The Guardians report alleged that Al-Fayed had approached the paper and accused Ian Greer of paying then-MPs Neil Hamilton and Tim Smith to table parliamentary questions on his behalf at £2,000 a time. Smith resigned immediately after admitting to accepting payments from Al-Fayed himself, but not from Greer as The Guardian had alleged. Hamilton and Greer immediately issued libel writs in the High Court against The Guardian to clear their names. The furore prompted the then-prime minister John Major to instigate the Nolan Committee, to review the issue of standards in public life. Six weeks later in December 1994, in a private letter to the chairman of the parliamentary watchdog the Members' Interests Committee, Mohamed Al-Fayed alleged that he had paid Hamilton, in addition to the original allegations that Ian Greer was the paymaster. Hamilton denied this new allegation. The Defamation Act 1996 was designed to alter the Bill of Rights 1689, and allows an MP to waive parliamentary privilege. This would have permitted Hamilton to give evidence in court concerning statements he made in the House of Commons. Two years later, at the end of September 1996, three days before Hamilton's and Greer's libel actions were due to start, three of Mohamed Al-Fayed's employees claimed that they had processed cash payments to the two men. Hamilton and Greer denied these new allegations. Hamilton and Greer withdrew their libel action on 30 September 1996. Hamilton's and Greer's withdrawal of their libel actions provoked an avalanche of condemnation of the two men in the British press, led by The Guardian. Parliament initiated an official inquiry into the affair, to be led by Sir Gordon Downey. In December 1996, Ian Greer's lobbying company collapsed. Downey began his inquiry in early 1997, but before he published his report Prime Minister John Majorprorogued Parliament for a general election, to be held on 1 May 1997. Smith resigned from Parliament on 25 March, and stood down in the general election. In the election, former BBC reporter Martin Bell stood in Hamilton's Cheshire constituency of Tatton as an independent candidate on an "anti-corruption" platform. Bell easily defeated Hamilton with the assistance of the Labour Party and the Liberal Democrats, who both withdrew their candidates and supplied party workers to help Bell's campaign. Sir Gordon Downey published his 900-page report in early July 1997, clearing Ian Greer, Neil Hamilton, and Tim Smith of The Guardians original allegations that Ian Greer had paid the two MPs to table questions. However, Downey decreed that the three Fayed employees' testimony that they had processed cash payments to Hamilton amounted to "compelling evidence", though he did not accept their claims to have processed cash payments to the lobbyist Greer. At the same time, the Standards and Privileges Committee published its conclusions in relation to complaints made by The Guardian and Mohamed Al Fayed, which concluded:
In 1998 Neil Hamilton issued a writ for libel against Mohamed al-Fayed, over allegations that Al-Fayed had made on a Channel 4 documentary programme broadcast in January 1997. In late 1999 the trial began at the High Court. Hamilton lost and was ordered to pay costs. Two months later, in February 2000, The Mail on Sunday reported that shortly before Hamilton's libel action Mohamed Al-Fayed had acquired reams of privileged legal papers stolen from the chambers of Hamilton's barristers. Hamilton immediately lodged an appeal against his libel defeat. In late 2000, Hamilton's appeal was heard at the Court of Appeal. The three judges dismissed Hamilton's appeal on the grounds that Fayed's acquisition of the stolen papers would not have materially affected the outcome of the trial. In 2001 Neil Hamilton declared bankruptcy.
Riddick and Treddinick
Though the term "cash for questions affair" is used to refer to the events that followed the publication of The Guardian's story, it was not the first time that a British newspaper had accused MPs of taking bribes to table questions. Three months earlier, in July 1994, a 'sting' operation by The Sunday Times reported that two Conservative MPs Graham Riddick and David Treddinick had accepted cheques for £1,000 for agreeing to table a parliamentary question. The two were suspended from parliament for 10 and 20 days respectively, Mr Riddick receiving a shorter 'sentence' due to his apparent decision to apologise quickly and return his cheque bribe. Riddick lodged a formal complaint with the Press Complaints Commission. Basing its decisions on the information compiled by the Commons' Privileges Committee the PCC found in Riddick's favour. The commission judged that The Sunday Times failed to make clear to its readers that its approach to Riddick had been on the basis of a legitimate consultancy, not on the basis of a one-off payment in return for asking a question and that there was no justification for the newspaper's resort to subterfuge. This overturned a ruling two years earlier by the PCC in favour of The Sunday Times when Riddick had been unaware that the PCC was investigating the matter. The PCC apologised to Riddick for 'this serious breach of our procedures.'
