Examination of Witnesses (Question Numbers
O'DONNELL KCB AND
14 DECEMBER 2009
Q860 Chairman: Supposing there was
discussion in a government department about the nationalisation
of a major industry, and that information was leaked, then someone
who had advance notice of that might well be in a position to
sell his or her shares in advance of the announcement, and thereby
avoid sustaining a loss; is that the kind of thing that you have
Sir Gus O'Donnell: More specifically,
if you knew exactly something that was very market sensitive,
then you could operate in the markets and make a lot of money.
Mr Howard: I shall forebear from commenting
on leaks of precisely that kind which appear to have been Government
authorised which have taken place in recent months.
Q861 Chairman: You have never had
to call in the police to investigate the Government though.
Sir Gus O'Donnell: I was thinking
of things which are much more specific, to do with statistics.
Q862 Mr Howard: Let me just try and
understand the procedures which you followed, because as I have
pointed out and you have agreed, normally it is the responsibility
of individual departments to investigate these matters. Then it
says: "In extenuating circumstancesand I do not really
understand the use of the word extenuating, but stillDSI
[the Directorate of Security and Intelligence] may convene a case
conference in order to establish a proposed course of action,
and if necessary, provide co-ordination of any damage assessment
in maintaining an oversight role. In serious cases of cross-departmental
and persistent leakingwhich I assume is what you thought
was happening hereDSI will bring together departments,
relevant individuals, the police, Treasury solicitors, and in
cases of suspected espionage or terrorism, the security service."
Was such a case conference established in this case?
Mr Hannigan: There were a number
of informal meetings but not a formal case conference in this
case. There were a number of informal meetings between Cabinet
Office staff and the Metropolitan Police which I know Mr McDowall
talked about in his evidence to the Committee at some length.
Q863 Mr Howard: Why not? If the guidance
had been followed, there would have been a case conference, would
Mr Hannigan: I think it is a matter
of judgment. As you say, it is extenuating circumstances; not
every case needs a case conference. It may be where there is only
one department involved essentially here, plus Cabinet Office,
it is not necessary to have something that is formally called
a large case conference, maybe just three people sitting down.
The difference is very, very marginal, I think.
Q864 Mr Howard: But the Cabinet Office
effectively took over the investigation or the responsibility
for this investigation, did it not?
Sir Gus O'Donnell: Well, throughout
this, I was talking to David Normington, and we decided that we
would call in Cabinet Office investigators, and that is what happened,
and then later moved on to the police.
Q865 Mr Howard: Well, it was the
Cabinet Office that contacted the police.
Sir Gus O'Donnell: Yes.
Q866 Mr Howard: Not the Home Office.
Sir Gus O'Donnell: No, but as
I said in my opening statement, I discussed this with David Normington,
and we had agreed that I would call it in, because remember, you
are looking at something where we genuinely do not know where
this is going to go, so we start off in the Home Office, but it
could easily have gone elsewhere. There could have been other
departments involved, it could have been the Cabinet Office involved
as well, so it was important, I think, that the Cabinet Office
called this into the Home Office, and then it would have had the
authority of the Cabinet Office to go to other departments if
necessary, or agencies or wherever.
Q867 Mr Howard: Let me ask you about
Mr Wright's involvement if I may. You have referred to the sentence
in his letter which was wrongly dated 8 September, when it should
have been 8 October, which refers to "damage national security".
He goes on to say: "The risk of leaking is having an impact
on the efficient and effective conduct of Government business,
affecting the ability of ministers and senior officials to have
full and frank discussions on sensitive matters and undermining
necessary trust." That is not a consideration which should
lead to a police investigation, is it?
Sir Gus O'Donnell: But the first
part did, so this was in addition.
Q868 Mr Howard: But it should not
have been there, should it?
Sir Gus O'Donnell: Why not?
Q869 Mr Howard: Because it is no
part of the duties of the police to investigate matters which
might have an impact on the efficient and effective conduct of
Sir Gus O'Donnell: Well, I think
it is just qualifying the sentence which is above, which makes
it clear that the reason for this is we are concerned about considerable
damage to national security.
Q870 Mr Howard: But I am suggesting
to you that the sentence that I have quoted is an illegitimate
reason, Sir Gus. It may or may not be reasonable to investigate
matters where you say there has been damage to national security,
it is wrong to suggest that the police should investigate matters
which have an impact on the efficient and effective conduct of
Sir Gus O'Donnell: The first sentence
is making clear that there is a very strong case for the police
to get involved, because of the considerable damage to national
security. It is then explaining that the risk of leaking is also
having other effects. It is just an explanatory statement.
Q871 Mr Howard: No, the police do
not need to have anything explained to them.
Sir Gus O'Donnell: I wish.
Q872 Mr Howard: If you are asking
for something to be investigated because it is a breach of national
security, that should be enough.
Sir Gus O'Donnell: Yes, but you
can always explain other things that are going on
Q873 Sir Alan Beith: With what intention?
Sir Gus O'Donnell: Let me explain.
The reason that we were keen that we had some possible route into
the national security leaks that we had had over a number of years,
that we had not been able to get hold of, was that suddenly we
got something here which admittedly was not a national security
issue, but was related to ministers, which might as a starting
point lead us into the other material.
Q874 Mr Howard: There is nothing
in the letter to that effect, is there?
Sir Gus O'Donnell: What it is
saying is that there is a risk of this having an impact on ministers,
but that that, if you like, is the impact of the latest informationif
you look at the later letter that Chris Wright sends, he says
as a starting point, in terms of looking at the material thatit
was, I think, a letter where we had some views that we might be
ablebecause it had a very small distribution, that we might
get some real leads from it, which was the Whips' thing, that
that might lead us into a source which might go further and get
us into the things we were really interested in.
Q875 Mr Howard: I will come to his
second letter, but there is nothing remotely like that in this
letter, and the sentence that I am asking you about in this letter
is the sentence which suggests very clearly that the police ought
to investigate this matter because it is having an impact on the
efficient and effective conduct of Government business.
Sir Gus O'Donnell: It is saying
that that is the implication of what has been going on, but it
is very clear, I think the language is explicit, "We are
in no doubt there has been considerable damage to national security".
That is the point of it.
Q876 Mr Howard: Just look at the
letter: " ... we are concerned that the potential for future
damage is significant", and then it does not go on to talk
about the potential for national security, it goes on to talk
about the impact on the efficient and effective conduct of Government
Sir Gus O'Donnell: I think that
obviously includes an issuethe efficient and effective
conduct of Government business; if you are not sure that secret
and national security issues are going to be kept safely and not
leak, then that will affect the efficient conduct of Government
Q877 Mr Howard: You would accept,
would you not, that it would be improper to suggest that the police
should carry out an investigation because something was having
an impact on the efficient and effective conduct of Government
Sir Gus O'Donnell: As I have said,
if I were having to investigate every single case where there
have been leaks which affected the conduct of Government business,
then we would have an enormous number of such investigations.
Q878 Mr Howard: Now following that
letter, we know that there was a meeting, we do not know exactly
who was there, and I hope you can enlighten us, but there was
a meeting between Mr Wright, we presume, and some senior police
officers. Can you tell us exactly who was there?
Sir Gus O'Donnell: That is the
second meeting that took place on 22 September, I do not have
the exact list of who was at that meeting. Do you?
Mr Hannigan: I do not. We can
come back on that.
Sir Gus O'Donnell: We can give
you that, but I was not involved in that, it was Chris Wright
and I guess officials from the Met.
Q879 Mr Howard: At that meeting,
discussions took place which were originally described by Mr McDowall,
who gave evidence to us, as a negotiation between the police and
Mr Wright as to the scope of the investigation.
Sir Gus O'Donnell: And if I remember
rightly, in exactly the same hearings, he then withdrew that term.