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More on Arthur Maundy-Gregory

Two more reflections on this man's life which so impinges on our noble PM.

Detectives reopen the file on Lloyd George's arch fixer
By Ben Fenton 15/07/2006

Scotland Yard detectives investigating the alleged sale of peerages are studying the historical records of the only man ever convicted under the 80-year-old law forbidding the abuse of honours.

The Metropolitan Police requested that its own file on John Maundy-Gregory, which was transferred to the National Archives in Kew only in 2002, be sent back so detectives could study details of the 1933 investigation.

The documents were retrieved from the archives at the beginning of April and ever since officers have been studying the case of Gregory, possibly the most corrupting influence on British politics in the entire 20th century.

Among those he entwined in a web of huge bribes and dodgy titles was, according to previously unpublished documents in Kew, F E Smith, by then the Earl of Birkenhead, one of the great statesmen of his day and a former Lord Chancellor.

According to a sworn court statement by his own accountant, in 1929 the monocle-wearing Gregory paid Lord Birkenhead, a high-living man without a high income, £20,000 (about £750,000 at today's values) in return for a knighthood being conferred on Julien Cahn, the cricket-loving heir to a furniture fortune. Gregory had charged Cahn £100,000 (£3.7 million).

However, police today are unlikely to find much of use in the file, because Gregory was persuaded by Tory grandees in 1933 to change his plea to guilty and not to name names.

Gregory's cash had gone to both of the main political parties in Lloyd George's coalition government, which was brought down by an uproar over the wholly corrupt 1922 honours list.

In return for his silence, Gregory received a minimum sentence of two months in Wormwood Scrubs and a £50 fine - as well as a £2,000 pension believed to have been paid out of the funds of companies friendly to the Conservative Party.

But Scotland Yard will need to study the case because it is the only such prosecution on record, a source told The Daily Telegraph.

A senior detective, not involved in the investigation, said: "All our investigations rest on case law and they will be looking to see what kind of evidence was gathered and what stuck.

"Especially in a case where there have been no prosecutions for such a long time, you have to look at the precedents."

Gregory was one of the most extraordinary characters of the last 100 years, although he prospered by keeping a low profile and remained discreet even at the moment of his conviction for selling honours in February 1933.

He began his political career as an intermediary between wealthy men wanting knighthoods or peerages and Lloyd George's cash-strapped coalition government in 1918, when he was theoretically a private in the Irish Guards but probably working for the infant Security Service.

As a former actor and theatrical producer, he had built up numerous contacts in London's night-time world and made a living providing the capital's most important hotels with details about their prospective guests as an insurance against scandal and bilking.

This ability to co-ordinate information networks apparently recommended him to Sir Vernon Kell, the head of MI5 - as did the fact that Gregory's father was a vicar in Southampton.

His network of informers in the hotels, nightclubs and theatres of London was next used to help out the struggling Liberal Party.

Approached by Lord Murray, then chief whip, Gregory agreed to work introducing some of the wealthy men he knew to the concept of cash for peerages.

A sliding scale of ennoblement was quickly put in place, with Gregory charging £10,000 (£310,000 today) for a knighthood and £40,000 (£1.24 million) for a baronetcy.

It is estimated that between £1 million and £2 million (£31 million to £62 million) ended up in the coffers of Lloyd George's Liberal Party and his Conservative coalition partners as a result of the cash-for-peerages operations of 1918-22, with Gregory, who handled the majority of the cases, being paid the equivalent of about £3 million a year for his services.

He used the money to buy the Ambassador Club in Soho and the Deepdene Hotel in Dorking, Surrey.

The former was a "fast" place whose habitues included the Prince of Wales and most of London's bored aristocratic young men. The latter was a favoured destination for London businessmen to weekend with their lovers.

Both ran at a loss, but their value to Gregory lay in the constantly running river of gossip and intrigue that passed through them.

It is still not known exactly which peerages, baronetcies and knighthoods are owed to the greasing attentions of Gregory.

But his gravy train ran off the rails in 1927 when a new Unionist government came into power and the party chairman, J C C Davidson, made it his business to block anyone nominated for a peerage who had as much as shaken hands with Gregory.

With his main source of income cut off and his businesses losing money, he switched to the less lucrative sale of foreign honours, doling out Greek, Serbian and Ukrainian honours obtained from the ruling houses of those former sovereign states.

He also sold Catholic orders, most notably knighthoods of the Order of the Holy Sepulchre, which he flogged to gullible and wealthy English Catholics.

In 1930, trouble loomed when the estate of a baronet who had died before receiving a promised peerage sued him for the return of £30,000 (£1.11 million).

Gregory was now constantly on the lookout for money. First, he appears to have persuaded Edith Rosse, the alcoholic ex-actress with whom he had shared a home platonically for 10 years, to change her will. She died mysteriously a few days later, leaving Gregory her entire £18,000 (£666,000) estate.

Then he inadvisedly offered a baronetcy for £12,000 (£444,000) to Lt Cdr Billyard Leake, a friend of Lord Mountbatten, who went straight to dictate a statement to the Solicitor General on Jan 27, 1933.

It was the passing of the 1925 Honours (Prevention of Abuses) Act that left Gregory open to prosecution for his previously legal activities. Within four weeks, he had been charged and sentenced.

He got out of Wormwood Scrubs two months later and straightaway caught the ferry to France. Documents in the National Archives show he had debts totalling £22,000 (£814,000). But he lived very comfortably in Paris before being imprisoned in a labour camp by the Germans in November 1940.

Gregory died the following year, aged 64, rumoured still to be worth millions, but actually penniless.

MI5 still keeps secrets of man jailed for selling peerages
By Ben Fenton 25/07/2006

MI5's personal file on the only man prosecuted for selling peerages is still so sensitive that parts of it remain censored 73 years later.

The papers on John Maundy-Gregory, a flamboyant homosexual who exploited his ownership of a nightclub and a hotel of ill-repute to obtain damaging information about dozens of society figures in the 1920s and 30s, come to an abrupt halt in 1946.

The file's last pages are retained by MI5 under Section 3(4) of the Public Records Act which make it unlikely that they will be seen for decades to come, if ever. The thick file contains details of the investigation of Maundy-Gregory, who had claimed to work for MI5. It shows the establishment's concern about prosecuting a man who knew so much about the shady workings of the honours system.

A memo in 1928 by John Davidson, the Conservative Party chairman, to Sir Vernon Kell, the head of MI5, asks him to halt the shadowing of Maundy-Gregory. It suggests he had so much dirt on so many important people that prosecuting him under the 1925 Honours (Prevention of Abuses) Act was out of the question.

"In view of the fact that neither the Lord Chancellor, the Attorney General and the PM [Stanley Baldwin] believe that a prosecution is practical politics, I don't see any reason for continuing any special measures of surveillance. I wish we could have jugged the devil, but it is clearly impossible."

Eight years later, Maundy-Gregory was facing charges after a clumsy approach to a friend of the future Lord Mountbatten. Despite "practical politics", a court case was inevitable, as is shown by a note to Kell from a deputy who met the Director of Public Prosecutions.

Dated Feb 7, 1933, the note says: "Before any proceedings were set on foot, Downing Street was consulted, and it was only after considerable hesitation that the decision to proceed was taken."

The Attorney General had asked MI5 for information about anyone known to "have been approached by Maundy-Gregory in the past with a view to obtaining Honours through his good offices".

But two days later, presumably after the disgraced middleman had been persuaded by Tory grandees to plead guilty, a different kind of note appears in the MI5 file, which has lain unnoticed since its opening at the National Archives, in Kew, in 2002. "DSS [Kell] saw DPP this morning on this case, and it has been settled that the authorities will not require any information in the possession of this office."

Another document says all MI5 material in connection with an investigation of the peerages scandal by Sir Maurice Hankey, a former Cabinet Secretary, was destroyed at Kell's instructions.

But the most revealing document follows an MI5 interview with Ivan Korostovets, a former Russian diplomat who tried to enlist the maverick Englishman to help in anti-Bolshevik activities. Korostovets realised money raised by Maundy-Gregory for this cause went into his own pocket and his Anglo-Ukrainian Fellowship was a front for further peerage sales.

The Russian discovered that, in the eight years since the 1925 Act stopped Maundy-Gregory's influence, he took £380,000 "without return" and most of those paying for honours they would never get had "cut their losses". He had handled the equivalent of £103 million in today's terms.

Maundy-Gregory served two months in Wormwood Scrubs before moving to Paris where he is reported to have been captured by the Nazis and to have died in 1941.

See also

Arthur Maundy Gregory: A Summary
Victor Grayson
Sidney Reilly
Vernon Kell
Basil Thompson
Zinoviev Letter
Crime Pays
Lords Kaput
Reforming the Lords
Lord Levy - not the fall guy
Lord Levy arrested
Lord Levy - schmoozing Labour into trouble
Sleaze and political corruption
Bankrolling New Labour
David Mills
Berlusconi & Blair
Police investigate loans for peerages
Cash for Peerages Row Deepens
Cash for Peerages : A summary
Cash for questions affair
Ethos of corruption