20. Letter
to the Commissioner from Mr Tony Baldry MP
Complaint by Rt Hon George Foulkes
Thank you for your letter of 21 April in which you
raise a number of questions.
I enclose a further folder of material which I hope
you will find helpful as it tries to set Red Eagle's involvement
in Sierra Leone into a proper chronological context. The documents
I hope help answer a number of your questions.[36]
16. The contract between Red Eagle Resources
and Milestone was signed on 23 November 2004. It did not arise
out of any assistance that I had given to Milestone as I explained.
My initial assistance to Milestone was as a UK Member of Parliament
seeking to help a UK company clearly in difficulties in a country
in which no-one else was seemingly able to assist and where I
believed that I could be of help. The contract between Red Eagle
and Milestone came about some time later when both Milestone and
Red Eagle recognised that there would be benefits in collaborating
together in Sierra Leone.
17. This is explained in the last three paragraphs
of the accompanying statement but essentially post mid November
2004 Red Eagle was helping Milestone discover and develop other
commercial opportunities in Sierra Leone in addition to the mining
business which they already had.
18. To be honest, I don't know. I can only speculate.
My recollection is that in the first telephone conversation that
I had with Dean Nelson of the Sunday Times, when I explained the
relationship between Red Eagle Resources and Milestone, he asked
me what benefits that contract had brought Red Eagle and what,
if any, money had been paid by Milestone to Red Eagle. I think
I must have replied that my recollection was that Red Eagle had
received some $40,000 from Milestone (as you can see, it was in
fact $37,500) and somewhere in the reporting, dollars seem to
get converted into £ sterling. The reason why I was somewhat
hazy about the exact amount was that the actual payment had been
negotiated by my colleague Anthony Lawson who had issued the invoice.
I also explained that under the contract between Red Eagle and
Milestone, Red Eagle would be entitled to 3% of the shareholding
in the event of Milestone floating on the Stock Exchange. As I
understand it, the next day, the journalist Dean Nelson went and
interviewed Dr Levy. I can only speculate that he asked Dr Levy
what Dr Levy estimated the market capital value of Milestone might
be if and when it floated. I don't know what valuation Dr Levy
put on the company or how that valuation was arrived at as my
understanding is that there is yet to be a detailed geological
survey carried out of the licence holdings owned by Milestone,
but I can only speculate that whatever figure was given, the journalist
calculated that 3% would equal £1.5 million.
19. Yes I have known Stuart Polak for many years
but the first contact I had with Dr Levy, Mr Levy and Milestone
in any way was on the 21 September 2004.
20. Yes. There was no suggestion of any financial
nexus or involvement whatsoever between myself and Milestone or
Red Eagle and Milestone. Throughout the correspondence with the
President and the Vice President, my only interest and my only
locus was that of a Member of Parliament trying to solve a problem
for a UK company, concerned that having spent some time helping
to encourage UK companies to invest in Sierra Leone, if this was
the way that significant investors were being treated, that was
obviously not going to encourage further UK companies to venture
into the country and I saw this as a problem that needed to be
resolved and staggeringly no-one else seemed to have got to grips
with it.
21. I cannot recall exactly when it was first
mooted that if Milestone were to float that I might become Chairman.
I think my recollection was that it was shortly before Christmas
2004, when as I understand it, Milestone had decided that they
wanted to raise venture capital from a broader base and had thus
decided to go to the Stock Exchange.
As for the Serjeant at Arms, presumably he will have
seen a copy of the statement that I gave you regarding the letter
I sent to Hilary Benn.[37]
Finally in relation to Angel Gate Aviation Ltd I
enclose at the back of the folder a copy of a letter that I sent
to the Vice President on behalf of Angel Gate Aviation Ltd on
9 February 2004.[38]
You will see that it clearly states that "I am writing this
letter in my capacity as Chairman of Angel Gate Aviation Ltd which
is a United Kingdom company and owns Air Horizons and Euralair
in France …".
You will see that the letter was copied to the Ministry
of Transport, the Chairman of the Privatisation Commission, the
Managing Director of SNA, and the High Commissioner for Sierra
Leone in London. I don't think that there can be any doubt in
the mind of the Vice President or indeed any other relevant person
in the Government of Sierra Leone that when I was referring to
the airline project, I was doing so in my capacity as Chairman
of Angel Gate Aviation Ltd.
Throughout 2004 the Government of Sierra Leone were
seeking to find a way forward on their airline; their difficulty
was that at some point their contract with Icelandic Air would
come to an end and with it any direct air service between London
and Freetown. I seem to recall during the latter part of the summer
of 2004 receiving telephone calls from the Sierra Leonean High
Commissioner in London asking if Angel Gate Aviation Ltd were
in a position to help and my letter to the High Commissioner of
the 8 September was a re-statement of the fact that Angel Gate
Aviation Ltd were prepared to help but on the understanding, as
set out in my earlier letter, that this would be a contract whereby
we would undertake contractually to provide a level of service
in exchange for traffic rights over a period of time and it was
to that continuing proposal first set out in February 2004 that
Mr Turay responded and on which he wished to have a meeting, which
indeed took place in London, between him, myself and ***, at which
meeting I had thought we had come to an agreement but as I explained
earlier, events intervened in that pretty much simultaneously
a South African company was offering the Government of Sierra
Leone in Freetown a seemingly too good to be missed opportunity
of paying off the debts of SNA, etc. In the event, the South African
deal never came off, the Sierra Leoneans now have no airline of
their own; the only connection between London and Freetown is
a UK private airline based at Gatwick and I only observe that
what I had negotiated with colleagues would have delivered to
Sierra Leone a contract-based air service for ten years at no
cost whatsoever to the Sierra Leonean exchequer.
Lastly, the Sunday Times have sought to set the whole
of my actions as being hypocritical—in championing Africa
whilst at the same time having business in Africa. To this I would
simply observe that Sierra Leone like much of Africa is desperate
for foreign direct investment to create jobs.
Take Bonthe in Sierra Leone as an example. Its warehouses
have closed down; ships no longer stop for bunkerage; the piassava
industry had collapsed; the electricity supply broke down a number
of years ago and has never been repaired; there are few, if any,
jobs—which leads to a double migration; those with "get
up and go", get up and go to Freetown; and those in Freetown
with "get up and go", seek to migrate overseas—either
to Britain or to the US.
Even a couple of fishing trawlers based at Bonthe
would start to transform the area and likewise elsewhere where
a Sierra Leonean fishing industry can get established.
Likewise, health provision in Freetown is so poor
that for Foreign Office officials, for example, Freetown is an
"unaccompanied post". A new diagnostic health centre
is not going to be able to serve the whole of Freetown's medical
needs but it is a step in the right direction.
Improving the management of the National Lottery
in the great scheme of things may not necessarily be of huge benefit
but it should lead to more money being generated for the Government
of Sierra Leone to spend on priority areas and again hopefully
encourage other investors to think about entering the country.
26 April 2005 Tony Baldry MP
21. Letter
to the Commissioner from Mr Tony Baldry MP
Thank you for your letter of 11 June.[39]
As to the specific queries that you raise on items
1 and 3, I have now had the opportunity of discussing these matters
with Tony Lawson.
(1) This is confusing. I had always thought that
there had been a single payment in respect of a single invoice
and indeed, there has only ever been one payment made by Milestone
to Red Eagle and that was the payment made in response to the
invoice issued on the 15 December. A second invoice was issued
subsequently in January 2005 by Tony Lawson, but cancelled almost
immediately because Milestone told him that they wanted to see
what further work needed to be done and was done on the Lotteries
project, the fisheries project and with the possible diagnostic
centre.
The first time I saw the amount of the possible valuation
of Milestone was in the article in the Sunday Times. I still suspect
that the valuation figure is pure conjecture.
As to (3), there were discussions about the various
ways to try and establish a long term agreement that was fair
to both Red Eagle and Milestone.
At the time of the agreement, Milestone had made
it clear that they intended in due course to put their mining
and non mining interests in Sierra Leone into one public company.
At that time of the agreement, we believed that this would be
some time off. It was some time later that Milestone started to
talk about the possibility of seeking an earlier listing on AIM
but my recollection is that it was at the end of 2004 when they
decided they needed to raise more venture capital.
On 2, I enclose a statement from Stuart Polak which
clarifies matters as he recalls them, as I think it is important
that you and the Committee understand the context within which
I sought to help Milestone.[40]
I of course cannot put myself in Dr Levy's, or anyone
else's mind, but nothing that was said at the first meeting, or
subsequently, gave me the impression that Milestone wanted me
for my contacts, "to do some politics, PR (things) like that",
which, if they had, I would not have undertaken.
Milestone presented to me a serious problem which
they asked me help to try and resolve and I was willing to help,
as I would have for any UK organisation in difficulty. It occurs
to me that colleagues would not unreasonably say that this was
not an immediate "constituency" case. I would simply
ask that it is borne in mind that during the last Parliament,
there was barely a working day that went past when I didn't have
a pressure group, an NGO, Parliamentarians, a UK company, or some
organisation coming to seek my advice and help in relation to
some development issue somewhere in the world. I think many of
those who came and saw me would have thought it incredibly churlish
if I had simply said to them "Go and seek out your own Member
of Parliament" but instead I would seek to help any organisation
experiencing legitimate problems, by listening to the problem
and trying to work out how best to take forward the issues and
that was the mindset in which I tackled the problem raised by
Milestone.
As to the response by the Serjeant at Arms, I have
previously explained to you my actions and motivation in full.
So far as the letter to the Vice President was concerned,
I was not trying to influence anyone, I was simply seeking to
set out the facts as I understood them, although I fully appreciate
that a "stream of consciousness" ramble about an airline
project, even if the Vice President was well aware of the background
and context of those comments, laid me open to criticism.
As to my letter to Hilary Benn, I can only observe
that this letter must have been very poorly written by me if objective
and dispassionate readers conclude that I was "seeking DFID
checks for business reasons". As I have explained, that was
not my purpose: I simply wanted to ensure that a new and substantial
UK investor in Sierra Leone, in a sensitive commodity, was complying
with the rules, and that DFID was aware of this company's existence
and operations. I have explained in detail why and how these letters
came to be written and I am disappointed, having read those explanations,
that the Serjeant at Arms concludes that there was a "business
imperative" in everything that I did. That was most certainly
not the case, nor my intention.
However, I fully accept that the perception of an
MP's conduct is important and if I have managed to give the Serjeant
at Arms that perception from these letters, then I fully understand
and accept why the Serjeant at Arms has come to the conclusion
that I have broken the current rules of the House and the guidance
on the use of stationery given by the Administration Committee.
I fully accept his adjudication and I apologise unreservedly.
13 June 2005 Tony Baldry MP
24 WE3, 4 & 5. Back
25
WE 14. Back
26
WE 12. Back
27
WE 13. Back
28
WE 14. Back
29
Not appended by the Commissioner. Back
30
Not appended by the Commissioner. Back
31
Not appended by the Commissioner. Back
32
Not appended by the Commissioner. Back
33
Not appended by the Commissioner. Back
34
Parliamentary Standards Procedural Note 4. Back
35
WE 10. Back
36
Not appended by the Commissioner. Back
37
WE 16. Back
38
Not appended by the Commissioner. Back
39
Not appended by the Commissioner. Back
40
Not appended by the Commissioner. Back
