Select Committee on Standards and Privileges Appendices to the Minutes of Evidence


Letter to the Clerk of the Committee on Standards and Privileges from Mr Geoffrey Bindman, Bindman & Partners, Solicitors

Because the complaint that he should have declared a financial relationship when recommending Mr Zaiwalla for an honour is the only one which the Commissioner has upheld, Mr Vaz is particularly anxious that his evidence and arguments against this conclusion should be absolutely clear to the Committee. For this reason he has asked me to write to you to spell them out once again. In doing so, I have taken into account the oral evidence of Mr Zaiwalla and Mr Brown which they have now given to the Committee.

1.    The evidence

(a)  Both Mr Zaiwalla (paras. 37 to 40) and Mr Vaz have continually and consistently denied that Mr Zaiwalla made any payment to Mr Vaz for his personal benefit or for his office.

(b)  The only evidence to the contrary which is relied on by the Commissioner as establishing that Mr Vaz received "financial benefits" from Mr Zaiwalla relates to payments of £250 on 25 January 1993 and £200 in September 1994 alleged to have been made by Mr Zaiwalla or his firm (see para. 328 of the Commissioner's report).

(c)  The only evidence for these payments is that entries for these amounts appear in Mr Zaiwalla's office cashbook, accompanied by references to Mr Vaz. The entries indicate that the payments were made by cheque and numbers are given but no cheques or stubs have been produced. Mr Brown, who according to his oral evidence to the Committee was employed by Mr Zaiwalla from 1986 to 1994 mostly as bookkeeper, has claimed no recollection of any such payment. There is no evidence that either cheque was presented or cashed (save indirectly in that any advertisement by Zaiwalla appeared in the calendar).

(d)  In his oral evidence to the Committee on 6 February 2001, Mr Zaiwalla says (para. 653) that the first of these alleged payments, which he had not remembered but was revealed by a search of his cash books reported by him to the Commissioner on 10 July 2000, was to Mr Vaz's constituency office, and the second for the publication of a calendar advertisement. He repeats the former statement in para. 659. It is far from clear whether he remembered the payment or was merely drawing inferences from the cash book entry. However, Mr Zaiwalla says that the payment would not have been donated to the Labour Party but for community work for the local Asian community. He also says that he does not know to whom the cheque was paid but is sure that it was not made out to Mr Vaz.

(e)  The first entry refers to "K. Vaz MP office account" and to "donation". Mr Vaz has made it clear that he has no recollection of receiving such a payment and he has told the Committee (para. 287 of transcript) that every payment was registered when it was required to be so. In any event the Commissioner says that she would not regard it as fair to regard him as having failed to register this payment as a registrable benefit even if he had in fact received it (para. 312).

(f)  The second of these entries refers to a calendar and to advertising. It can reasonably be inferred that a payment was made of this amount for advertising in the community calendar (not "producing" a calendar as the Commissioner says in para. 443).

(g)  Mr Vaz continues to believe that the payment of £250 recorded in January 1993 is most likely to have been for advertising in the calendar. He believes that advertising was being sought at that time and the payment could have been the first part of the required fee. No advertisement would have been published until the full payment had been made which could have been completed by the payment of £200 in September 1994. An advertisement by Zaiwallas appeared in the 1995 calendar.

This hypothesis is supported by two pieces of evidence—admittedly far from conclusive:

(i)  The Calendar was intended to benefit the Asian community and Mr Vaz has made it clear that it was not intended to support his political activities. Mr Zaiwalla has said that his payment of £250 (if made to an account connected to Mr Vaz) would have been made for his work for the Asian community. He says he refused to give a donation to the Labour Party. (paras. 661 to 669 of his oral evidence). His evidence is consistent with a payment for the Calendar.

(ii)  The solicitors for Mapesbury have now said in their letter to you of 9 February that the price of advertisements in the Calendar was £250 or, in a few cases in 1995 and 1996, £400. (Mr Zaiwalla advertised in 1995). The former figure coincides with the cash book entry in January 1993 and not the later payment, though the latter is clearly identified as a payment for advertising.

(h)  The Commissioner accepts (para. 435) that there is no evidence that Mr Vaz offered to recommend Mr Zaiwalla for an honour in return for benefits received or expected. It should be borne in mind that this allegation was made by Mr Milne who also alleged that Mr Vaz had promised to approach the Inland Revenue on behalf of Mr Zaiwalla. The Commissioner rejected both allegations.

2.    Analysis

(a)  The evidence that either of the two alleged payments were made as claimed by the Commissioner is inconclusive. While it is accepted that there is a probability that the second payment was indeed made for advertising in the Asian community calendar initiated by Mr Vaz, he sought advice on such payments and acted in accordance with the advice of the Registrar and then Commissioner. There is a real possibility that the first payment was made for the same purpose. If not there is no conclusive evidence as to where it went or for what purpose and it would be unfair to Mr Vaz to reach any firm conclusion about it.

(b)  In any event the Commissioner is satisfied that neither payment was registrable or if registrable that Mr Vaz was entitled to assume it was not. (paras. 312 and 316)

(c)  It is appreciated that the fact that payments are not registrable does not preclude, in theory at least, an obligation on Mr Vaz to declare them in recommending Mr Zaiwalla for an honour. But it would be a curious anomaly if payments held to be too small to be registrable were considered big enough to require disclosure in a recommendation.

3.    The obligation to declare a financial relationship

(a)  In paragraph 12 of the Committee's eighth report on the complaint against Mr Tony Baldry MP the Commissioner has quoted three passages from the Code of Conduct which identify the obligation of Members in relation to recommendations for an honour.

The first of these requires recommendations to be made on merit. Mr Vaz has made it clear that he did so and there is no evidence to the contrary.

Nor could it be plausibly inferred from the evidence that he was influenced by two small payments of which he had no knowledge or recollection. The recommendation must also be seen in the context of a longstanding ambition to see more qualified Black and Asian people in the honours list, or whom Mr Vaz believed Mr Zaiwalla to be one.

The second requires Members to avoid any conflict of interest. Again, in the absence of any knowledge or recollection of the two payments, it cannot be inferred that he preferred any private interest in recommending Mr Zaiwalla to the public interest.

Thirdly, Mr Vaz fully accepts the obligation to be open and frank in relation to organisations (or individuals) with which he has a financial relationship. In this case he does not agree that he had a financial relationship or any relationship which required a declaration of payments of which he was unaware.

(b)  The Commissioner has stated that the two payments of £200 and £250 constituted a "financial relationship" between Mr Vaz and Mr Zaiwalla (para. 443) and that Mr Vaz received "financial benefits" from Mr Zaiwalla (para. 503). Even if it were proved that the payments were indeed made as claimed by the Commissioner in the former paragraph, it is a distortion of language to claim that such payments made to a third party created a financial relationship with every contributor to party funds? Or even to every friend from whom he or she has received hospitality of any financial value? It is equally inappropriate to refer to these small sums, not shown to be paid to Mr Vaz personally, as financial benefits received by Mr Vaz.

(c)  It is entirely reasonable to assume that the obligation described in the quoted passages requires the Member to ask himself or herself when considering making a recommendation: "is there any financial or other relationship which might influence or appear to influence me in making this recommendation?" Given the fact that he was not conscious of having received any benefit from Mr Zaiwalla and even a thorough search of all his accounts would have revealed no payment, he could not have been expected to give an affirmative answer. Even if he had thought of the Calendar and checked whether Mr Zaiwalla had paid for an advertisement in it (which was a benefit to Mr Zaiwalla), would it have been reasonable to regard that as a "financial relationship" or an interest which he should declare given that he had been told by Sir Gordon Downey that payments below £500 need not be registered? Surely not.

4.    The case of Mr Tony Baldry MP

This is entirely different from Mr Vaz's case:

(a)  the payment was a formally agreed personal loan which plainly created a financial relationship, and conferred a financial benefit on Mr Baldry;

(b)  the amount was substantial;

(c)  the loan was made only 12 days before Mr Baldry made his recommendation in which he did not mention the loan.

Here an important financial relationship was established; it could not have been forgotten at the time when the recommendation was made; and it was obviously of such significance that Mr Baldry must have known that it created the appearance of a conflict of interest, even though in fact it may be accepted that Mr Baldry did not make the recommendation in return for the loan.

5.    Conclusion

*    There are serious shortcomings in the evidence on which the Commissioner has based her findings of fact. Even if they were justified she was wrong to uphold the complaint because a declaration of interest was not required in that hypothetical situation.

*    The Baldry case is a good example of when a declaration of interest should be made. A relationship which could give rise to the appearance of bias or conflict of interest should be disclosed. But a line must be drawn as a matter of common sense between such cases and cases involving small donations or hospitality which might easily be overlooked and which would not detract from the credibility of the recommendation.

Those who give recommendations obviously must—as Mr Fort has pointed out—know the person whom they are recommending. (In this case the recommendation was made to two people, John Major and Lord Mackay, who already knew Mr Zaiwalla as a supporter of the Conservative party). In many cases that knowledge will be the result of exchanges of hospitality or shared support for particular causes. Honours are regularly recommended for donors to political parties. Is every act of hospitality or donation to be disclosed in a recommendation for an honour in every case, even if the donation is below the minimum level required to be disclosed by statute or practice?

If that is to be the rule for the future it should be spelled out in the Code. It cannot be right to apply so strict a standard on the basis of the current rules as identified by the Commissioner and the Committee in the Baldry report.

12 February 2001

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