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THE OBSERVER,
Thursday, 30 March 1989
Why we are publishing today
IT IS NOT unknown for The Observer, in the course of its 200- year history, to publish a mid-week edition. It used to happen quite often in the early days, especially when wars began, ended or took some dramatic turn at an inconvenient moment for a Sunday publication. It is not unknown for the newspaper to devote most of its pages to a single issue: we did this famously in 1956 when we published the full text of Khrushchev's historic denunciation of Stalin. To do both at the same time, however, may require some explanation.
Our concern over the Fayeds' acquisition of Harrods -- part of House of Fraser, the biggest stores group in Europe -- began four years ago. We asserted then that the money was not theirs, that they had misrepresented their origins, their wealth, even their date of birth. After years of inquiries into other bidders, we said that the unprecedented speed of the Government's approval of the deal -- blessed by Mohamed Fayed's presence at a Downing Street dinner -- was, at the very least, unseemly and misjudged.
These allegations have brought a storm of abuse on our head, much of it from rival newspapers whose cheeks should blush with professional shame (if they have any) when they read this report, and involved us in legal costs of hundreds of thousands of pounds. Our chief allegation -- that the Fayed brothers are crooks and fraudsters and should not be allowed to stay in charge of a great British institution -- is demonstrated fully in the pages that follow.
That would not, in itself, have persuaded us to take the legal and other risks of publication. Nor would the satisfaction, real though it is, of clearing our name, especially against the charge (now surely and officially disposed of) that we merely acted at our owners' behest. The report by the Department of Trade inspectors is not just an indictment of the Fayeds. It throws into sharp relic the unsatisfactory procedures of the DTI itself and of the Office of Fair Trading, the chief regulatory bodies for the conduct of business in this country. It exposes the hollow claims to authority or the professional advisers in this case, especially the bankers Kleinwort Benson and the solicitors Herbert Smith. It reveals important weaknesses in the City Code and the Companies Act that need to be rectified urgently.
Urgency is the key. The report has been with Lord Young, the secretary for Trade and Industry, since last July. He knew its main conclusions a year ago. One can understand his reluctance to publish such a damning document. It is a grave embarrassment to his Department, to himself, to some of his predecessors in Victoria Street, and to the general reputation of a Government that claims to be squeaky clean on Victorian moral values. At first he said he would publish it, then changed his mind -- or was persuaded to do so -- and instead kicked the greasy ball into touch at the Serious Fraud Office.
We do not believe that the Minister acted in good faith in this matter. We believe he is party to a cover-up. We believe a year is much too long for these serious matters to have remained hidden from Parliament and the public. Incredible as it may seem to anyone reading this report, we believe it might never have seen the light of day without our publication. It had been effectively buried -- and would only have been exhumed, if ever, once the situation had become irreversible and the political embarrassments no longer relevant or dangerous.
At one point in their report the inspectors ask: 'Who was led up the garden path?' The answer is pretty well everybody, especially Mr Norman Tebbit (who exercised his Ministerial responsibility in the matter by ringing up the ill-informed chairman of an interested merchant bank), the DTI and OFT (with the lone exception of one civil servant, Miss Llewellyn-Smith, whose doubts were drowned in a welter of professional assurances), the aforesaid merchant bank and solicitors, Professor Roland Smith and his House of Fraser board -- and, shamefully, most of the Press, notably the Sunday Times and Sunday Telegraph, whose gullible articles on the Fayeds muddied the waters and allowed their lies to multiply in the cuttings libraries of Fleet Street.
The report makes clear, and we modestly admit, that the only people not led up the garden path were Lonrho, The Observer and the Poirot-like inspectors themselves. By publishing today we are ensuring that the public is not led up the same path. The Government, of course, may not take this charitable view of our public contribution. It is hard to forgive people for being so completely right and they will doubtless try to find ways to make us pay for it. Shooting the messenger is a favourite pastime at Mrs Thatcher's court. Before invoking the law, however, the Government might ponder two homely phrases often on the lips of the Prime Minister, the Home Secretary and other custodians of public order and morality: 'Crime doesn't pay' and 'cheats never prosper'. In Knightsbridge today, through the Government's own negligence, crime is paying very well and cheats are prospering to the tune of many millions they didn't have before. The British public must find this insupportable, even if its rulers -- for reasons of embarrassment and self-interest -- prefer to turn a blind eye.
The Government might also ponder this remark by Mr Brooke and Mr Aldous in the introduction to their report: 'English law, whether the common law or the criminal law which is now largely found in Acts of Parliament, has always frowned on those who obtain or attempt to obtain valuable benefits from others by dishonest representations. Dishonesty causes people to act in a way in which they would not act if they knew the true facts'.
The Government can no longer argue that they do not know 'the true facts' about the Fayeds. They may say that our report today is incomplete, in that it had to be selective for reasons of space. We have also been inhibited from publishing some parts of the report, mainly on the involvement of the Sultan of Brunei -- by undertakings we voluntarily gave to a judge in a libel action, which there has been no time to seek to have withdrawn.
But the conclusions are there and indisputable. If the Government doesn't agree that our version of 'the facts' is fair and accurate, the remedy lies in its own hands: to publish the lot, every word of it, and then -- in the name of truth, justice and decent government -- to act on it. Now.
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