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BRITAIN : Scandal Figure Cites Morality as Motive : Harrods mogul says he is watchdog. Some suggest Egyptian is getting even for failed citizenship bid.

November 05, 1994|WILLIAM TUOHY | TIMES STAFF WRITER

LONDON — The man at the core of the so-called "sleaze scandal" that has shaken Britain's political Establishment is an unlikely player--a self-designated keeper of government morals.

Mohamed Al Fayed, 61, is not even British. He's an Egyptian entrepreneur whose properties include London's most famous department store, Harrods, and Paris' equally celebrated Ritz Hotel. Both landmarks figure in the scandal.

Fayed says he is offended by British ethical improprieties. That is why, he says, he has been leaking information about his dealings with politicians.

"I trust my intervention will be recognized as having brought only benefits to the way in which we conduct public life in this country," he says.

His revelations have forced three junior members of Prime Minister John Major's government to resign. A fourth, Treasury Chief Secretary Jonathan Aitken, has been under fire this week for the way he settled the bill for a two-night stay at the Ritz last year.

Fayed's interest in British politics stems from his bitter battle in 1985 to take over Harrods' corporate parent, the House of Fraser retailing group, from Lonrho, a controversial international conglomerate run by Roland (Tiny) Rowland.

One big issue was whether Fayed had the cash necessary for the $1-billion buyout. He said that he had ample funds from a family fortune in cotton and shipping. Rowland challenged this, calling Fayed and his brothers "phony pharaohs."

Fayed hired public relations firms to leak anti-Rowland stories, and paid legislators to ask embarrassing questions in Parliament about Rowland. He also contributed about $400,000 to the coffers of the Conservative Party under then-Prime Minister Margaret Thatcher. "When Margaret Thatcher wanted a favor from me," he later said, "I was there."

An investigation by the Ministry of Trade and Industry showed that Rowland was right: The Fayed family--Mohamed, his brothers, Salah, 59, and Ali, 57--had no inherited wealth. Instead, they had made their money wheeling and dealing in various construction firms in Haiti, the Persian Gulf and Brunei.

The report concluded that the Fayeds had "dishonestly misrepresented their origins, their wealth, their business interests and their resources" during the takeover fight. But for reasons unexplained, the report was not made public until the Fayeds already had won the takeover tussle. Rowland's supporters said the delay was political.

When Fayed and his brother Ali sought British citizenship, the Home Office, the equivalent of an interior ministry, objected. Fayed reportedly was furious: He had contributed to the governing party, and now it was refusing him citizenship.

He approached Prime Minister Major through an intermediary, saying he wanted the damaging Trade Ministry report about him to be withdrawn, and he repeated his wish for citizenship. But the approach came across, Major said a week ago, as blackmail: citizenship in exchange for not blowing the whistle on Tory politicians who had accepted Fayed's lavish hospitality.

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This week, Fayed charged that Aitken, who was then defense procurement minister, stayed at the Ritz for two days and allowed the bill to be paid by a fellow guest, a Saudi Arabian arms dealer.

Then the Egyptian added to the furor by exposing a ruse that the highly regarded editor of the Guardian, Peter Preston, had used to obtain a copy of Aitken's controversial bill at the Ritz. Preston authorized the forging of a fax under Aitken's parliamentary stationery to ask the Ritz for a copy. Furious Conservative members of Parliament clamored for Preston to be charged with forgery.

While some commentators have called for Fayed to be deported, others noted that many Britons seemed more inclined to share his outsider's view of the scandal than those of the Tory insiders in Major's government.

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