Minister admits not declaring an interest yes

Chief Secretary to Treasury insists he had no need to disclose his directorship of Lebanese-owned firm in parliamentary register

BY TIM KELSEY

Jonathan Aitken, Chief Secretary to the Treasury, did not declare a directorship in a Lebanese-owned company in the parliamentary Register of Members' Interests.

Mr Aitken, then a backbench MP, insisted yesterday that he did not need to declare this directorship because he did not receive any remuneration from his association with the company, Future Management Services.

Company records, however, disclose that at the time of his directorship, Aitken Hume, a bank founded by Mr Aitken and in which he had a substantial shareholding, acted as banker to Future Management Services.

It has also emerged that the bank made a substantial loan to a wholly- owned subsidiary of Future Management Services. This commercial loan was secured on property belonging to the subsidiary, a security company called Integrated Security Group, which is based in Basildon, Essex.

Mr Aitken insisted yesterday that he was not paid for his directorship of Future Management Services and that therefore, under parliamentary rules, did not have to declare it.

He indicated that under new rules introduced in 1993 which compelled MPs to list all directorships and all clients of companies for whom they worked, his association with Future Management Services could have been declarable. He had, however, resigned his directorship the year before.

It is not clear if he was aware of the bank loan which could have been of indirect benefit to him as a shareholder in Aitken Hume.

A spokesman for Integrated Security Group declined to make any comment on the loan yesterday.

During the period of Mr Aitken's directorship, MPs were obliged to declare directorships for which they were remunerated or involvement with companies where they were representing business interests in any proceedings in Parliament.

MPs were also supposed to declare any payment or material benefit received from a foreign company or person either to themselves directly or via a third company in which they had an interest.

The Register of Members' Interests states: "The purpose of this Register is to provide information of any pecuniary interest or other material benefit which a Member may receive which might be thought to affect his conduct as a Member or influence his actions, speeches, or vote in Parliament."

In annual returns, Future Management Services describes its principal activity as "supply of services to non-UK resident companies". In 1993, for instance, it became involved in the construction of a factory in the north of Lebanon to manufacture glass fibre pipes.

Its parent company is based in Luxembourg. It was founded in 1984 by two Lebanese brothers, Ziad and Fouad Makhzoumi, who were close to the Lebanese government and a number of ruling families in the Middle East, including that of Saudi Arabia.

Mr Aitken was director between 1985 and 1992. He resigned before becoming Minister for Defence Procurement that year.

Late in 1992, the company began to act as a middleman for the provision of security systems, guards and weapons to the Lebanese government. Mr Aitken has denied any use of improper influence in assisting the Makhzoumi brothers with this business.

He said yesterday that he had told Ministry of Defence officials about his banking connection with the brothers and that their business with the MoD was handled with propriety.

The Guardian reported yesterday that Mr Aitken had met with the brothers since his resignation as director of the company on at least six occasions. Lawyers for the Lebanese businessmen, who hold British passports, said that the contacts were purely for social reasons.

The newspaper also alleged that Mr Aitken had tried to conceal his relationship with a Saudi prince from his constituents. Quoting an unnamed former secretary, it alleged he did not disclose the gift of a Jaguar XJ6, or of trips to the Middle East.

John Thomas, chairman of Mr Aitken's Thanet South constituency Conservative association, said yesterday that if it these allegations were proved: "It would be of great concern. It would be of great concern everywhere. I had no idea of any gifts."

But Mr Thomas said that people in the constituency had faith in their MP, and added: "People are saying that the press is like a pack of wolves trying to tear him to pieces. He has served us well for 20 years."