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[April 07, 2006]


(Evening Standard Via Thomson Dialog NewsEdge)In 1925, the cash-for-honours antics of Lloyd George and his louche fixer provoked Parliament into passing the Honours (Prevention and Abuses) Act. As Scotland Yard uses that act to investigate the current scandal, and Lord Levy is hauled in by a Select Committee, historian Andrew Roberts traces the fate of Maundy Gregory and asks whether Lloyd George's barons and their descendants got their money's worth

Today they are about as worthy a group of peers as ever graced an ermine collar. The 4th Viscount Astor, an Opposition spokesman in the House of Lords since 1997, is a genial fellow who is married to David Cameron's mother-inlaw; he's also trustee of the Sir Stanley Spencer Gallery. The 4th Baron Forres is an alderman, noted expert on Australian agriculture and patron of international exhibitions; the 3rd Baron Vestey is Master of the Horse, but has also previously chaired important charities and trade associations. They are all three ornaments to the peerage.

Yet their titles - and very many more in the British aristocracy - were all paid for in the most notorious period of honours scandals, when their ancestors paid David Lloyd George huge amounts of cash for coronets. From the moment he became Prime Minister of a Coalition government in 1916 until virtually the day he left office six years later, Lloyd George sold honours in order to finance his political fighting fund. 'Not only did he sell honours with less excuse,' the historian AJP Taylor later wrote, 'lacking a party, he sold them for his own account.' Although it wasn't actually made illegal until 1925, the blatant selling of honours was always considered morally reprehensible, so Lloyd George farmed out the brokering of the deals to the Liberal party Chief Whip, Freddy Guest MP, who in turn sought to distance himself by subcontracting it to one of the most colourful con men in British political history, AJ Maundy Gregory.

Of course, the sale of honours had been going on since 193 AD, when Marcus Didius Julianus bought the title of Roman Emperor, and it was the British Prime Minister William Pitt the Younger who laid down the dictum that 'Any man who is master of GBP10,000 has a right to a peerage', but it was Maundy Gregory - a clergyman's son and former theatrical agent - who most brazenly applied the practice to 20th-century British politics. (Intriguingly, his modern-day counterpart, Lord Levy, was also an impresario, managing the likes of Alvin Stardust and Chris Rea.) Maundy Gregory undertook the blithe sale of baronies and baronetcies - and even the occasional viscountcy - on a secret commission basis, and, unbeknown to customer and provider alike, took a very substantial rake-off from every 'donation' to the Lloyd George Fund. The problem came when Gregory sold honours to nouveaux riche businessmen who were suspected of profiteering from the Great War and wanted to cloak their activities with the respectability that then went with a title.

'Gentlemen received titles whom no decent man would allow into his house,' complained the eminently respectable MP Lt Col Henry Page Croft in a Commons debate. 'Several of them would have been blackballed by any respectable London club.' One example was Sir John Stewart, a Dundee whisky manufacturer who went bankrupt shortly after buying a baronetcy off Gregory. Stewart shot himself in 1924, and was discovered to have debts of half a million pounds.

At the subsequent creditors' meeting, the solicitor was recorded as saying: 'I don't believe for a moment that GBP50,000 was all Stewart paid for that baronetcy. I know what baronetcies have fetched in the past. More likely it was GBP150,000.' (The 6th Baronet, Sir Simon Stewart, is today a very distinguished graduate of the Charing Cross Medical School.) The following year, in 1921, Rowland Hodge, a Newcastle shipbuilder and convicted food hoarder under the Defence of the Realm Act, bought a baronetcy off Gregory.

King George V privately let it be known of his 'feelings of annoyance and indeed disgust that this man should have received any honour, let alone a baronetcy', but by then the award had gone through. (The 3rd Baronet, Sir Andrew Hodge, leads a blameless life in Perth, Western Australia.) It was finally on 3 June 1922 that the Establishment, which had been smarting for years over names it did not consider worthy of ennoblement, was faced with an honours list that it could no longer stomach. A revolt began that only ended with the fall of Lloyd George himself four months later. The four recommendations for peerages that caused the explosion were Sir Joseph Robinson, Sir William Vestey, Sir Samuel Waring and Sir Archibald Williamson.

(A fifth, Sir Robert Borwick, a blameless manufacturer of custard and baking powder, escaped censure.) Sir Joseph Robinson, chairman of a South African company called Randfontein Estates, had bought mining freeholds in his own name which he had then sold on to the company for five times the amount, without disclosing to the shareholders the vendor's identity. The South African courts ordered him to pay compensation of half a million pounds, an astronomical amount for those days, and in November 1921 the judicial committee of the Privy Council had dismissed his appeal. Yet only seven months later, after paying Gregory GBP30,000, Robinson's name appeared on the honours list for a barony.

The public outcry forced Lloyd George to back down, and an emissary was sent to the Savoy Hotel to inform Robinson that his name would not be going forward after all.

The old man, who was going deaf, initially misunderstood the reason for the visit, and took out his cheque book, resignedly asking: 'How much more do you want?' When the situation was fully explained to him, Robinson - not unreasonably - asked for his money back. Gregory was then summoned to the Coalition Chief Whip's office and asked if he knew what had become of the GBP30,000? 'Of course I know what has become of it,' snapped Gregory in reply.

'I have spent it.' Sir William Vestey's name had been put forward, so the citation stated, because, as chairman of the Union Cold Storage Company, he had 'rendered immense service' during the First World War by providing cold storage 'gratuitously' for the victualling of the army in various Channel ports.

Yet in the following days it turned out that not only had the taxpayer paid market rates for the storage, but Vestey himself had avoided paying GBP3 million income and profits taxes in 1915 by moving his GBP20 million meatpacking business to Buenos Aires, at the cost of 5,000 British jobs.

As if the Robinson and Vestey names were not enough, Sir Samuel Waring, chairman of the department store Waring & Gillow, was accused in the House of Commons of war profiteering. Waring shouted, 'That is a false statement!'

from the distinguished Strangers' Gallery above the Commons chamber when the allegation was made, causing yet more embarrassment to the government.

Also proposed for a peerage was Sir Archibald Williamson, an oil tycoon who was accused of having traded with the enemy during the war, via South America. The body responsible for managing the wartime blockade of Germany, the Foreign Trade Department of the Foreign Office, compiled a large file on Williamson's activities, which had led to his licences to trade being withdrawn for a period during the war. 'The firm's record was putrid,' concluded a report to the Foreign Secretary, Lord Curzon. Intercepted letters from the firm contained instructions on how to trade with the enemy while staying within the strict letter of the law. Nonetheless, in 1922, Williamson was elevated to the peerage as the 1st Baron Forres. Although he defended himself vigorously against all the charges against him, it is likely that Williamson chose a territorial title in order to expunge his surname from public memory.

The appointment of the Warrington industrialist Charles Cain to a baronetcy in July 1921 was not controversial at the time, but as the 1st Baron Brocket from 1933 onwards he became one of the most convinced pro-Nazis in the House of Lords, visiting Hitler on the Fuhrer's 50th birthday only six months before the outbreak of the Second World War (which Brocket opposed Britain fighting). His great-grandson, the 3rd Lord Brocket, was imprisoned in 1996 for insurance fraud, and, even more humiliatingly, wound up as a contestant on I'm A Celebrity, Get Me Out of Here.

Of course it was not only the Liberals who were involved in the trade; Lloyd George's Conservative partners in the Coalition were also deeply implicated.

In 1921 a row even broke out between the Tory Chief Whip, Sir George Younger, and his Liberal counterparts over who should pocket the 'subscription' of Frederick Mills, the chairman of the Ebbw Vale Steel, Iron and Coal Company, for a baronetcy. It seems that the Lloyd George Fund won. (The 3rd and present baronet, Sir Peter Mills, fought in the Second World War and later served with distinction in African agriculture ministries in the Sixties and Eighties.) According to Kenneth Rose's magisterial life of George V, by far the most notorious Tory honours-monger during the Lloyd George period was Lord Farquhar, Lord Steward of the Household and a friend of the King.

Entirely unbeknown to George V, Farquhar - who was also Treasurer of the Conservative party - sold titles, sometimes for the party's benefit, but also sometimes for his own. It was through Farquhar that Waldorf Astor, who in 1917 received a viscountcy from Lloyd George only 15 months after his barony, had channelled GBP200,000 into the funds of both major parties of the Coalition. When it was discovered that the Tories could not trace the money, in March 1923 Farquhar was dismissed as party treasurer. The fall of Lloyd George in October 1922 did not end Maundy Gregory's nefarious business dealings, since customers still believed that he was capable of acquiring honours for them, and were willing to exchange cash for respectability.

Although an Honours (Prevention of Abuses) Act was passed in 1925, Gregory continued trading on his contacts. In 1927 he bought the Ambassador Club, which by day was a respectable club in Conduit Street whose regular visitors included the former Lord Chancellor the Earl of Birkenhead, the Foreign Secretary Austen Chamberlain and the Marshal of the Diplomatic Corps, Major-General Sir John Hanbury-Williams.

'The Ambassador became a favourite lunchtime rendezvous for Members of Parliament,' recalled one of them years later. 'Its charm lay in its distance from Westminster. Members felt they were far away enough from the sound of the division bells to allow them to relax.' At 12.45pm every day, two magnums of Moet & Chandon on ice were wheeled to Maundy Gregory's table in the centre of the dining room, where he entertained both customers for honours and the politicians who could deliver them.

As night fell, the club's character altered completely. From being an all-male preserve during the day, the Ambassador became a louche nightclub of the type at which the roaring Twenties excelled. Seeking to entertain, in his words, 'the leisured seekers of the lighter life', Gregory entertained the bright young things, including the Prince of Wales, who was given the codeword 'Number One'. The manager, Peter Mazzina, later recalled how Gregory would give him instructions such as: 'Number One will be arriving at midnight with a party of six. The Marchioness of Dufferin and Ava will have to give up her table, as Number One doesn't like to be too close to the orchestra.'

Rumours that the de luxe flats above the club were used to show blue films, and that it was used as a fencing operation for stolen goods, were probably untrue.

For all his second occupation as a nightclub proprietor, Gregory could not give up his principal money-earner, and in 1933 was arrested under the Honours (Prevention of Abuses) Act for offering to obtain a knighthood for a distinguished retired naval officer, Lt Cr Edward Billyard-Leake DSO, for GBP10,000. At first Gregory pleaded not guilty and threatened to name names from both major political parties in the subsequent court case, but soon afterwards he suddenly changed his plea to guilty, and he kept quiet instead.

He was sentenced at Bow Street to two months' imprisonment plus 50 guineas costs and was sent to Wormwood Scrubs, where he was assigned light work in the library. So what had caused him to change his plea?

Years later it emerged that the fear of public exposure of their dealings going back over 17 years had persuaded politicians of all the major parties - including the former Tory Premier Stanley Baldwin and the National Labour Prime Minister Ramsay MacDonald - to acquiesce in a scheme to buy Gregory's silence. If he would plead guilty and live in France for the rest of his life after leaving prison, they would pay him GBP30,000. Sure enough, by the evening of his release on 12 April 1933, Gregory was in Dieppe. He spent his exile in Paris, virtually living in the American bar of the Hotel Meurice - which he called 'my headquarters' - where he was friendly with the head barman, Ronnie Russell. He introduced himself as Sir Arthur Gregory, and was the only man in the history of the hotel who has ever been allowed to run up a monthly bar bill. His table - to the right of the door as one entered from the lobby - was perfectly placed so that he could leave hastily if he spotted a creditor.

Although he was adjudicated bankrupt, he continued to receive money from the Ambassador Club, passed to him in brown envelopes, sealed with red wax, by Peter Mazzina.

In November 1940, Gregory was interned in the notorious German prison camp at Drancy, outside Paris. He had believed that he could evade capture by living among German officers in a hotel that they had requisitioned, and was successful for five months before he was betrayed. When the Germans offered to release him after a fatal heart condition was diagnosed, Gregory refused - probably on financial grounds - telling them: 'You arrested me, now you can jolly well keep me for the duration of the war, and what's more, we are going to win.' He died in jail in September 1941 of 'progressive cardiac insufficiency', although Ronnie Russell - who had been interned with him - had a different but equally compelling diagnosis: 'Maundy died from lack of booze. The Germans had cut off his whisky supply.' With superb irony, the only way that the government emissaries could covertly pay off Gregory was by selling yet another baronetcy, for the exact hush-money of GBP30,000, this time to the sportsman and philanthropist Sir Julien Cahn. (Sir Julien's son, the 2nd Baronet, Sir Albert Cahn, is a respected family therapist and former director of the Elm Therapy Centre in New Malden.) Although neither politician liked it, both Baldwin and MacDonald knew all the details of the arrangement. 'Lloyd George,' concludes Kenneth Rose, 'was not the only Prime Minister of King George V to muddy the Fountain of Honour.' And not the only Prime Minister either.

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