TUESDAY 21 MARCH 2000

MR TONY BALDRY, MP

  40. How would he know that you knew him?
  (Mr Baldry) I assume that someone in Mr Zaiwalla's office, or whoever, had given Lord Feldman an indication of people at the bar, judges and so forth, who knew Mr Zaiwalla. That may even have been Mr Milne, I know not.

  41. Why would he ring you?
  (Mr Baldry) Sorry?

  42. Why would he ring you and ask you for support? He did not ring me. Why did he ring you?
  (Mr Baldry) I think that is a question you must put to Lord Feldman. I assume that Lord Feldman knew me as a Member of Parliament, he knew that I knew Mr Zaiwalla.

  43. He did know that you knew him?
  (Mr Baldry) Yes, he had obviously been told that I knew Mr Zaiwalla. With the benefit of hindsight I assume that he was told that by Mr Milne or by somebody else. Does that make sense?

  44. Yes. When did you last speak to Mr Zaiwalla?
  (Mr Baldry) I last spoke to Mr Zaiwalla about three or four days ago. He telephoned me to explain to me that Mr Milne had been declared bankrupt.

  Mr Campbell-Savours: That is all, thank you.

  45. You had discussions, according to your statement, about the loan on 5 December and at the end of the meeting you signed your loan agreement and you gave the postdated cheque and received a cheque at that meeting on 5 December. I know in the run-up to Christmas with family commitments and so on I am always very anxious to get my parliamentary expenses in earlier in that month. Why did you not pay it in?
  (Mr Baldry) Because the cheque I think was not dated—I am sure if one wants to I could go to the bank as an issue has arisen—5 December. The loan agreement ran from 6 January and I can only assume the cheque must have been dated early January. This was money Mr Zaiwalla was lending on his personal account, he wanted to get it off deposit or whatever, so the cheque was not dated 5 December, the agreement was. I cannot recall now whether I put that cheque in the post to the bank for it to be credited early in January or whether I physically paid it in early in January.

  46. Thank you. You said in your letter of 23 February to the Commissioner: "I repeat, at no time have I put Mr Zaiwalla forward for an honour".
  (Mr Baldry) Yes.

  47. We are dealing with someone you felt was close enough for you to ask a loan of without embarrassment. One would have thought that the name would have struck a chord with you and the coincidence of the timing of the event would have struck a chord with you?
  (Mr Baldry) Let me just make this clear so the whole Committee understands the chronology of this, okay? The first time that these became live issues was the Sunday Telegraph article of 5 December. Following that article, Mr Milne wrote to William Hague and I was obviously copied that letter and I wrote to Michael Ancram. I hope you have got the letter in front of you. Obviously at that time I put my mind to all of the issues that were in Mr Milne's letter. You can rest assured that if I had at that time any recollection of any reference for Mr Zaiwalla, I would have said so, I would have said so to Michael Ancram and I would have dealt with it at that time. I did not and I do not. When Mrs Filkin wrote to me and said Lord Feldman had said that I had given a reference, I said I had no recollection of that. If Lord Feldman says that is correct then of course I am prepared to accept what Lord Feldman has to say. I have found it as frustrating as everyone, as anyone, more than anyone, not actually having had a complete recollection of all of these events. I hope that the Parliamentary Commissioner will confirm that when the issue first came out in relation to Lord Feldman the thought was that I had given this reference in March and I said if that was what Lord Feldman was saying I had no reason to disagree with him about it because I actually could not remember.

  48. Zaiwalla is quite an unusual name. How many Zaiwallas do you know?
  (Mr Baldry) This is the only Mr Zaiwalla I know. I accept this is the only Mr Zaiwalla I know but I do not recall having put him forward for an honour.

  49. You can understand that it is puzzling in that we have someone who is less than a friend but less than a stranger from whom you did something which I am sure was not a normal thing for you to do, to go and borrow £5,000, and yet confronted with the name on a piece of paper no bells rang whatsoever.
  (Mr Baldry) Confronted with the name on a piece of paper when, Mr Williams?

  50. When you were asked to provide the reference, or sign the reference.
  (Mr Baldry) I have no doubt that when Lord Feldman telephoned me and asked me if I would give a reference for Mr Zaiwalla, I have absolutely no doubt that of course I knew who he was talking about and I think I would have been supportive of Mr Zaiwalla at the time in that, as my reference says, he was a somewhat unusual man in that he was one of the first Indian solicitors to have established a practice in the City of London and to have done well professionally in that practice. At a time when various of my ministerial briefs during my life had been in support of ethnic communities and so forth in inner cities and elsewhere, that sort of endeavour seemed to me to merit recognition. I am quite sure I had absolutely no doubt who Lord Feldman was referring to. I have no doubt that Lord Feldman would have known that I knew Mr Zaiwalla and I have no doubt that Lord Feldman would have made it clear to me that he was approaching a whole number of other people as well. What I have readily said to the Committee is I accept that at the time I should have said to Lord Feldman "Basil, I am very sorry, I do not think I am going to be able to help you because I recently had a loan from Sarosh Zaiwalla", but I clearly did not put my mind to the issues at the time. I accept that I should have done. There was no intention to deceive anyone. I know from your perspective it must look as though from 5 December to 6 January it was a comparatively short space of time. I can only assure the Committee that at that time in my life every day was very long and all of the things, the Fisheries Council and BSE, would have been light years away.

  51. It was a short time from the time when you actually paid in the cheque and you had to fill in the name on the counterfoil and so on.
  (Mr Baldry) One of the difficulties with these committees is that I would be concerned if the Committee drew inferences which were not necessarily fair. I cannot recall whether I immediately put the cheque in the post to the bank on the day that I received it. If that is an issue I am more than willing to ask the bank when that happened. I am more than willing for the Commissioner to produce my bank statements which I gave her. One of the things about the bank statement, which is quite interesting, without having asked the bank I am not sure what to draw from it, is against the payment it has "SR Zaiwalla" rather than "counter credit" or whatever, okay? I would assume if I had paid it in myself as a counter credit, across the counter on that date, it would have just said "counter credit" but actually it said "SR Zaiwalla". That makes me think I may well have put the letter in the post, the cheque in the post in advance and it was paid in by the bank at that time.

  52. So when you received the phone call you knew who it was, you remembered things about his community work and various other things he had done. Is it not probable that at the same time you remembered he was also the person who had made you the loan?
  (Mr Baldry) Firstly, I know Lord Feldman, I know Sarosh Zaiwalla, I have no doubt about that. I am quite sure had I put my mind to it of course I would have known I had a loan from Mr Zaiwalla, but what I did not put my mind to was properly saying either to Basil Feldman "I am terribly sorry, Basil, I think I may be in some difficulty here because I have recently had a loan from Sarosh Zaiwalla, and therefore I do not think I can give you a reference", or to say "fine, I can do that but I shall also have to write to the Lord Chancellor's Department". All I can say to the Committee is that I think at that time, with the pace of my life at that time, I just simply did not think that through properly. I readily acknowledge that for that I should be criticised and I have apologised to the Committee for that.

  53. One final point. In your letter to the Commissioner on 2 March you said "I am afraid I have no records, constituency or otherwise, prior to the last general election". Shona has already made the point, and I almost grew up in the building here so I have seen quite a few general elections, with a marginal seat I would never have dreamt of disposing of all of my case work. I had a marginal seat so I entered each election crossing my fingers hoping I was coming back, but in your career you have been in the position of being fairly sure of coming back.
  (Mr Baldry) Again, Mr Williams, you are more than welcome to ask my secretary or to ask my research assistant, who was with me immediately after the general election, as to what we did. I can only tell you that after each general election we get large numbers of those House of Commons paper sacks and we fill them with material prior to the general election. If you are going to take some inference from that then you are very welcome to ask my secretary, or whoever, to give evidence.

  54. It is just that I find it almost mind-boggling when one has so many cases that you build up for reference for future work and you know some of your cases are going to live through a general election. My personal practice is to get rid of letters after three years except what I call the "habituals", and I have got some of them going back 15 years. Everyone has their own way of working but to get rid of all correspondence seems rather strange.
  (Mr Baldry) You are very welcome to come to my office. You are very welcome to look through my files. I think you will find there are practically no letters there over about two years. We have a limited number of filing cabinets and my correspondence gets cleared pretty quickly. Maybe my case work or the way I deal with constituency cases is different from other colleagues but I find that most constituency cases clear themselves up fairly speedily.

  55. You are obviously better at the job than I am. Can I borrow your secretary? She is obviously better at the job than I am.
  (Mr Baldry) All I ask this Committee, Mr Williams, is this: that if there are issues where the Committee, either individually or collectively, is minded to draw inferences to my discredit, and there are matters which, either by asking my bank or by you coming to see the way in which I operate, I can demonstrate what are the facts, then I would simply invite you to do that.

  56. Thank you. There is one further point. We have established the fact that you have a paper massacre at every election opportunity, which is one way of making sure you keep your office files tidy, but I understand from the Commissioner that in 1999 you were able to find a 1996 loan agreement with—
  (Mr Baldry) I did not. I telephoned Zaiwalla & Co. about the loan agreement. I did not have a copy of the loan agreement. Again, I think that my House of Commons secretary can confirm, and the office clerk at Zaiwalla can confirm, that on the Monday immediately following the Sunday Telegraph article my secretary telephoned Zaiwalla & Co., and that loan agreement was produced by them. In fact, that was the loan agreement they had on their records, it was not a part of my records. That was why there was a lot of frustration, because when the Sunday Telegraph telephoned me I could not immediately put my hand on the documentation. I said to the Sunday Telegraph, "Look, if you give me till early next week, I can find the documentation." I did not have it. So that loan agreement did not come from me—and again, I hope this is something the Committee will check—it came from the offices of Zaiwalla & Co.

  57. Of course, there are certain tax requirements in relation to keeping certain forms of agreement, are there not, for so many years? As a lawyer, you would be more aware of that than I am. I am not quite sure what is and is not required.
  (Mr Baldry) Suffice it to say that the financial benefit to me of this loan was below the registerable value. I did not have a copy of the loan agreement, and the fact of the matter is that the loan agreement that was produced to the Commissioner came from Zaiwalla & Co. and from their records. I very much hope, on this and on any other issues that are causing the Committee concern, that you will check that fact.

  Mr Williams: Thank you. Dale wants to come back.

  58. You have got in your pile an actual copy of the reference letter that you signed, have you not?
  (Mr Baldry) I have seen it. I have not got it, but— (Document handed to Mr Baldry)

  59. Can you just read it?
  (Mr Baldry) Do you want me to read it aloud?