Back in Downing Street, the Prime Minister’s watching advisers were agog. They had read the Telegraph’s story when it landed on the website at 10 p.m. the previous evening. ‘The alarm bells had started ringing immediately,’ one of those present later said.
In the Cabinet Office at 7 a.m. Sir Gus O’Donnell, the Cabinet Secretary and the most powerful civil servant in the land, was starting to immerse himself in the Malik case.
Sir Gus was a clear-headed and highly respected Whitehall veteran. He had been around John Major’s unravelling government as the Prime Minister’s press secretary, so he knew what a crisis looked like. By 8 a.m. he had spoken to the Prime Minister and given his initial thoughts on Malik’s position. They were not positive. O’Donnell was concerned about the implications of Malik’s rental agreement on the Ministerial Code of Conduct. The code stipulates that ministers must disclose to the senior official in their department any financial arrangement which could put them under an obligation to someone. No such arrangement had been registered by Malik.
By mid-morning, Jack Straw had also spoken to Malik, as had the permanent secretary at the Ministry of Justice. Again, the prognosis was not good.
Just before 11 a.m. on Friday, 15 May, Downing Street announced that Malik was to be investigated by the independent adviser on the ministerial code. Barely two hours after he had dismissed the Telegraph’s investigation as ‘a non-story’, Malik announced he would be stepping down from his ministerial post while the investigation was carried out. Once again, the bunker team had apparently been vindicated, at least for the time being.
Such was the unstoppable momentum which the expenses investigation had gathered, however, that there was no time for anyone to rest on their laurels. The following day was Saturday, the Telegraph’s biggest-selling edition in any week, and a new batch of MPs were already being investigated by the team.
After the immense pressure of the Malik investigation, the veteran Labour MP Sir Gerald Kaufman was to provide some welcome comic relief. Kaufman’s claims had first been examined the previous week by Gordon Rayner, who had been looking forward to writing about them for days.
Rayner had barely been able to contain his glee on the day he first looked through Kaufman’s expense receipts.
‘Have a guess how much Gerald Kaufman claimed for a television,’ he asked the reporters in the bunker.
‘Two grand?’
‘No.’
‘Two and a half?’
‘No. Eight thousand, eight hundred and sixty-five pounds.’ Cue gasps of disbelief.
Sir Gerald had bought a 40-inch Bang & Olufsen LCD television for £8,865 and tried to claim for it in 2006. The fees office told him it fell into the category of ‘luxurious furnishings’ and paid him only £750. And there was much, much more. The Manchester Gorton MP, a former environment minister, had also charged the taxpayer £1,851 for what he described as a ‘second-hand rug’ on his claim form. It turned out he had bought it from an antiques centre in New York. His other claims included £220 for a pair of crystal grapefruit bowls and £225 for a rollerball pen. In one exchange with the fees office, regarding £28,834 of work on the kitchen and bathroom at his London flat, he had said the work needed to be done because he was ‘living in a slum’, even though his second home, off Regent’s Park, was in one of the most expensive areas of the capital. He had also claimed £1,262 for a gas bill that was £1,055 in credit.
When Rayner contacted Sir Gerald, he admitted that the claim for the TV was ‘a bit daft’, insisted his flat had needed work because it was ‘neglected’ and said he would pay back the money for the rug if he was asked to.
Like so many other MPs, however, Sir Gerald found that the story continued to run in his local newspaper, and more than a fortnight later he agreed to give an interview to the Manchester Evening News in which he came up with perhaps the most bizarre attempt at an excuse in the entire history of excuses.
‘I live very modestly. I don’t have much in the way of luxuries,’ he began, before addressing the subject of why he tried to claim £8,865 for a TV.
‘I’d self-diagnosed myself with obsessive compulsive disorder and I’d bought a new television set. Then I decided to have a bigger one. I thought to myself, “Well, you can claim for a TV, so why not claim for it?”
‘Because I’ve got this self-diagnosed OCD, I do things according to rules that I’ve created.’
On the subject of the grapefruit bowls, he said: ‘As part of my OCD, I have the same breakfast when I’m at home both in London and Manchester every day. Half a grapefruit, a bowl of muesli with semi-skimmed milk and a cup of coffee with a Rich Tea biscuit. That’s breakfast. A cleaner broke one of the dishes, so I went and got a replacement.’
Readers of the Manchester Evening News were incredulous. One correspondent wrote: ‘Sir Gerald blames “self-diagnosed obsessive compulsive disorder (O.C.D.)” for his behaviour. I have worked in the NHS for nearly 20 years and my opinion is that he suffers from self-diagnosed G.R.E.E.D.!’
While Rayner was chuckling to himself over Sir Gerald’s expenses claims, Jon Swaine was about to make a breakthrough on a story which appeared to involve another ‘phantom mortgage’.
Swaine, originally from Chelmsford in Essex, had joined the Telegraph as a graduate trainee in 2007, and from his very first day it had been clear he was going places. Spending six months on a local newspaper and six months with the Press Association as part of his training on the Telegraph scheme, he was a frighteningly quick learner who could not only rapidly turn around well-written, accurate stories but was also fully fluent in emerging web-based reporting techniques including blogging and Twitter. As one of the paper’s newer recruits, he often had to work early shifts, starting at 6 a.m., to make sure the Telegraph’s website was bang up to date in time for the morning rush hour; so he was the only member of the team for whom the 8 a.m. starts in the bunker represented a lie-in.
For Swaine, still only twenty-four, the expenses story represented a chance to prove that he was not only bright but also capable of pulling his weight in a major investigation, and he repaid the faith of Bayley and Evans by quietly getting on with the job in hand, producing a string of excellent stories as the investigation progressed.
‘The Swaine’, as the other bunker reporters called him, had become highly suspicious when he had checked the expenses claims of David Chaytor, a little-known backbench Labour MP representing Bury North. Chaytor appeared to be the most frequent flipper in Parliament. His files showed that he had changed his designated second home six times in five years. One of his flips was to a property where his son was registered as the occupant, where he paid off thousands of pounds’ worth of bills. Swaine prepared a letter for Chaytor asking him to explain why he had made claims for this property along with a number of other questionable expenses. While waiting for the MP’s response, he started to delve more deeply into the various properties for which Chaytor had claimed.
Using Land Registry records, Swaine established that a London flat on which the MP had claimed £13,000 in mortgage interest in 2005 and 2006 was not currently mortgaged. But had it been mortgaged at the time he made the claims? As Watt had done with Elliot Morley, Swaine asked the Land Registry office in Birkenhead to check the history of the mortgage, and was told that Chaytor had paid off his Yorkshire Building Society loan in January 2004, the year before he started claiming expenses for the mortgage.
‘Are you absolutely sure?’ Swaine asked the official.
‘I’ve no doubt about it, Jon – we received an application to end the mortgage on the seventh of January, 2004, and there don’t appear to have been any others since,’ she said. Swaine asked her to fax over the document.
It didn’t arrive.
Panic began to mount. Swaine called to check she had sent it – she had. He asked her to send the document again – she did. Still it didn’t arrive. With the deadline looming, Swaine began to fear that the official had accidentally sent it to the news desk of
another newspaper, or made up the whole thing as a ‘Friday joke’ after getting fed up with doing so many checks for the bunker team during the week.
Eventually Swaine found another fax machine in the main newsroom, gave the Land Registry the number, and then stood guard beside it, waiting. After what seemed like hours, the document eventually came through. It showed that Chaytor was indeed another ‘phantom mortgage’ claimer – the second in a week.
The rush was now on for Swaine to put a series of follow-up questions to Chaytor. He wrote a second, more serious, letter to the MP, asking whether he might have broken the law. The wording was identical to that of the letter that had been sent to Morley. He then called Chaytor’s constituency secretary, to whom he had spoken when sending the first letter. ‘I’ve got another letter for Mr Chaytor, this time with some very serious allegations,’ he said. She explained that the MP was on a ‘fact-finding’ trip to America with a parliamentary committee to study education policy. An hour later, the secretary replied:
Thank you for your two emails, which I confirm have reached David Chaytor’s inbox. However, as he is away on a Select Committee visit abroad, and has had technical problems all week in accessing his inbox, I do not know whether he has yet received them personally. I am trying to contact him to let him know you have written and would like a response.
After another two and a half agonizing hours, Swaine still hadn’t received a reply. He telephoned the secretary again, called Chaytor’s mobile phone and even called Mrs Chaytor (who worked in the MP’s Westminster office). Chaytor had switched off his phone and his wife was sounding incredibly stressed.
Just before 5 p.m. Swaine asked the secretary for her mobile number, in case she had to leave the office. ‘I don’t think that’s going to be happening tonight,’ she said. Swaine was encouraged.
At 5 p.m. precisely, Chaytor made contact with Swaine for the first time. ‘As you know I am abroad on a Select Committee visit at the moment, and have been all week,’ he said in an email. ‘Because of this I have been unable to go through the documents properly. Because of this I am taking legal advice and therefore am unable to give a statement at this time. I will respond as soon as possible.’
After consulting Arthur Wynn Davies, Swaine replied:
As is widely accepted, our investigation concerns matters of enormous public interest. Given that each Member of Parliament is accountable for expenses claimed from public funds you are plainly under a duty to respond to legitimate questions raised with you as a matter of public interest and concern. This matter is urgent.
While we note what you say about being currently abroad, we cannot see any reason for your not being able to answer the relatively straightforward questions put to you in my earlier email.
Just eight minutes later, the MP sent back a long and detailed response.
Swaine crouched forward as he eagerly read Chaytor’s email. As he got halfway down the screen, he collapsed back into his chair and breathed out heavily. Holding his outstretched arm towards the computer, he turned to Winnett.
‘He’s admitted it,’ said a mightily relieved Swaine.
The reporters gathered round his screen, giving Swaine morale-boosting slaps on the shoulder as they read Chaytor’s response.
‘In respect of mortgage interest payments, there has been an unforgivable error in my accounting procedures for which I apologise unreservedly,’ he had written.
Arthur Wynn Davies came into the bunker. ‘He’s coughed to it,’ Winnett told him.
‘Bloody hell – he must have had it ready all along,’ said Wynn Davies.
Winnett passed the news on to the editor.
‘He’s the first one to actually just admit it and apologize, right?’ said Lewis.
‘Yep,’ replied Winnett.
Winnett and Swaine started work on a story which would be headlined: ‘The MP and the phantom £13,000 mortgage’. It was the first time the phrase ‘phantom mortgage’ would appear in print.
As the finishing touches were put to the story, Chaytor was heading for an airport in Washington DC to catch a flight back to Britain to face the Labour Party. Television crews would be waiting for him at his various properties the following day. Like Morley, he would be suspended from the Parliamentary Labour Party and would decide to pay back the money and announce he would not be standing at the next election. And, like Morley, his claims would become the subject of a police investigation.
Apart from stories about Chaytor and Kaufman, that Saturday’s Daily Telegraph also contained stories about the expenses claims of another eight MPs – a measure of just how much was going on in the bunker on any one day. The paper also contained a new feature of the expenses investigation: the ‘saints’. Readers had made it clear that as well as finding out which MPs had been up to no good, they wanted to know which members had been scrupulously honest. By the time the investigation had finished, the Telegraph had published the names and details of fifty ‘saints’ who had done all they could to minimize their burden on the public purse. They included Vince Cable, the Lib Dem Treasury spokesman, who was one of seven Lib Dem MPs representing outer London constituencies who had chosen not to claim the ACA despite being eligible to claim it. The Conservative MP Ann Widdecombe claimed just £858 of her second-home allowance in 2007/8 (for occasional hotel stays), having decided against buying a second home in London and opting instead to commute from her constituency home 42 miles away in Maidstone. Labour’s ‘saints’ included the likes of Martin Salter, the Reading West MP, who claimed nothing at all under the second-home allowance, choosing to commute the 50 miles from his Berkshire constituency rather than buying a flat in London at taxpayers’ expense.
The saints also included some of Parliament’s wealthiest MPs: Geoffrey Robinson, the millionaire former paymaster general and Labour MP for Coventry North West, claimed nothing at all on his ACA, despite owning more than one property. True, he was wealthy enough not to need help from the taxpayer; but that hadn’t prevented other wealthy MPs, such as Michael Ancram, from claiming thousands from the public purse.
The bunker team had written to about twenty MPs on that Friday alone, and the reporters were starting to feel the pace. Before they could go home for the evening, however, they were summoned into the editor’s office for one last duty of the week: sharing a trolley-load of champagne bought by the proprietors and handed round by chief executive Murdoch MacLennan.
MacLennan was generous in his praise for the efforts of the team, describing the expenses investigation as one of the biggest scoops in Fleet Street history. But with the investigation only a week old, there were plenty more twists and turns to come.
A Very British Revolution
Tuesday, 19 May
CHAPTER 19
FOR CHRIS EVANS, the Daily Telegraph’s head of news, the first two weeks of the expenses investigation had been even more nerve-racking than they had been for the rest of the team. Evans’s wife was pregnant with the couple’s second baby, which was due on 1 May – just two days after the Telegraph first obtained the expenses disk. Chris had resigned himself to the likelihood that he would miss the biggest story he might ever be involved with. Although he could never admit it to his wife, he had been secretly relieved when the baby became overdue and he had been able to steer the expenses investigation through its crucial first few days.
Coincidentally, Matthew Bayley, the news editor, was in a similar predicament. His wife was also expecting the couple’s second child, due three weeks after Evans’s baby, and each of them would share a joke every time their mobile phones rang without it being a call to rush to the hospital.
By day seven of the publication campaign, however, Mrs Evans could wait no longer. With the baby two weeks overdue, the birth would have to be induced; and so, as the suspension of Shahid Malik unfolded, the Telegraph news executive was pacing around a waiting room at University College Hospital in central London, following events on his BlackBerry and sending regular ‘thoughts’ vi
a email to Winnett and Bayley. The other parents-to-be on the ward were speaking of little other than MPs’ expenses, but Evans decided not to disclose his key role in the story of the moment.
Julie Evans finally gave birth to a daughter, Sophie, at 11.15 p.m. on Friday, 15 May. For the next week, Evans’s only chances to keep abreast of the growing parliamentary scandal he had helped trigger came during snatched moments in front of rolling news channels when his new daughter was asleep.
Over the weekend, pressure built on Michael Martin, the Speaker, following his disastrous handling of the expenses scandal the previous week. Sunday is the day when politicians traditionally head to the television studios to give lengthy live interviews to the likes of Andrew Marr and Adam Boulton. On Sunday, 17 May, the interviews were dominated by one subject – Speaker Martin’s future.
Despite coming under criticism following his hectoring of MPs including Kate Hoey and Norman Baker in the Commons chamber, Martin had refused to back down. The respected Labour MP David Winnick had told Martin that his behaviour had been ‘inappropriate’ and his refusal to apologize ‘inadequate’, to which a bullish Martin retorted: ‘If it’s not adequate, then you know what you must do.’ The Speaker, who was in overall charge of the allowances system, should have been the man to whom MPs looked for a solution. Instead, his belligerent behaviour over the previous week had meant he had become part of the problem.
That Sunday Nick Clegg, the leader of the Liberal Democrats, broke with the convention that party leaders do not criticize the Speaker and said that ‘the Speaker must go’. On the Labour side Charles Clarke, the former home secretary, became one of the first senior figures to break cover, saying Martin’s behaviour had been ‘utterly deplorable’ and he was ‘not the right man to oversee the necessary reform of the members’ allowance system’. For the Conservatives William Hague, David Cameron’s deputy, said the situation was at ‘crisis point’. Meanwhile Douglas Carswell, a little-known Tory backbencher, had begun gathering signatures for a motion of no confidence in the Speaker, which had been backed by a small number of MPs from all three main parties and had generated considerable coverage in the media.
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