Phillip Knightley, one of the country’s most distinguished investigative journalists, has never gone undercover. For him, investigative reporting involves long, boring hours in libraries, looking things up, tracing people, studying court reports, attending legal conferences, typing up memos and listening to outlandish conspiracy theories: that sort of thing. Here he offers six top tips to an aspiring sleuth
There are lots of myths about investigative journalism. It is thought to be exciting and glamorous. Its practitioners are seen as dashing, devil-may-care reporters who made the leap from suburban courts to “under-cover” work exposing the wrong-doers in our society and obtaining justice for those who had suffered at their hands.
Investigative journalists, so the myth goes, persist when ordinary reporters give up, have flashes of inspiration and insight, persuade reluctant insiders to confide in them and then, at the right moment, confront the guilty men (seldom women) and reveal all.
It must have sometimes happened that way, Watergate for example. But not in my experience. I got into investigate journalism by accident. I never went “undercover” in my whole career. I never pretended to be other than what I was – a reporter on The Sunday Times. Most of the exposures that I worked on involved long, boring hours in libraries, looking things up, tracing people, studying court reports, attending legal conferences, typing up memos and listening to outlandish conspiracy theories. Yes, there were occasional long lunches with new sources but I was usually too busy to take lunch at all. In fact, the investigation of which I am most proud, The Rise and Fall of the House of Vestey, came to me because I was not out to lunch.
On a quiet Wednesday in 1979 at The Sunday Times building in Gray’s Inn Road my telephone rang. It was the commissionaire at the front door. “There’s a Canadian gentleman here who wants to see Stephen Fay,” he said. But he doesn’t appear to be in.” I shared an office with Stephen and we fielded each other’s callers. “Send him up,” I said.
In those days a lot of stories walked in off the street because newspaper offices were in the centre of London and easy to contact.
Lesson One: make it easy for potential whistleblowers
Make it easy for potential whisteblowers to heed their impulse to talk to a reporter. The Canadian turned out to be an economist who was living in Australia at the time and working for a group of cattlemen in Queensland who sold their beasts to the Vesteys, best known for Dewhurst, a chain of British butcher shops. His assignment was to try to improve the price the Vesteys were paying for beef cattle.
He had started his task by drawing up an organisational chart showing all of the Vestey’s worldwide companies and their interlocking structure. At first the chart occupied the top of his desk, then the floor of his study and finally his whole garage. “Don’t you think that’s interesting,” he said.
I could not see a story but to humour him I called the library and ordered up the clippings on the Vestey family and their companies. In view of what he had told me, I expected several bulging packets. There was one packet which contained only one clipping – a story about Lord Vestey playing polo with Prince Charles. “You see,” the economist said.
“There’s something odd going on here.”
Lesson two: be prepared to believe improbable stories
Be prepared to believe the most improbable stories that whistleblowers tell you. Enough stories will turn out be true to make it worth your while.
We mapped out a plan. He would return to Australia after his holiday in Britain and continue his research. Meanwhile I would try to find out more about the Vestey family. We would share our results and if there were, indeed, a worthwhile story, The Sunday Times would pay him a handsome freelance fee. I dropped everything and started work on the Vesteys that afternoon.
Lesson Three: work for an overstaffed newspaper
Try to work for a newspaper that is so overstaffed that it can afford to allow you limitless time to pursue your hunch that your story will eventually stand up.
My Vestey investigation took a year and involved enquiries around the world. It revealed that the Vesteys, one of Britain’s richest and most respected families, had been tax avoiders to the tune of millions of pounds for more than 60 years.
It soon became evident from the Canadian’s research that the whole structure of the Vestey empire was created to avoid taxation. They ran the biggest privately-owned multi-national in the world. They were the world’s biggest retailers of meat. They owned woollen mills in Yorkshire, textile factories in Hong Kong, and cattle ranches in South America, Australia and New Zealand. The family had interests in 27 countries, including grocery wholesalers, supermarkets, guard dogs, insurance, shipping lines and travel. But it was with meat that the Vesteys made their millions. At their peak, it was difficult to eat a chop or slice of beef in Britain that had not come from a Vestey animal.
They owned the ranches and farms where the animals were raised, the slaughterhouses and packing plants that processed the carcasses; the shipping lines that brought the meat to Britain, the insurance companies that insured the ships and their cargoes, the wholesale companies that took delivery and the butcher shops that sold the meat to the housewives.
This meant that they were able to take their profit at any stage down this chain and naturally they took it where they paid the least tax. So the Vesteys set off profits in one part of their empire against losses in other parts, a practice which is entirely within the law. But it meant that, in one year for example, the Dewhurst butcher shop chain turned over £152.5 million and their pre-tax profits were £2.3 million.
Their tax bill was £10.
The real problem for the Vestey’s was to avoid tax on their personal income and yet still be able to live in Britain. In 1919, the family had found a brilliant accountant, Edward Brown. Brown was a tax genius and he created for the family the famous Paris Trust, to this day a source of the Vestey’s wealth.
The scheme, with all its intricate subtleties, requires hundreds of pages of legal jargon to set out, has been pored over, dissected and examined by some of the greatest legal minds of the century. Generations of Revenue officers and their legal advisers have tried to crack the Vestey Trust, all without success.
The Vesteys have always fought any attempt to break the trust, or tax its pay-outs, and have always been prepared to go to the House of Lords. And, in the end, they have always won. Revenue officers have summed up what fighting the Vesteys generation after generation, has been like. One described the genius of Edward Brown: “It was as if he had peered into the minds of the Revenue, and anticipated their every move, not only for now, but for years to come.” Another said: “Coming to grips with the Vesteys, is like trying to squeeze a rice pudding.”
They had social clout as well. The Vesteys were pillars of the British establishment – friends of the Royal family, peers of the realm, Old Etonians, High Sheriffs, Deputy Lieutenants of the country, Masters of Hounds. Lord Vestey liked to joke that he was the only butcher in the House of Lords, but at weekends he would often entertain the Waleses, the Westminsters, the Beauforts, the Astors, the Hoares and the Cobbolds.
Lesson Four: you must not be afraid to take on the powerful
You must not be frightened of taking on powerful people but it is wise not tell your editor in advance how powerful they are.
So I plugged away at the story because it seemed to me to confirm my definition of what investigative journalism is all about. The story should reveal a major injustice or scandal which has been there untouched for some time. The guilty parties should be people of substance. (“Don’t expose people who earn les than you do,” Paul Foot used to say.) The investigation should lead to setting matters right and then legal reform so it won’t happen again. Although it should arouse indignation, it must be a good read.
Gradually the Vesteys emerged as a Victorian family whose obsession with making money was almost pathological. The brothers who founded the fortune, William and Edmund, considered business not simply a way of making a living but life itself. They worked six days a week, kept modest houses and had no outside interests whatsoever.
They refused to live on income or even the interest on capital. They lived on the interest on the interest. William believed business to be so important that when he was on his honeymoon in 1924 in Ceylon (now Sri Lanka) with his new wife and there was a fire in the Vestey meat plant in Brazil, he packed her off on the next steamship to Rio to sort out the trouble, while he went back to London.
The brothers maintained their own debt collection department to handle small traders who could not pay for their meat, or tenants who had fallen behind in their rent. It was their policy to sue in the county court for any debt of £1 or over and evict any tenant who was more than £4 behind with the rent. Employees were treated fairly but without sentiment. It was Vestey policy, for example, to promote three times a good workman in their Argentine meat plants. But when the man became due for a fourth promotion, he was instead sacked – on the grounds that he had already given his best for the company and could now only decline.
None of this was generally known about them because of the family’s obsession with secrecy. How was I to penetrate this? What I had learned about the current head of the family, Lord Vestey, did not suggest that he would be forthcoming at an interview, although it was obvious that sooner or later I would have to put my allegations to him and give him an opportunity to comment.
The experience of Anthony Gardener, a magazine writer, was not encouraging. Lord Vestey met him and remained aloof but courteous until there was a mix-up over an appointment. Then Lord Vestey told him: “You are the most disgusting little shit I have ever come across…How dare you come bursting into my office without an invitation. Do I have the right of veto on this article? No? Out! Out! You’d better bloody get it right, sonny, or I’ll sue you until your feet don’t touch the ground.”
When I was nearly ready, I wrote to Lord Vestey suggesting a meeting. He replied saying that he had been well-aware that I had been making enquiries about his family for a long while but he had no interest in speaking with me. Far from a reassurance, this alarmed me.
Lesson Five: use the crucial confrontational interview to test conclusions
The confrontation interview can be crucial. It is your chance to test your conclusions and confirm their accuracy. Without such an interview it becomes doubly important that you’ve got it right.
Had I got it right? Hundreds of highly-skilled accountants and expensive lawyers had pored over the Vesteys’ tax affairs for years. Was I not presuming too much to imagine that I could tell their story without making serious errors for which I would be severely punished?
One of the advantages of living in a bureaucratic society is that everything is written down somewhere. It is just a matter of finding it. I had heard rumours that a senior Revenue officer with a literary bent had written for posterity a small book that set out the story of the battle between the Vesteys and the Revenue. I was told that the book might be available in the House of Lords library. I contacted the librarian who said, yes there was such a book and it was in the library. Could I borrow it? He said no journalist had ever asked to borrow a book from the House of Lords library but as far as he could see there was no rule against it.
The book became my bible that enabled me to check everything I had written about the Vesteys and after a long bout with the defamation lawyers, The Sunday Times proceeded to publication in October 1980 under the headline “The Gilded Tax Dodgers”. On the Monday, readers’ letters poured in full of praise – for the Vesteys. Three out of four letters attacked me and the newspaper and supported the Vesteys. The newspaper was accused of “gutter journalism”, “pandering to envy”, and “humbug”.
Lesson Six: readers may not necessarily support your investigations
Do not expect all your readers to agree with your investigation. There will always be some who consider any media enquiry to be an invasion of privacy, sensationalism and designed solely to sell papers. There is nothing you can do about this.
I had some success. The tax laws were changed but too late to make any difference to the Vesteys. In 1993 when Lord Vestey heard that the Queen had agreed to pay income tax, he smiled and said, “Well, that makes me the last one.”
I am sure there are stories like the Vesteys out there now waiting for someone to find them and investigate them. The trouble is finding the finance. If no one is willing to do so, we may have to put up the money ourselves.
Note on the author
An Australian by birth, Phillip Knightley became part of the celebrated Sunday Times “Insight” team from the 1950s to the 1970s, breaking such famous stories as the Kim Philby spy scandal, the Profumo sex scandal and exposing the effects of thalidomide on new-born babies. Now an acknowledged expert in the dark arts of warfare, having written the seminal text of wartime propaganda First Casualty, he lives in London and works as a freelance journalist for publications all over the world. He is the author of some 10 books, covering in depth some of the biggest stories of recent times. Most recently he has written his autobiography A Hack’s Progress and the critically acclaimed history Australia: A Biography of a Nation.