The forgotten man
When in opposition, Labour supported Paul Grecian's claims for compensation for his wrongful arrest over the arms-to-Iraq affair. So why, asks Graeme McLagan, has it abandoned him now?
Thursday January 2, 2003
The Guardian
As war looms with Iraq, the government continues to wield public-interest immunity certificates to withhold evidence in the David Shayler and Paul Burrell cases. Businessman Paul Grecian, for one, is not surprised. "Some things never seem to change," he says, "and the official cover-up is one of them."
Ten years ago Grecian, now 47, was caught up in the arms-to-Iraq affair. Although he exported military equipment to Iraq, he was also supplying valuable information to MI5 and MI6 about Iraq's weapons programme. Under the code-name Raven, he was the first to tell the spooks of Iraqi attempts to build a supergun that would have Israel within its sights. He also revealed details of an Iraqi submarine base and a missile project.
"I was told that I was the source of 50% of the security services' information about Iraq," Grecian says. "I was also getting good intelligence information from Pakistan, which at that time was supporting the mojahedin in Afghanistan. My handler told me that they had no reliable intelligence source in Pakistan and they encouraged me to get more. I put my life on the line for these people and it's soul-destroying when I consider how I've been treated since."
Grecian's risky world of spying and arms dealing collapsed when he and his company, Ordtec, were charged by customs with the illegal export to Iraq of a fuse assembly line. He had used Jordan as a "back door" route to the pariah country. But when Grecian tried to obtain evidence to prove that he had spied for Britain, the authorities slapped PII certificates on the information, preventing him mounting a defence that he had breached export regulations with government knowledge. He is still trying to obtain information to support his claim for financial compensation. But although Labour supported him while in opposition, Grecian's requests for help have been turned down by both Robin Cook and Jack Straw.
"The hypocrisy is staggering, but nothing surprises me now," says Grecian. I don't particularly blame the ministers. It's the officials behind them - the faceless people advising them - they are the ones to blame."
In 1992, lacking documentary evidence of government knowledge, Grecian pleaded guilty to avoiding export laws and was given a 12-month suspended prison sentence. His company fell apart. It was only later, after the disclosure of secret documents in the Matrix Churchill case, and the setting up of the Scott inquiry into the arms-to-Iraq affair, that Grecian learned more of what had happened behind the scenes.
One chilling document, sent to MI5 before the court case, says Grecian "may be persuaded" to keep quiet about his connections with the police Special Branch and "yourselves". It goes on: "There is the obvious risk that he will try the 'working for British intelligence' ploy. However, his personal future might be in some doubt if ever he was publicly identified as the man who blew the gaff on the Iraqi Babylon project. If we were not too squeamish, we might use this point to ensure silence."
Another memo, dated February 7 1992 and headed "Secret and Personal", was sent to the cabinet office with copies to the DTI, Foreign Office, the Ministry of Defence, customs and "Box 500", the code for MI5. It said a PII certificate had been prepared which would prevent Grecian's Special Branch handler from being questioned in court on security and intelligence matters. The DTI was also preparing a PII certificate to protect its secret papers.
The memo went on to discuss the steps that could be taken to avoid more adverse publicity. It said that if the Special Branch officer was called, his evidence would probably be heard in camera, without the public or journalists being able to hear it. However, it added: "The possibility remains that the information will be publicised, attracting further speculation in the press of early government knowledge of British involvement in Supergun."
Armed with this fresh information, Grecian appealed against his conviction, and in 1995 the court of appeal quashed it, along with those of three other Ordtec executives. The lord chief justice, Lord Taylor, ruled that the failure of ministers to disclose papers had prevented the four from mounting a proper defence.
Grecian was now apparently free to start rebuilding his life. A divorcee with two children, he visited his girlfriend in South Africa. But once there, he was arrested pending extradition to the US as a "fugitive from justice". The Americans wanted him for allegedly breaking US export laws, substantially the same charges of which he had just been cleared in Britain. He was held in prison for six months while he and his lawyers, with help from the British authorities, persuaded the South Africans that there was no merit to the US extradition case.
Back in England, he learned that the US extradition warrant covered the whole world: he could even be held if he went to continental Europe. He approached the home secretary, Jack Straw, for help, but was told that Straw believed intervention was "inappropriate". Grecian has not travelled abroad since.
The Home Office accepted in 1996 that he was eligible for compensation for the miscarriage of justice he had suffered in the UK courts. He also sued customs for wrongful arrest and/or malicious prosecution, and sought the disclosure of four intelligence reports which, he claimed, would give full details of how he had helped the security services.
He was hopeful that Robin Cook, as the new foreign secretary, would help, because he had supported his case when in opposition. But in 1999, Cook himself issued a fresh PII certificate preventing disclosure of the documents, saying that disclosure would cause "real harm" to the security services' operations.
After two other businessmen caught up in the arms-to-Iraq affair won compensation of £4m from the Home Office, Grecian abandoned the legal action against customs and concentrated on his Home Office claim. But that is now bogged down in complications with the government's independent assessor of compensation claims, Lord Brennan.
At the heart of the dispute is Ordtec's value at the time of Grecian's arrest. In a 1,000-page document, the businessman claims that the company was worth several million pounds. The assessor says there is evidence that it was in financial difficulties before then. But according to Grecian's solicitor, Lawrence Kormornick, there are wider issues relating to the way the Home Office compensation system is administered. Grecian and his lawyers are now threatening to take the Home Office system to judicial review, arguing that, under the present rules, the businessman cannot get the fair hearing to which he is entitled under the European convention on human rights. They point to a general lack of transparency under the scheme which makes it difficult for a claimant to know what the assessor is looking for. And with everything done on paper, with no oral hearings normally allowed, there is no effective way of challenging or cross-examining witnesses who have submitted contrary evidence to the assessor. Brennan has refused to meet Kormornick to discuss the claim. He agrees that the scheme is not organised or funded in a way that would permit oral hearings, but he has not yet ruled them out. He is waiting to receive a report from a firm of independent accountants on Ordtec's value.
Meanwhile, Grecian has had two interim compensation payments totalling £32,500, but has refused to accept a third of £17,500 in protest at its inadequacy. A final settlement is clearly a long way off. "I don't understand why it is taking so long," he says. "I feel that I and the others with compensation claims have become forgotten men. It looks like there will be another war with Iraq, and that will be sorted long before we are compensated for our suffering."