Prince's aide quits in wake of 'palace perks' report

The Prince of Wales lost his most trusted aide today as an official report into allegations of misconduct in the royal household recommended tighter controls on the way gifts are handled.

Father­of­two Michael Fawcett, 40, once described by the Prince as "indispensable" bent palace rules and accepted valuable perks and hospitality, the report found.

But although he is quitting the royal staff, he will continue to work for the Prince on a freelance basis.

He is to set up his own event management business and has been guaranteed work by the Prince, who also gave him a cash severance package.

The Prince said of his personal assistant: "I am enormously grateful to Mr Fawcett for all he has done over many years and I wish him well with his new business."

News of Mr Fawcett's resignation came as the Prince's private secretary Sir Michael Peat published his report into the misconduct allegations.

The report, following an inquiry by Sir Michael and barrister Edmund Lawson QC, uncovered no evidence of serious wrongdoing but expressed misgivings about some staff practices.

Sir Michael insisted that the report was not a whitewash.

He said: "The cover may be cream but it's certainly not a whitewash. In many ways it is unprecedented ... and says where there were serious failings.

"I am not going to make any excuses – things have not been well handled in this office.

"The Prince of Wales has said that he wants everything to be sorted out – he wants his office run to the highest possible standards."

Commenting on the report, the Prince said: "The review does not make comfortable reading in some parts, but I accept full responsibility and all the recommendations."

He added: "I am determined that the administrative procedures in my household should be to the highest standards and I have asked Michael Peat to ensure that this is the case."

Mr Fawcett's departure will come as a blow to the Prince, who is said to have once remarked: "I can manage without just about anyone, except for Michael."

The Peat inquiry found:

• No proper records of gifts to the Prince were kept;
• Of 180 official gifts, 19 went missing;
• The Prince sold unwanted gifts for charity;
• He gave away smaller gifts to staff;
• Seven private gifts were sold or exchanged;
• Staff accepted gifts and hospitality from outsiders despite rules forbidding it;
• Mr Fawcett, the Prince's personal assistant, bent the rules but was "not guilty" of financial impropriety;
• No evidence of staff selling gifts or other items without authorisation, or of taking commissions was discovered;
• An allegation of homosexual rape made by a member of staff against one of the Prince's closest aides should not have been treated so dismissively;
• There was no improper conduct over the collapse of the Old Bailey theft trial of former royal butler Paul Burrell.

The 111­page report contains evidence, collected during the non­statutory inquiry's four­month investigation, from 59 people, including the Prince but no other member of the Royal Family.

With "very few exceptions" those asked co­operated with the investigation.

The Prince asked Sir Michael, assisted by Mr Lawson, to set up the inquiry last November after the collapse of the Burrell trial, which prompted a string of allegations in the Press.

The inquiry set out to answer four questions:

• Was there an improper cover­up of the rape allegation made by royal valet George Smith in 1996?
• Was there anything improper or remiss in the conduct of the Prince's household with respect to the collapse of the Burrell trial?
• Have official gifts to the Prince been sold?
• Have any staff in the Prince's household received improper payments or other benefits?

The inquiry did not attempt to determine whether the allegation of homosexual rape was true or false, but it investigated whether or not there had been a cover­up.

Mr Smith, who was said to have a history of depression and an alleged drink problem, had not been believed and decided not to persist with his claim.

Despite some misgivings, the inquiry found no deliberate or dishonest cover­up of the rape allegation.

But the report said: "A serious allegation of this sort should not, in our opinion, have been treated so dismissively, even though there was universal disbelief as to its veracity, without (at minimum) full and documented consideration of the decision not to investigate."

It concluded there was anxiety to prevent knowledge of the allegation being spread further or reaching the media.

However, there was a genuine belief that there was no truth in the claim.

"There was not, therefore, an improper cover­up in the sense that those involved deliberately or dishonestly sought to suppress what they believed to be, or thought might be, true," the report said.

Investigating the involvement of the Prince's household in the Burrell trial, which collapsed on the eve of the former royal butler giving evidence, the report found "no improper conduct".

"The Prince of Wales had, throughout, serious concerns about the implications of Mr Burrell being tried," the report stated.

"He was concerned at the prospect of himself and, more particularly, his sons being called as witnesses, and understandably worried that information personal to himself and his family would be revealed during the trial and be the subject of intense media interest.

"His main concern in that regard was the distress which could be caused to his sons by 'revelations', true or not, relating to their mother.

"He would have preferred it if the trial could have been avoided."

The Prince had been advised, however, that he could not properly intervene and should not be seen to interfere.

The disclosure by the Prince's office of the Queen's recollection of an earlier conversation with Mr Burrell, in which he told her he was taking some of Diana, Princess of Wales's papers into "safekeeping", had been properly made, the report said.

It added: "The suggestion that the disclosure was made for an improper motive and in the expectation of preventing the trial continuing finds no support in the available evidence."

The section of the report which is most critical of the Prince's household concerns whether official gifts were sold.

Record keeping of gifts received by the Prince had not been good enough, it said.

"The policies and procedures in the Prince of Wales's household to record and control the receipt, maintenance and disposal of official and other gifts, including the maintenance of inventory records, have been deficient.

"This was not, we believe, intentional, but the result of pressure of work and limited resources and in part because those involved had become accustomed to the informal practices then in operation.

"The procedures have been or are in the course of being enhanced to be in line with current best practice."

The report said it had always been the policy, even though not documented, that official gifts should not be sold, exchanged, or even given away other than to charity.

However, there was no documented definition or official gifts and, while the Prince himself was quite clear that they included gifts received during or in connection with an official engagement recorded in the Court Circular and gifts sent in by the public, many staff were unaware of the definition, and had not been given any guidance on how official gifts should be treated.

The report also found evidence of staff accepting gifts from Royal Warrant holders despite a ban on it.

The report stated: "Staff have accepted a range of gifts and entertainment from Royal Warrant Holders and other suppliers, the value in one case amounting in aggregate to several thousand pounds, despite a requirement in their terms of employment not to 'accept presents from firms or tradesmen'.

"However, this term was not enforced and the practice of accepting presents and entertainment was with the knowledge and implicit approval of senior management."

Referring to Mr Fawcett, who was accused of "fencing" gifts, it said: "Insofar as the Press comments and allegations have been directed at Mr Fawcett, our investigation has not produced any evidence of financial impropriety on his part.

"He did infringe the internal rules relating to gifts from suppliers, but opprobrium cannot attach to this because the rules were not enforced and he made no secret of such gifts.

"Press suspicions were understandably aroused by his involvement in the sale of gifts (which, unknown to the media, were all authorised by the Prince of Wales) and by it being widely known that he received valuable benefits from third parties.

"His robust approach to dealing with some people combined, perhaps, with his having been promoted from a relatively junior position within the household, undoubtedly caused jealousy and friction in some quarters.

"This has encouraged some to voice rumours as to his financial probity; but they are just that, rumours.

"There is no evidence to justify a finding by us that he has been guilty of the alleged financial misconduct.

"In short, we have found no evidence of staff selling gifts or other items without authorisation or of their taking commissions on sales.

"Gifts and discounts have been given to staff by suppliers; however, this was done with implicit authorisation and we have found no evidence that it resulted in decisions being influenced.

"Policies and procedures in these areas have been deficient. They need to be, and are being, enhanced," the report said.