House of Commons - Foreign Affairs

Select Committee on Foreign Affairs Second Report

INSIDE THE FCO IN LONDON

56. There were two early warnings which the FCO did not take as seriously as they should have. The first was an article published in the Toronto Globe and Mail on 1 August 1997 which alleged that Sandline was involved in a plan to overthrow the Junta. This story was copied to London by the High Commission in Ottawa, and an appropriate press line was sent back from AD(E). Although this occurred before the arms embargo, the story should have alerted officials to the need to treat Sandline with circumspection. Nor does any further cognisance of the Toronto story seems to have been taken inside the FCO once the Order in Council was made. We note, too, that the story was not copied to Mr Penfold.[211] He certainly would have liked to have seen the story, although he pointed to the communication difficulties.[212] Had he done so, he might have been more circumspect in his dealings with Sandline. Ministers were not told of the article either.[213] We are astonished that this story was not copied to Mr Lloyd's private office, particularly prior to the Adjournment Debate in the House of Commons.

57. A second early warning came when Mr Spicer telephoned Mr Everard on 5 January 1998 to say that he had signed an agreement to give support worth $10 million to President Kabbah and the Kamajors. Mr Everard was not told that arms formed part of this contract, and does not seem to have deduced that they would have done. Mr Penfold told us that a sum of this size would have meant arms to him.[214] Mr Murray told us that a contract of this size did not necessarily imply arms.[215] We think this is naive, and we note what Sir John Kerr said:[216]

"I think if I saw the number 10 million I would want to ask a lot of questions about what it was being spent on. I do not know that I would have assumed that it must be arms, but I think I would have wished to establish by a series of questions that it was not, because it does seem a lot of money."

In the event, another opportunity to ascertain the position was missed by officials.

58. The two failings (to take account of an accurate press report which appeared in the Toronto Globe and Mail on 1 August 1997 and of a telephone call by Mr Spicer to the FCO on 5 January 1998) display serious shortcomings by FCO officials.

Informing Ministers

59. The Foreign Secretary did not know of the Sandline affair until 28 April, and then only as the result of the letter of 24 April from Mr Spicer's solicitors being received in the Department. The Foreign Secretary told us that it is "not an easy judgement" to decide when the Sandline affair should have been notified to Ministers,[217] and he pointed out that it was not until 30 March that the Department was officially notified that Customs and Excise were conducting a formal inquiry. We believe that officials should have warned their political masters very much earlier. If the FCO machine had worked properly, Mr Penfold's meeting with President Kabbah on 19 December—what Sir John Kerr called the "Penfold bombshell"[218] should have been reported to Ministers immediately. Certainly, we would expect Ministers to have been informed immediately there was a suspicion that a High Commissioner might have committed an indictable offence. The contrast between the speed and efficiency with which Customs and Excise reported to Ministers as compared to the FCO is striking. Customs first formally became aware of the Sandline allegations on 10 March when they were notified of the letter which Lord Avebury had sent to the FCO. Some three weeks later, the Minister with overall responsibility for the operation of Customs, Ms Dawn Primarolo MP, had been notified in what Legg described as "clear and specific" briefing of the nature of the Sandline allegations.

60. The period from 19 December until 2 February is one during which we cannot be absolutely sure that any FCO official other than Mr Penfold knew about Sandline's precise intentions. To say that is to give a large measure of benefit of the doubt to London-based officials: we have to assume that Mr Penfold did not inform them properly or that he failed to inform them at all; that Mr Spicer's version of the meeting on 19 January is false and moreover that Mr Murray and Mr Andrews were unable to surmise from that meeting what Sandline's intentions were; that Mr Everard did not make straightforward deductions from his conversation with Mr Spicer on 5 January; that Mr Andrews could not understand the Project Python document; and that Ms Grant and Mr Murray did not put two and two together when they saw Mr Penfold on 30 January. Even if we accept that all these errors of judgement occurred, there is nevertheless no dispute that Mr Penfold's minute of 2 February was prima facie evidence that criminal wrongdoing occurred and that the High Commissioner and the Department in London might be regarded as complicit. That one of their number could be accused of having committed the criminal offence of promoting the supply of arms was a matter of high political moment.[219]

61. There was corroborating evidence about Sandline from Lord Avebury's letter to Ms Grant of 5 February. Lord Avebury's letter, which was written directly to Ms Grant because of previous dealings which he had had with her, drew attention to the Toronto Globe and Mail article of the previous August, and to a new article from US News and World Report which contained accurate information on Sandline's supply of arms to President Kabbah.[220] For the Foreign Secretary, the failure by the FCO to connect the 2 February minute with Lord Avebury's letter was "one of the gravest errors and misjudgements."[221] Certainly, as soon as both those pieces of information were received, it should have been the duty of officials to draw the matter to the attention of Ministers. On the contrary, as Sir John Kerr put it, in his masterly understatement, there was "no evidence that the alarm bells were rung....it is not a pretty story."[222]

62. There is a third document that should have rung the alarm bells equally loudly. This is the Sandline Project Python military operations document that Mr Penfold had handed to Mr Andrews on January 29, the day after he had been given it by Sandline. The political objective of the military operation was stated in unambiguous terms. It was "to return the democratically elected government to Sierra Leone."[223] The document described how Sandline would help to achieve this objective in both a "supporting role" and "a direct action role." The tasks listed under the supporting role included "Procurement and delivery". In the context of this document the strong likelihood must have been that "Procurement and delivery" would include arms, as indeed proved to be the case. The document also listed the planned targets for Sandline's military personnel in their direct action role. On February 2 Mr Andrews forwarded the Project Python document to Ms Grant and Mr Dales with the following covering note[224]: " This was given to me by Peter Penfold on January 29. Came from Tim Spicer. The paper gives details of proposed support for the Kamajors and President Kabbah. Spicer is proposing a 55 man team including 5 helicopters." Quite extraordinarily, there is no evidence in any of the papers the Committee has seen of Ms Grant and Mr Dales responding to their receipt of the Sandline Project Python document.

63. Ms Grant agreed that the 2 February minute was "very strong evidence" of illegal activity by Sandline, and she conceded that it was also evidence of a potential criminal offence by the High Commissioner.[225] She told us that she had instituted a paper chase to discover any records of the meeting on 23 December or the letter of 30 December (both referred to in the 2 February minute) rather than bring the matter to Ministers' attention.[226] This, she argued, was so that she could be properly informed before she went to Mr Lloyd.[227] We also appreciate that early February was the time of the counter-coup in Sierra Leone, and this increased the work load of officials. Ms Grant further pointed out that Mr Lloyd was not in London for long periods between the beginning of February and March[228]—though we note that even when abroad, Ministers are easily contactable through the appropriate Embassy or High Commission. We believe that her claim that her intention was to "get a better handle on what the facts were before briefing Ministers"[229] could also be regarded as a desire to ensure that FCO officials' backs were covered before the political masters of the Department were alerted to what would undoubtedly be a major embarrassment, as it indeed proved to be. We believe that the senior officials who received both Mr Penfold's minute of 2 February and Sandline's Project Python document (Ms Grant and Mr Dales) made serious errors of judgement and failed in their duty to Ministers by not acting promptly and decisively on the information it contained.

Briefing Ministers

64. The Legg report deals at some length with the briefing provided for Baroness Symons, who had to reply to a starred question from Lord Avebury on Sierra Leone in the House of Lords on 10 March, and to Mr Lloyd who replied to a similar adjournment debate in the House of Commons two days later.[230] Legg is highly critical of the quality of the briefing material: he described the briefing of Baroness Symons as "inaccurate, incomplete and indigestible." Despite Sir John Kerr's earlier assurances to the Committee that "we do not have a sort of word processor on which we roll off stock briefs for any old minister,"[231] Legg found that much of the briefing used for Baroness Symons was, in fact, re-used for Mr Lloyd, and the supplementary answers provided were "in all material respects identical."[232] Sir John Kerr abandoned his traditional understatement and conceded in his later evidence that the briefing was poor: "they were a dog's dinner....quite inadequate....a shambles....really bad," "incompetently put together" and "there is no way in which a minister could have been expected to work out from these briefs that what the Department had by then had fairly clear evidence had happened, had happened."[233] This is a remarkable admission of professional incompetence by the Permanent Under-Secretary.

65. It is worth spelling out some of the relevant parts of Mr Lloyd's briefing.

"Allegations in "Observer" article of 8 March

- obviously Mr Penfold worked closely during that time with President Kabbah and other representatives of the government in exile, and in the course of his duties, Mr Penfold came into contact with representatives of Sandline Services and their affiliates.

What did HMG know about the actions of Sandline (British-based mercenaries)?

- we will refer any detailed allegation that the company were involved in illegal activities to the appropriate authorities who may assess whether any crime may have been committed."

This briefing was grossly deficient. As far as The Observer article was concerned, the first part of the brief was actually used by Mr Lloyd to deny that any tripartite meetings between President Kabbah, Sandline and Mr Penfold had taken place—an allegation The Observer had made.[234] But the denial of this specific allegation could easily have been interpreted as a denial of any contacts between Mr Penfold and Sandline—contacts well known to officials in London. The other parts of the briefing were not used, but were grossly inaccurate: FCO officials had been informed that arms had been delivered and were not merely "aware of reports that a deal was in the offing"; Sandline were hardly just "military advisers"; and the allegations against Sandline had already been transmitted to Customs and Excise on 18 February.[235] Had detailed questions relating to Sandline been raised in the Lords or the Commons on 10 or 12 March, Ministers who relied on the briefings they received would have run a grave risk of misleading Parliament.[236] We are very surprised in the context of a new ethical foreign policy that the breach of a UN Resolution and an Order in Council putting an embargo on the export of arms with possibly massive political fall out, was not drawn to the attention of Ministers.

66. Earlier, when Mr Lloyd had himself very properly raised his concerns about Mr Penfold's involvement with private military companies following the article in The Observer on March 8, he was not told of the full facts by officials. In particular, he was not told that arms were being supplied and that Customs were investigating. Ms Grant, who was ultimately responsible for the briefing and who met Mr Lloyd before the adjournment debate, accepted that she had not dealt properly with the briefing,[237] arguing both pressure of work and a concern to ensure that she was fully in the picture herself before Ministers received a proper account. She believed that there had been an "unusual and exceptional lapse," and she referred to new guidance which had been circulated re-affirming that which should be self-evident—the "importance of clear, concise and accurate briefing."[238] The Foreign Secretary and Mr Lloyd both criticised the gaps in the briefing which the Minister of State had received on this occasion.[239]

67. It was not just for the adjournment debates that Ministers were inadequately briefed. There was a considerable traffic of communications between the FCO in London and Mr Penfold in mid to late March seeking information on his contacts with Sandline.[240] None of the information received seems to have been brought to the attention of Ministers. Even more surprisingly, when Mr Lloyd travelled to Sierra Leone, accompanied by Mr Andrews, on 31 March, his briefing material contained nothing on Sandline. This was despite the receipt of an official notification of Customs' investigation the previous day. How such a "massive failure of briefing" occurred was a mystery to Sir John Kerr,[241] though Mr Lloyd, perhaps excessively kindly, explained that his visit was under the auspices of the Commonwealth, who therefore provided his principal briefing.[242] Mr Lloyd for his own part might well have pursued his earlier questions at this stage. Ms Grant told us that Mr Lloyd was informed by her about the Sandline affair on 30 March,[243] but this was done by means of side copies of other documents which were themselves described by Legg as "misleading" and "substantially incomplete."[244] In any case, the documents were not brought to the Minister's personal attention for at least two weeks after they had been sent to his office, another key failure of the FCO. It is the job of the private office to alert Ministers, and we are surprised that this was not done in this case. We conclude that there was an appalling failure in the briefing of Ministers, which we recommend should not be repeated. It is on the basis of briefing that Ministers report to Parliament and, in the words of the Resolution of the House,[245] "it is of paramount importance that Ministers give accurate and truthful information to Parliament." We expect lessons to be learned from the Sandline case in the FCO and in all other Departments.

Errors by senior officials

68. Errors of judgement were not confined to the middle and junior ranks of the FCO. The Foreign Secretary agreed that warning signs had not been recognised by senior management and, in particular, the head of the diplomatic service.[246] Mr Dales, the then Head of Africa Command, seems to have been the dog who did not bark. Either papers were not sent to him or, according to Legg, he did not recall having seen some of those which were. For example, he was made aware of the meeting on 19 January, and copied the minute of 2 February,[247] but these did not cause him to initiate the action one would have expected of a senior manager. And it was he who rejected Mr Murrray's advice that Mr Penfold be recalled, and who appears to have inhibited Mr Murray from any future action to deal with Mr Penfold.[248]

69. Sir John Kerr has himself accepted responsibility for a number of misjudgements. On 30 March, he received a minute[249] from Mr Murray via Mr Dales which alerted him to Customs' raid on Sandline, and to Sandline's defence that they were acting with the full knowledge of the Government. Mr Murray's minute explained that Sandline had been in touch with the FCO over a period, and that the Department was aware that they were helping the Kamajors with "training and logistics." The minute went on to say—misleadingly[250]—"we were not aware of any shipment of arms." Sir John told us that he may have misread this minute, and that he was certainly misled by it.[251] We regard his response—"Thank you. Please tell Mr Murray on the basis of these papers he has nothing to worry about"—as wholly inadequate.

70. Equally seriously, when he was brought more fully into the picture[252] on 3 April by a minute from Mr Dales following the Customs' raids on Sandline and the FCO,[253] Sir John chose not to inform Ministers immediately. His laconic comment on the minute was "Thank you." He was certainly then aware of the gravity of the matter, having held discussions with his Department's Chief Legal Adviser, with the FCO Chief Clerk (in effect, Sir John's deputy) and the Chairman of the Board of Customs and Excise, and, as a consequence, made far-reaching management changes to enable the investigation to proceed. Sir John told the Committee that the minute of 3 April was copied to Mr Lloyd, and that the responsibility of informing Ministers "had already been discharged."[254] We disagree: Sir John was the primary recipient of the 3 April minute, and we must expect him to have the professional acumen to realise that, if Ministers had not previously been informed, they really had to be told immediately and directly. Indeed he recognised this when he gave evidence.[255] As he said in written evidence[256] "in monitoring the supply of advice to Ministers, the PUS seeks to ensure that they get the service they need, and that the office follows the strategic guidance they give." A heavy responsibility rests on the Permanent Under-Secretary to get these things right. We conclude that the Permanent Under-Secretary failed in his duty to Ministers. The Foreign Secretary was first informed about Sandline on 28 April—more than four weeks after Sir John Kerr had first been told of the Sandline affair and three weeks after he had learned of Customs' raid on his own Department. Moreover, the Foreign Secretary was informed, not by his own officials, but by Sandline's solicitors' letter. The Permanent Under-Secretary must be held responsible for this unacceptable situation. It represents a serious failure of communication by the Permanent Head of the Department to his Secretary of State.

71. The Foreign Secretary contrasted the lack of political awareness by the senior management of the FCO with that of his special advisers.[257] The way in which no-one with a right to put papers up to Ministers—Ms Grant, Mr Dales or Sir John Kerr—did in fact do so reveals at best political naivete, and at worst a Yes Minister-like contempt for civil servants' duties towards their Ministers. That there was an element of the latter is best illustrated by Ms Grant's failure to reveal the full facts as she knew them when Mr Lloyd raised with her his concerns following the Observer article on Sandline on 8 March—though Mr Lloyd generously said that he did not believe that information was deliberately withheld.[258] Ministers emphasised to us that they had instituted new procedures designed to ensure that they are never again kept in the dark on a matter as serious as sanctions breaking[259] or allegations of criminal wrong doing by a senior diplomat. We recommend that the Permanent Under-Secretary remind all senior members of the diplomatic service of their constitutional responsibility to Ministers, and through them to Parliament. More specifically, we recommend that, as a matter of course, when a line manager in the FCO becomes aware that any prosecuting authority in the United Kingdom may be investigating an officer he or she manages for an indictable offence alleged to be committed in the exercise of the officer's duty, he or she ensure that the Permanent Under-Secretary is immediately informed, and that the Permanent Under-Secretary forthwith inform the Secretary of State.