Volume Two
Section D Arms and Defence-Related Exports to Iraq
Chapter 6 Specific Export Licence Applications after the Cease-Fire

Excerpt:
(II) THE HAWK PROJECT AND MR DAVID HASTIE

D6.29 The Head of Defence Sales in DESO (HDES) from 13 May 1985 to 15 September 1989 was Sir Colin Chandler (as he later became). Prior to his appointment he had been Group Marketing Director in British Aerospace Plc (BAe). In that office he had responsibility for the organisation and control of the marketing efforts of BAe’s operating divisions, including the division responsible for the Hawk aircraft. Mr David Hastie had been recruited into BAe by Sir Colin and in February 1988 was BAe’s Divisional Director, Marketing Operations. *55 Among the BAe sales prospects with which Mr Hastie was concerned was the Hawk project. On 19 February 1988, Mr Roger Keeling, ARMD2A at DESO, wrote to Sir David Miers, FCO/MED, inviting FCO representatives to attend a BAe presentation on Hawk. A “hidden” copy of this letter was sent to, among others, Mr Hastie at BAe. *56 It seems clear that Mr Hastie was in regular correspondence with DESO regarding the Hawk project. *57

D6.30 In April 1988, Mr Hastie was seconded from the BAe to DESO as “Business Development Adviser to HDES”. His secondment was to continue for a period of 364 days from 25 April 1988. But his salary and employment allowances were to continue to be paid by BAe. BAe was to be responsible for making arrangements for his employment after the secondment had come to an end. The post of “Business Development Adviser” was a new one, created for Mr Hastie. No one was appointed to the post in Mr Hastie’s place after his secondment terminated.

D6.31 Mr Hastie’s appointment as Business Development Adviser came about in the following way. Sir Colin Chandler had a conversation some time in February 1988 with Mr Dick Evans, Corporate Marketing Director at BAe. They talked about Mr Hastie and his abilities, for which Sir Colin had a high regard. Sir Colin has explained:

“We agreed that it made sense to use [Mr Hastie’s] talents in DESO for a short period whilst BAe took a long term view as to his future. I had for some time had the idea that it was in DESO’s interest to stimulate awareness in smaller companies of DESO’s role. The position of Business Development Adviser was established to expand DESO’s influence to companies smaller than those with whom we usually dealt in connection with export sales and I thought David Hastie could fill that role for us. I had in mind that a short term secondment would do the trick because he could be put on to setting up systems for promoting interest amongst the smaller companies and once the system was up and running he could move on and go back to BAe. The system having been established and proven, there would be no need to continue the post of Business Development Adviser.” *58

D6.32 The conversation between Sir Colin and Mr Evans was followed up by a letter dated 12 February 1988 from Mr Evans to Sir Colin in which the basic terms of the proposed secondment were outlined *59 and on 7 March, following a meeting between Sir Colin and Mr Hastie on 3 March, Sir Colin wrote to Mr Hastie expressing delight that he was “going to be seconded to the DESO as Business Development Adviser for a period of one year”. *60 Following further correspondence, the detailed terms of the secondment were agreed upon. *61 The secondment commenced on 25 April 1988 and was, therefore, due to terminate on 24 April 1989. However, in March 1989 it was agreed that the secondment would be extended for a further six month period expiring on 24 October 1989.

D6.33 While in post as Business Development Adviser, Mr Hastie continued to play a part, now on behalf of DESO, in the progress of the Hawk project. Thus,

(i) a letter dated 15 June 1988 from Mr Keeling to BAe’s Executive Vice-President, Defence Marketing, on the subject of the Hawk project was copied to Mr Hastie; *62

(ii) a letter dated 27 February 1989 from BAe’s Head of Marketing regarding certain Hawk specifications was addressed to Mr Hastie at DESO; *63

(iii) Sir Michael Quinlan, Permanent Under Secretary of the Ministry of Defence from April 1988 to 1992 has commented to the Inquiry:

“That Mr Hastie, while BDA in DESO, should have had some continuing contact with British Aerospace would seem to me unsurprising. I should, if anything, be surprised if he had not.” *64

(iv) Mr McDonald (Head of DESS) said that “Mr Hastie’s background knowledge and expertise would have been very useful in DESO in drafting the various papers about [the Hawk] project” *65 and, in oral evidence, said:

“Certainly it [ie Mr Hastie’s presence in DESO] was seen as an advantage by me, when I consulted him, in putting together the submission on the sale of Hawk, because he was able to explain to me, in a way in which a civil servant would not have been able to explain, the background of the negotiation and in particular some of the intricacies of the potential possible financial arrangements.” *66

(v) Lord Trefgarne explained to the Inquiry:

“...Mr Hastie whilst at DESO was not involved in submitting advice to Ministers but, rather, was involved in enabling DESO to support BAe’s export efforts within the overall constraints of Government policy and there was thus no difficulty in the appointment. Indeed it was not clear until 1989 that the Government would not allow BAe to export Hawk.”*67

(vi) A DESS Note dated 13 March 1991 prepared at the request of the Permanent Under Secretary, Sir Michael Quinlan, referred to research that had been carried out in DESS files and said that “Mr Hastie, prior to the exhibition [in April/May 1989] had been to Baghdad, with HDES agreement, on BAe business on at least one occasion”. *68

(vii) Mr Hastie has commented:

“...because I had managed the project at BAe for a number of years, it was natural that on occasion I should be consulted both by DESO colleagues and from time to time by British Aerospace, where there was a new Project Manager. The assistance I could give in what was an extremely complex programme was in explaining aspects of both the products and the requirements of the project. This has been acknowledged by both DESO and BAe.” *69

It will be recalled that an MOD paper, prepared by Mr McDonald, supported the proposed sale of Hawk to Iraq. *70 It is clear from the evidence to which I have referred, that Mr Hastie played some part in assisting in the preparation of the paper.

D6.34 To the extent that, after his secondment to DESO, Mr Hastie became involved on behalf of DESO in the progress of the Hawk project, he was, through no fault of his own, placed in a position of potential conflict between interest and duty. While there is no reason at all to suppose that Mr Hastie was thereby led into any breach of the duty he owed as BDA in DESO, he ought not, in my opinion, to have been placed in that position. I do not doubt the many advantages of the secondment to DESO of a person with the experience in defence sales and the abilities of Mr Hastie, but BAe were, throughout the period of his secondment, paying his salary and retaining responsibility for his future employment. Whatever the perceived value to the DESO of utilising Mr Hastie’s particular knowledge of the Hawk project, care should, in my opinion, have been taken to ringfence him from any involvement in the project, or, indeed in any other of BAe’s commercial projects. The principle that people should not be placed in a position in which their interest and duty may conflict is not simply an ancient principle of equity (which it is) but ought also, in my opinion, to be regarded as a necessary principle to be applied to all secondments into Government service from industry. In the case of Mr Hastie the principle was evidently lost sight of.

D6.35 Both Mr Hastie and Sir Colin Chandler have expressed disagreement with the opinion expressed in the previous paragraph.

Mr Hastie:

“The role of DESO is clear, including the purpose of secondments. The bulk of my work was not in practice to do with British Aerospace but they were equally entitled to support from DESO as a general principle.

I do not believe that the Body Politic within the DESO and other Government Departments would necessarily agree that the principle of equity is at risk from secondees from both industry or civil service, in either direction, having contact with their former organisations or, indeed, giving assistance. In the past there have been a number of appointments as ‘project officers’ to give specific focus to the promotion of particular equipment - drawn from the respective companies. How many Export Promoters are now employed by the DTI on a temporary basis? Are they never to assist their own companies, at least in part?” *71

Sir Colin Chandler:

“The system of secondments had been with us for some time and, indeed, is still with us and I believe it works well in the national interest. BAe had no UK competitors and, in the context of DESO being charged with helping sales, it seemed to me, and indeed still does, that the interests were the same and did not conflict. At the end of the day, Mr Hastie did the job he was recruited to do for most of the time he was with DESO. DESO took advantage, quite rightly in my opinion, of his presence to assist with the promotion of the Hawk on a few occasions.” *72

These comments, in my view, miss the point. Mr Hastie’s period as BDA coincided with the time when Government had to decide whether or not to support the Hawk project. In so deciding Government expected, and received, advice from the MOD. The officials within the MOD whose duty it was to give, or to contribute to the giving of, that advice had no interest in whether their advice was favourable or unfavourable to the Hawk project. BAe, on the other hand, had an obvious interest in that advice being favourable to the Hawk project. And every employee of BAe whose duty was owed to his employer had a similar interest. Mr Hastie was an MOD official but his salary was paid by BAe and his future employment prospects were, to an important extent, in the hands of BAe. It is as plain as a pikestaff that, so far as MOD advice to Government on the Hawk project was concerned, Mr Hastie was in a position of potential conflict between duty and interest. There was no reason at all why he should not have been seconded to DESO. However, in my opinion, he should have been ringfenced from involvement in any of BAe’s current projects at least until such time as Government support for the project had been decided upon.

D6.36 The ambiguity of Mr Hastie’s position vis-à-vis the Hawk project came to a head in connection with and following the International Military Production Exhibition which was staged in Baghdad from 26 April to 2 May 1989. It had been a relatively vexed question for the Government to decide what attitude to adopt towards the Exhibition in which a number of British firms, including BAe (and, also, Matrix Churchill) were anxious to participate. In a note dated 2 February 1989 to Mr Barrett, Lord Trefgarne’s Private Secretary indicated that the Minister was content, in principle, for defence related equipment to be exhibited at the Exhibition, subject to export licences being obtained, and the equipment being returned to the United Kingdom. *73 The note went on to say that the Minister was content, also, “for DESO representatives to attend this exhibition... provided the Embassy was kept abreast of our proposals.” “However” the note continued “...there should be no DESO stand at the exhibition.” *74 On 6 March 1989 Mr Barrett put up a submission informing the Minister of a proposal from BAe to exhibit a Hawk trainer at the exhibition and recommending that BAe be allowed to do so. *75 The submission said:

“HDES is keen to allow BAe to exhibit the Hawk because the Iraqis have asked for it to be there; also, we understand that the French will be there with the Alpha Jet. *76 If BAe are allowed to take the Hawk, then other companies must be allowed to take their equipment (subject to export licence of course).”

Lord Trefgarne accepted the recommendation made in Mr Barrett’s submission and agreed, inter alia, that “BAe should be allowed to exhibit the Hawk trainer at the Exhibition.” *77

D6.37 The FCO, however, were dubious about the proposal that DESO representatives should attend the Exhibition. A letter dated 22 March 1989 to DESO from Mr Lamport, FCO/MED, outlined the difficulties that FCO saw in the proposal and concluded by saying:

“For these reasons I must advise against DESO sending personnel from London to the Military Fair.... British companies are, of course, free to exhibit in their own right. Our Embassy staff in Baghdad will be present to give whatever local assistance at the exhibition they can. In the circumstances I hope that DESO’s interests can be adequately covered by the attendance by the DA and members of the Embassy Commercial Section.” *78

The FCO letter was, under a covering letter of 30 March, copied to Sir Colin Chandler (HDES), to the Director General of Marketing in DESO and to Mr McDonald (Head of DESS). The covering letter advised that “Given the argument which FCO adduce, I do not think we should contest their decision.” 79 No dissent from this was expressed.

D6.38 Despite the FCO advice, and although the advice had been accepted by the MOD, Mr Hastie attended the Exhibition. He did so in order to assist BAe in promoting the Hawk project to the Iraqis. This came about in the following circumstances. Shortly before the commencement of the Exhibition, the team leader of the BAe team responsible for the Hawk project was refused an entry visa to Iraq on the ground that he had previously been a military attaché in Baghdad. BAe then asked, at short notice, for Mr Hastie to be allowed to go to the Exhibition in place of the non persona grata team leader. Sir Colin Chandler personally took the decision to give the requisite permission. He explained to the Inquiry:

“In view of the urgency, it seemed to me that the best thing to do was to second him back to BAe. I certainly did not think there was any conflict. So far as I am aware he was to try to find out for BAe if Iraq was still interested in Hawk and also to see what BAe’s competitors were up to. I believe that the Iraqis saw him as a BAe man and I do recall telling him before he went that he was expressly to say that he was there on behalf of BAe. As it happens I do not think that the Iraqis would have viewed him in any other light. So far as they were concerned, and indeed, for the period of the desecondment, he was a BAe man.” *80

D6.39 Knowledge that Mr Hastie had gone to the Exhibition was communicated by the MOD to the FCO on 26 April. In a telegram sent on 26 April from the FCO to the Embassy in Baghdad, the situation was described as follows:

“A complication has now arisen. The MOD have told us this afternoon that because Sandars, the BAe team leader, has been unable to obtain a visa, David Hastie of BAe has been drafted into the company’s team at short notice. Hastie is at present on secondment to the MOD.... Hastie left this afternoon with the agreement of HDS and Lord Trefgarne. We understand that Hastie may in fact lead the BAe team. Hastie’s status is ambiguous and could be open to misinterpretation. The MOD believe that the Iraqis were keen for Hastie to be included because they continue to believe him to be a member of BAe. They may equally know that he is not. Either way, we are anxious to ensure that Hastie and his team are scrupulous in presenting Hastie only as a member of BAe.... In particular, he should not give out any MOD visiting cards....” *81

D6.40 The telegram referred to agreement to Mr Hastie’s presence at the Exhibition having been given not only by Sir Colin Chandler but also by Lord Trefgarne. It is not clear, however, that Lord Trefgarne knew of what was proposed in time to have intervened if he had wished to do so. It is, however, clear that Lord Trefgarne did approve, probably after the matter had become a fait accompli, the decision by HDES to allow Mr Hastie to go. Lord Trefgarne said:

“...Mr Hastie was not attending as an MOD employee and, given that he was not representing DESO, I believed it was entirely proper for Mr Hastie to attend the Exhibition. Given that the FCO had what appeared to be presentational concerns, it would have been preferable for BAe to send someone other than Mr Hastie had there been anyone else with sufficient expertise in relation to Hawk. However there was no one else who had the requisite expertise and who could go.” *82

D6.41 On the other hand, it seems to be the case that Sir Michael Quinlan, the PUS, did not approve of the decision that HDES had taken. There is no contemporary evidence of Sir Michael’s attitude but a note dated 6 March 1991 from Sir Michael’s Private Secretary to Mr Simpson of DESS said this:

“PUS remembers that he told the then HDES that Mr Hastie must choose between continuing in the MOD’s employment and attending the Baghdad Military Exhibition. I can find no papers relating to this on my files. Could you do some further research and let me know the results.” *83

Mr Simpson’s further research led to his note dated 13 March 1991 *84 which did not significantly add to what was already known. It may be that the reference in the letter of 6 March 1991 to what “PUS remembers” is not accurate. Sir Colin Chandler has no recollection of Sir Michael saying that “Mr Hastie must choose...” etc. *85 and Sir Michael has commented:

“I find Sir Colin Chandler’s reported reaction wholly understandable; I do not recall saying what the 1991 minute attributes to me, and I do not believe I would have done so. Neither my own recollections of the Exhibition episode nor the 1989 papers... bear out the ‘ultimatum’ idea; moreover if I had said anything so black - and - white I am sure I would have placed it on record then to HDES.” *86

Sir Michael did, however, express this view:

“My reaction was that the matter was to be regretted, given the FCO view and the potential difficulty of giving reality, in Iraqi eyes, to a distinction between Mr Hastie on secondment to DESO and Mr Hastie temporarily restored to British Aerospace from that secondment.” *87

D6.42 It is clear that Lord Trefgarne felt some embarrassment in having to explain to the FCO how it was that Mr Hastie had been permitted to go to the Exhibition. A letter dated 28 April 1989 to his (Lord Trefgarne’s) Private Secretary from Mr Waldegrave’s Private Secretary referred to a telephone call from Lord Trefgarne’s Private Secretary earlier that day “explaining Lord Trefgarne’s concerns about Mr Hastie’s inclusion in the British Aerospace team” attending the Exhibition. *88 The letter went on to record the FCO’s “alarm” at the news and to comment that “Mr Hastie’s status in Baghdad, given his secondment to the MOD, is ambiguous and open to misinterpretation.” The same point, plainly justified, had been made in the telegram to the Baghdad Embassy. The letter concluded thus:

“....there must be a risk that Mr Hastie’s position in MOD will become known. In response to the criticism which there has been in Parliament and by members of the public about British firms attending the Baghdad exhibition, we have taken the line that HMG has not provided support to the exhibitiors. Mr Hastie’s presence could therefore prove to be a considerable embarrassment.”

D6.43 The FCO letter of 28 April was answered by a letter dated 2 May 1989 from Lord Trefgarne’s Private Secretary. The letter explained that “Lord Trefgarne was equally concerned when he learned on Thursday about Mr Hastie’s visit” and that “Lord Trefgarne tried to speak to Mr Waldegrave personally on Thursday to express his regrets for the potentially embarrassing situation.” *89 The letter explained the circumstances in which the decision to allow Mr Hastie to go to the Exhibition had been taken and said: “In the special circumstances this was agreed in the belief that his going would not infringe the FCO’s advice against DESO attendance, because he would not be representing the Ministry of Defence. Mr Hastie was told to keep a low profile...

....A line has been agreed at desk level for use in the event that questions are raised on the matter.”

D6.44 The “line” that had been “agreed at desk level” was as follows:

“Line to take (Defensive)

The DESO will not be represented at the Exhibition.

A civilian employee of BAe, currently seconded to the DESO, will be attending as a representative of BAe, at short notice, to stand in for a BAe employee who was unable to attend. He is not attending in any capacity as a MOD representative.

Why should he be asked to go?

BAe asked that he be released by MOD to go because of his particular and unique company experience which made him the ideal choice.

If pressed

He was due to complete his secondment to MOD on 24 April, but has been extended by 6 months.” *90

D6.45 Telegrams from the British Embassy, Baghdad, to the MOD and FCO in London referred, inter alia, to discussions about the Hawk project that Mr Hastie had had with the Iraqis while at the Exhibition:

(i) A telegram sent on 4 May 1989 said that the Iraqi Deputy Minister of Industry and Military Manufacturing “who saw David Hastie in his capacity of representing BAe, urged BAe not to drop out of the race” and that “Hastie’s judgment, as reported to me by DA, was that [the Iraqis’] interest [in Hawk] is genuine.” The telegram went on “Time is evidently short if BAe wish to stay in contention and the attitude of HMG towards the sale is clearly going to be an important, if not the critical, consideration.” *91

(ii) A telegram sent on 5 June 1989 said that “on basis of comments reportedly made to Mr Hastie [among others] I believe IAF [Iraqi Airforce] regard Hawk as the best aircraft available” and “as Deputy Minister for Industry and Defence Manufacturing made clear in his tête-à-tête with Mr Hastie... the Iraqis are looking for a clear expression of HMG’s political will to support [the Hawk project].” *92

D6.46 Notwithstanding that once his presence at the Exhibition had come to an end Mr Hastie’s “desecondment”, as Sir Colin Chandler put it, likewise came to an end, the ambiguity of the relationship between him and BAe during the secondment continued.

(i) A telegram sent on 1 May 1989 from the Baghdad Embassy to Mr Rob Young, FCO/MED in London said:

“David Hastie, the representing BAe, called on me on 30 April for a general discussion of defence sales prospects in Iraq”

and

“...Hastie told me in brief outline of a possible ...deal which could open the way to financing for Hawk assembly here. He recognised, however, that there was still a major political problem of overcoming Ministers’ reluctance to engage in defence sales of substance to Iraq. He referred to a discussion on the subject of Hawk and defence sales more generally between Lord Trefgarne, Mr Alan Clark and Mr Waldegrave about ten days ago.” *93

(ii) On 11 July 1989 a telegram from the Baghdad Embassy to the MOD and the FCO in London said this:

“David Hastie of British Aerospace and [a BAe Hawk project manager] called on 10 July to brief us on their latest round of negotiations with the Iraqis (they are flying back to the UK today, 11 July).... Hastie explained that during BIMPE he had agreed to prepare a revised offer.... Hastie had presented the revised offer a few days ago and, he said, the technical details were now agreed in principle. The Iraqis had however hoped he would have bought with him a price for the new offer... He was told in strong terms that the Iraqis required a fully costed proposal by 17 July.... Mr Hastie now has the task of persuading his chairman to agree to BAe submitting a priced offer by the deadline.... Against this background Hastie informed me of state of play (so far as he knew it) on HMG consideration following the BAe presentation on Hawk.” *94

D6.47 The ambiguity to which I have referred could hardly be more apparent and prompted strong representations from Sir Michael Quinlan. A file note made by Sir Michael on 14 July records the following:

“1. I spoke to HDES pm 14 July 89 and said I was disturbed to note, from Baghdad telegram.... of 11 July, that Mr David Hastie had a continuing and indeed apparently central involvement in the exploration of a Hawk sale to Iraq, despite the fact that the Trefgarne/Waldegrave exchange in April/May seemed clearly to envisage that his attendance at BIMPE on 28 April was a one-off force-majeure contrivance, acquiesced in moreover on a too-late-to-stop basis.

2. HDES said that he had secured Minister (DP)’s informal assent recently to Mr Hastie’s involvement in the imminent contacts in Baghdad. He admitted however that there had been insufficient attention latterly to the sensitivities of the matter.

3. I asked HDES to take stock urgently after the 17 July contacts and report thereafter to me. I said that we would need to consider very quickly such options as ending Mr Hastie’s secondment forthwith if this could be done without increasing the very risks which we were anxious to reduce.

4. I told CDP the position later the same afternoon.” *95

In his evidence to the Inquiry, Sir Michael explained that the “risks” he had in mind “would have related to the possibility that the Iraqis might see Mr Hastie as an official able to commit HMG, or at least to imply a Government predisposition in favour of a sale....” *96

D6.48 The Government decision, finally taken at the Cabinet meeting on 27 July 1989, was that the Government would not support the Hawk project. Mr Hastie duly completed the six month extension to his secondment. Sir Colin Chandler has commented that “after his desecondment he came back to DESO and continued to work for the extended six month period on a variety of projects, including the small business contact role in which I thought he would, and indeed did, excel.” *97 It does, however, appear that during the period of his secondment Mr Hastie assisted DESO in promoting within Government the Hawk project and that both at and following the Exhibition he took an active part in BAe’s discussions and negotiations with the Iraqis. This should not, in my opinion, have been allowed to happen. I repeat that I do not regard Mr Hastie as being at fault. He acted throughout with the full knowledge of and support from the HDES, Sir Colin Chandler.

D6.49 On 21 February 1991 Mr Alan Clark, the Minister (DP), gave a written answer to a Parliamentary Question from Mr Tony Banks MP. The PQ was in these terms:

“To ask the Secretary of State for Defence, if any of his officials attended the 1st International Exhibition for Military Production held in Baghdad in 1989.” *98

A “Background Note” was provided by DESS. The Note said this:

“The exhibition was not financially supported by HMG, no British Minister attended and there was no official representation from the MOD. However, the Minister will wish to be aware that the Business Development Adviser to HDES (David Hastie), who was on secondment from BAe and being paid by BAe, did attend the exhibition but in his capacity as an employee of BAe. The BAe team leader of Project 3/25 (Hawk Trainer assembly plant) was unable to attend because the Iraqis refused him entry as he had been a Military Attaché in Baghdad a few years previous. As Mr Hastie had previously been involved in the project and had visited the country many times, BAe asked if he could be released for the occasion. In the circumstances it was agreed, believing that his attendance would not infringe the FCO’s advice against DESO presence at the event.” *99

This was, save for the last two sentences, a fair summary of the position. The penultimate sentence might, more accurately, have said that Mr Hastie had continued, during his secondment, to be involved in the project. As to the final sentence, it is not my reading of the papers and evidence that it was believed that Mr Hastie’s attendance at the Exhibition would not infringe the FCO’s advice. The MOD’s, and Lord Trefgarne’s, embarrassment in having to explain to the FCO what had happened tells its own tale. The suggested “Draft Answer” to be given by the Minister to the PQ was expressed thus:

“None. or There was no official representation from the MOD.” 100

In the event, however, Mr Alan Clark answered the PQ by saying, simply, “No.” *101

D6.50 Neither of the draft answers, nor the actual answer, was, in my opinion, consistent with the standard set by paragraph 27 of Questions of Procedure for Ministers. *102 Paragraph 27 requires Ministers to give Parliament “...as full information as possible about the policies, decisions and actions of the Government”. An answer that had followed the “Line to take” agreed in the MOD in April 1989 *103 would, in my opinion, have been difficult to criticise. It might of course, have led to more searching questions. It would have opened up a story which, it had been recognised in April 1989, might be embarrassing to Government.

D6.51 Some anxiety about the answer given to Mr Bank’s PQ was, evidently, felt by Sir Michael Quinlan. He asked DESS for some background on the matter and, on 4 March 1991, Mr Simpson of DESS provided him with a manuscript addendum to the “Background Note” that had been provided to the Minister. The additions were as follows:

“3. Hastie on secondment - due to complete his tour on 24 April 89 (Baghdad Exhibition 28 April - 4 May) tour extended by a further 6 months.

4. HDES personally approved the BAe request for Hastie to attend.

5. FCO not pleased - potential embarrassment.

6. Hastie instructed to ‘keep a low profile’.” *104

Sir Michael’s reaction, as recorded in the note of 6 March 1991 from his Private Secretary was “...PUS believes that in submitting the reply given on 22 February to Mr Banks, the Department sailed close to the wind.” *105 In his evidence to the Inquiry, Sir Michael has emphasised the words “close to” and added “on reflection and after some detailed refreshment of my memory, I did not consider that the Answer quite crossed the threshold.”

D6.52 Mr Clark was not aware that Mr Hastie’s secondment had been extended from the original expiry date, 24 April 1989, to 24 October 1989. His attention having been drawn to the extension, he said, in his oral evidence to the Inquiry:

“In that case, I would regard that as falsifying the answer that I gave. I can only plead that I was not in possession of that information.” *106

D6.53 In the circumstances, the answer given to Mr Banks’ PQ was not only inadequate when measured against the requirements of paragraph 27 of Questions of Procedure for Ministers, but was also in my opinion, in agreement with that of Mr Clark, misleading. *107

D6.54 Mr McDonald has made the following comment on the previous paragraph:

“Both the adequacy and the potential for being misleading depend ultimately on subjective judgments. Certainly the answer was not misleading as to the purpose and intention of Mr Hastie’s ”de-secondment“. Government action was taken to ensure there was no official representation of the exhibition.... I believe explicit reference... should be made to this and to the facts that: a. the answer directly responded to the question b. the answer was factually correct c. the then Permanent Under Secretary of the MOD, my ultimate civil service superior within the [MOD], does not agree with the judgment of the [previous paragraph]” *108

As to that, a judgment that Mr Clark’s reply “sailed close to the wind” is hardly an endorsement of a satisfactory answer. And an answer the factual correctness of which depends on assessing Mr Hastie’s status by concentrating on the chimerical “de-secondment” arranged for his visit to Iraq and ignoring the reality of his status as an MOD official immediately before and immediately after that visit does not seem to me an example of the manner in which Ministerial obligations under paragraph 27 of the Questions of Procedure for Ministers should be interpreted.

Endnotes
*55 - Sir Colin Chandler’s written statement submitted to the Inquiry on 19 May 1994, p10.

*56 - MOD/15.1.167. The copy of the letter on MOD files was marked for “Hidden Copies” to be sent to “Mr D Hastie, Divisional Director Marketing Operations, British Aerospace,” to “PS/HDES”, to “DG Mktg” and to “Head of DESS.” The significance of “Hidden Copies” was that although the letter itself would ordinarily include reference to those to whom copies of the letter were to be sent, it would contain no reference to the “Hidden Copies.” The recipient of the letter (or of a copy of the letter) would be kept unaware that copies had gone to the recipients of the “Hidden Copies.”

*57 - In a letter to BAe dated 15 June 1988 (MOD/15.2.251), Mr Keeling referred to BAe’s “negotiations with the Iraqis over [Hawk]” and said that he and Mr W Perry, also of DESO, had “discussed this in some depth with David Hastie prior to his joining the ranks of the DESO”.

*58 - Sir Colin Chandler’s written statement dated 19 May 1994, p.10

*59 - MOD/59.3

*60 - MOD/59.7

*61 - MOD/59.9, MOD/59.13, MOD/59.21, MOD/59.25 and MOD/59.31

*62 - MOD/15.2.251

*63 - MOD/24.2.43

*64 - Written statement of 2 August 1994, paragraph 8

*65 - Written statement of 1 October 1993, p.61

*66 - Transcript, Day 34, 26 October 1993, p.191

*67 - Written statement submitted on 18 March 1994, paragraph 157

*68 - MOD/48.3.35

*69 - Written comments submitted on 5 November 1995

*70 - paragraphs D6.9 to D6.11 supra

*71 - V/22 - Letter to the Inquiry dated 5 November 1995

*72 - Written comments to the Inquiry dated 27 October 1995

*73 - see paragraph D3.164 to D3.171 supra

*74 - MOD/24.1.295 at 297

*75 - MOD/24.2.91

*76 - The Alpha Jet was perceived as being a commercial rival to the Hawk

*77 - MOD/24.2.95

*78 - MOD/24.2.159

*79 - MOD/24.2.199

*80 - Sir Colin Chandler’s written statement of 19 May 1994, p.11

*81 - MOD/48.3.43

*82 - Written statement submitted on 18 March 1994, paragraph 156

*83 - MOD/48.2.275

*84 - see paragraph D6.33(vi) supra

*85 - Written statement of 19 May 1994, p.11

*86 - Written statement of 2 August 1994, p.3

*87 - Ibid. p.2

*88 - MOD/25.1.129

*89 - MOD/25.1.143

*90 - MOD/48.3.41

*91 - MOD/25.1.177

*92 - MOD/25.1.385

*93 - FCO/13.2.290

*94 - MOD/28.2.19

*95 - The file note was supplied to the Inquiry under cover of a letter from the MOD Scott Inquiry Unit dated 13 April 1994 - MOD/785.

*96 - Written statement of 2 August 1994, p.3

*97 - Written comments to the Inquiry dated 27 October 1995

*98 - MOD/48.2.155

*99 - MOD/48.2.153

*100 - MOD/48.2.151 and MOD/48.2.153

*101 - House of Commons Hansard: 21 February 1991, Col. 250

*102 - see paragraph D4.57 supra and paragraphs K8.4 and K8.5 infra

*103 - paragraph D6.44

*104 - MOD/48.2.237

*105 - MOD/48.2.275

*106 - Transcript, Day 50, 14 December 1993, p.119

*107 - see paragraphs K8.4 and K8.5

*108 - Written comments to the Inquiry dated 26 October 1995

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