... I cannot recollect what I said to The Sunday Telegraph; if you say that I have said that, but it is possible; he may have just said it. It is possible, nothing more than that."

Mr Vaz's response

91.  In his letter of 11 April denying the allegation relating to honours, Mr Vaz told me:

92.  Subsequently, as part of the questionnaire I sent to Mr Vaz in preparation for a meeting with him planned for 3 July, I asked him whether, in view of Mr Zaiwalla's reference in his taped conversation with The Sunday Telegraph to Mr Vaz addressing him as "Lord Zaiwalla", Mr Vaz had ever made any remarks, whether jokingly or otherwise, which Mr Zaiwalla could have construed as a willingness to recommend him for an honour.

93.  Mr Vaz's reply, in a letter from Bindman's dated 5 July 2000 (Annex 36) was:

    "This is not evidence. See my letter of 11 April. Nominations for honours are made in confidence... ."

94.  On 12 April I wrote to the Permanent Secretary at the Lord Chancellor's Department, Sir Hayden Phillips, to ask whether Mr Vaz had proposed Mr Zaiwalla for an honour. The Permanent Secretary informed me that Mr Vaz had made such a recommendation to the then Prime Minister, Mr John Major, in August 1996 and that he had also written separately, in March 1997, to the then Lord Chancellor, Lord Mackay, in the same terms.[114]

95.  Subsequently, in a letter of 25 May 2000 (Annex 27), Mr Vaz's solicitors provided me with the same information. Mr Vaz had previously declined to answer any questions to him on the subject, maintaining that he was concerned not to breach the confidentiality of the honours system.[115]

The calendars linked to Mr Vaz

96.  In view of Mr Zaiwalla's evidence of a payment by him to Mr Vaz in connection with the publication of a calendar linked to Mr Vaz,[116] and Mr Vaz's response informing me that he had registered the calendars, it was necessary for me to examine Mr Vaz's Register entries for the relevant period. The annual printed Registers contained the following four references to calendars—

Date of RegisterEntry
31.01.95Income received from Annual Calendars used to pay for staff and publications to further community political involvement and information, including work on the Race Relations (Remedies) Act 1994 and Report on ethnic involvement in Quangos.[117]
31.03.96Income received from Annual Calendar used to support the work that I do with the Asian community; no payment made to me.
31.01.97Income received from Annual Calendar used to support the work that I do with the Asian community; no payment made to me.
31.01.99Contribution towards the cost of constituency calendars for 1999 from Mr A P Patel; no payment made to me.

97.  Mr Vaz's personal Registry file contained several examples of calendars with which he was associated. These included:

    —   a calendar for 1994, in a single folded A5 format, carrying small advertisements placed by businesses and featuring Mr Vaz's name and photograph

    —   a calendar for 1995, in a larger, map-sized format, carrying advertisements and also featuring Mr Vaz's name and photograph, as well as telephone numbers of government departments and other public agencies; amongst the advertisements was one from Zaiwalla and Co, solicitors

    —   a calendar for 1999, featuring Mr Vaz prominently but carrying no advertising.

98.  In Mr Vaz's letter of 17 July 2000 (Annex 39), he told me that the calendars were intended only for constituents in Leicester East and did not carry advertising;[118] they were usually hand-delivered in the December preceding the year to which they related. The calendars were not a success, however, and they were discontinued. The person organising them resigned. Mr Vaz said that the question of how to register the annual calendars had been the subject of extensive discussions with the then Commissioner and the then Registrar and that he had scrupulously followed the advice he had been given.

99.  I wrote to Mr Vaz on 18 July (Annex 40), informing him that I had copies of the calendars for 1994 and 1995 which, contrary to what Mr Vaz had said in his letter of 17 July, did indeed carry advertising. Prior to sending Mr Vaz a copy of this memorandum in draft, I had not received any explanation from him for this apparent discrepancy.[119]

100.  Mr Vaz's correspondence with the then Registrar on the subject of the calendars (in addition to the annual renewal of his entries) was as follows:

    —   the calendar was first registered on 18 July 1994[120]

    —   on 17 October 1994 Mr Vaz wrote to the then Registrar asking whether it was necessary for him to "declare every advertisement in the calendar" and adding "The income goes to a company which administers the staff that are employed for the purposes set out.[121] None of it comes to me."

    —   on 19 October 1994 the then Registrar replied as follows:

    "I see no reason why you should identify the individual advertisers, unless

      (i)  they sponsor the calendar fairly predictably year after year, and
      (ii)  they pay more than £500 each for the advertising space.

    If any of the advertisers does meet both criteria, it should strictly speaking be identified as a sponsor of your political activities, even though you derive no personal pecuniary benefit from the arrangement."

Mapesbury Communications

101.  Since the stated purpose of the annual calendars was to support Mr Vaz's work with the Asian community, I noted from Mr Vaz's personal Register file that in 1996 he informed the then Parliamentary Commissioner for Standards (Sir Gordon Downey) that he had established a company called Mapesbury Communications Ltd with the same objectives and that the company would receive his "income from the Annual Calendar together with all income I receive from outside Parliament".

102.  I therefore wrote to Bindmans on 11 July 2000 (Annex 38), to ask Mr Vaz for information about Mapesbury Communications, as well as for copies of the accounts for the company from that date.

103.  In his reply of 17 July (Annex 39), Mr Vaz said:

104.  On 18 July I wrote to Mr Vaz (Annex 40) saying that I assumed that any advertising revenue from the calendars would have been paid into Mapesbury Communications. I sought Mr Vaz's confirmation on this point, together with details of how the revenue was spent.

105.  Having had no reply to my letter of 18 July, I wrote again to Mr Vaz on 19 October 2000 (Annex 47) to clarify the details of the company with him. I explained that I had noted from his letter to my predecessor of 19 January 1996, that he had set up Mapesbury Communications with the purpose of supporting his work with the Asian community and that the directors at that time were his wife and mother-in-law.

106.  In the same letter Mr Vaz had informed the then Commissioner that "as yet no income has been spent from this company on any parliamentary duties, but I anticipate that it will pay for publications that cannot be paid by the Fees Office—petrol payments for members of my staff and equipment such as a computer or a shredding machine". Sir Gordon replied that since the Register showed Mr Vaz's income from the calendar, and assuming that he did not receive any personal income or benefit from Mapesbury Communications, his present entry "would seem to be satisfactory".

107.  Mr Vaz's Register entries have never contained any reference to Mapesbury Communications.

108.  In my letter of 19 October, I asked Mr Vaz to let me know the date on which he ceased to be involved with Mapesbury Communications Limited; whether during the period from 1996 to date he had received any income or benefit from the company; and whether Mr Vaz and Mr Vaz's mother-in-law remained directors. I also asked him to confirm that he had never been a shareholder of the company.

109.  In response Mr Vaz told me in a letter from Bindmans, dated 2 November 2000 (Annex 50), that the purpose of the company had been fully explained to Sir Gordon Downey; and that he (Mr Vaz) had already confirmed in his letter to me of 17 July (Annex 39) that he had been neither a shareholder nor a director of the company and had "received no financial benefit from it."

110.  In the light of Mr Vaz's suggestion to that effect, I obtained from Companies House copies of the annual reports and accounts for Mapesbury Communications Ltd for the financial years 1995-1996, 1996-1997, 1997-1998, 1998-1999 and the annual report for 1999-2000. These showed that, throughout this period, Mr Vaz's mother[122] and his wife continued to be directors of the company and that his wife, Ms Maria Fernandes, was the sole shareholder. The records also show that the company keeps its register of members at Mr Vaz's London home and that its registered office address is Mrs Vaz senior's Leicester home.

111.  I wrote again to Bindmans on 27 November 2000 (Annex 52) to seek Mr Vaz's comments on this information and, in particular, how it related to his statement, in the letter from Bindmans of 17 July, that Mapesbury Communications had continued to trade with new officers[123] after the calendar project was abandoned.

112.  In response, in letters dated 4 and 7 December 2000 (Annexes 53 and 55), Bindmans told me that Mr Vaz was unwilling to answer any further questions from me but that he was prepared to provide the Committee with information, if requested by them to do so.

112   See paragraph 87. Back

113  'Lord Loomba' and 'Lord Noon' are respectively, references to Mr Raj Loomba and Mr G K Noon, Asian businessmen (see paragraph 26). Back

114   Correspondence not annexed to this memorandum Back

115   Mr Vaz took up this matter with the Speaker, the Head of the Honours Unit and the Secretary to the Cabinet. Back

116   See paragraph 65.  Back

117   This interest was first registered on 18 July 1994. Back

118   Emphasis added. Back

119   Mr Vaz provided an explanation in his formal response to my draft memorandum (Annex 56A, paragraph 26). See also paragraphs 455 to 458. Back

120   See paragraph 96. Back

121   It is not clear to what this phrase refers since the only enclosure with Mr Vaz's letter was a copy of the calendar itself. Back

122   Mrs Vaz senior became a director on 1 February 1996. She has also been the company secretary since 15 January 1999. Back

123   My emphasis. Back

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