The House of Fraser

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Marginalia in the House of Fraser archives

After a speculative exploration of the daunting extent of the House of Fraser archives the first task was to find a specific and appropriate area of study and develop what could be called a hermeneutic heuristic, some sort of methodology, or in other words what to try to interpret and how to do it: but where do you start, what do you start with?  The attempted take-over by ‘Tiny’ Rowland’s Lonrho was chosen as a significant, although complex and controversial, crisis ‘period’ in the company’s history, notable for many features, including the ‘resignation’ of Sir Hugh Fraser from the board, what would detail reveal to question the received wisdom?  This period as a useful division also had much commentary surrounding it beyond the archives.

The investigation began by compiling a digital photographic record, which eventually amounted to 440 images of three separate file groups discussed below. After a brief arrangement of the files the intention was to study the background history with a view to formulating a basic ‘research question’, but only a complicated labyrinth emerged minus Ariadne’s guiding thread.

This absence provoked the memory that Georg Simmel once said:

The purpose of maintaining secrecy is, first of all, protection. Most radical of all the protective provisions is certainly that of invisibility. (Simmel, 1906: 441)

Contemporary investigative reporters may have keenly wanted to see the confidential and private correspondence that the archivist can peruse at leisure, the immediate clamour of events (and the need for secrecy) having somewhat abated.  So the investigative thread running through the analysis of this labyrinth is secrecy, with a research emphasis on this in terms of confidential and private correspondence and what these might reveal about the struggle for power.

But examination of the inter-relationships between the documents offers the insight that the language used is highly coded and nuanced.  The colloquy of the Captains of Industry has a formal idiom; but beyond the circumlocution of prepared formal correspondence, where language is circumscribed by ceremonial etiquette: what is the provenance of an unguarded informality that would satisfy the ethnomethodologist and the investigative journalist as a revealing expression?

One of the subtler revelations of archive work, and a specific element of this report in relation to this, are the notes in the margins of the correspondence, and how their character and emphasis can influence the interpretation of a document, or even provide a summary of its initial response.  What this marginalia (possibly invisible to 1980s photocopiers and thus official inspection) can offer is a potential insight into the inner workings of a company where the author — usually the chairman — appends a sotto voce assessment or strategy or some other commentary that can be at odds with (or reveal the machinations behind) the ‘official’ explanation, or that which we have come to regard as such, or some other parapolitical intrigue; or just exhibit character.

Although conscious of some sort of record, It can be expected that on some occasions the authors of these remarks would assume that their notes may never be seen, never brought to the public by inquisitive journalists at a meaningful juncture; or reveal that the pressure of events may have elicited a more candid or forced response, which otherwise we would have no record of.  For some of them we can think of them as cartoon thought bubbles. 

The margins of some of the correspondence referred to below was used by the chairman (and at times other executives) for the purpose of drafting out the reply, and marked to decide upon a strategy of action: in the case outlined below mainly to fend off ‘Tiny’ Rowland.  Although it is also of note that — not unlike a palimpsest — actual documents can reveal what was erased intellectually in terms of strategy, alternate courses of action merely ‘pencilled in’ before red ink is applied.  Close examination of these features (the main narrative which follows is between newly appointed chairman, Professor Roland Smith’s and, ‘Tiny’ Rowland) reveals elements of the positioning and decision-making processes across a time frame — first drafts themselves can also be found in archives — together with the ruminations of those driving the decision-making process.  Such marginalia (1)  has surely been of interest to  archivists in the past. Possibly the reference to Ashraf Marwan (an intriguing parapolitical figure also known as ‘Dr. Death’, who was to feature in the later battle between Rowland and Al-Fayed) may be the first to decipher the House of Fraser’s (HOF) executives attempt to link him to, and thus discredit, Rowland with a view to removing him from the board.  It was not just Tiny who schemed: fire was fought with fire.

But evidence has many interpretations. To an honest researcher examination of this type of archive material must contain the realisation that their interpretation of the stagecraft of management legerdemain and (most certainly in this case) chicanery and subterfuge, requires a working knowledge of Company Law, board room procedures, the complex inter-relationships of a company’s Brokers, Lawyers, Bankers, Public Relations Companies, Shareholders and Merchant Bankers and many other aspects of Big Business, to develop even the capability of understanding of the significance of the material, let alone identify the abuse of power by an conflicting establishment. (2)

Another complementary area of study presents itself here — how is power over a large company obtained and retained or lost: what does this reveal about the character of the people involved? The archive file containing documentation related to the enquiry of the Monopolies and Mergers Commission (MMC) (3)  into the Lonrho take-over in the early 1980s presented an opportunity to pursue this line of enquiry.  Therefore, this report relates to three HOF archive files:

•    Private and Confidential Correspondence by the directors

•    Monopolies and Mergers Commission

•    The Scottish Influence File

These were selected as the appropriate material from which to make an evaluation of the power struggles, stratagems, secrecy and what could be termed revelatory marginalia concerning HOF’s directors, with the view of synthesising this into a narrative with other corroborative information to contextualise a selective narrative of the history of a notorious plutocratic clash.  The purpose here is not to make an exhaustive collation of data, but rather to illustrate the salient features of the battle.

Comparative analysis of the documents which went on to form the basis of the official pronouncements of the MMC (key elements of which were censored) with contemporary Newspaper’s version of events is relevant but highly problematic in this case and would distract from a concentration on the archives — so this study uses only slight reference to this complex area.  In the case of House of Fraser (HOF) and Lonrho the manipulation of the press, particularly the Observer and Guardian, in relation to the later struggle over Harrods with the Al-Fayed brothers, must be viewed in relation to the ownership of ‘rival’ Newspapers and networks of influence within government via PR companies, as each side lobbied for position.

Chronologically this report covers the first part of the ‘era of conflict’ beginning with the resignation of Sir Hugh Fraser in January 1981 and ending with Rowland’s in November 1984 before the onset of his Pyrrhic struggle with the Al-Fayed brothers.

“An Era of Conflict”

At a January 20, 1981 board meeting, in a prepared statement, ‘Tiny’ Rowland referred to Sir Hugh Fraser’s gambling (4) , claiming that many of his gaming cheques had been dishonoured in recent months, questioned Fraser’s fitness to serve as a director of any public company and invited him to vacate the office of chairman. (5)  This was Rowland’s opening gambit in his attempted take-over.  The MMC account of events are that at a meeting at Troon on January 22 a reconciliation between the two seemed to have been effected, but, that the following day Fraser met with certain of his fellow directors but declined to give details about the debts or explain the circumstances whereby he had become reconciled to Rowland.  No reconciliation was effected here and at a board meeting on January 28 resolutions carried by a large majority terminated Fraser’s appointment as chairman and replaced him with Professor Roland Smith.  By February 27 Lonrho’s offer was on hold, having been referred to the MMC, and would eventually be declared to be contrary to the public interest. Rowland and Lonrho’s Duncan-Sandys resigned on December 31, 1984 as the House of Fraser was purchased by the Al-Fayed family in a £615 million deal.(6)

Having noted this background we will now proceed to explore the archive.

An exchange of words: ‘rancour and personal attacks ‘

The archives have a letter to Professor Smith from Rowland (Rowland, 1982) where Rowland tries to sack him and states that Harrods (the most profitable part of the business) should be de-merged.  To avoid confusion Professor Roland Smith is referred to as ‘Smith’ and Rowland Walter Rowland (born Rowland Walter Fuhrhop) is referred to as ‘Rowland’ ot ‘Tiny Rowland’. A few facsimile exchanges occurred the day after as the directors write a draft response arguing that the matter is discussed “without the rancour and personal attacks on the chairman” (Milligan, 1982).  Although Rowland seems to be democratically acting in the interests of shareholders and concerned about the amount of the dividend, it should be noted that as major shareholders in HOF Rowland qua Lonrho stood not only to gain from, but tried to set the level of the dividend (this caused the first falling out).(7)

Tiny Rowland’s protracted correspondence of the period (8) , mostly to Smith, complains of a lack of access to company documentation that he and Lord Duncan-Sandys feel is deliberate. (Rowland, 1982a)  Possibly the HOF directors were dragging their feet in response to his renowned assertive tone, but Smith has put a large question mark in the margins and singled out two of Rowland’s ten demands, which suggest his suspicion is that Harrods is as an asset about to be stripped.  These are (vi) “management accounts for the last five years (identifying Harrods — the store operations).” And (viii) “Papers and financial information considered in February 1981 or prepared more recently on the de-merger of Harrods…” This Rowland states will be held in strictest confidence, although he offers the ominous proviso that “we may wish to take professional advice.”

Although no reply had been sent, a week later Rowland can write to Smith that:

Whatever may have been the position in the past, the recent resolution commanding a large majority, places upon the whole board the duty to consider demerger proposals for Harrods. (Rowland, 1982b).

This also tells us that Smith cancelled the November board meeting (the October meeting was also cancelled: Smith repeatedly buys time).  Rowland states that this “is not a matter of my tanks on your lawn,” adding that the great plutocrat’s actions are motivated by propriety and a duty to the shareholders.  Rowland has also discovered a newspaper report of a HOF special committee of directors working with Touché Ross to look at the de-merger from which he seems to have been excluded.

A letter from Len Berkowitz of Linklaters & Paines (HOF’s solicitors) reveals that Berkowitz believed that Rowland (always playing to the gallery) was engaging in a stratagem here:

Having regard to the tenor of the letters of the 3rd and 10th they seem to me to have been prepared in a way which would enable them to be distributed. (Berkowitz, 1982)

This letter tries to represent the position of Smith, Warburgs and the Solicitors who appear entirely at a remove from both Rowland and Duncan-Sandys (Berkowitz apologises for dictating the letter while rushing for another important meeting).  A draft of the letter aiming to mollify Rowland (according to Smith’s November 15 response, Rowland had previously hand-delivered the November 3 letter ‘in front of the television cameras’ at an EGM, he had forced) seems perfectly reasonable but meets with a five-page assault from the ex-member of the Hitler Youth, the margins of which Smith covers in retaliatory blood red ink.  Again Rowland is trying to force the issue of the Harrods de-merger — hindsight tells us that his manoeuvrings were ultimately in vain as the coveted prize would go to Al-Fayed a few years later.

The reply from the chairman aims a fusillade, targeting the ‘security of board information’ i.e. Roland’s unreliability, and nails his colours to the mast:

I cannot possibly ignore the persistent and continuing conflict in recent years on many issues between House of Fraser and Lonrho, whose actions you have endorsed.  Our concern is that having regard to continuing conflict between the two companies your duties as a Director of both companies are often incompatible.  This must continue to be a factor of some significance in regard to your requests for additional information, until it is clear that the era of conflict is over, and notwithstanding that Lonrho has indicated its present intention to abandon plans to make a direct bid for House of Fraser. (Smith, 1982)

This is a pounce by Smith on a few levels, notably on the question of whom Rowland might consult, it reverses the legalism and lays a trap: will they be different from Lonrho’s directors?  Rowland’s reply can only play on the wishes of the shareholders:(9)

I am disappointed that you should suggest that there now exists an “era of conflict”, as you describe it, between Lonrho and House of Fraser and I cannot accept that my duties as a director of those companies are incompatible.  Whatever may have been the position in the past, the shareholders have requested the board to formulate proposals for the separation of Harrods. All directors now have a common interest in putting forward constructive proposals in accordance with the shareholders’ wishes. (Rowland, 1982c)

On the question of who Rowland might consult, his reply was initially uncharacteristically reticent: he considers it a “private matter,” but then uses the opportunity to counter with the information that “independent Counsel has been instructed” to advise him on “inter alia, my right of access to company documents.”  Note the somewhat menacing use of Latin.

We gain an insight into company hierarchy here because Smith must have asked the advice of Lord Garmoyle of S. G. Warburg (Smith was a Warburg’s nominee to the board) HOF’s financial advisers who, after consulting HOF’s brokers, Cazenoves, wrote to outline the possible response strategies to maximise support for the board.  Here the advent of the ‘day-glow’ high-lighter pen helps Smith pick out Garmoyle’s acknowledgement of Rowland’s hostility and ‘confrontation’ and it is Garmoyle who offers the draft wording of a boardroom resolution:(10)

In the light of the inappropriate manner in which Lonrho has sought to debate its differences of opinion with the board of House of Fraser and the damage that Lonrho’s methods entail for House of Fraser, Lonrho should seek to resolve any future differences in a proper manner through Board discussions.  In the event that it is not able to do so it should sell its holding in the company. (Garmoyle, 1982)

Rowland had the great advantage of being able to speak as a director of both Lonrho and HOF, and seems to have exploited it.  The letter Smith wrote the day after Garmoyle’s advice notes that, having removed Hugh Fraser, Rowland tried to have Smith removed from the board and turns this around to good effect using it as another weapon against Rowland.

For one recent aspect evidencing a continual conflict between House of Fraser and Lonrho I need only refer to Lonrho’s attempt to have me removed as Chairman contrary to the interests of House of Fraser as perceived by all the directors (excluding yourself and Lord Duncan-Sandys) and by a very large majority of the shareholders who returned proxies.  My own involvement in that issue is immaterial.  I have no doubt that Lonrho had its reasons for seeking my removal although the published reasons both for seeking my removal and for withdrawing the Resolution struck me as irrational.  (Smith, 1982a)

The point here is that on this issue Smith has established evidential conflict of interest.  Rowland comes back with a December 23 letter maintaining that everything Smith said was “an excuse” for denying him documents and information and was “illogical’.  Again, the “era of conflict” is denied by Rowland, although the specifics of his many requests (league tables of profits, analysis of stores by turnover, profitability tables etc., all unrelated to Harrods de-merger) do come across as someone looking for assets to strip.  Smith on the other hand is keeping Rowland (who wanted control of it) at a distance from the Working Party set up to look into the de-merger, until it delivered its 360 page report.  What would be of interest here is to know what off-the-record conversations Smith might have had — and by the same token to whom was Rowland speaking to: Hugh Fraser?

After the Christmas break Smith replies three weeks later.  This makes quite a perceptive point on Rowland’s character: (11)

…you do not appear to recognise the possibility of there being any problem in attempting to serve two masters. (Smith, 1983b: 2)

Rowland replied muddying the waters with the ironic introduction of the arcane differences between Scottish and English law.

A ‘Strictly Private and Confidential’ plan by Maclay, Murray & Spens seems to have been the starting point for the PR propaganda battle and the attempts to anticipate what moves Lonrho, now ‘the opposition,’ would take, this is very heavily notated in the margins, one quite indistinct almost indecipherable note seems to say this:

If the Inspector has reported & links RWR  to Marwan & Funaro, should we not seek to remove them from the board.  What does this do to the retiral by rotation.  If the inspector has not reported I think we should consider the use of our knowledge. (Maclay, Murray & Spens, 1984: 3)

Smith is holding some trump card (“our knowledge”) in reserve here.  The 1984-5 inquiry conducted by John Griffiths QC, concluded that Ashraf Marwan was acting as a front-man for Rowland.  It is very likely that the reference to ‘RWR’ this to Rowland, (see note 7). There is a list of HOF shareholders that contains the name, Mrs Adriano Funaro (listed with 1,200,000 shares) hidden in the archive. Possibly Smith is intimating these are the property of someone else. Smith also feared that some directors would be forced to retire by normal procedures inadvertently letting in more of Rowland’s men. A scrap of paper with his notes on the AGM suggests that Duncan-Sandys could be got rid of via this procedure thus weakening Rowland.

In connection to Marwan, it has also been stated to a Parliamentary Commission that:

I should explain that Ashraf Marwan was the son-in-law of the late President Nasser, and had been head of security, intelligence and information in Egypt. He had been trained by the KGB. He was therefore a man of great skill in intelligence, counter-intelligence and disinformation techniques, and of the utmost influence and power; this influence and power continued after President Nasser’s death. He remained in a position to produce or obtain whatever false documents or information he wished or to arrange for the destruction of any documentation. I know that he used that power and influence to assist Mr Rowland in his attack on the Fayeds by manipulating information and evidence so as to ensure that false and damaging material was produced to the Inspectors. (Hansard, 1996)

Letters from Marwan (not to any HOF executive) outlining his intentions to buy shares are in the archive. Marwan  (who owned 5% of HOF) sold four million HOF shares to Lonrho in November 1984 as a last ditch attempt in the take-over.  (Cornelius & Pagano, 1984) Marwan, Rowland’s ‘business associate,’ was to surface again in Rowland’s 1989 battle with Al-Fayed.  In an attempt to disrupt Rowland’s Lonrho meeting at a key stage, Al-Fayed aimed to link Rowland to Colonel Gaddaffi (then a bête noire) and illicit arms dealing via Marwan by using Ian Greer who inveigled the MP Neil Hamilton to put down an Early Day Motion (which could be quoted by the press) on Marwan in the House of Commons. (Leigh & Vulliamy, 1988: 100-101)  So this is perhaps Smith planning the same linkage to discredit Rowland.

By May 1984 Rowland had not given up and was as intransigent as ever, finally rolling the tanks onto the lawn with the attempt to increase the number of (Lonrho-connected) directors on the board — thus effecting the take-over it had undertook never to do, while the MMC bureaucracy ruminated. In confidential letters, Smith wrote to Norman Tebbit, then Secretary of State for Trade and Industry to inform him that the MMC decisions were being circumvented by Rowland’s attempt to increase the number of HOF directors from 18 to 25, with the future 12 new directors all members of Lonrho or who had connections to the company.  Tebbit would later have to make a DTI decision on this. (Smith, 1984)  A month later Smith uses the Marwan card in a letter to Tebbit (‘in strict confidence’) that exposes that Marwan had built up a stake in HOF after Lonrho initiated the de-merger, that the merchant bank had lied about this and enclosed the court judgement for his perusal. (Smith, 1984a)

Rowland tried a few ruses.  A Telex of May 15, 1984, from HOF shareholder, Jack Hayward to Smith had contrived to allege that:

“Your action clearly confirms Lord Garmoyle’s disgraceful but obviously truthful statement that your present Board would rather see the company destroy itself than come to any sort of accommodation with Lonrho.” 

To which Smith wrote in the margins:

‘Crap.’

Hayward, in a May 18, 1984 letter to Smith, ostensibly to offer a rapprochement, quotes Garmoyle’s statement on the war of attrition, this time noting that those who heard it had gone on oath to the MMC inspector John Griffiths QC, this may have provoked Smith’s letter to Tebbit.  Although a reply to Hayward tries to win him over by blaming Rowland for any inertia in the commercial development of HOF because of the internecine strife, Hayward would later propose some of the names of the new directors (possibly at the behest of Rowland).(12)

With leaks to the press mounting, Smith’s subsequent letter to Rowland notes that deals were desperately being struck.  Lonrho were ready to agree to drop the two legal actions outstanding against House of Fraser but more important Lonrho was ready to drop its intentions to de-merge Harrods.  Smith seems to have anticipated that Rowland’s ‘readiness to trade the Harrods for the four or five board candidate’ suggested by Hayward could have led to the de-merger being put back on the table.  This elicits cognitive dissonance and the projection of blame and then open attack in Rowland’s letter, and here there is not just scribbling in its margins, someone has furiously scribbled all over the letter which alleges ‘panoramic untruths.’  But something turned up.

A five-page dossier (13) dated November 5, seemingly written by Smith, outlined a meeting with Mohammed and Ali Al-Fayed.  This was “the first meeting” after introduction of Kleinwort Benson’s John MacArthur, who mentioned a “Middle East client,”  “over dinner on August 7th 1984.”  Via the Al-Fayed brothers Smith probably knew that Rowland was planning to sell his HOF shares by October and that this would be his undoing. The HOF directors, excluding Lonrho directors, had gathered on November 5 after meetings with the éminences grises at Warburgs and Cazenoves:

Mohammed Al-Fayed did all the talking. He said that he was negotiating with Mr. Rowland […] The theme was very much — “Professor Smith you must be sick to death with Mr Rowland — here is an opportunity to get him off your back — I am sure you will support us.” […] Lonrho were not aware of any negotiations or dealings with House of Fraser. In the morning session Ali Al-Fayed expressed severe criticism of Dr. Marwan.  “ He is no Doctor — his father was President of Ciaro University and he was given a degree.” (Smith, 1984b)

In a matter of days Rowland would resign from HOF and turn his destructive rage on the Al-Fayeds, but this is beyond our study.  We move now to make some concluding remarks.

Conclusion

How do the Captains of Industry obtain and maintain power over a company? Can the answers be found in what is deposited in an archive? Is it sufficient to think about power in a top-down manner?  The people on whom, and in relation to whom, power is exercised are an indispensable part of a company, but have no real voice in the archives.  One might search in vain for an analysis of how the workers —indoctrinated with a HOF’s quasi-feudal, ideological mélange of authoritarianism, thrift, the protestant work ethic, uniformity and uncritical obedience, and who had also invested their lives and savings — felt about their efforts being squandered on the roulette wheel and in acrimonious vendettas. Smith estimated that some £8m had been lost because of the infighting.

Any study of ‘communicative planning’ must take an interest in the pathology of the planners manipulative lying along with their ‘truth-telling’.  We must be interested in illegitimate claims to authority alongside legitimate claims, since lying and abuse of authority are both abiding aspects of communicative interactions in the supposedly democratic settings that enable managerialism (and poker). We can use the HOF archive to enable the analysis of the formation of the ideology of exaggeration, falsehood, and the selective manipulation of information whereby Authoritarian personalities (continue to) mythologise themselves.  The whole point of ‘communicative’ analysis is to assess how the planners control affected people’s information and (lack of) understanding in actual practice (both theoretically and empirically).  Here what is in the margins deserves to be in the mainstream.

An exploration of the differences in political orientation of Fraser, Smith, Rowland et al, who were all of the right, should have been included but would perhaps have taken us away from a scrutiny of the archives.  Similarly a focus on twentieth-century debates over the relationship between language, knowledge, and power; how language operates in several canonical political theories (Locke, Rousseau, Nietzsche) could have been entered into but would have left less space for the archives contents.

The period (aside from the quaint technology) has a fin de siecle aura around it: and certainly marked the nadir of Fraser and Rowland, whose ‘friendship’ remains something of an enigma.  Although we might put this down to the rise of managerialism, the all-consuming nature of the internecine fight makes took place during the assault on trade unionism and the end of industrial relations, the advent of ‘human resource’ management; the managerialisation of the public sector, including the managerialisation of universities or the overall tendency to lionise ‘management’ as a solution to all types of social/economic ills.

In the work ‘The Managerial Revolution’, Burnham […] discovered a social phenomenon that the Second World War was a transition from capitalism to managerialism. In his view, a new social class—the managerial class was emerging, and trying to replace the old ruling class, i.e. capitalists. He shared Marx’s notion of class struggle, considering that this transition was a class revolution. Yet, from an orthodox Marxist perspective […], the ruling class must be supported by its correspondent ideology—the ruling ideology. Namely, if our ruling class is no longer capitalists but managers, it then implies that our ruling ideology is by no means capitalism, but managerialism. (Hsu, 2003: 3)

Of course there is more to Burnham than that — did he not invent, rather then discover?

Rowland’s world is an illusory vested interest pragmatism, primitive acquisition hiding behind noblesse oblige towards the shareholders. Rowland’s letters are almost entirely animated by a monomania of what should be to the exclusion of matters related to the actual running of the Company.  Rowland, DuCann and Duncan-Sandys were, to an extent, maverick anti-establishment figures redefining the meaning of greed and indulging in the luxury of utter recklessness.  Edward Heath’s memorable phrase “the unpleasant and unacceptable face of capitalism,” really laments the non-existence of a putative gentlemanly capitalism.(14)   It may be profitable to relate Rowland to the work of the Frankfurt School, particularly in reference to Adorno’s (1950) ‘The Authoritarian Personality’, with regard to its conceptualization of nine dimensions of authoritarianism. These are:

*Conventionalism: rigid adherence to conventional middle-class values
*Authoritarian submission: an uncritical attitude towards idealized moral authorities of the group
*Authoritarian aggression: the tendency to condemn and punish those who violate ‘conventional’ values
*Anti-intraception: opposition to the subjective, the imaginative
*Superstition and stereotypy: the belief in mystical determinants of fate and the disposition to think in rigid categories
*Power and toughness: a preoccupation with dominance and submission, the identification with power figures
*Destructiveness and cynicism: generalized hostility
*Projectivity: the projection outward of unconscious emotional impulses
*Sex: an exaggerated concern. (Adorno, 1969: 255-257)

The 1980s might, prima facie, qualify as an anti-managerial era, when those who advocated free market regimes and mavericks were in power — but they did not operate in a vacuum.  It is difficult to see the meta-theory of ‘efficiency’ or the Weberian tradition of ‘goal rationality’ at work here — yet the conditions of the employees of the House of Fraser were by no means the worse, they seem patrician: so these values are preached in terms of controlling the work force and traduced in the practice of the owners private lives (Sandys is another case in point here).  But it is an easy task to identify Veblen’s pecuniary emulation, conspicuous consumption, industrial exemption, vicarious leisure and consumption in the character of Fraser and Rowland.

From the perspective of the power structure researcher, Mills’ trilogy (The Power Elite, The New Men of Power and White Collar) still has an astonishing relevance and freshness in many of its characterizations of how the ‘high and mighty’ operate.  The private and confidential correspondence is bristling with volatile expressions that, in Rowland ascends to a plateau of malevolence which illustrate perfectly Mills’ terms such as “the warlord”, “the higher immorality,” “the power elite,” “crackpot realism,” and “organized irresponsibility.”

notes

(1) There is another classification of marginalia which we could term ‘fragmentary’ i.e. thoughts are recorded on little scraps of paper which contain, usually hand-written addendums and although appearing somewhat extraneous, may actually be indicative of central rather than marginal concerns. They may even have been passed around. All correspondence is essentially drawn from shorthand notes by a secretary or Dictaphone recordings by the directors, that might still exist, along with diaries and internal memos. What is absent from the files are any record of telephone conversations.

(2) There is also the problematic of whether the researcher simply goes along with the received wisdom of official accounts — which in this case was subject to manipulation.

(3) The MMC is now the Competition Commission and has its own detailed record of the proceedings which is available on-line.

(4) According to Veblen the gambling propensity is another subsidiary trait of the barbarian temperament and the predatory discipline, one form of the animistic apprehension of things. (Veblen, 1994: 276-277).

(5) As a result of previous mounting gambling debts Fraser had sold SUITS (Scottish Universal Investments) to Rowland’s Lonrho (The London Rhodesia Company) in 1976 giving the conglomerate chief a 30% stake in HOF from which he was to mount his take-over. TIME magazine noted that Fraser could be frequently seen in the casinos of London and Monte Carlo, always at the roulette wheel, and lost some £250,000 at Ladbrokes playing back to back tables. In a scolding report, the London Stock Exchange accused him of “lack of judgment” and “inefficiency and ignorance of financial matters” in his running of the company, but at the same time it cleared him of attempting to use privileged information for personal gain. (TIME, 1976)

(6) This précis is drawn from the MMC diary of events: Fraser sold his shares to Rowland to again cover his gambling debts.

(7) The main elements in the earlier dispute can be summarised as follows: (a) Disagreement about the level of HOF’s final dividend for 1979/80 and the composition of the board, culminating at the annual general meeting in June 1980. (b) Disagreement about the appointments of Professor Smith as deputy chairman in place of Rowland, and also about the simultaneous establishment of an executive committee from which Lonrho was excluded. (c) A simultaneous disagreement about the granting of service contracts to the executive directors and to Smith. (d) The attack by Lonrho directors at that time on Hugh Fraser’s fitness to be chairman of HOF, their subsequent reconciliation with him at the meeting mentioned above, Fraser’s removal from the post of chairman by the other HOF directors, Lonrho’s cancellation of the proposed sale of its HOF shareholding and its offer on 28 January of 150p a share for the HOF shares it did not already own. In addition to these major issues it was claimed by HOF, though denied by Lonhro, that there was from at least 1980 onwards a deliberate harassment of the HOF management by Lonrho. (MMC, 1985:4)

(8) A May 15, 1984 letter bemoans much the same thing as that from 1982.

(9) It should be noted that this probably refers to the institutional shareholders which included the Bank of Credit & Commerce International and the Bankers Investment Trust.

(10) Rowland had assured Hugh Fraser that his interest in SUITS was simply as an investment. Rowland’s true purpose — a takeover of Harrods through gaining control of HOF — was soon revealed and finally frustrated in the early 1980s when the MMC barred him from acquiring HOF. Instead, Rowland sold (he famously claimed to have merely “parked”) his 30% to the Al-Fayed brothers in 1984. Yet in 1985, the brothers reached an agreement with HOF to acquire the outstanding 65% of the company, in a deal worth some £615m. Rowland counter-attacked with a smear campaign, and even managed to convince friends in the government to launch an investigation into the Al-Fayeds’ finances. The report, completed in 1988, was left unpublished. The following year, however, Rowland managed to obtain a copy and published it in the Observer. Yet no criminal charges were ever brought against them.

(11) It has been asserted that Rowland, when interned in a camp for Nazi sympathisers during the war with his father, acted as a double agent. There were plenty of intelligence connections on the Lonrho board (see note 14).

(12) Al-Fayed alleged that: “A further point of concern stems from the 1984 report of John Griffiths, QC, appointed by the DTI to enquire into alleged concert parties in share dealings in the House of Fraser […] Amongst those suspected of acting in concert with Mr Rowland were Ashraf Marwan, Sir Hugh Fraser and Sir Jack Hayward. The inspector could find no firm proof of a concert party but — after the publication of the report and immediately after the sale of Lonrho’s shares — Lonrho brought [sic] the holdings of those three individuals. One obvious interpretation is that they were acting in concert with Mr Rowland and that there was an agreement between them to the effect that if Lonrho sold its shares then Lonrho would buy out the others immediately, thus protecting them from the prospect of any loss consequent upon Lonrho quitting the scene as a potential bidder for the whole of Fraser.” (Al-Fayed, 1987)

(13) This was prepared by the HOF directors at the behest of their solicitors and it is possible that this was done in retrospect to establish no connivance.

(14) The Hayman/Slimmings DTI report of 1976 had an emphasis on Rowland’s corruption and personal enrichment at his company’s expense. It is possible Heath was more annoyed at Rowland’s reluctance to pay tax rather than Lonrho’s business methods in Africa which included ‘sanctions busting,’ bribery and funding of armed groups such as RENAMO, together with mock attacks on pipelines. (Vines, 1998). Other members of the board included: Sir George Bolton, Bank of England and a board member of the Bank of International Settlements; Sir Edward du Cann M.P chairman of Keyser Ullmann; Nicholas Elliot, a senior department head in MI6; Maj. Gen. Sir Edward L. Spears, chairman of Ashanti Goldfields in 1967, when Lonrho took it over; Sir Peter Youens, of the Colonial Administrative Service in Africa; Alan Ball, son of Sir Joseph Ball, a former M15 member of ‘Le Cercle’ and deputy chair of the secret spy-hunting Home Defence (Security) Executive during World War II.

Bibliography

Adorno, T. W. (1969) The Authoritarian Personality, Harper & Row, New York.

Al-Fayed, M. (1987) Select Committee on Standards and Privileges, First Report (Appendix 63) Letter from Mr Mohamed Al-Fayed to The Rt Hon Paul Channon, MP Secretary of State for Trade and Industry.
http://www.publications.parliament.uk/pa/cm199798/cmselect/cmstnprv/030ii/sp01100.htm

Anon. (2002) The Marwan Mystery, Scallywag. http://www.scallywag.org/diana/chapter-ix.html

Berkowitz, L. (1982) Letter to R. Smith, November 11, HF1 2/3/1/1/1.

Cornelius, A., Pagano, M. (1984) Wrangle over Fraser shares, The Guardian,
December 8.

Domhoff, G. W. (2006) Mills’s The Power Elite 50 Years Later, Contemporary Sociology 35:547-550.
http://sociology.ucsc.edu/whorulesamerica/theory/mills_review_2006.html

Garmoyle, L. (1982) Letter to R. Smith, December 16, HF 1 2/3/1/1/2.

Hansard (1996) Select Committee on Standards and Privileges First Report, Appendix 5, The Khashoggi Affidavit and the Fayed Bribe. http://www.publications.parliament.uk/pa/cm199798/cmselect/cmstnprv/030ii/sp0161.htm

Hansard (1997) DTI Inquiries, June 4.
http://www.parliament.the-stationery-office.co.uk/pa/cm199798/cmhansrd/vo970604/debtext/70604-01.htm

Hsu, S-W. (2003) Beyond Managerialism: Towards An Ethical Approach, Business School of University of Newcastle upon Tyne.

Leigh, D. & Vulliamy, E. (1997) Sleaze, The Corruption of Parliament, Fourth Estate, London.

Maclay, Murray & Spens, (1984) Letter to R. Smith, January 30, HF1 2/3/1/1/2.
Marckus, M. (1985) This bloody Harrods battle, The Observer, March 10.

Milligan, S. (1982) Letter to R. W. Rowland, September 17, HF1 2/3/1/1/1.

Monopolies & Mergers Commission (1985) Lonrho PLC and House of Fraser, A Report on the Proposed Merger, Her Majesty’s Stationary Office.
http://www.competition-commission.org.uk/ rep_pub/reports/1981/fulltext/147c04.pdf

Rowland, R. W. (1982) Letter to R. Smith, September 16, HF1 2/3/1/1/1.

—————— (1982a) Letter to R. Smith, December 7, HF1 2/3/1/1/1.

—————— (1982b) Letter to R. Smith, November 3, 1982, HF1 2/3/1/1/1.

—————— (1982c) Letter to R. Smith, November 10, 1982, HF1 2/3/1/1/1.

—————— (1984d) Letter to R. Smith, May 18, HF 1 2/3/1/1/2.

Shaoul, J. (1998) Tiny Rowland: No longer the “Unacceptable Face of Capitalism”, World Socialist Web Site.

Simmel, G. (1906) The Sociology of Secrecy and of Secret Societies, American Journal of Sociology 11.
http://spartan.ac.brocku.ca/~lward/Simmel/Simmel_1906.html

Smith, R. (1982) Letter to R. W. Rowland, November 22, 1982, HF1 2/3/1/1/1.

———— (1982a) Letter to R. W. Rowland, December 17, HF1 2/3/1/1/1.

———— (1983b) Letter to R. W. Rowland, January 14, HF1 2/3/1/1/1.

———— (1984) Letter to N. Tebbit, May 25, HF 1 2/3/1/1/2.

———— (1984a) Letter to N. Tebbit, June 25, HF 1 2/3/1/1/2.

———— (1984b) Dossier on Mohammed and Ali Al-Fayed, November 5, HF1 2/3/1/1/1.

TIME (1976) Sir Hugh’s Addiction, December 20. http://www.time.com/time/magazine/article/0,9171,911932-1,00.html

Veblen, T. (1994) The Theory of the Leisure Class, Penguin.

Vines, A. (1998) The business of peace: ‘Tiny’ Rowland, financial incentives and the Mozambican settlement, Conciliation Resources.
http://www.c-r.org/our-work/accord/mozambique/business-peace.php

Appendix One House of Fraser Shareholders

A computer print-out of November 28, 1983 lists shareholdings of over 100,000:

Bank of Credit & Commerce International 125,000
Bankers Investment Trust 100,000
Bank of England Nominee Ltd 125,000
Bank of Scotland London Nominee 231,000
Clydesdale Bank Nominees Ltd 1,156,845
Co-operative Insurance Society Ltd 1,274, 260
Mrs Adriano Funaro 1,200,000
Jack Arnold Hayward 2,00,000
Glyn Mills Nominees 4,175,000
Junction Nominees 2,950,000
London Australian & General Property Co. Ltd 6,000,000
Lonrho Ltd 19,939,850
Marine Midland Bank 3,502,800
Max Morel Nominees Ltd 2,000,000
N.AB.A.D. Nominees Ltd 1,975,000
National Coal Board Pension Fund 2,077,311

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