Volume One
Section D Arms and Defence-Related Exports to Iraq
Chapter 2 Applications of The Guidelines in the period
December 1984 to August 1988

Excerpt:
Specific Cases - (xix) Tripod Engineering Ltd

THE INVOLVEMENT OF THE INSTITUTE OF AVIATION MEDICINE: 1981-1987

D2.362 The Royal Air Force Institute of Aviation Medicine (“IAM”) is part of RAF Strike Command. The primary function of the IAM is to undertake research into factors that may affect the safety, comfort and efficiency of air crew. The research encompasses studies of human responses to the physical and psychological stresses of flight and of methods to minimise them. One of the purposes of this research is to establish performance specifications, air crews’ accoutrements and associated aircraft systems. The specifications are then issued to the manufacturing firms. The firms may seek IAM advice, and sometimes assistance, on the interpretation and implementation of the specifications. *505 In addition, the IAM makes available specialist advice to some national and private industries that are unrelated to aviation, e.g., British Rail, the Coal Board. The teaching of aviation medicine, another function of the IAM, is not relevant for present purposes.

D2.363 The Commandant of the IAM is responsible for all the functions described above. Between October 1975 and October 1988, when he retired, Air Vice-Marshal Peter Howard (AVM Howard) was the Commandant. AVM Howard was also the Dean of Air Force Medicine between 1984 and 1986.

D2.364 It was not the practice of the IAM to become involved in private sector export projects. However, many British firms actively sought export markets for products which had been developed primarily for British military use, e.g., oxygen systems and ejector seats. So, to the extent that the successful production of such products might have been based upon IAM research, expertise and advice, the IAM indirectly facilitated export sales. *506

D2.365 On 4 May 1981, a request was made by Sales 1b (one of the DESO Regional Marketing desks) for IAM assistance to a company bidding for an Iraqi Air Force contract. Authority for IAM involvement was given by the Director General of RAF Medical Services (DGMS) on 19 May. As a result, two company representatives visited the IAM. They said to the IAM that the customer was the Iraqi Air Force, an assertion which was borne out by the inclusion in the specification of human centrifuge and ejector seat training rig. AVM Howard gave advice to the company on about a dozen occasions until the end of 1981; but at no time did he have contact with the company’s Iraqi customers. The company informed him in December 1981 that its contractual proposals had been lodged with the Iraqi Air Force authorities. *507 In December 1983, however, the Iraqis informed the company that the project, together with other long-term projects, had been suspended.

D2.366 The MOD have been unable to provide the Inquiry with papers relating to this early period. But there is no reason to suppose, having regard to the IAM’s remit or to the available evidence about AVM Howard’s role, that there was any reason to question the involvement of the IAM or of AVM Howard.

D2.367 Iraqi interest in the project revived in 1986. By then, the proposal for what was referred to as a “Second Stage” of the project was being co-ordinated by Tripod Engineering Co Ltd (Tripod). According to MOD papers, a Ms Purcell of Tripod and an architect, Mr Hindi, asked MOD for permission to visit the IAM to discuss the project in order “to assist the firm in submitting proposals for the design and construction of an Aeromedical System in Iraq.” *508 Tripod also asked to visit the pilot selection training facilities at Biggin Hill. MOD permission was given for a visit to both establishments. *509

D2.368 Ms Purcell and Mr Hindi duly visited the IAM on 21 October 1986. The contractual specifications for the project differed from the original 1981 specifications in that they now contained requirements for flight simulators, an air crew selection centre and facilities for medical examinations of air crew and air crew candidates. According to AVM Howard’s evidence:

“[t]he centre was declared to be intended for research, selection and training. The client was the Iraqi Air Force, and the requirements for a high performance altitude chamber and for an ejection seat rig indicated a military capability.” *510

At that stage, AVM Howard was unaware of the restrictions on exports to Iraq that had been introduced by the Howe Guidelines.

D2.369 On 27 October 1986, Ms Purcell and Mr Hindi visited the RAF Officers and Aircrew Selection Centre at Biggin Hill, where they expressed interest in the purchase of a computerised pilot aptitude testing package manufactured to specifications approved by the RAF. Details of the RAF’s commercial supplier were subsequently provided by the RAF to Tripod, as were details of an associated software package whose copyright belonged to the MOD. It was made clear to Tripod that an export licence might be necessary to export the equipment to Iraq and that the export of the software would also require Government approval. *511 Two years later, RAF Biggin Hill was once again to feature in the Tripod story.

D2.370 Between October 1986 and June 1987, AVM Howard provided ad hoc advice on about a dozen occasions to Tripod. According to his evidence, he gave his opinion of the overall feasibility of the project, made suggestions about British and foreign sources from which major items of capital equipment might be obtained and advised on the interpretation of, and modification to, the Iraqi requirements. *512 There was a meeting at the IAM with Tripod representatives in June 1987. Other than that, the Air Vice-Marshal’s advice was sought by telephone, either by Ms Purcell or by Mr Hindi. There was no written correspondence with Tripod, but AVM Howard was sent a copy of Tripod’s proposed amendments (based on IAM advice) to the Iraqi schedule.

D2.371 In early June 1987, Tripod told AVM Howard of a forthcoming visit by three Iraqi Air Force officers to discuss the contract. These were high-ranking officers. Tripod asked whether the officers could spend a day at the IAM. AVM Howard was not willing to agree to a request for foreign military personnel to visit the IAM. It was, as he put it in his second written statement:

“irregular in that it came from the private sector, and I felt unable to accede to it without MOD approval (paragraph 5.1.1 of my previous evidence specifically refers to visits from British civilians). Tripod were therefore advised to seek that authority if they considered the visit to be essential .... I was unwilling to accept the visit because of the workload that it would place on an Institute already over-burdened by officially-sponsored visits ....”

D2.372 Although AVM Howard judged it to be inappropriate for a meeting with the Iraqi officers to take place at the IAM, he agreed to meet them in London “to answer any medical points.” *513 He has told the Inquiry that he “saw attendance at the meeting in London as a proper expression of the Institute’s assistance to Tripod”. When asked to justify the distinction between seeing the Iraqi officers in London as opposed to seeing them at the IAM, he said: *514

“.... the Iraqis were not necessarily “people who were not permitted to visit the IAM”, but .... as foreign military personnel, they could only be admitted with the blessing of the MOD. On that basis, I certainly drew a distinction between an unsponsored visit to the Institute and a meeting with the Iraqis elsewhere, as the Institute’s adviser to Tripod ....”

D2.373 The Iraqi officers visited the United Kingdom between 16 and 30 June 1987. The meeting took place at a London hotel. It was attended by Tripod executives, the three Iraqi officers and AVM Howard. AVM Howard has told the Inquiry that the meeting had been in progress for an hour before he was invited to join the meeting. He was introduced as an RAF Consultant in Aviation medicine. In a note provided to MOD/DESS on 1 June 1988, the Air Vice- Marshal said that “he was present as a consultant to Tripod and did not represent the Royal Air Force or HM Government.” *515 In his evidence to the Inquiry he said:

“I immediately stated that my function was to clarify and attempt to resolve any aeromedical questions that the Iraqis or Tripod might have, and that I was in attendance solely to advise Tripod on such questions, and not as a representative of the British Government. Ms Purcell reinforced that statement. I knew none of the Iraqis, and although they were introduced to me by their names and appointments I do not remember them.

It was clear that the Iraqis knew who I was. The only question that was put to me concerned the failure of Iraqi Air Force medical officers to gain admission to [a Diploma course] at the IAM. I reiterated that I was present solely to answer questions related to the aeromedical centre. There were none, and I left the meeting after about ten minutes. I had no contact with the Iraqi delegation on that or on any other occasion.” *516

AVM Howard’s explanation of the basis on which he attended the meeting is, in my opinion, unsatisfactory. As a senior, serving RAF officer giving advice to Tripod, it is difficult to understand how he could have been acting in any capacity other than as a representative of the RAF. The presence of a senior RAF officer at a meeting of this kind was ill judged. The proposed visit to the IAM itself had had to be refused because the MOD had not sponsored it, and the Air Vice-Marshal should have appreciated that it was quite inappropriate, without specific MOD approval, for him to attend to give advice in effect to the Iraqi officers. In written submissions to the Inquiry, AVM Howard argued *517 that he had not given “advice to the Iraqi Airforce. The IAM through AVM Howard gave advice to Tripod”. His argument is inconsistent with his own account of events, namely, that he was “not present as a representative of the British Government”. In any event, whether the Iraqi officers would have appreciated any distinction is a moot point; insofar as the Iraqi officers and Tripod were concerned, each presumably had a shared interest in the successful outcome of the contract to supply the centre to Iraq. The Iran- Iraq war was in progress at the time and the questionable propriety of providing advice, in effect direct to the Iraqi Air Force, should have been apparent to the Air Vice-Marshal and have led him to think twice and to take MOD advice. The position would have been worse if he had known of the existence of the Howe Guidelines. I should make clear, however, that Air Vice- Marshal Howard has expressly denied having received any remuneration from Tripod while Commandant of the IAM and I accept that denial. *518 It should be noted that he believed that, if export licences were granted in respect of the project, Tripod would probably seek further consultant medical advice. *519

D2.374 In December 1987, AVM Howard was told verbally by Tripod that Tripod’s tender was close to acceptance, but would be accepted in the name of Iraqi Airways. Ms Purcell told AVM Howard that the customer had claimed that this was being done “for internal administrative reasons”. Notwithstanding the apparent change in the identity of the Iraqi entity involved in the contractual negotiations, the project continued to be in the charge of an Iraqi Air Force officer. AVM Howard was conscious of the change, but was not unduly concerned by it and was not convinced by it. *520 The military nature of the project was no doubt obvious, especially in the light of the requirement for such equipment as an ejector seat trainer and a human centrifuge. But the significance of the change of identity in the Iraqi contracting entity should not be understated; it was almost certainly an attempt to divert attention from the patently military nature of any contract entered into by the Iraqi Air Force.

EXPORT LICENCE APPLICATIONS IN 1988

D2.375 On 11 February 1988, Ms Purcell submitted a number of export licence applications to cover exports to be used for the purposes of the project. In her covering letter, Ms Purcell said that the financing for the project was “under the Anglo/Iraqi Protocol”. In fact, an application for an ECGD buyer credit guarantee was not submitted to ECGD until 15 February 1988.*521 The details of the ELAs, fourteen in all, may be summarised as follows (figures are given for values of equipment as specified in the ELAs):

ELA NUMBER	EQUIPMENT	VALUE QUOTED ON ELA
1A/1468/88	EJECTOR SEAT TRAINER	£230,000
1A/1469/88	UNDERWATER ESCAPE TRAINING EQUIPMENT	£60,000
1A/1470/88	NIGHT VISION TRAINER	£79,000
1A/1471/88	OXYGEN TRAINING SYSTEM	£195,000
1A/1422/88	VIBRATION LAB	£70,000
3G/22036/88	ELECTRON MICROSCOPE	£189,000
3G/22037/88	COMPUTERISED APTITUDE TEST SYSTEM	£200,000
3G/22038/88	HYPERBARIC TRAINING CHAMBERS	£900,000
3G/22039/88	HYPERBARIC TREATMENT CHAMBERS	£812,000
3G/22040/88	ENVIRONMENTAL STRESS CHAMBER	£198,000
3G/22041/88	GENERAL PURPOSE COMPUTER	£110,000
3G/22042/88	FLIGHT TRAINING SIMULATORS	£2,850,000
3G/22043/88	TELEMETRY SYSTEM AIR TO GROUND	£120, 000
3G/22044/88	HUMAN CENTRIFUGE	£1,327,000
	TOTAL	£7,340,000

 

D2.376 At the request of Tripod and, in turn, the DESO regional marketing desk, the ELAs were put forward for consideration at the MODWG meeting on 18 February 1988. Mr Hextall’s recollection is that they were briefly considered on that date. *524 However, at the MODWG meeting on 18 March 1988, the ELAs were considered at length and Group Captain St Aubyn, the MODWG expert on air force matters, was asked to discuss the ELAs with the IAM and to report back. He visited the IAM on 22 March 1988, discussed the exports with AVM Howard and reported back to Mr Barrett by a minute of the same date. *525 It appears that this was the first occasion on which the restrictions on the supply of military equipment and dual-use goods to Iraq had been drawn to the Air Vice-Marshal’s attention. *526 Mr Barrett (in written comments dated 15 February 1995) suggested that it was the responsibility of Sec(O)(C) *527 to give guidance to the IAM on advice that could be given to the Iraqi Airforce. He added, however, that “this [did] not concern the application of the Howe Guidelines”. By contrast, Mr Hextall (in written comments dated 16 February 1995) said that “it was the responsibility of Service Departments who were represented at the MODWG to keep establishments such as the IAM informed and to provide them with appropriate guidance”. *528 Given that neither the Service members of the MODWG nor SEC(O)(C) were members of the IDC, whereas MOD/DESS were, Mr Barrett and Mr Hextall were in the best position to ensure that the IAM was properly briefed, using whatever MOD conduit was appropriate. Having regard to the role that the IAM was expected to play in advising British firms on, inter alia, export sales, I do not think that DESS can escape responsibility for the Air Vice-Marshal’s lack of knowledge of the restrictions imposed by the Guidelines.

D2.377 Group Captain St Aubyn began his report to MOD/DESS (“the St Aubyn report”) by expressing his astonishment that AVM Howard had been involved with the project “for some 7 years, as adviser to both sides ....”. As to the potential for significant enhancement of Iraqi capability, he said:

“.... 2 From a long and fascinating discussion the following main points emerged:

a. Against (My view)

(i) It was described as an Iraqi Airforce project until Dec 87, when, according to MD Tripod, it became ‘for no clear reason’ an Iraqi Air Lines contract - though still fronted by an Air Force Major.

(ii) It would enhance military potential (but see below)

(iii) Of the principal items of equipment, 0001 - 0011 at reference, the most expensive, the centrifuge, would be bought outside UK (FRG) & Others possibly also.

b. For (My view)

(i) The centre would probably take some 3 yrs from contract to complete & a further 2 to become fully effective in contributing to aircrew selection/grading and training procedures. (I noted that the total Iraqi requirement includes a Biggin Hill-type selection centre and a North Luffenham type Aviation Medicine Centre for aircrew; thus, the Tripod facility apparently is not seen as the entire solution to the aircrew problem).

(ii) Excepting the ejection-seat trainer & centrifuge the equipment could be said to have a civil &/or research application (the centrifuge is discounted as a research tool as Iraq simply does not have, nor will have, the associated expertise).

(iii) A US firm, of which the Commandant has no good to say, has been competing throughout but Iraqi contacts say that UK/RAF participation would much be preferred. It is believed, however, that MATRA has put in a late appearance.”

The Group Captain concluded that:

“It seems to me that provided the transparent attempt (by the customer or Tripod) to remove a potential barrier to the deal can be put to one side the balance of argument lies in favour of treating it as a dual purpose military/civil project where the military value is both a distant and unquantifiable derivative. The Commandant said that he would be disappointed if the contract did not receive approval.”

The St. Aubyn report might be taken to suggest that the military value of the project was unclear. But AVM Howard has said that he believed that military potential would be enhanced, albeit not at that stage. Whether it was appropriate to take account of the lapse of time in setting up the project is questionable.

D2.378 The Group Captain having highlighted the attempt by the Iraqi authorities to disguise the project, it was incumbent on the MODWG and the IDC to consider the ELAs on the footing that they related to a military project. Mr Barrett’s view was that:

“As Group Captain St Aubyn had considered the ELAs as though the end user was in fact the Iraqi Air Force, and he had concluded that “the balance of argument lies in favour of treating it as a dual purpose military/civil project where the military value is both a distant and unquantifiable derivative ....”, I imagine that we did not take the matter further ....” *529

The FCO and DTI members of the IDC had notice of the change in the Iraqi contracting entity in that the change was referred to in “the MOD report” (i.e. the St Aubyn report) which was attached as Annex B to the Summary Record of the IDC meeting on 23 March 1988. *530 In his first written statement, Mr Hextall said that the St Aubyn Report was used as a basis for discussion at the IDC. *531 But some of the officials at the meeting may not have been conscious of the change. Mr Simmons (FCO/MED), then Chairman of IDC, said in written evidence to the Inquiry that the FCO had not been aware of the change in the Iraqi contracting entity. *532 He added that:

“The knowledge [of the change] may [if it had been known] have affected the discussion in the IDC, but not markedly, as the MODWG at the time considered the barriers between Iraqi Airways and the Iraqi Air Force to be very thin.”

Mr Simmons, as Chairman, ought to have read the St Aubyn Report and, if he had done so, would have been aware of the change. Be that as it may, Mr Simmons’ answer ignores one important aspect, viz. the role of FCO Ministers. FCO Ministers should have been invited to consider the ELAs on the footing that the intended consignee was the Iraqi Air Force. Irrespective of any judgment by the MODWG on significant enhancement, FCO Ministers might have wanted to consider whether, in presentational terms, they would be able to defend against public criticism a decision to approve the licences having regard to the attempt to disguise the consignee. FCO Ministers were not, as appears below, given that opportunity. Nor is there clear evidence that MOD Ministers were told, explicitly at least, about the change in the Iraqi contracting entity, although Lord Trefgarne (the then Minister (DP)) made the point in regard to the end-user that “Iraqi Airways and/or the Iraqi Airforce were linked anyway.” *533 Mr Barrett’s 23 March submission to the Minister reported on the IDC meeting of the same date and referred to the Iraqi intention to use the centre for “training of both civil and military pilots.” *534

D2.379 The IDC recommended approval of the Tripod licences. The Summary Record of the 23 March meeting stated:

“.... Although some parts seem to have a military application (the G force testing equipment and the ejection seat trainer), this equipment is intended for civil and medical research. The MOD report indicated that this equipment is unlikely to be operational for 5 years.”

Mr Cowell, in the FCO submission containing his recommendation to approve the Tripod licences, merely repeated what was said in the Summary Record. *535 The St Aubyn report was attached to the submission, but there is no indication whether the senior FCO officials who approved the recommendation had specifically directed their minds to the report. The question also arises whether the recommendation made by Mr Cowell should have been marked up to Ministers having regard to the military aspects, to the involvement of the IAM and to the change of the Iraqi contracting entity, all of which were signalled in the St Aubyn report. In his written comments dated 17 July 1995, Sir David Miers commented that the Tripod papers made clear that officials did not consider the exports to constitute a significant enhancement. It was in those circumstances that the judgment was made not to mark the papers on to Mr Mellor. Mr Mellor, said Sir David, had told the Inquiry that “he did not regard officials as lacking in judgment about the range of material which he needed to see.” The recommendation was not in the event marked up to ministers and, as a consequence, FCO ministers did not have the opportunity to address the presentational and other factors at issue.

LORD TREFGARNE’S CONCERNS ABOUT THE INVOLVEMENT OF THE IAM AND OF AIR VICE-MARSHAL HOWARD

D2.380 In the meantime, on 23 March 1988 Mr Barrett at the MOD recommended that Lord Trefgarne should approve the licences. He said that the aviation research centre was intended to assist in the selection, grading and training of civil and military pilots and noted that the centre would not be fully effective for about five years. Tripod would, he added, face strong opposition from French and US competitors. He concluded:

“Whilst the centre, when fully operational, will represent an enhancement of Iraq’s military potential, the balance of argument lies in favour of treating it as a dual purpose military/civil project where the military value is both a distant and unquantifiable derivative. The IDC agreed to recommend approval as an insignificant enhancement”.

D2.381 Lord Trefgarne was not happy with the recommendation on two grounds. *536 First, while (as he put it in evidence to the Inquiry) he did not challenge the IDC’s assessment of the ELAs under the Guidelines, he was concerned about the IDC’s reasoning to the effect that the project could be treated as a military/civil project whose military value was a distant and unquantifiable derivative. Secondly, he was concerned about the involvement of the IAM. *537 He believed that their involvement should be reduced and eventually ended; his anxiety was that the RAF should not be advising Iraq. In the light of his concerns, he asked that a decision on the ELAs be deferred, pending a fuller and more detailed examination of the proposal and of the IAM’s part in its formulation. At that stage, the FCO and DTI members of the IDC were merely told by Mr Barrett in a letter dated 8 April that “MOD Ministers wished these applications to be deferred pending further consideration of the full proposal.” *538 Mr Barrett’s IDC colleagues from the FCO and the DTI did not become aware of the nature of those concerns until the IDC meeting on 28 June 1988. *539

D2.382 On 19 May 1988, Mr Barrett wrote to AVM Howard to explain Lord Trefgarne’s concerns and to tell him of the deferral of the decision on the ELAs. *540 Mr Barrett sought information to enable him to convince the Minister that the ELAs should be approved. He said:

“.... 4. In view of what I have told the Minister already, can you possibly provide any further information (preferably on one side of A4) which would help to convince him. We can perhaps emphasise the civil aspects, and the long term nature of the project, i.e. the conflict would have to go on for at least another five years (or more?) before the product of the centre would have any impact on it. If you have any information about the company, that would be useful (just a paragraph perhaps). And finally, could you please explain the IAM’s involvement in terms of their contribution, contact with the company or country, visits to the country, and what you assess would be the impact and likely reaction to IAM’s involvement being run down gradually.”

Mr Barrett’s request to AVM Howard is revealing in its invitation to provide information “to convince” the Minister and to “emphasise the civil aspects.” Mr Barrett was asked to explain his choice of words. He explained:

“In my letter to AVM Howard I said “we can perhaps emphasise the civil aspects” (my underlining). I was inviting the AVM to give me more information about this relatively new aspect of the project. That did not mean to say that that would be convincing, but it would have helped the company in view of the IDC’s recommendation to approve. I was not inviting the AVM to distort the case. The final sentence of my paragraph [4] of my letter made it clear that the Minister wanted to know about the IAM’s involvement, which would also have told him something about the military aspects of the project.” *541

Mr Barrett knew at that time that the project was intended for Iraqi military purposes; he has said as much to the Inquiry. *542 His request to the Air Vice-Marshal was not, as it should have been, an invitation couched in a manner intended to elicit views which evaluated in a balanced way the military and civil aspects of the project; rather it was an invitation to provide evidence in support of the views which officials had already espoused.

D2.383 AVM Howard provided his advice by means of a letter to Mr Barrett dated 1 June 1988. *543 The substance of his advice was contained in three enclosures to his letter. The Air Vice-Marshal was enthusiastic in his advocacy of the export opportunities afforded by the project:

“.... The third Enclosure is the ‘one side of A4’ for which you asked, on which I have attempted to place the putative military benefits of the Centre in perspective ...

4. I trust that the information will be of some help to you in convincing the Minister to grant the export licence. It would grieve me to see the contract fall from British hands, to the greater glory of the French.”

In using the word “putative”, I have taken AVM Howard to mean that the military benefits were unlikely to crystallise for some years and not that there would never be any such benefits. As to paragraph 4, the same attitude was echoed in the third enclosure already referred to, where AVM Howard said:

“.... 6. It is considered that the value of the contract to British industry far outweighs the small potential benefit that the Centre would afford to the Iraqi Air Force”.

In his written statement dated 18 March 1994, Lord Trefgarne referred to AVM Howard’s support for Tripod’s ELAs:

“Air Vice-Marshal Howard was supporting a UK firm in competition with French and US companies and I saw nothing improper in that. Whilst Air Vice-Marshal Howard had supported the grant of the ELAs he was not responsible for determining the application one way or the other.” (paragraph 22)

Nonetheless, AVM Howard’s advice was an influential factor in the determination of the ELAs. His attitude to the commercial opportunities undoubtedly bolstered the views of a receptive IDC audience.

D2.384 AVM Howard’s advice was that the project had been modified since 1981 to the extent that the purely military facilities appeared to be of secondary importance. The specifications agreed with the Iraqis appeared to exceed the needs of its Air Force “by a substantial margin”. The Air Vice-Marshal therefore inferred that the prospective use of the project had changed significantly. That said, he recognised that:

“.... The military value of the Centre is obvious but it cannot be readily quantified. Its strategic importance would certainly be great were the Iraqis to develop or acquire a new generation of high-performance aircraft, and it could be seen as provision for the future ....

5. Because most of the capital equipment must be custom-built, the timescale of the project is very long .... [T]he training of aircrew could not begin for at least five years and the fruits of any research would not be ripe for at least seven years. Moreover, without imported expertise, neither function is likely to provide greatly enhanced military capability.”

D2.385 At the IDC meeting on 28 June, the Summary Record notes the following discussion:

“.... Although the end user is stated to be civilian, some of the equipment suggests a possible military use (e.g., ejection seat trainer and human centrifuge). Nevertheless, at the previous IDC meeting, the IDC were content to recommend approval on grounds of military insignificance. However, MOD Ministers deferred a decision on this equipment because they were concerned about possible presentational difficulties arising from a connection between Iraq, Tripod Engineering and the RAF Institute of Aviation Medicine. MOD are looking into this, but DESS 2 have been reassured by the Institute that they have had very minimal contact.” *544

Mr Barrett and Mr Hextall were the MOD representatives at this meeting.

D2.386 The FCO Summary Record of the IDC meeting on 14 July 1988 records as follows:

“After an investigation into the presentational implications of the sale, the MOD were to recommend to their Ministers that this export be approved. The IDC agreed that as it had already given its own approval in principle, these applications need not be re-submitted to the IDC provided MOD Ministers were now content.” *545

Mr Hextall has, told the Inquiry that he believes “either Mr Barrett or [he] would have made the IDC aware in the discussions which took place over the period, of the extent of Lord Trefgarne’s concerns as [they] understood them at the time.” *546

D2.387 In the meantime, in a submission dated 5 July 1988, Mr Barrett advised Lord Trefgarne that:

“It is clear that IAM have been acting as advisers to the company and not to the Iraqis; the advice has been ad hoc and Minister (DP) may feel in the circumstances that it could continue on the same basis. The note on the military benefits confirms that the benefits to the Iraqis would not mature for at least seven years and without imported expertise would not greatly enhance their military capability. Tripod have been asked to sign a contract quite soon. I should be grateful if Minister (DP) were now able to approve it; we should perhaps suggest that the company does not give it any publicity.” *547

In response to Mr Barrett’s submission Lord Trefgarne’s Private Secretary recorded in a minute dated 15 July 1988 that Lord Trefgarne was content, on the basis of the advice which he had received, to agree that the contract should go ahead. *548 However, the Assistant Private Secretary added:

“Whilst accepting that the contact which the Commandant of the Institute, Air Vice Marshal Howard, has had with Iraqi officials has been minor, Lord Trefgarne is anxious that no future contacts of this sort should take place. Additionally, Lord Trefgarne agrees that it should be suggested gently to Tripod Engineering that the involvement of the IAM should not be given any publicity.”

D2.388 In written evidence to the Inquiry, Lord Trefgarne explained the views summarised in his APS’ note:

“Notwithstanding that I was re-assured about the involvement of Air Vice Marshal Howard, I was concerned that his involvement may be misunderstood. I was concerned that, rather than appreciating that the IAM was merely assisting a British company to win an export, it may have been erroneously perceived by the public as the RAF advising the Iraqis or itself being involved in the sale of equipment to Iraq. Therefore in my APS’s note of 15 July 1988 .... although I accepted that the contact which Air Vice Marshal Howard had had with Iraqi officials had been minor, I was anxious that no future contacts of this sort should take place and I felt that the involvement of the IAM should not be given any publicity.” *549

Lord Trefgarne’s comment about public perception was, in my opinion, justified.

D2.389 On 19 July, Mr Barrett minuted Mr Hextall by way of a manuscript note on the Assistant Private Secretary’s minute. He said:

“RM2 should do this carefully - say it is in interest of company to play down military aspects.”

On 27 July, Mr Hextall minuted Miss Ginny Johnson, RMD2a, to say that Minister (DP) had endorsed the IDC’s recommendation on Tripod and that “it should be suggested gently that the involvement of the IAM should not be given any publicity.” *550 Mr Hextall then gave her the following advice:

“As we discussed, this would probably be best achieved by suggesting to Tripod that it would clearly be in their best interests to play down the military aspects of their contract, and that it would therefore be wise to ensure that no publicity is given to the IAM’s involvement.”

On 28 July, Mr Barrett wrote to Mr Steadman to say that the Tripod ELAs had been endorsed by Lord Trefgarne. *551 He noted that Tripod were pressing for urgent approval and observed that, “since FCO Ministers endorsed the IDC recommendation some months ago when it was first put to them, the way is now clear for the licences to be granted.” *552 In fact, as described in paragraph D2.379, FCO Ministers had not been asked to approve the original Tripod recommendation. Even when the IDC was later told on 28 June of possible presentational difficulties about which MOD Ministers were concerned, FCO Ministers were not asked to consider the matter of IAM involvement in advising Tripod/the Iraqi Air Force. *553

D2.390 Lord Trefgarne and his MOD officials were entitled to rely on AVM Howard’s advice to the effect that the Tripod equipment would not significantly enhance Iraq’s military capability. But they were anxious to play down the military aspects of the project. The obvious inference to be drawn from their anxiety that publicity be avoided is that they wanted to avoid the criticism and awkward questions which were likely to follow if it became publicly known that the IAM and AVM Howard had in effect been involved in advising the Iraqi Air Force in relation to a project which had military value to the Iraqis and that the Government had granted export licences for items destined for use for the purposes of such a project.

AIR VICE-MARSHAL HOWARD’S CONSULTANCY ROLE

D2.391 Mr Barrett wrote to AVM Howard on 18 August 1988 to tell him of Lord Trefgarne’s decision on the ELAs and on the continued involvement of the IAM and of the Air Vice- Marshal himself:

“.... Minister (DP) was most grateful for the fuller account of the involvement of the IAM in Tripod Engineering’s project and, on the basis of the advice he was given on the military significance of the project, he was prepared to agree that the contract should now go ahead. Whilst he accepted that the contact which you had had with Iraqi officials was minor, Minister (DP) was nevertheless anxious that no future contacts of this sort should take place.

Minister (DP) was, however, content that you could continue to provide ad hoc informal advice to the company but felt that it should be suggested gently to Tripod Engineering that the involvement of the IAM should not be given any publicity. It has now been suggested to the company that it is in their own interest to play down the military aspects of the project and that it would be wise to ensure that no publicity was given to the IAM’s involvement ....” *554

Lord Trefgarne has agreed that he was content for AVM Howard to continue to provide advice to Tripod, provided that the Air Vice-Marshal had no more contact with the Iraqis. *555 Neither the FCO nor the DTI, however, were told of Lord Trefgarne’s agreement that AVM Howard should continue to provide advice to Tripod. In Mr Barrett’s view the matter was not their business.

D2.392 AVM Howard was in service until October 1988 when he retired. After he retired, he acted as a consultant to Tripod. In written comments the following explanation was put forward on his behalf :

“.... [AVM Howard] no longer has any documents relating to his consultancy agreement with Tripod, save for one computer disc which contains some of his correspondence and reports sent to Tripod. From the documents held on disc it appears that the consultancy agreement was recorded in a letter from Tripod dated 18 November 1988.... A copy of the retainer letter is no longer in AVM Howard’s possession.

20. AVM Howard’s recollection is that he received a telephone call in about early November 1988 inviting him to a meeting with Tripod. The meeting, which took place shortly before the letter of 18 November 1988 was sent, was attended by Messrs Tappuni, Hindi and Purcell. A consultancy agreement was discussed and agreed. AVM Howard is sure that prior to his retirement he received no offer, or indication of any prospect of an offer, of employment with Tripod.

21. The work done for Tripod consisted of writing reports for Tripod, which were sent to the architect for the project, Mr Hindi. The reports were written between 19 December 1988 and 5 February 1989....

24. The consultancy agreement required AVM Howard to provide advice to Tripod in connection with the proposed Iraqi contract. Such advice was given based on AVM Howard’s medical expertise and experience, without needing in any way to draw on advice from the IAM or official records.” *556

AVM Howard has provided the Inquiry with details of the remuneration paid for his consultancy work; the terms of remuneration are not relevant for present purposes. *557

556 Written comments of AVM Howard dated 25 April 1995 557 see AVM Howard’s letter to the Inquiry dated 18 October 1993 (MOD/497)

D2.393 According to the MOD, AVM Howard was, as a retiring “two star officer”, required for two years after his last day in Crown Service to seek official permission to accept any paid employment. *558 The relevant rules in force at the time of AVM Howard’s retirement were as follows:

“The scope of the rules

2. Those to whom the rules apply are required to obtain the assent of the Department before accepting any offer of employment in business or other bodies outside the Civil Service which would commence within two years of leaving Crown employment, whether full or part-time, or before establishing a consultancy. The rules apply to appointments:

a. in the United Kingdom; or

b. overseas in a public or private company, or in the service of a foreign government or its agencies...” *559

Applications for assent were required under rule 3 from all non-industrial civil servants or officers in HM Forces of Grade 3 level, Rear Admiral level or equivalent rank and above. Air Vice- Marshal is the RAF equivalent of Rear Admiral. The rules did not, however, apply to unpaid appointments with non-commercial organisations. On 29 February 1988, AVM Howard signed a document entitled “Premature Voluntary Release - Certificates” in which he certified that he was aware of the Queen’s Regulations and an RAF circular concerning the acceptance of business appointments after leaving the service. The terms of the RAF circular are identical to those set out above. The MOD have told the Inquiry that there is no trace in the record of applications made under the Business Appointment Rules of an application made by AVM Howard to accept any employment. *560

D2.394 AVM Howard has agreed that he did not seek official permission to accept work as a consultant with Tripod. Having had his attention drawn to the rules, AVM Howard agreed that permission should have been sought but said that “the failure to seek permission was certainly not deliberate.” *561

D2.395 It was argued in written submissions to the Inquiry that it was probable that AVM Howard “would have been granted permission if he had sought it .... The MOD had been content for him to provide technical advice to Tripod whilst serving and there seems to be no reason why such advice should have been deemed inappropriate after retirement.” The points put forward in support of this contention were these:

“.... Tripod was not a contractor to the MOD, and had no relationship with the MOD. There was therefore no ”negotiating relationship“ between Tripod and the MOD (paragraph 5 of MOD/1060), nor was AVM Howard in a position to influence the outcome of contractual or other dealings between the MOD and Tripod (paragraph 6 of MOD/1060). Although AVM Howard had been involved in giving advice in relation to a policy decision in relation to the Tripod ELA, he was clearly being retained by Tripod, not in connection with the policy decision which had not been made wholly or in part by AVM Howard, but on account of his technical expertise in aviation medicine. The MOD could have no legitimate interest in preventing AVM Howard making use of his own personal technical expertise, and no right to do so....” *562

D2.396 The rules were, however, expressly designed to counter suspicion, whether or not justified, that the advice and decisions of a Crown servant might have been influenced by the hope or expectation of future employment with a particular firm or organisation. *563 Paragraph 1 of the rules is in the following terms:

“Introduction

1. It is in the public interest that people with experience of public administration should be able to move into business or other bodies and that the possibility of such movement should not be frustrated by unjustified public concern over a particular appointment. It is also no less important whenever a Crown servant accepts a particular outside appointment that there should be no cause for any suspicion of impropriety. The rules set out below are designed to safeguard against such criticism both the public service and individual officers who wish to take up these appointments. The aim of the rules is:

a to counter suspicion, however unjustified, that the advice and decisions of a serving officer might be influenced by the hope or expectation of future employment with a particular firm of organisation; and ....”

AVM Howard’s actions, however unintentionally, were apt to give rise to precisely the suspicion which the rules were designed to avoid.

SUBSEQUENT VISITS TO RAF ESTABLISHMENTS BY IRAQI PERSONNEL

D2.397 As has been said above, Tripod had in October 1986 visited RAF Biggin Hill and shown an interest in purchasing a computerised pilot aptitude testing system for the aviation research centre project. *564 The ELA for the system, numbered 3G/22037/88, was approved as part of the batch referred to above. When briefed by MOD/DESS in March and July 1988, Lord Trefgarne was not told that Tripod had visited RAF Biggin Hill to be briefed about the system or that the system was one which had been designed for the RAF and included an associated software package whose copyright vested in the MOD. *565 The Minister had, in approving the licence applications, made clear that no future contacts between the Iraqis and the IAM were to take place. It should have been obvious to MOD/DESS that that veto would apply equally to comparable contacts with other RAF units. Yet on 23 August 1988 the Commandant of the Officers and Aircrew Selection Centre (OASC) at RAF Biggin Hill, presumably unknowingly, agreed to a proposal from the Ministry of Defence that a delegation of Iraqi visitors should visit OASC with Tripod. *566 The visit was sponsored by DESO on behalf of Tripod. *567 In due course, a delegation of senior Iraqi Air Force staff visited the OASC on 6 September to study the pilot aptitude system which, according to an OASC letter dated 7 September recording the outcome of the visit, was “the subject of a contract with Tripod Engineering Ltd, sponsored [by] the UK Government.” *568 In fact it became obvious from the discussion at Biggin Hill that the Iraqis were interested in the so-called “Phase 2” aptitude tests designed specifically for use on computer and not the “Phase 1” tests under discussion in 1986. For a number of reasons, the RAF did not believe that it could fulfil the task for the Iraqis.

D2.398 In sponsoring a visit by Iraqi Air Force officers to RAF Biggin Hill after Lord Trefgarne’s veto had become known, officials were acting in a manner contrary to the effect of an MOD Minister’s instructions. Because MOD papers submitted to the Inquiry in relation to the Tripod project are incomplete, it is not possible to say with any certainty whether or not DESO were told by Mr Hextall of Lord Trefgarne’s views on RAF contacts with Iraqi military personnel. *569 What is clear is that Mr Hextall’s minute to Miss Johnson on 27 July does not mention the point. If the Minister’s views were not passed on to DESO, that was a reprehensible failure by MOD/DESS. In his written comments dated 15 February 1995, Mr Hextall told the Inquiry that the question of contact between members of UK forces and foreign nationals was “a matter for Minister (AF) to rule on. Had the intention of either the APS’s minutes been to rule out such contact with the Iraqis, they would, at the very least, have been copied to Minister (AF) and Sec(O)(C), the MOD’s Policy Secretariat responsible for such matters.” It is unnecessary to reach a concluded view on whether the APS and the Minister (DP) should themselves have involved Minister (AF) and Sec(O)(C). It is sufficient to note that the papers clearly indicate that DESO were throughout responsible for facilitating and setting up the Tripod visits to the IAM and other RAF establishments; in those circumstances, DESS, who were in direct contact with the Minister (DP)’s office, were in the best position to ensure that the appropriate steps were taken to alert DESO of his views, as well as alerting Minister (AF), Sec(O)(C) and relevant military establishments, using any appropriate MOD channels of communication.

D2.399 Further requests for Iraqi officers to visit the OASC were made in early 1990. In response, on 26 February 1990 the MOD told Mr Norris of John Laing International (by now involved with Tripod in the venture) that the timing of the proposed visits presented difficulties. *570 In fact timing should not have been the main obstacle to a visit; MOD Ministers had in effect forbidden it.

D2.400 On 9 April 1990, Mr Haddow (RMD1c) wrote to the new Commandant of the IAM apparently in response to a Tripod/ Laing request to permit Iraqi officers to visit the IAM. Mr Haddow said:

“.... 2. Due to recent events, there is now an embargo on Iraqi officers visiting any UK military or government establishment. Mr Norris will shortly be contacting the Institute to request permission for a small team of Laing/Tripod representatives to visit the Institute’s Vibration Laboratory

.... 3. [Group Captain Glaister] has been in touch with me as the Tripod representative who wishes to visit the Laboratory is of Iraqi national status. I have checked the position with Sec (O)(C) and the FCO Middle East Department, who laid down the policy on Iraqi visits to military establishments and neither have any objections to the Tripod representative attending providing the visit can be conducted at an unclassified level ....” *571

I have assumed that the “embargo” was part of the measures introduced by the British Government in response to the execution of Mr Bazoft. There is no record of an OASC reply. Mr Haddow passed on the content of his letter to the OASC to Mr Norris of Tripod/Laing by faxed letter dated 9 April 1990. In a subsequent minute to Wing Commander Goodman, MOD (RI) from Mr Haddow dated July 1990, Tripod/Laing were recorded as showing continuing interest in the Phase 2 tests which were said to be very important to Tripod/Laing. *572 The Haddow minute was sent on to the OASC. Squadron Leader D’Arcy of the OASC replied on 31 July 1990. *573 He concluded his letter by saying:

“In making the decision, it should be asked what if any are the advantages to MOD in providing a test system for Iraq. The licence fee is trivial and the normative data (if ever it was received) would be of very limited value. Finally, since it would be very naive to assume that the Aptitude test system would only be used for civil pilot selection, it would turn out to be an embarrassment; the image of the Royal Air Force could be permanently tarnished by the inevitable publicity that would be given to the Iraqi Air Force using the RAF Aptitude tests.”

Kuwait was invaded shortly thereafter. The discussions foundered.

AFTERMATH

D2.401 As has been noted above *574 ECGD credit support was granted in respect of the Tripod project. The importance of the project was such that the Iraqi authorities had made it clear during an ECGD visit to Baghdad in September 1988 that this was a high priority project, which would be nominated under the 2nd General Purpose Line of Credit signed in 1988. ECGD therefore decided exceptionally to waive the £10 million loan value limit for the Tripod contract. The contract was signed on 8 November 1988. The UK goods totalled £16,458,000 and the UK services £726,800. Local services amounted to £1,494,400. The total contract value was £18,680,000 and finance was provided for 85% of the UK goods and UK services giving a loan value of £14,607,760 and a maximum liability figure of £18,594,860.89. *575

D2.402 The evidence before the Inquiry does not indicate whether, in the event, any or all of the equipment was exported to Iraq.

Endnotes
*505 - see written statement of Air Vice-Marshal Peter Howard dated 18 October 1993 (“First written statement”): paragraphs 1.2 and 7.3.2/7.3.3

*506 - see AVM Howard’s first written statement paragraphs 7.3.2/7.3.3

*507 - see Ibid. paragraphs 2.1/2.2; MOD/166.177 at 179

*508 - see MOD/239.7

*509 - see MOD/239.13 (visit to the IAM approved at unclassified level) and MOD/239.19 (visit to Biggin Hill approved at unclassified level provided that Tripod’s interest centred on the medical aspects of pilot selection training facilities)

*510 - see paragraph 5.1.2 of his first written statement

*511 - see MOD/443.3

*512 - see MOD/166.177 at 179; paragraph 9.1.2 of AVM Howard’s first written statement; paragraph 6 of his second written statement dated 13 January 1994 (“second written statement”)

*513 - see MOD/166.177 at 181, paragraph 5

*514 - see paragraph 8.1 of his second written statement

*515 - see MOD/166.177 at 181, paragraph 5

*516 - see paragraph 9.3.6 of AVM Howard’s first written statement

*517 - Written comments of AVM Howard submitted on 25 April 1995, paragraphs 33 and 35

*518 - see MOD/166.177; see also paragraph 11 of his first written statement

*519 - see MOD/166.177 at 181, paragraph 6

*520 - see paragraph 7 of his first written statement

*521 - see letter to ECGD from the Midland Bank International Division (ECG/13.6.(Folio 297)). Export Credit was, in the event, granted: see also paragraph D2.103 supra and D2.401 infra

*522 - see ECG/13.6.(Folio 297)

*523 - The DTI classified some of the items as Military List items. Other items with a clear military application, such as the Flight Training Simulators and the human centrifuge, were classified “3G”. But the project as a whole was, given the connection with the Iraqi Air Force, obviously a military one.

*524 - see Mr Hextall’s written statement dated 1 November 1993, p. E1

*525 - see MOD/166.95

*526 - see AVM Howard’s first written statement, paragraph 6.3

*527 - Secretariat (Overseas) (Commitments)

*528 - Sec(O)(C) is a separate MOD directorate from the branch to which the individual “service” members of the MODWG belonged, namely the Equipment Security branch

*529 - see Mr Barrett’s written statement dated 27 October 1993, paragraph E.4.7

*530 - see MOD/166.133. The FCO submitted their copy of the MOD report to the Inquiry in June 1993, some months after the Summary Record itself had been sent to the Inquiry (FCO/2.6.285A)

*531 - see Mr Hextall’s written statement dated 1 November 1993, p. E.1

*532 - see his written statement dated 3 September 1993, Section N

*533 - see his written statement to the Inquiry dated 18 March 1994,paragraph 19

*534 - MOD/166.103

*535 - see FCO/2.6.269 at paragraph 2(ii)

*536 - see Lord Trefgarne’s first written statement dated 18 March 1994. pp. 10-14

*537 - MOD/15.1.313: Minister (DP) was recorded by his APS as having “felt very uncomfortable about the involvement of the Institute of Aviation Medicine in advising Iraq on their proposed new Aviation Research Centre, and asked for a further detailed report. He was, however, firmly of the view that this involvement should be ended, although .... gradually.”

*538 - MOD/166.137 at 139

*539 - see FCO/2.6.191 (see paragraph D2.385 infra)

*540 - see MOD/166.173

*541 - see Section E of Mr Barrett’s first written statement, paragraph 11

*542 - see ibid, paragraph 9

*543 - see MOD/166.177

*544 - FCO/2.6.191 at 192

*545 - MOD/166.207 at 209

*546 - Mr Hextall’s written comments dated 16 February 1995, p.18

*547 - see MOD/166.185 at paragraph 2(d)

*548 - see MOD/166.211 at paragraph 2(d)

*549 - see Lord Trefgarne’s written statement dated 18 March 1994, paragraph 23

*550 - see MOD/166.215

*551 - see MOD/166.217

*552 - Mr Barrett believed at that time that all IDC recommendations were put to FCO Ministers (Written comments dated 15 February 1995)

*553 - see Mr Cowell’s submission to Mr Young and Sir David Miers dated 12 July 1988: FCO/2.6.189. Sir David Miers commented that there was no need for the submission to be marked on to Mr Mellor

*554 - see MOD/166.257

*555 - see Mr Barrett’s first written statement; paragraph E.16: Lord Trefgarne’s statement dated 18 March 1994

*558 - MOD/239: Letter from the MOD Scott Inquiry Unit dated 3 June 1993

*559 - The rules in force at the time of AVM Howard’s retirement were promulgated in August 1987 (GEN 92 Acceptance of outside appointments by Crown Servants) [D(CM(IR))/1/1/L:4857MB] (see MOD/1060)

*560 - see MOD/239

*561 - Written comments of AVM Howard dated 25 April 1995, paragraphs 25 and 26

*562 - The criteria for consideration for permission to which AVM Howard refers(MOD/1060) included the following:

“5. Many Crown servants are engaged in dealing with private interests on behalf of MOD, and such officials could have a special knowledge of how the Department would be likely to react to particular sets of circumstances... It is important that the Department should take into account the advisability or otherwise of permitting an individual to join an outside interest with whom the Department has been, or is, in a negotiating relationship. It may also be relevant that a senior official has been involved in policy discussion leading to a decision the effect of which is considerably to the benefit of the firm offering him an appointment. The extent of a company’s dealings with an applicant would be a relevant factor in deciding the outcome of an application for approval to take up a directorship or other appointment with that company. 6. The degree of previous official contact between the applicant and the prospective employer is an important consideration, as is the nature of the proposed appointment and the connection between it and the applicant’s previous official duties. It will be necessary to establish whether the individual was in a position to influence the outcome of contractual or other dealings between the department and the prospective employer and, if so, whether the individual acted as a member of a team; and whether the company benefited substantially from such dealings. Sometimes the prospective employer’s relations with the Department may be relevant irrespective of any involvement on the part of the individual concerned; normally, however, some measure of personal involvement on the part of the applicant will have been necessary for this factor to be relevant. This might be either direct involvement of the applicant in dealings with the company concerned or indirect involvement through officers for whom he was responsible (whether or not they normally worked to the officer)”

*563 - see MOD/1060

*564 - see paragraph D2.369 supra

*565 - There was a passing reference to the involvement of Biggin Hill in one of the enclosures to AVM Howard’s letter to Mr Barrett dated 1 June 1988

*566 - see MOD/443.7 567 see MOD/443.5

*568 - see MOD/443.19

*569 - The MOD’s Tripod papers were submitted in 5 tranches: the original papers submitted in the first months of the Inquiry; MOD/166 (30 April 1993); MOD/239 (3 June 1993); MOD/443 (17 September 1993); MOD/1060 (28 November 1994)

*570 - see MOD/443.27 and MOD/443.29

*571 - see MOD/443.33

*572 - see MOD/443.39

*573 - see MOD/443.41

*574 - see paragraph D2.103 supra

*575 - see ECG/13.6.301

* The Full report is available from The Stationery Office Ltd., PO Box 276, London, SW8 5DT.