Hamilton's demands 'horrified oil firm'

Lionel Blumenthal, the former head of Mobil Oil's tax affairs, told the High Court yesterday he was "horrified" when Tory MP Neil Hamilton asked about payment after he tabled an amendment on the firm's behalf in the Commons.

Lionel Blumenthal, the former head of Mobil Oil's tax affairs, told the High Court yesterday he was "horrified" when Tory MP Neil Hamilton asked about payment after he tabled an amendment on the firm's behalf in the Commons.

Mr Blumenthal, speaking on the 13th day of Mr Hamilton's libel case against Mohamed Al Fayed, said the whole issue of payment for parliamentary access struck him as "a hornets' nest". It had never occurred to him that the company might be asked to pay.

George Carman QC, representing Mr Fayed, asked Mr Blumenthal what his reaction was in 1989 when he heard Mr Hamilton had asked about payment after tabling an amendment to the proposed Finance Bill. "I was horrified," said Mr Blumenthal, who retired from Mobil in 1995. "The thought that he would ask for payment for that was horrifying to us: a, because we didn't expect it, and b, as a matter of company policy the idea of paying an MP for doing what he had done seemed very questionable."

The court was told at a previous hearing that Mobil and other oil companies were concerned in 1989 about a clause in the draft Bill that would affect their tax payments.

It is alleged by Mr Fayed in his defence that the former Conservative MP for Tatton "corruptly" demanded a payment of £10,000 from Mobil.

Mr Blumenthal, who joined Mobil in 1969 and became responsible in 1979 for the tax affairs of its UK companies, said he heard of Mr Hamilton's payment request after his deputy, John Deakin, heard from Peter Whiteman QC, a tax adviser to Mobil, that Mr Hamilton had said words to the effect of: what does Mobil pay, or what are Mobil's payment terms?

But Mr Hamilton was not being asked to give any tax advice, he said. "We sought his help purely as a politician who knew the parliamentary procedure and who could make representations both in committee and if appropriate to government ministers."

Mr Blumenthal said he discussed the issue with Mr Whiteman and expressed his shock at the request. He said he was told this was the normal course of things for some MPs and it was suggested that £10,000 was the sort of figure involved.

Mr Blumenthal said there was never any question of requiring Mr Hamilton's services as a tax consultant. He said he regarded a letter to him from Mr Hamilton in August 1989 as "sort of a fishing expedition". "He was out for work from Mobil".

Mr Blumenthal said he read of the allegations over Mr Hamilton and cash for questions in the press in October 1994. Hewrote to Mr Hamilton saying the company was "shocked" to learn that the MP had asked what its payment terms were: "I know you will have regard to the foregoing in making your decision about your future as a member of the government."

It said: "I will delay sending this letter to the Prime Minister for 48 hours in the hope it will not be necessary to do so." Mr Blumenthal said he took the letter to the Department of Trade and Industry offices and handed it to a secretary, stressing its urgency.