Memorandum from the Ministry of Defence
1. The Committee has requested a memorandum
from the MoD, further to the one supplied on 11 July 2006, setting
out the extent and nature of the investigations that it undertook
to test the accuracy of allegations made in 2003 and 2006 concerning
bribery in connection with UK defence exports.
2. The allegations made in the Guardian
newspaper in 2003 centred on an obsolete provision in the MoD
Contracts Manual in the version then published on the internet.
The newspaper also drew on Government files from the 1960s available
in the National Archives. To assess those allegations searches
were made of available departmental files with a bearing on the
issues raised, and certain files in the National Archives were
examined, including those on which it appeared the Guardian
had drawn.
3. Research in departmental files sought
to establish when the provision concerning special commissions
in the Contracts Manual had been in force, the context in which
it had been applied, and when its relevance had ceased. This entailed
searches for surviving records of policy and practice on the employment
of agents and payment of commissions. These searches went back
to the 1970s, and also referred to a PAC Report from the 1980-81
session incorporating MOD evidence. The searches identified directives
issued by the Permanent Under Secretary to the Head of Defence
Sales in 1976 and 1977, setting out the policy to be followed.
Paragraph 4 of the memorandum sent to the Committee in 2003 reflected
the terms of these directives. The same paragraph also reflected
the work to establish the basis on which a revised directive was
issued in 1994.
4. The 2003 memorandum also rested on:
— findings from the research in the
National Archives, for details supplied in paragraph 7;
— investigations, reported in paragraph
8, concerned with establishing the availability of evidence from
a corruption trial in 1977, to which the Guardian allegations
also referred; and
— checks on the applicability of UK
laws concerning bribery to UK civil servants when serving overseas,
before the coming into force of legislation enacted in 2001. The
findings on this point were reflected in paragraph 6, in response
to the Committee's specific question on the effect of this legislation.
5. Turning to the allegations made this
year, having studied these the Department concluded that the issues
raised were not sufficiently different to bear further detailed
investigations. The documentary evidence for which references
were given in the memorandum supplied to the Committee by the
Campaign Against the Arms Trade (CAAT) is from the 1960s and 1970s.
The recollections of Lords Gilmour and Healey, reported in the
media, referred to the same period. The work on the allegations
made in 2003 had underlined the many practical difficulties involved
in establishing a reliable picture of practices over thirty years
ago. The Department remains clear that its interpretation of the
evidence on which its 2003 memorandum was based has not been put
in question by the memorandum from CAAT, or the other allegations
to which the Committee drew attention.
November 2006
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