In the early Fifties the Hon. Angus Ogilvy, after National Service in the Scots Guards and three agreeable years at Trinity College, Oxford, approached his father, the 12th Earl of Airlie, with his plan ‘to do something in the City’. The old earl gruffly dismissed the idea with three monosyllables: ‘They’re all crooks.’ The Earl’s warning, which was ignored, seems to come up like a ghost at the feast throughout this remarkable book.
Just as Robert Maxwell was officially declared unfit to run a public company before he was allowed to take over and rob the biggest printing company in the country, so Roland ‘Tiny’ Rowland, before he and his company Lonrho were allowed to take over the Observer and Today newspapers, was once denounced by a Tory Prime Minister, Edward Heath, as ‘the unacceptable face of capitalism’. Tom Bower has now written books about both men which prove both charges a hundred times over. Maxwell was so infuriated by Bower’s book that he spent hundreds of thousands of pounds to stop it appearing and even commissioned a more favourable biography from his employee, Joe Haines. Rowland, as far as I know, has not yet reached for his lawyers over this book, though it is in my view even more damaging to the ‘revolutionary capitalism’ he pretends to represent than anything Bower wrote about Maxwell.
Rowland’s favourite tactic for expanding his business was not entirely revolutionary. He bought people. Since he was dealing mainly in Africa, most of the people he bought were Africans. The book is full of the perks provided for top African politicians by Lonrho: a palace (and much much more) for Banda, the dictator of Malawi; a hospital for Mrs Sadat, wife of the former Egyptian head of state; an education in England for the son of Samora Machel, President of Mozambique; an account at a Saville Row tailors for President Moi of Kenya; endless favours for former President Kaunda of Zambia and Joshua Nkomo – who, for so long, looked like fulfilling Rowland’s ambition for him to become Prime Minister of Zimbabwe. Nkomo learnt the dangers of this largesse the hard way in 1984. He had criticised the Government of Zimbabwe, to which Rowland was at that time making advances, for massacring his supporters. Nkomo’s outburst was, as far as Tiny was concerned, an intolerable display of free speech. He was suddenly told that the bill at his usual London watering hole, the luxury Howards Hotel, wasn’t being paid any more and had to retire to a dingy bedsit.
In Africa, in the twenty-five years of Rowland’s stewardship, Lonrho paid out millions of pounds in commissions, bribes and inducements. Back home in straight old England, where Lonrho kept its registered office, this was regarded on the whole as ‘acceptable capitalism’. To the not altogether sophisticated minds of City of London experts on African finance, it didn’t seem possible to get anything done in Africa without paying bribes. But Bower’s relentless researches prove that Rowland’s capacity for buying people was no where more generously and effectively applied than in England. Lonrho’s generosity to Tiny Rowland himself, for instance, knew no bounds. Rowland fostered an ‘austere’ image. He avoided the trappings of opulence which so obsessed Robert Maxwell. Visitors to his offices at Cheapside would be lucky to be offered a cup of tea. His austerity, however, did not extend to his salary, his dividends or his share options. Bower reckons Rowland ‘earned’ £100m from Lonrho. That’s not counting little extras like the refurbishing of his home at Hedsor Wharf on the Thames, which Lonrho had bought for him in 1968. The improvements were expected to cost £73,500. When they were finished in 1971, they had cost £323,589. Part of the increase was due to a bridge over a tributary of the river, which cost £40,000. The austere millionaire was so taken by the bridge that he ordered another one.
Rowland’s inexhaustible passion for himself led him to surround himself with people he could rely on, people he could reward. The most well-connected of these was the Hon. Angus Ogilvy, who was overcome with gratitude when Rowland fixed him up with ‘a slice of the action’ – a share option scheme which meant he never had to worry about money again. ‘I wish I felt able to begin to thank you for all you did,’ grovelled Ogilvy. ‘The option, the cases, the flat – everything – but it’s impossible. I only hope you realise how grateful I am. It’ll make a tremendous difference to my personal life.’ An even more tremendous difference was made to his personal life the following year when Ogilvy married Her Royal Highness Princess Alexandra, a cousin to the Queen. Rowland, the scourge of the Establishment, was absolutely delighted with the match, and much enjoyed his many invitations to tea at Thatched House, Richmond. He joyfully extended his favours to other members of the Royal Family, such as Princess Margaret, who he once flew free to her hols in Sardinia.
Reminding Ogilvy all the while of his secret share options, signed and sealed in the Bahamas, Tiny retained the services of the royal husband for 12 years – until finally Ogilvy was forced to resign in case anyone found out that Lonrho was breaking sanctions against the illegal regime in Rhodesia. The Foreign Office took the view that although sanctions-busting was all very well for oil companies and banks, it was not very wise where a member of the Royal Family was concerned. Ogilvy and Rowland parted like sorrowful lovers. Today Ogilvy’s Who’s Who entry does not mention his long association with Lonrho.
Ogilvy was educated at Eton. Another habit of the anti-establishment Rowland was to surround himself with old Etonians. They should put up a plaque to him at Eton College, in recognition of his consistent choice of Old Etonian directors. They included the first of his chairmen, Alan Ball, who had a free Lonrho house; an early director Gerald Percy, a direct descendant of Hotspur (he had a free house too); the former MI5 officer Nicholas Elliott, whose finest hour in the British secret service was to denounce Kim Philby in time for the spy to run to Moscow; and Paul Spicer, Rowland’s devoted bagman, who is well known to every journalist who ever asked a question about Lonrho and had it suavely deflected. But Tiny’s greatest catch was perhaps his second chairman. He was looking for someone who might fit in with his company’s image as non-racist, pro-African and hostile to the illegal Rhodesian regime of Ian Smith. He lit upon Duncan Sandys, a slow-witted, racist, pro-Rhodesian right-wing Tory MP, described by another director as ‘bent ever since he was a lower boy at Eton’. Sandys was interested in chairing Lonrho for one reason only: the remuneration. He was already a consultant to Lonrho at a salary of £51,000. Being chairman would mean giving that up. Sandys demanded, and was paid, £130,000 compensation, on top of his new chairman’s salary of £38,000. The ‘compensation’ was paid through the Cayman Islands to avoid tax. Sandys sucked the Lonrho fruit dry until he had to resign for fear of scandal. Yet he was not top of the Lonrho Largesse League. That honour undoubtedly went to Sir Edward Du Cann, the oleaginous Tory MP for Taunton, who joined Lonrho soon after his bank, Keyser Ullman, had helped Lonrho out of a jam with loans that other more patrician banks would not stomach. Keyser Ullman went bust in the property crash of the mid-Seventies leaving Du Cann with debts in the region of a million pounds. By coincidence, a million pounds was just about what he got for years and years of applying his eloquent tongue to Lonrho’s benefit.
Rowland’s capacity for buying people is not his only quality exposed here. He showed the respect which tycoons of his ilk always show to the constitutional foundations of capitalist democracy. So great was his belief in the independence of the judiciary that he persuaded the South African Government to drop a prosecution for fraud against Lonrho directors in exchange for facilitating an important political meeting with African leaders. When Tiny’s friend and patron Hastings Banda wanted to prosecute a trade unionist for the shocking crime of opposing the Government of Malawi, the prosecution was led by Anthony Beveridge QC and masterminded by the solicitor Anthony Nich-Smith, both time-honoured and faithful lawyers for Lonrho. As soon as a Scotland Yard detective finished his report after an inquiry into Lonrho, Rowland snapped him up as a security officer. The freedom of the press was best ensured by buying it. When he bought the Observer, Tiny naturally expected that the paper would be at the service of Lonrho’s business interests. He helped this along by appointing the paper’s Africa correspondent.
The real value of Bower’s book is signposted by its sub-title; ‘a rebel tycoon’. Rowland’s greed and lust for power forced him into conflict with patricians who had been practising greed and lust for power long before Tiny was defending Hitler at his Hampshire school. The encrusted imperialists who had been looting British Africa for a century took unkindly to the ruthless entrepreneur jet-setting round Africa flattering the black leaders into new deals, made at the expense of the old Establishment which denied Tiny the access he secretly craved. However much he surrounded himself with old Etonians, he could never surmount his reputation as a rebel. His testy reaction was to fight his rivals with a ferocity which grew into the great passion of his life.
In the battles which followed, the main casualty, on both sides, was the secrecy on which they depended. Tiny Rowland’s own approach to freedom of information was brilliantly summarised in an answer he gave to Department of Trade investigators who asked him about bribes. When he tried his customary, self-denigrating flannel, an inspector interrupted: That’s no answer.’ Tiny snapped: ‘It’s my business. That is my answer.’ Rowland’s vendetta with established British capitalists cracked open previously impenetrable bunkers of secret information. Nowhere was this clearer than in the row over sanctions against the ‘illegal’ white minority regime in Rhodesia from 1966-79. Throughout the period in which he was wooing black African rulers – telling them, among other things, that he detested the racialist Rhodesian regime – Rowland maintained his mining and other business interests in Rhodesia, and consistently broke sanctions. His business rivals, infuriated by this hypocrisy, made the mistake of exposing it. The Department of Trade inspectors investigating Lonrho in 1975 and 1976 were provided with inside information about Lonrho’s sanctions busting.
Tiny Rowland exploded. He knew, and could prove, that his own sanctions-busting was is nothing compared to that of the Big Boys in British industry, especially the oil companies. On 7 July 1976, the day the second report on Lonrho was published by the Department of Trade, Tiny issued a devastating letter to the newspapers demonstrating how Shell and BP were transporting oil into Rhodesia, not just breaking sanctions but keeping white Rhodesia afloat. The allegations were immediately and vigorously denied, but the cat was out of the bag. Tiny’s letter led inexorably to the 1978 Bingham Inquiry into sanctions-busting. Bingham was obliged to concede that the oil companies had indeed been flagrantly breaking sanctions, and that the Government knew all about it.
Rowland’s feud with the City and the oil companies over sanctions was a prelude to the greatest battle of his life: the contest for Harrods. His own attempts to buy the store were constantly frustrated by government references to the Monopolies and Mergers Commission, while the bid of the Egyptian brothers Mohammad and Al Fayed was almost instantly accepted. Rowland’s multi-million pound campaign on this matter brought to the public an unending stream of delicious and scandalous information, at least some of which was demonstrably true. His central claim was that the Thatcher government favoured the Fayed bid largely because of the brothers’ connections with the Sultan of Brunei, and that the Fayeds’ claims were accepted without the most elementary inquiries. The Fayeds’ bid, backed by merchant bankers Kleinwort Benson and the legendarily expensive City solicitors Herbert Smith, claimed that the Fayeds came from an ancient Egyptian aristocratic family, that they had a fleet of liners, that they owned oil wells and the Rockefeller Plaza and had hundreds of millions of pounds’ worth of construction work on order from one of Britain’s top builders, Sunley. John MacArthur, a senior director of Kleinwort Benson, told millions of people watching Channel Four’s Business Programme that the Fayeds’ business empire was worth ‘seven billion dollars’.
Now, everyone knows that many of the Fayeds’ claims were lies. That we know this from DTI inspectors is almost entirely due to the remorseless campaign of Tiny Rowland. I was one of the lucky journalists who, in the late Eighties and early Nineties, received, unsolicited, a steady stream of glossy pamphlets whose most disarming quality was their irreverence. Rowland’s claims about the Fayeds went far further than the grumbles of a disappointed businessman. They went to the root of the ‘business ethics’ which dominated the Thatcher decade. He concentrated on three events: 1. 29 January 1985. The mega-rich Sultan of Brunei visited Margaret Thatcher at 10 Downing Street. Thatcher was worried about the Sultan’s removal of five billion dollars from London to the United States. She persuaded him to return the money to Britain. With the Sultan on that visit was a man who described himself as his ‘private and personal adviser’, Mohammad Fayed. 2. 12 March 1985. Secretary of State for Trade Tebbit met officials from Kleinwort Benson, Herbert Smith and the Office of Fair Trading to discuss the bid for Harrods. 3. 14 March 1985. Mohammad Fayed was in Downing Street again for a meal in honour of the visiting President of Egypt, Hosni Mubarak. Fayed sat next to Carol Thatcher. Later that day, Tebbit announced that the Fayed bid for Harrods would not be referred to the Monopolies Commission.
It is fair to say that Fayed claimed by the time his bid was accepted that he had cut off all links with the Sultan. Both men say, as Bower does, that no one has ever proved that the money for Harrods came from the Sultan. No one has ever proved it didn’t, either. What has been proved beyond doubt is that the fantastic Fayed claims underwritten by Herbert Smith, Kleinwort Benson, Norman Tebbit and Sir Gordon Borrie could have been disproved by a single cub reporter with a telephone.
Which reporter was there to make the calls, however? Tiny Rowland naturally ordered the Observer to expose his rivals, and the Observer did so. Not everyone there approved. If the newspaper was part of a business which benefited from the exposing of business rivals, did not this present precisely the conflict of interest which investigative reporters seek to expose? The problem was a perennial headache for the Observer editor, Donald Trelford. On the whole, on this and many other issues, he succumbed to his paymaster, and he is strongly, and I think fairly, criticised by Tom Bower for doing so. Although Rowland’s campaign against the Fayeds exposed the lies they told to the Department of Trade and asked some very important political questions about why those lies were accepted by City and government, the source of the information was so plainly polluted by self-interest that the information itself, when published in Rowland’s newspaper, lost its sting.
The 12th Earl of Airlie was right all the time. But in the great pool of chaos and corruption exposed in this book, there are a few lights faintly glimmering. Anthony Howard resigned as deputy editor of the Observer when he felt the paper was becoming entirely an instrument of its owner’s business ambitions. So did David Leigh, the paper’s investigative reporter, who refused throughout to touch stories sourced by Rowland, even if he thought they were true. The clearest proof that all is not yet lost is this book itself.