Select Committee on Standards and Privileges Third Report



Background to the allegations

113.  On 4 March 2000, I was telephoned by a journalist on The Sunday Telegraph, Mr Chris Hastings, who told me that, following articles published by the newspaper over the previous few weeks concerning Mr Vaz, he and colleagues had interviewed "a large number of people in Leicester". These approaches had produced "quite a lot of information" but so far none of the people contacted was willing to make a statement on the record. One of those interviewed had claimed that Mr Vaz had offered to help with a planning application for a mosque in return for a payment of £500, which he [Mr Vaz] later accepted. I was subsequently informed by Mr Hastings that the person concerned was Mr Jaffer Kapasi, a businessman and Deputy Lord Lieutenant of Leicestershire.

114.  On 8 March 2000, Mr Hastings telephoned me again to say that The Sunday Telegraph now possessed taped interviews with a number of members of the Asian business community in Leicester and that one of them claimed to have a list of about 20 people who had allegedly provided Mr Vaz with money either in return for help with matters such as planning applications, or as contributions to Mr Vaz's campaigns. This list included a number of councillors who had been asked to make a monthly payment to Mr Vaz's office fund. Mr Hastings repeated, however, that as yet none of those approached was willing to repeat their allegations in public. He did, however, supply me with the names of the people to whom The Sunday Telegraph had spoken, amongst them that of Mr Kapasi.

115.  Following receipt of this information, I wrote to Mr Kapasi on 14 March 2000 (Annex 129) seeking his response to the specific allegation concerning a payment of £500 to Mr Vaz for assistance with a planning application for a mosque, but asking him in addition whether he had made any other payments to Mr Vaz— and, if so, for what purpose, and whether he knew of any others who might also have provided Mr Vaz with cash or other benefits.

116.  On 17 March, before I had received Mr Kapasi's reply to my letter of 14 March, Mr Hastings and a fellow Sunday Telegraph journalist, Mr Rajeev Syal, came to see me. At the meeting they played the whole of their tape-recording of their conversation on 3 March 2000 with Mr Kapasi, during the course of which the following exchanges took place (Annex 3):[124]

"RS:What we wanted to know is that we have been speaking to people who have been giving Mr Vaz money. There is nothing wrong with giving him money for election expenses. Obviously there is nothing wrong with doing that. The only thing that is wrong is if he does not declare it. Then he has done something wrong. Have you ever given him money?
JK:Well yes, but seriously, I would deny it if anybody asked. (laughs)."
"CH:You know the period immediately before the last election. A number of people say they donated in 1995, 1996 and 1997. Do you know what kind of sums people would have given him then? I mean, off the record, are we able to ask how much you were asked to give?
JK:I was asked to give a thousand. And I ended up giving him about £500.
RS:In 1997? So we can check, and see if he has declared it.
CH:Did you give it as an individual or as a company?
JK:As an individual.
CH:And you made it out to him? A cheque? To Keith Vaz?
RS:I have spoken to the people who say they have given cheques.
JK:I think these people should really stand up.
CH:When did you give your £500? Was it 1990?
JK: Let me see... was it 1992 or 1991?
RS:1991 or 1992?
JK:And he was asked to pay cash, yes.
RS:Were you asked to give him anything else around the 1997 general election?
JK:No, but many other people did.
RS:How does he collect money? Does he come around himself?
CH:So you go round with the £500?
 (response inaudible)
RS:What was it in, a brown envelope?
JK:A white envelope. (laughs)"
"CH:Did he promise people anything in return, did he promise you anything? Did he hint at... (pause) What sort of hints does he say?
JK:He said he would help us with a planning issue, that's all."
"RS:How does he get money out of people? Does he approach them and say 'can you give me money?'? Is that what he did with you? Did he give you a call saying 'can you come and give us some money?' Is that what he did with you? Did he give you a call? Did he give you a call saying 'can you come and give me some money'?
JK:It's more subtle than that—being a solicitor as well. He says 'I will do this for you but the (inaudible word) that I expect is some of my expenditure.' Not in an open way. 'A person can incur a lot of expenditure in my duties and I need you to finance it'. He will not say 'Look here, do you think a backhand... (inaudible) give me £500 and I will do the job for you', but 'I will have some expenses, can you finance the expenditure'. I think when he asked me I said 'Can I have a bill for it and I will pay for it?' But he says, no there's no bill, he incurred this expenditure and he needed to finance it.
RS:What were you asking for? Were you asking for planning permission? For here?
JK:For a place of worship.
RS:He was asking for money for him to sort out a mosque with the local council.
JK:To finance it, yes.
CH:You're joking.
RS:Outrageous. A mosque?
CH:Where was that?
CH:And he actually said that to you.
JK:That he would incur expenditure and (inaudible word) funds. His mother was very crude. She would have (inaudible words). But he was much more subtle than that.
RS:Is it Hamilton where there is a temple, a mosque? That is where we were told that all three were asked to donate money. And was this in 1990?
RS:Do you think that any of the other people will talk to us about it?
JK:I can give you phone numbers, but they will not talk to you. They are just like me. To be so careful...
CH:The £500 that you gave him was specifically to do with a mosque application. God does not stop at much, does he? Did you get the application in the end?
JK:No, it's still going on.
RS:How much did the others pay?
JK:I think they were asked to pay £1,000 each.
RS:How much did the others pay?
JK:The Hindu group paid £500. I don't know about the Sikhs.
CH:That was to him. You gave yours to him?
JK:Yes I delivered it myself, you know.
CH:Did he say it as blatantly as that, give me £1,000 and I will help you get planning permission for the mosque?

117.  On 21 March 2000, Mr Kapasi responded to the questions in my letter to him of 14 March, in so far as they related directly to himself, as follows (Annex 130):

    "(i)  No payment was made to Mr Vaz in 1991/92, either personally or by my business, Kapasi & Co, in return for any assistance with regard to planning permission for a mosque.

    (ii)  I have not made payments, donations or provided other support to Mr Vaz as a Member of Parliament. I have, however, made a very small donation of £52.00 in 1995/96 to a charity called Sahara Trust, of which Mr Vaz is a trustee."

Evidence from Sir Peter Soulsby

118.  In the meantime, I had contacted Sir Peter Soulsby, a former local government colleague of Mr Vaz's, who was at one time Leader of Leicester City Council and who had been alerted to my inquiry by the articles in the press. Sir Peter had also been approached by Councillor Mustapha Kamal, a Leicester city councillor, to whom I had written as one of those whom The Sunday Telegraph had indicated might be a potential witness to my inquiry into the complaints against Mr Vaz.[125] Sir Peter agreed to come to my office to describe, from his own experience, some of the relevant events and personalities involved.

119.  At that meeting, on 23 March 2000, Sir Peter began by sketching in the political background to the allegations against Mr Vaz (Annex 117):

    "SIR PETER SOULSBY: It would be helpful if I give you some background, because I really ought to say right from the outset that Keith and I have a long history of quite a difficult relationship and it does date back initially to the period when he was selected as the prospective candidate in Leicester—back in about 1985. At that time, shortly after he was selected, he obtained a job with a council—funded law centre, the Belgrave Law Centre. It was something which I found very uncomfortable because there were suggestions at the time that the job had not been properly advertised and so on, and as Council Leader—I had in fact been Council Leader since 1981—for the Labour controlled council, this was of some embarrassment to me, as the council was funding the project. I was then further embarrassed when allegations were made that he was operating as a solicitor without a proper practising solicitor certificate. There were several complaints from the Law Society and so on. Then complaints from political opponents that the office was effectively being used as his campaign headquarters. I found myself having to field some very difficult questions for which I did not have proper answers. That was perhaps the first strain in our relationship. The second strain in our relationship was in 1987 when he was elected to Parliament when, despite a number of requests from me and from the Town Clerk, Keith delayed resigning from his post and continued to draw his salary for, I think it was, about eight months after his election. That, to me as Council Leader and to the Town Clerk, who was actually the departmental head with responsibility for it, was a very difficult period indeed. When he did eventually leave I was told that he took the secretary with him and all the filing cabinets, which clearly was a further embarrassment to me and a further strain on our relationship. Over the subsequent years there was then a series of issues which caused problems between us, particularly with regard to his office, which he subsequently set up at 144 and 146 Uppingham Road in Leicester: problems with the planning permission, with an unauthorised sign, more recently with his electoral registration, his claims he lived at the office, when it was suggested that he did not—he was not paying council tax at the office—a whole series of difficulties between us. The first issue which raised Keith to a national profile, you may recall, was the BCCI issue. While there are all sorts of allegations still widely spread about that period, I have no knowledge at all of the financial interest he might or might not have had in that and certainly cannot comment on it. There have actually, though, been a number of subsequent difficulties between us. Keith has a very effective, some would say crude, constituency machine which I would say to my knowledge, having been Council Leader for the best part of 20 years, is almost unique in the extent to which it sought to control the selection of council candidates. You will see the relevance of this in a little while. His mother was found a safe seat and there are several transcripts and tapes which were taken of him discussing these issues—not taken with his knowledge, I hasten to say, nor with mine at the time—which show the extent to which he was seeking to control the council candidates who came forward for the Labour Party from the wards in his constituency. I shall explain the relevance of this in a little while. Considerable concern was expressed over constituency finances and about the way in which membership of the party in Leicester East was paid for. I have records of the auditors' reports, from that period and indeed have the transcript of a discussion between the person who was the treasurer of the constituency party and Ian Murray of The Times about the period 1990 onwards, about the way in which the finances of the constituency were organised.

    MS FILKIN: What does that show?

    SIR PETER SOULSBY: I can certainly pass this to you. How can I summarise it? It alleges that block memberships were purchased in certain wards by people who in some cases were not aware that they were being signed up to the Party. It suggests that Merlyn Vaz, Keith's mother, who was by about this time a councillor for one of the wards, was personally involved in paying cheques for other people's memberships. I shall pass this over to you. The relevance will become more evident in a minute. It is really that in 1991 Merlyn Vaz, Keith's mother, became Chair of the Property Committee of the City Council. That was after considerable pressure from her and others for her to get that job. I tried to replace her in 1992, but the person whom I tried to put in her place resigned within a few days of having accepted it, under considerable pressure from Keith and Merlyn. The relevance of all of this is that Leicester has three constituencies. Leicester East provided more than its share of councillors and Keith had an unusual degree of influence over the councillors from that constituency and therefore over the council and the Labour group in particular."

120.  I have quoted Sir Peter's opening remarks at some length since they are important for two reasons: first, they describe the context in which, according to Sir Peter, the events covered by the allegations against Mr Vaz took place; and second, they illustrate Sir Peter's candour in describing his strained relationship with Mr Vaz—an issue of relevance in assessing the respective credibility of the two men.

121.  Sir Peter then went on to speak directly of his knowledge of the alleged demand by Mr Vaz for a payment from Mr Kapasi in connection with a planning application:

    "SIR PETER SOULSBY: As I say, his mother became Chair of Property in 1991 and remained Chair through to 1993.[126] One of the most contentious issues in front of it [ie the Property Services Committee] at that time was the development of the Hamilton area of the city, which had been proceeding slowly in the years up to that stage, but on which it was suggested the council should permit the development, on its own land or on land which it could sell to groups, of some places of worship. The crucial time when this was under discussion was while Merlyn was Chair of the Property Committee. There were two issues with regard to that land: one was the disposal of property, the second issue would have been the granting of planning permission to build there. The thing which was of interest to Keith, and I have letters from him relating to it from slightly after this period, but nonetheless showing continuing interest over a considerable period of time, was the disposal of the land to some particular groups. I shall again pass you the letters so that you will see the context. Initially it was intended by those involved with Property,[127] and Merlyn was one, that the disposal should be to four groups. I and others insisted that we ran the process so that it could be transparent and it could be clear as to how these people were selected. The process resulted in three of the same four groups being selected. Merlyn very openly took credit for that position and it was intensely controversial. The two Conservative councillors for that ward resigned and fought a by-election in 1993 or 1994 and it is at this period, with that level of influence by Keith and his mother, that it was alleged to me by Jaffer Kapasi, one of the successful groups, and a person whose name I cannot remember, that Keith and Merlyn had asked for a contribution of £1,000 from them."

122.  In response to questions from me Sir Peter said that he had in his possession documentary evidence which would support his account:

    "SIR PETER SOULSBY: I have a file note to myself from a slightly later period, April 1994. I think it must have followed from some further conversation with Jaffer Kapasi, when I had drawn this to the attention of the Town Clerk. However, I do know in a subsequent discussion I had with Jaffer Kapasi that he was not prepared to repeat that at that time.
    MS FILKIN: But he definitely said it to you.
    SIR PETER SOULSBY: He definitely said it to me; I am absolutely certain of that.
    SIR PETER SOULSBY: He has absolutely definitely said it to me. I wrote a file note to myself and I drew it to the attention of the Town Clerk and that was probably in writing and that will probably be in the Town Clerk's files, if they go back that far.
    MS FILKIN: Who was the Town Clerk at the time?
    SIR PETER SOULSBY: It was Arthur Price Jones. Arthur has now retired."

123.  I then pursued further with Sir Peter the alleged purpose of the payments by Mr Kapasi to Mr Vaz:

    "MS FILKIN: Did Mr Kapasi say the £1,000 was for being on the shortlist or for planning permission? Did he tell you what the £1,000 was for?
    SIR PETER SOULSBY: It was something like, "Keith and Merlyn have said to me 'We are getting you this land'".
    MS FILKIN: For the land.
    SIR PETER SOULSBY: I am fairly sure it was that rather than planning permission.
    MS FILKIN: Rather than the planning permission itself.
    SIR PETER SOULSBY: And "This is the least you can do" or something to that effect.
    MS FILKIN: Did he tell you it was actually paid to both of them or to one of them?
    SIR PETER SOULSBY: To the best of my recollection, he had paid it directly to Merlyn.
    MS FILKIN: Not to Keith.
    SIR PETER SOULSBY: Not to Keith, to the best of my recollection. It was put to me that the request had been made jointly by one or other and paid to one or other but I think it was Merlyn to whom the money had actually been paid. I think the request was for £1,000 and £500 had been paid."

124.  I also asked Sir Peter whether he had evidence which related to the allegation made to The Sunday Telegraph that councillors in Leicester East were required to make contributions to Mr Vaz's party machine or to Mr Vaz directly.[128] Sir Peter replied:

    "SIR PETER SOULSBY: I do not have any evidence of that except that they have complained about having to do it.
    MS FILKIN: Complained to you.
    SIR PETER SOULSBY: No, they just moan about the fact that they are expected to contribute towards him. This was particularly the case when Keith was operating both 144 and 146 Uppingham Road.
    MS FILKIN: They complained that they had to fund that building.
    SIR PETER SOULSBY: That they had to fund the building. One of the buildings was the one he had problems with as an office, the other was essentially his residence at that time.
    MS FILKIN: Did they complain that they had to pay this money to Keith Vaz or that they had to pay this money for this building?
    SIR PETER SOULSBY: I think the complaint was actually that it was not possible to distinguish between the constituency finances and the personal finances of Keith. Had they been asked to contribute towards the constituency finances, they would not necessarily have objected. The objection was that payments were being made in a way, and indeed the constituency finances were being operated in a way, which was not transparent."

125.  At the conclusion of the interview Sir Peter re-emphasised the context in which his remarks needed to be understood—in particular his relationship with Mr Vaz:

    "I wanted to stress to you that there is this history of difficulty between us and I would not want you to be surprised about that if somebody challenged anything I had said later. That is all."

126.  At the meeting Sir Peter provided me with a number of documents in illustration of the points he had made during the interview, including:

    —  extracts of transcripts made by Mr H Asmal of taped conversations he had had with Mr Vaz and Mrs Vaz senior[129];

    —  contemporary newspaper articles about a Labour Party inquiry into allegations relating to the running of the Labour Party in Leicester East;

    —  a letter from Mr Vaz to Sir Peter about how Mr Vaz believed Sir Peter should proceed as Leader of the Council;

    —  a letter from Sir David Cooksey, the then Chairman of the Audit Commission, informing Sir Peter that Mr Vaz had made a complaint about him;

    —  an interview of Mr B Sachdev conducted by Mr Ian Murray of The Times about electoral registration; and

    —  a copy of the auditors' report for Leicester East Constituency Labour Party, dated 14 February 1991, signed by Ms Pat Stuttard and Mr Paul Gosling.

127.  Following our meeting, Sir Peter wrote to me on 17 April (Annex 118) with further information, including a copy of his handwritten note of his telephone conversation with Mr Kapasi, made on 20 April 1994. The relevant extracts from the note read:

    "[Mr Kapasi is] now prepared to go on record reference three groups paying £500!!?" and

    "Write to A P-J[130] to get on record. (Somebody needs to contact Kapasi very gently.)"

128.  With the same letter Sir Peter enclosed a copy of a draft letter to the then Town Clerk of Leicester City Council, Mr Arthur Price Jones, reporting to him the gist of Sir Peter's conversation with Mr Kapasi. The draft letter read as follows:

    "Dear Mr Price-Jones,

    As you know Cllr Merlyn Vaz is a member of the Property Services Committee which amongst other things deals with the sale of City Council land. She is also a member of both the Planning Committee and its Development Control Sub-committee which deal with planning applications in the City.

    You are, of course, also aware that there are three religious groups seeking to purchase land at a discount price from the Council and that, if they succeed, they will subsequently seek planning permission. These proposals are of course very controversial and were the subject of the recent by-election campaign.

    On Wednesday a colleague alleged that during that campaign and subsequently, Cllr Merlyn Vaz and Keith Vaz MP repeatedly and insistently solicited payment of £500 from each of the three groups and that offers of payment of less than that have been, it was alleged, rejected on the ground that if they could afford to buy the land they could certainly afford to pay £500.

    This morning I telephoned Mr Jaffar Kapasi of the Dawoodi Bohra Jamaat who confirmed that he had been asked repeatedly for a 'campaign contribution'.

    I would welcome your advice on how to proceed.

    Yours sincerely,

    22 April 1994
    Councillor Peter Soulsby".

129.  Sir Peter told me that he had been unable to find any contemporaneous record of the identity of the colleague referred to in the third paragraph of the draft letter, although it is clear both from the context and Sir Peter's subsequent recollection that the reference is to Mr Kapasi. Sir Peter added that, in the period after writing to Mr Price-Jones, he had been preoccupied by the "political upheaval" in the Council and had not followed up the letter to see what, if any, action had been taken.

130.  I wrote to the current Chief Executive of Leicester City Council, Mr Rodney Green, to seek any further information he might hold on the subject. He replied on 10 April 2000 (Annex 119) enclosing a copy of Sir Peter's signed letter to Mr Price-Jones (which was identical in wording to the draft) and stating that the Council's archived file contained "no response or follow-up documents."

131.  At Mr Green's suggestion, I also wrote to Mr Price-Jones (Annex 120), who told me he had discussed the contents of Sir Peter's letter to him with Sir Peter two days after it was received. A file note, dated 28 April 1994, attached to a letter of 3 May to me from Mr Price-Jones (Annex 121) recorded his advice to Sir Peter that there was not "sufficient substance in what was being said to justify referring the matter to the police." Mr Price-Jones confirmed that his conclusion was that "no formal action was warranted in the absence of more specific evidence from persons willing to come forward on a formal basis".

124   Although I had not at that stage been given a copy of the transcript, The Sunday Telegraph subsequently supplied me with one, at my request, when it became clear that the newspaper had told Mr Kapasi that this earlier conversation had been recorded (See paragraph 134). Back

125   Mr Kamal's evidence, and further allegations made by him against Mr Vaz, are dealt with later in this memorandum (See paragraphs 178 to 247). Back

126   See paragraph 353 (footnote) for Mr Vaz's comment on this statement by Sir Peter Soulsby. Back

127   ie the Property Services Committee Back

128   See paragraph 178. Back

129   Sir Peter subsequently provided me with the complete tapes of these conversations. None of the documents mentioned in paragraph 126 are annexed to my memorandum. Back

130   Mr Arthur Price Jones, the then Town Clerk. Back

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