1. Between October 1996 and October 1998 Mr Kevin Reid worked part-time as a researcher for his father whilst completing an LLB course at Strathclyde University. For the period covered by the complaint (beginning with April 1998) up to October 1998, Mr Reid was contracted to work 20 hours per week for his father on a fixed salary with no provision for overtime or bonuses. The job consisted of reading the Scottish press and following the broadcast media in order to be able to provide Dr Reid with briefings on political developments in Scotland. Mr Reid also provided his father with assistance in drafting press releases and speeches. This work was carried out either from home or in the Strathclyde University Library.
2. Following the completion of his degree course in May 1998, Mr Reid started working for the Labour Party at its Scottish headquarters in Glasgow. His contract with the Party was for 15 hours per week. The duties consisted of assisting the media monitoring unit in producing a digest of the morning press and other media output, which, according to Mr Reid`s statement, involved attendance in the Party offices from about early to mid-morning. Mr Reid`s work for his father (which he continued to do after becoming employed by the Party) then had to be accommodated in what remained of the day.
3. On 12 October 1998, Mr Reid switched to working full-time for the Party and ceased to be employed by his father. His place as his father`s Parliamentary researcher was taken by Ms Hilliard. Dr Reid agreed to waive the usual notice period and continued to pay his son from 12 October until the end of that month. The Fees Office has confirmed that there was nothing irregular about this practice. At the end of May 1999, Mr Reid left the Labour Party`s employment and took up a post in the media.
5. Ms Hilliard has been a Labour Party volunteer worker since starting a degree course at the University of Strathclyde in 1995. She has been particularly active since the 1997 General Election campaign but, although receiving basic expenses, she has never been an employee of the Labour Party. From September 1998 she worked in the Party`s media monitoring unit under the direction of Kevin Reid. Initially Ms Hilliard worked on the morning media briefing but later moved over to producing the analysis of the lunchtime media output. This involved afternoon attendance at Party headquarters.
6. At the start of November 1998, Ms Hilliard took up her employment with Dr Reid, replacing Mr Kevin Reid in his post as a Parliamentary researcher. As in Mr Reid`s case, the contract was for 20 hours per week and, initially, the duties were broadly similar. After a few weeks, however, Ms Hilliard took on the additional task of assisting Dr Reid in handling his constituency mail, following the illness of his constituency assistant. All of this work was carried out by Ms Hilliard from home during the morning.
7. After returning to university in October 1998 Ms Hilliard attempted for a while to combine her studies with both her work for the Party and her job with Dr Reid. This became increasingly impractical and in early 1999 Ms Hilliard sought and obtained from the university authorities a one year voluntary suspension from the degree course.
8. After ceasing to be Dr Reid`s researcher in June 1999, Ms Hilliard took up a similar post with Mr Maxton, but at an increased weekly commitment of 25 hours.
9. The following chart summarises Ms Hilliard`s commitments to the Labour Party and to Dr Reid and Mr Maxton, as well as her academic studies, during the period from April 1998 to September 1999.
10. After studying politics at Glasgow University Mr Winslow took up a post as Mr Maxton`s Parliamentary researcher on 1 June 1998 on a part-time contract for "20 hours variable" per week. In the middle of the same month Mr Winslow started work with the Labour Party in Glasgow, with a commitment to 15 hours per week.
11. Mr Winslow`s work for Mr Maxton consisted mainly of carrying out policy research, involving a mixture of regular daily tasks, ad hoc requests for information and long term projects. In fulfilling these obligations Mr Winslow worked mainly from home, but also occasionally from Labour Party headquarters, drawing as necessary on the facilities of the House of Commons Library. In addition, he kept track of the local print and broadcast media in order to be able to brief Mr Maxton on political events in Scotland.
12. The duties performed by Mr Winslow for the Party included policy research and drafting speeches, as well as contributions to policy forums and manifesto production.
13. In his statement Mr Winslow explained that he spent most of the day at his Labour Party office where he worked on both his Parliamentary and his Party commitments. In addition he would work at home in the evenings and at weekends.
14. In early November 1998, as a result of the increasing workload as the Scottish Parliamentary elections approached, Mr Winslow`s contract with the Party was doubled from 15 to 30 hours per week, on top of his continuing commitment of 20 hours per week to Mr Maxton.
15. Mr Winslow ended his employment with both Mr Maxton and the Labour Party at the end of May 1999 in order to take up a post as a special adviser in the newly formed Scottish Executive.
17. Mr Alex Rowley, General Secretary of the Scottish Labour Party from May 1998 to May 1999, told me that in his opinion Kevin Reid was working full-time for the Labour Party from April 1998 onwards. He added that when he arrived in the office at about 7.45 am. Mr Reid would already be there and that he stayed until between 1.30 pm and 2.30 pm. This impression was confirmed by both Mr John Rafferty, the Labour Party Campaign Co-ordinator between January and May 1999, and Mr Willie Sullivan, the Labour Party`s Scottish Development Officer between August 1998 and December 1999.
18. Indeed, Mr Rafferty went further, claiming that Mr Reid was well into his work when he (Mr Rafferty) arrived at 7.00 am and that he put in "very, very long hours" on the campaign. Mr Sullivan thought that, within these unusual hours, the equivalent of a full day`s work was being done by Mr Reid.
19. Mr Rowley`s belief was that in the period from May to mid-October 1998 (when Mr Reid left his father`s employment), his Parliamentary researcher`s salary was effectively being used to top up his salary from the Labour Party. This, according to Mr Rowley, reflected the reality of Mr Reid`s full-time commitment to the Party. Mr Rowley indicated that the arrangements in question were incorporated into the Party`s budget. Mr Rowley added: "I believe Kevin Reid worked full-time for the Party on a salary which was half-funded by the Party and half-funded by John Reid".
20. Mr Paul McKinney, the Labour Party`s Director of Communications in Scotland in April and May 1998, told me he recalled attending a series of strategy meetings during that period, the purpose of which was to plan the Party`s approach to the following year`s Parliamentary elections. A recurrent theme was the lack of staff and resources for the campaign. In the margins of one such meeting, according to Mr McKinney, Dr Reid had offered his son`s assistance to the Party using words along the lines of "My boy Kevin isn`t doing anything; he could come and help".
21. On this last point, there was some conflict of evidence. Mr Nelson supplied me with a record of a conversation he had with Mr McKinney in which Mr McKinney`s exact words were: "I think his dad [Dr Reid] said `I will help you out. You can have my boy and I will pay for him`". Later in the same conversation Mr McKinney ascribed to Dr Reid the words "... my boy`s not doing anything, he can come in and I will find a way of paying him". Mr Nelson provided me with a transcript of a taped conversation with Mr McKinney in which he confirms the substance of his previous account.
22. Mr Kevin Reid`s involvement with the Party overlapped with Mr McKinney`s for only 3 or 4 weeks, during which time Mr McKinney said he had the impression Mr Reid was an unpaid volunteer. He knew nothing of Mr Reid`s employment arrangements and only discovered much later from the press that in fact, Mr Reid was at that time being paid by his father as a Parliamentary researcher.
23. Mr Rowley, referring to the decision to switch Kevin Reid onto a full-time contract with the Party in October 1998, explained that this had been done at Dr Reid`s request. This followed several telephone conversations between Mr Rowley and Dr Reid in which the latter expressed concern at press articles criticising the Conservative Party for allegedly allowing Parliamentary researchers to be used for campaigning purposes whilst being paid from public funds. (Indeed, Dr Reid had faxed Mr Rowley one such article). Dr Reid, according to Mr Rowley, had been worried that unless his son were placed on a formal full-time footing with the Party, he might be vulnerable to similar accusations. Mr Rowley added that both Ms Annmarie Whyte (the office manager at Scottish Labour Party headquarters) and Mr Jonathan Upton (Director of Personnel at Labour Party headquarters in London) had been party to this arrangement.
24. As Mr Rowley put it: " I discussed employment with Jonathan Upton when creating the budget. I told Jonathan Upton that these staff were funded partly from Westminster research funds and I did explain to Jonathan Upton why Kevin Reid needed to be put on to a full-time salary. I told him what John Reid was concerned about". Ms Whyte informed me, however, that she had not been aware of any discussions relating to the employment of Kevin Reid, or of either of the other two researchers.
25. Mr Rowley stated that Dr Reid had made clear to him that, after Mr Kevin Reid had been made a full-time Party employee, "his researcher`s salary would be available to continue working on the campaign". And he added that Dr Reid had expressly raised with him in relation to his son the regulations prohibiting the use of funds paid through the Fees Office for party political purposes.
26. Mr Rowley told me that, at least during the period of the Scottish Parliamentary election campaign, none of the three researchers "had any spare time at all", and that Ms Hilliard had complained of being "under extreme pressure". Mr Rafferty supported this description of Ms Hilliard`s workload, in that she had worked on a shift basis which was `quite arduous`. This certainly, in Mr Rafferty`s view, amounted to a full-time effort as the campaign reached its height, when all the staff at Party headquarters worked "lots and lots and lots of hours". Mr Sullivan also viewed Ms Hilliard as a full-time member of staff who was not, as far as he was aware, doing work for anyone else at the same time.
27. Both Mr Rowley and Mr Sullivan understood Ms Hilliard to be receiving payment for the Party work. Mr Rowley told me he believed "that Dr Reid`s research money was being used for someone else after Kevin Reid had gone full-time", though he could not recall the specific arrangements put in place for Ms Hilliard. Mr Sullivan believed that Ms Hilliard`s salary was "made up from different sources as well", but he, too, was unable to remember the details.
28. Mr Rowley told me that Ms Annmarie Whyte, the Office Manager, had declared Mr Winslow to be "available full-time" for Party work. Mr Rafferty certainly regarded him as such, even though, as he explained, Mr Winslow frequently worked from home. On the scale of effort put in by Mr Winslow on behalf of the Party, Mr Rowley thought that he had done "a very hard year`s work". Mr Rafferty`s perception was that Mr Winslow had worked "very, very long hours" and that he was frequently already at his desk when Mr Rafferty arrived. This had amounted to a full-time commitment "for at least part of the campaign", to the point where it was difficult to see, in Mr Rafferty`s judgment, how Mr Winslow could have managed a second job for Mr Maxton in the very limited spare time available to him. This latter view was endorsed by Mr Sullivan, who estimated the time spent by Party workers on the campaign at between 12 and 14 hours a day in the immediate run-up to the election. Mr John McLaren, who occupied a senior position at Scottish Labour Party headquarters, estimated that Mr Winslow worked "at least 40 hours a week, usually more" as the campaign developed.
29. On the other hand, Mr Rafferty accepted that Mr Winslow had, on a number of occasions, referred to research he was engaged in for Mr Maxton. Indeed, he had sometimes asked for latitude over deadlines for Party work in order to be able to give precedence to his Parliamentary duties. Mr Rafferty added that Mr Winslow had an "enormous capacity for work".
30. Mr Rowley`s understanding of Mr Winslow`s position was that he "was paid part-time by the Labour Party and he worked full-time for the Labour Party". And he added: "He [Mr Winslow] was paid part-time by the Party and part-time by John Maxton. This agreement was made between me and Annmarie Whyte, and the budget papers which I was party to took account of the researchers` money. I arranged for his [Mr Winslow`s] wage to be made up to the level of Kevin Reid`s when he was taken on full-time by the Labour Party".
31. As already indicated, Mr Rafferty was aware that Mr Winslow was working for Mr Maxton whilst simultaneously employed by the Labour Party, although he saw nothing, in principle, irregular in that arrangement. But since during the election campaign, in particular, it was doubtful whether either he (or Mr Reid) could have performed their Parliamentary duties in their spare time, Mr Rafferty believed that they could, during that period, be seen as having been paid in part from the Office Costs Allowance for carrying out work on behalf of the Labour Party.
32. Mr Sullivan supported this analysis; his understanding at the time had been that Mr Winslow`s salary "was made up from different sources". But his assumption was that the source was not the Fees Office since he was aware of the rules prohibiting misuse of Parliamentary researchers for party political purposes.
33. Mr Rafferty confirmed that shortly after the Scottish Parliamentary elections in May 1999, he had brought together in a conference call all the special advisers in the newly formed Scottish Executive to brief them on some impending adverse press coverage of allegations concerning lobbying activities in relation to the Scottish Parliament.
34. During the course of the conference call, Mr Winslow had expressed the hope that the media would not "start making mischief" with the fact that he and Kevin Reid had for a while been simultaneously employed by the Labour Party and by Members of the House of Commons as researchers. Mr Rafferty had been left with the clear impression from the degree of anxiety shown by Mr Winslow that "there may have been misuse of public funds".
35. Mr Rafferty reported the gist of this conversation to the First Minister, Mr Dewar. The First Minister had taken the view that, given the problems already being experienced with critical press coverage of other matters relating to the Scottish Parliament and Executive, it might not be helpful for those involved to engage in public speculation or gossip on the matter. That conclusion was conveyed by Mr Rafferty to all the special advisers. Mr Dewar told me that he had no recollection of having discussed this matter with Mr Rafferty.