MoD Chief in Fraud Cover-Up Row

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As the UK's Hutton enquiry into the death of WMD inspector Dr David Kelly resumes this morning, the Ministry of Defence top witness who will take the stand to face cross-examination is himself in the spotlight in the UK press regarding fraud and corruption allegations:

The Guardian reports that:

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The personal role of Sir Kevin Tebbit, permanent secretary at the Ministry of Defence, in an alleged cover-up of major fraud and corruption is exposed in letters seen by the Guardian. Sir Kevin, the MoD's top official, failed to follow up for two years allegations that the arms firm BAE Systems ran a slush fund designed to bribe Saudi officials. "I have no wish to set damaging hares running," Sir Kevin wrote in a "personal and confidential" letter to the head of the Serious Fraud Office (SFO), who had brought the allegations against BAE to his attention. They raised "sensitive issues", he said. The MoD delayed for the past month in releasing to the Guardian two letters from Sir Kevin disclosable under the open government access code. Sir Kevin is revealed in the correspondence to have:

· Tipped off the chairman of BAE, Sir Richard Evans, about the contents of a confidential SFO letter

· Failed to fulfil a promise to the SFO to notify them of the outcome of his "detailed investigations".

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Sir Kevin prevented the MoD's fraud squad from investigating the case, and also withheld the SFO's warnings from the defence secretary, Geoff Hoon. Vince Cable, the Liberal Democrat industry spokesman, said last night that he was asking the attorney general, Lord Goldsmith, to intervene. "The fact that the MoD is taking refuge in assurances from BAE reinforces the widespread belief that the relationship between BAE and MoD is incestuous and unhealthily close," he said.

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Once the Guardian revealed the existence of the slush fund allegations last month, Sir Kevin defended himself in a second private letter to the head of the SFO. On September 12, he wrote to Robert Wardle, SFO director, saying his failure to follow up the matter, as promised, was "a bureaucratic hitch". Sir Kevin maintained "somewhat to my embarrassment" that it had been forgotten about, due to "a move of office location and changeover of private secretaries at exactly that time". He also tried to persuade Mr Wardle that the MoD had no responsibility for allegedly fraudulent BAE invoices submitted to the Saudi government under the Al-Yamamah government-to-government arms deals. "The MoD only endorses invoices under the Al-Yamamah project which relate to specific goods and services provided to Saudi Arabia," he wrote. Sir Kevin said the suspect invoices "do not fit into this category and are entirely a matter for BAE".

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Last night the original complainant, Edward Cunningham, a former employee of RLI, a front company involved, said this claim was false. All the payments made through RLI were recharged by BAE to the Saudi government under the budget heading "visa services" he said. "The Saudis were defrauded and the MoD endorsed it." The Saudi government pays the MoD a hefty annual fee to ensure that BAE meets its contractual arrangements under the arms deals. Last year they paid in the region of £30m. (The MoD does not release the exact figure.) Mr Cable said he was referring the case to the attorney general because "Sir Kevin's letters raise as many questions as they answer. My understanding is that some of the key disclaimers about MoD responsibility are probably factually wrong and need to be more thoroughly investigated by a responsible body which has no direct interest in the matter," he added. The most unexpected disclosure in the correspondence is that, although Sir Kevin was warned in confidence that Sir Richard had been accused of personal complicity, one of the first things he did was to tip him off.

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More:

http://politics.guardian.co.uk/foi/story/0,9061,1061673,00.html


It should be remembered that any questions that Sir Kevin Tebbit may answer at the UK High Court this morning before Lord Hutton are neither under police caution nor under oath.

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1. Coda: Tebbit denies 'devious' strategy

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The Ministry of Defence's top civil servant has told the Hutton inquiry there was "no devious strategy" to publicly name Dr David Kelly.The inquiry is into the death of Dr Kelly, who apparently committed suicide shortly after being named as the suspected source for Andrew Gilligan's BBC report claiming the government "sexed up" a dossier on Iraq's weapons of mass destruction.

Lord Hutton has reconvened his inquiry for one day to hear again from Sir Kevin Tebbit, permanent secretary at the MoD, who postponed his appearance last month because of an eye operation. During Monday's hearing, he said MoD head of personnel Richard Hatfield had decided the weapons expert should be admonished rather than punished, because he had voluntarily come forward and because he disputed Mr Gilligan's version of events. However Sir Kevin said Dr Kelly's letter to his MoD bosses admitting he had spoken about the Iraq dossier to Mr Gilligan was a "ticking bomb" and there had been no choice but to announce an official had come forward.

He argued that the MoD had also later had no choice but to confirm Dr Kelly's name if he was identified by journalists as the source. Had he (David Kelly) really said that Alastair Campbell and the government had intervened in the intelligence judgements... then that would have been a very grave charge indeed. There was a discrepancy between what Mr Gilligan said his source had said, and Dr Kelly's version of what he had told the BBC journalist, Sir Kevin said. But MoD officials had been more ready throughout to accept the version of events given by Dr Kelly than the version presented by the BBC reporter.

He said: "We believed that an employee of 20 years standing, a man of considerable eminence, when his words were weighed against the views of Mr Gilligan - with whom we had recently had difficulties - as part of our duty of care, we retained trust and confidence in our employee." He added: "We simply accepted his account. There was no reason, no suspicion even in the mind of the deputy chief of defence intelligence that Dr Kelly was being other than truthful with us. "With the benefit of hindsight, he was not being truthful to us about contacts with a number of other journalists, but we didn't know that at the time.

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More:\

http://news.bbc.co.uk/1/hi/uk_politics/3186096.stm