The Conduct of Lord Elder
Annexed to this report are reports by the Sub-Committee on Lords’ Conduct and the Commissioner for Standards relating to a complaint against Lord Elder.
The Commissioner has upheld the complaint in respect of Lord Elder’s failure to register a relevant interest correctly and his misuse of House of Lords stationery. Lord Elder has accepted the Commissioner’s findings and apologised; the matter has therefore been dealt with by means of remedial action and is now closed.
We make this report for information.
Annex 1: Report from the Sub-Committee on Lords’ Conduct
The Commissioner for Standards has submitted the attached report upholding a complaint made against Lord Elder.
The complainant alleged that Lord Elder (i) incorrectly registered his interests in the Al-Maktoum Institute for Arabic and Islamic Studies as a non-financial interest when it should have been registered as remunerated employment as he was in receipt of an honorarium; and (ii) improperly used a House of Lords envelope for non-parliamentary business.
The Commissioner found Lord Elder to have breached the Code of Conduct in respect of both elements of the complaint. Lord Elder accepted this finding and the Commissioner agreed with him remedial action in the form of a letter of formal apology to the chairman of the sub-committee (which is reprinted as an appendix to the Commissioner’s report).
We welcome Lord Elder’s acceptance that he breached the Code of Conduct and his apology for that breach. We do not consider that any further sanction is appropriate.
We recommend that the Committee for Privileges and Conduct should make a report to the House on this case.
Annex 2: Report from the Commissioner for Standards
Summary of the complaint
Dr Malory Nye in a letter dated 10 May 2012 (appendix A) complained that Lord Elder had breached the Code of Conduct in two respects. First, that he had incorrectly registered his interest in the Al-Maktoum Institute for Arabic and Islamic Studies as a non-financial interest when it should have been registered as remunerated employment; and secondly that he improperly used an envelope bearing the emblem of the House of Lords when sending Dr Nye a letter of dismissal.
I advised Lord Elder in a letter dated 24 May 2012 (appendix B) of the complaint and invited him to supply me with a full and accurate account of the matters in question.
Key facts
Lord Elder responded in a letter dated 14 June 2012 (appendix C) attaching letters from Blackadders solicitors and the Al-Maktoum College of Higher Education, providing additional information in relation to his position within the College and associated financial support arrangements.
I replied to Lord Elder on 27 June 2012 (appendix D) advising him of my initial thinking and we subsequently met on 5 July 2012.
Lord Elder was keen to ensure that he supplied me with accurate information and that his actions were fully in compliance with the requirements of the Code of Conduct and the relevant guidance. On 27 July 2012 he again wrote to me, forwarding a letter from the Director of Operations, Al-Maktoum College of Higher Education (appendix E). That letter set out the background to payments from the College to Lord Elder and stated that they should never have been described as an honorarium but rather as payments in respect of expenses. Lord Elder also submitted a letter to the chairman of the Sub-Committee on Lords’ Conduct (appendix F), acknowledging and apologising for his incorrect entry in the Register of Lords’ Interests and his inappropriate use of an envelope bearing the emblem of the House of Lords.
Findings
Lord Elder did register his interest in the Al-Maktoum College of Higher Education in compliance with paragraph 10(a) of the Code of Conduct. However, he registered his interest under category 10 (“non-financial interests”). This was in my judgment incorrect but, given the specific references to the governing bodies of universities, colleges or schools in paragraph 79 of the Guide to the Code of Conduct, Lord Elder’s error is understandable.
Paragraph 49 of the Guide to the Code of Conduct, which offers guidance on registering category 2 (“remunerated employment”) interests, states: “All employment outside the House and any sources of remuneration which do not fall clearly within any other category should be registered here.” The payments made to Lord Elder were described in the Al-Maktoum College’s accounts as an “honorarium”. I believe that a reasonable member of the public would conclude from that that Lord Elder should have registered this interest as a category 2 (“remunerated employment”) interest. Lord Elder accepted this view.
The House Committee’s report Rules Governing the Use of Facilities (2nd report, session 2008–09, HL Paper 47) states that House of Lords envelopes should not be used for general correspondence (except that of an essentially parliamentary nature) or business letters. Lord Elder accepted without reservation that he should not have used a House of Lords envelope for the letter of dismissal that he sent.
In all the circumstances I decided that this matter was best dealt with by way of remedial action. Lord Elder was from the outset open and apologised for both his incorrect Register of Lords’ Interests entry and inappropriate use of a House of Lords envelope. He has written to the chairman of the Sub-Committee on Lords’ Conduct apologising for his errors. I believe that no further action is required. Lord Elder breached the Code of Conduct but only in minor ways and his response to the complaint has been exemplary.
Paul Kernaghan CBE QPM
Commissioner for Standards
Appendix A: Letter from Dr Malory Nye to the Commissioner, 10 May 2012
I am writing to bring to your attention what appears to be a breach of the House of Lords’ Code of Conduct by one of its members.
I believe Lord Elder has been in breach of the Code of Conduct on two matters of concern, as detailed below.
The first concern is about an irregularity that I have recently discovered in Lord Elder’s entry on the Register of Interests in 2010.
On the Register of Lords’ Financial and Other Interests for the session 2009–2010, Lord Elder is shown on page 57 to have made the declaration that he held the office of Chancellor of the Al-Maktoum Institute for Arabic and Islamic Studies, in Dundee. This is correct. However, he is registered as having declared that this was a non-financial interest (category 10, e).
During the time I was Principal and Vice-Chancellor of the Institute (as it then was, it is now named ‘Al-Maktoum College of Higher Education’).
I am very aware that this was not a non-financial role and the declaration as it stands is not correct. Lord Elder’s position with the Al-Maktoum Institute at this time should have been considered as category 2 (remunerated employment) as he did in fact receive remuneration for this office.
From 1 January 2009 to 31 December 2010 he received an honorarium payment of £5,000 per year for the services that he provided to the Al-Maktoum Institute. This payment was made to him on the instruction of the Chairman of the Board of Directors, and the company’s account for 2010 registered this payment to him on page 15 (note 7).
My understanding is that on this basis Lord Elder has breached the Code of Conduct of the House of Lords, by failing to notify the change in his interests to the Registrar of Lords’ Interests within a month of the change, in January 2009 (as required by section 13 of the Code).
Lord Elder also received a payment of £5,000 for his position as Chancellor in 2009, whilst again also registering his interest in this matter as non-financial.
My second concern is that Lord Elder made use of House of Lords stationery in November 2011 for the sending of a business letter to myself related to the work of the Al-Maktoum College.
On 16 November 2011 he wrote to me in his capacity as Chancellor of the Al-Maktoum College. This was a letter of dismissal to me as Principal of the College. The letter was written on College headed paper, but was sent in an envelope bearing the emblem of the House of Lords. This of course made the letter misleading – giving the suggestion that my dismissal was in some way related to his position as a member of the House of Lords.
My understanding is that the sending of this letter in a House of Lords envelope is in breach of the requirement in the House of Lords Staff Handbook that ‘official stationery is provided solely for use on House of Lords business and must not be used for any other purpose’ (section 12.20, page 65). In doing so he has also breached section 10c of the Code of Conduct.
The particular circumstances of the sending of this letter are important here – it was a letter of dismissal related to an issue that (as far as I am aware) had nothing to do with the business of the House of Lords. Lord Elder sent the letter as Chancellor of a College to dismiss me, the Principal (chief executive) of the College. The sending of the letter in a House of Lords envelope – which was the first thing I saw when I received the letter – was extremely inappropriate. I would presume that this is a matter of concern to Commissioner of Standards.
I am enclosing relevant documents on these two matters, as follows:
Extract of the House of Lords Register of Lords Interests for Lord Elder, 18 June 2010
Registered company accounts for Al-Maktoum Institute, 2010, signed and approved by Lord Elder on 16 September 2011 (pages 1-2, 9-11, 15)
Copy of the letter and envelope sent by Lord Elder to Prof Malory Nye on 16 November 2011 (enclosed are photocopies, and I can supply the originals should you require them)
I look forward to hearing from you.
Annex 1
ELDER, Lord
Category 2: Remunerated employment, office, profession etc.
Adviser, Daval International Ltd (UK pharmaceutical company)
Category 10: Non-financial interests (d)
Chair of Trustees, Smith Institute
Category 10: Non-financial interests (e)
Chancellor, Al-Maktoum lnstitute fur Arabic and Islamic Studies
Annex 2: Letter from Lord Elder to Dr Malory Nye, 16 November 2011
I refer to our meeting on Friday 4 November 2011.
The purpose of that meeting was explained in my letter of 19 September 2011 where I expressed my concern that the relationship between you and some of the College’s stakeholders had broken down irretrievably. I also stated my belief that this might make it untenable for you to continue as Principal and indicated I was minded to terminate your appointment as Principal and your employment at the College.
The purpose of our meeting on 4 November was to afford you an opportunity to persuade me why your appointment/employment should not be terminated. While I understand your conviction that you have acted in the best interests of the College and that the current difficulties are the fault of others, particularly Mr Abubaker, I believe that responsibility for the major concerns within the College must lie at your door.
You have been serving as the College’s most senior manager and the effective operation of the senior management team is therefore ultimately your responsibility. I am satisfied that you have been giving insufficient attention to the College’s academic agenda and focusing too much time on administration matters. Of perhaps the greatest concern is that the relationship with the University of Aberdeen has broken down during your stewardship of the College.
On any view these are serious matters and I am driven to the conclusion that they make your continued appointment/employment untenable. It is therefore my decision that your appointment as Principal and employment as Chair of Multiculturalism should be terminated on three months’ notice effective from the date of this letter.
Towards the end of our meeting, you explained that, if you were to be dismissed from the role of Principal, you would be willing to remain employed as a Professor within the College. Since our meeting, I have reflected on this proposal and have come to the view that, regrettably, it would not be possible to allow you to remain within that role. Given the length of time which has passed since your suspension and the content and number of grievances which have been lodged against various members of the College, I do not believe that this is a viable option.
You have the right to appeal against my decision. If you wish to appeal you should do so in writing not later than 23 November 2011 setting out your grounds of appeal. Your letter of appeal should be addressed to me in the first instance.
Appendix B: Letter from to the Commissioner to Lord Elder, 24 May 2012
I am writing to you in my capacity as the Commissioner for Standards. I have to advise you that I have received a complaint against you. Namely, that you have breached the Code of Conduct by reason of your failure to properly register a remunerated office and through the improper use of House of Lords’ stationery, specifically an envelope.
I attach for your information a copy of the letter I have received from the complainant (Dr Malory Nye).
It appears on the basis of the complaint that you may have breached the following provisions of the 2010 Code of Conduct—
8. Members of the House:
(a) must comply with the Code of Conduct;
(b) should always act on their personal honour ...
10. In order to assist in openness and accountability Members shall:
(a) register in the Register of Lords’ Interests all relevant interests, in order to make clear what are the interests that might reasonably be thought to influence their parliamentary actions ...
(c) act in accordance with any rules agreed by the House in respect of financial support for Members or the facilities of the House.
The rules governing the use of stationery are set out in the House Committee’s 2nd report of 2009–10, appended to the Handbook on facilities and services for Members (May 2010).
I have conducted a preliminary assessment of the complaint and believe it is appropriate and in the interests of all concerned that I investigate it. Therefore, I now invite you to respond in writing with a full and accurate account of the matters in question. A response by 14 June 2012 would greatly assist me in investigating this matter in a timely fashion.
I enclose for ease of reference a copy of the “Code of Conduct for Members of the House of Lords and Guide to the Code of Conduct” (second edition: November 2011).
Appendix C: Letter from Lord Elder to the Commissioner, 14 June 2012
Thank you for your letter of 14 May, which as I explained to your office I had unfortunately left unopened in the office over the recess. I asked Blackadders, solicitors in Dundee to seek the necessary information from the college, and their letter, and the College’s reply is attached to this letter.
I should perhaps explain something of my role as Chancellor of the AlMaktoum College of Higher Education. Initially it was almost entirely ceremonial – but over the last few years it has become much more managerial. The College, which offers taught Masters degrees and PhDs and is based in Dundee, has been linked with Aberdeen University for degree validation purposes.
Following increasing tensions between the College and Aberdeen over the last few years, and allied with increasingly difficult staffing problems within the College, that agreement has been ended by them as from September this year.
These difficulties within the College have demanded much more of my time than was originally envisaged. It has involved meetings in Dundee, and in London and a good number of meetings in Aberdeen. Effectively, the last four years has meant a much heavier commitment of my time and effort than was originally envisaged. Often the College is able to arrange these matters in advance: on other occasions I make the arrangements and pay for them myself.
In fulfilling my role for the college I have never been remunerated, but those in Dubai have been keen to ensure that I was not out of pocket in fulfilling my role on their behalf. The present system of an annual lump sum payment to cover out of pocket expense was introduced by and at the instigation of the College chairman, who is based in Dubai. I have never regarded these as either remuneration or taxable income.
I hope that this background is helpful to you.
I should say finally that I used a House of Lords envelope when I needed to get a letter in the post that night and had no other envelope to hand. I should not have done so, and apologise for so doing.
Letter from Simon Allison, partner of Blackadders LLP, to Mr A G Abubaker, Director of Operations, Al-Maktoum College of Higher Education, 13 June 2012
We have been contacted by Lord Elder in relation to a reference from the Commissioner for Standards in Parliament.
In order to respond to this, it would be helpful if the College could provide us with information in relation to the payments which were made to Lord Elder as Chancellor, the period during which such payments were made and the basis upon which such payments were made (i.e. what the payments were intended to represent).
Given the fact that Lord Elder requires to respond to the Commissioner for Standards by close of business tomorrow, we would appreciate an early response from you in respect of this matter.
Letter from Mr A G Abubaker, Director of Operations, Al-Maktoum College of Higher Education, to Simon Allison, partner of Blackadders LLP, 14 June 2012
I refer to your letter dated 13 June 2012.
Lord Elder was appointed as Chancellor of the Al-Maktoum College in 2004. He has never received any remuneration for this appointment but the College wished to cover any expenses incurred while carrying out work on behalf of the College. This was something he did not do very regularly. In 2008, Lord Elder’s appointment as Chancellor was renewed for a further period of 5 years from 1st August 2008. It was further decided to pay him an annual amount of £5000 to cover all his expenses in order to eliminate the need for him to make regular claims. Following his appointment to the College’s Board, the amount of the honorarium was treated as a reimbursement of expenses to better reflect the nature of the payment.
The following payments were made:
20 November 2008£3000
19 November 2009£2000
31 December 2010£5000
9 March 2012£4750
I trust you find the above in order.
Appendix D: Letter from the Commissioner to Lord Elder, 27 June 2012
My letter dated 24 May 2012 and your reply dated 14 June 2012 refer.
I am grateful for your response to the complaint lodged by Dr Nye. I have carefully considered the information supplied by Al-Maktoum College, through Blackadders Solicitors, together with your explanation. I am also aware that Dr Nye is pursuing a claim for unfair dismissal against Al-Maktoum College.
In your letter you make it clear that Al-Maktoum College did support you, be it by arranging travel to facilitate college business, or later by way of an annual lump-sum payment. That lump-sum payment was designed to ensure you were not out of pocket in connection with your duties as Chancellor of the College. You state that you never regarded such payments as either remuneration or taxable income. I note that you registered your position as “Chancellor, Al-Maktoum Institute for Arabic and Islamic Studies” in the Register of Lords’ Interests as a “Category 10 non-financial interest”.
Paragraph 37 of the Guide to the Code of Conduct states—
Members are responsible for making a full disclosure of their interests, and if they have relevant financial interests which do not fall clearly into one or other of the specific categories, they are nevertheless expected to register them, if necessary under category 9 (Miscellaneous financial interests).
However, in this particular case it is my view that the honorarium should have been registered under “Category 2 Remunerated employment etc.”—
Employment, office, trade, profession or vocation which is remunerated or in which the Member has any pecuniary interest.
Category 2 (paragraph 49 of the Guide) states—
All employment outside the House and any source of remuneration which do not fall clearly within any other category should be registered here. When registering employment, Members should state the employing organisation, the nature of its business (where this is not self-evident) and the nature of the post that they hold in the organisation.
I am of the view that though you did register your interest in, and connection with, the Al-Maktoum College, you should have registered it under Category 2. I have been unable to find any record of your having sought advice from the Registrar in respect of how best to register this particular interest.
I am minded to suggest that this matter is best resolved by way of remedial action, as per paragraph 123 of the Guide. Specifically, can I suggest that you write to the chairman of the Sub-Committee on Lords’ Conduct (via this office) and apologise for failing to register your financial interest in the Al-Maktoum College under the correct category, namely category 2? Your letter should also highlight that you have already altered your Register entry accordingly.
In respect of the complaint that you misused a House of Lords’ envelope, can I say that I accept your explanation that this was an oversight for which you apologise. I consider that particular complaint to be trivial given it was a one-off error and I believe no additional action is justified or required in relation to it.
I trust that my suggested course of action will commend itself to you. However, I stand ready to discuss this matter in person if you felt that would assist.
Appendix E: Letter from A G Abubaker, Director of Operations, Al-Maktoum College of Higher Education, to the Commissioner, 27 July 2012
Lord Elder was appointed as Chancellor of the Al-Maktoum College in 2004. The appointment is non-remunerable, however, the College wished to cover any expenses incurred by the Chancellor while carrying out work on behalf of the College. It must be said that initially we struggled to convince Lord Elder to submit expenses claims even though he was making regular trips to attend events/functions in Dundee.
In 2008, Lord Elder’s appointment as Chancellor was renewed for a further period of 5 years from 1st August 2008. The Board of Directors decided to advance him an annual amount of up to £5000 as a contribution to his expenses, in order to eliminate the need for him to make regular claims. This was due to the fact that as the College grew and its activities increased, the Chancellor’s travel pattern to Dundee has become more and more demanding.
Unfortunately these payments were wrongly described in the College’s accounts as an honorarium. This has subsequently been changed and the payment to Lord Elder is now correctly reflected as contribution to expenses in the College’s audited accounts for year ending 31 December 2011.
I trust you find the above in order.
Appendix F: Letter from Lord Elder to the chairman of the Sub-Committee on Lords’ Conduct, 27 July 2012
I am writing to you in connection with the complaint made about my entry in the register of interests by Professor Malory Nye. I have discussed these matters with the Commissioner for Standards, Mr Paul Kernaghan.
I am afraid that there was an inaccuracy in the way the matter was reported in the accounts. However I wish to make clear that I am well aware that that in no way excuses the inaccuracy of the way I recorded my entry in the Register of Interests, and I regret that I did not consider the matter more closely and carefully. The position has now been regularised to explain in the College’s accounts with complete accuracy the nature of their payments to me. However that does not excuse the fact that I allowed the inaccurate report to stand in the accounts, and more importantly in this context, in the register of interests. For this error I unreservedly apologise.
It was also the case that I did when trying to get a letter away one evening, use an un-franked House of Lords envelope to do so. That too was an error, and for that I also apologise.