Arms and the man

I first met Gerald James in a bleak prison car park on the Isle of Sheppey nearly 25 years ago. He’d been to visit his business partner, Chris Gumbley, who’d been jailed there. If you’re old enough to remember fireworks that could be bought singly over the counter you might recall a brand called Astra.

As the chairman of Astra during the 1980s, Gerald was responsible for turning this firework-maker in to £100m-a-year-turnover arms manufacturer. The company made and sold munitions, many of which found their way on to the front line in the Iran-Iraq war of 1980-88.

While the United Nations had imposed an arms embargo restricting trade with the belligerents, a number of western governments turned a blind eye to deals that channeled arms through third party countries such as Jordan or the UAE, or which supplied so-called dual-use equipment such as lathes that could produce shell-casings.

The Midland Bank had a special section wholly devoted to financing arms deals and a number of well placed individuals with long standing intelligence briefs were overseeing this trade. When the war ended, however, relations with Saddam began to cool and when it was discovered that he had ambitions to develop Iraq in to a nuclear power, the game was up for this lucrative trade.

But deals could not be severed overnight. Commission-earning middle-men needed to be paid and some individuals and companies had contractual obligations to fulfil. The trade was further complicated by the Iraqis having taken business interests in some western companies, including some of the UK’s oldest established machine tool companies.

Britain’s mainly Midlands-based machine tool industry was once the envy of the world, but by the 1980s it was concentrated among just a few companies and many of these had important contracts with Iraq. One of them, Matrix Churchill, had come to be associated with a Canadian ballistics scientist called Gerald Bull who was engaged in developing long-range guns for Iraq.

The barrels for one of these guns – that came to be described as the Supergun – were seized by UK Customs and Excise officers at the docks in Middlesborough six months after Bull had been shot dead outside his flat in Brussels.

As head of investigations, I covered a lot of these stories in the Financial Times when the newspaper ran exclusive after exclusive on this covert business. They were heady times and the newspaper collected a clutch of awards along the way. But that was many years ago. There’ve been two Gulf Wars since then and Saddam Hussein is dead. But Bull’s murder is still unsolved.

My interest was rekindled a little while back when an intriguing document (you can read a transcript here) emerged from the trial of Asil Nadir, former chief executive of Polly Peck, who was imprisoned for 10 years on fraud charges.

The document purports to be a CIA briefing (I say purports though I have no reason to doubt it. Whether the analysis was accurate at the time it was written in 1991 is another matter). If the content is accurate it is disturbing because it says that Bull’s assassination was orchestrated by a team of British military and intelligence operatives who wanted him silenced. Bull had launched legal proceedings in the UK that threatened to expose a whole string of covert arms deals. The same people, it says, were responsible for other unexplained deaths.

Gerald James, now 77, says he and most of his board were duped by a business/intelligence cabal that profited from the arms trade with Iraq. These same people, he says, engineered his removal from the company. He's written a book, but here is a summary of his whistleblowing. As I say, I’ve known Gerald for many years now and, while I have sometimes questioned his assumptions, I’ve been impressed by the consistency of his recollections, his dogged refusal to let the story die and the way he has conducted himself in the face of those who would seek to discredit him.

As a former merchant banker and member of the Monday Club, he is the most unlikely scourge of Government and that’s what makes him all the more credible. Was he and his business stitched up by forces out of his control? I have no doubt of it. As far as I can see, he never tried to pursue covert business with Iraq but in fact blew the whistle on deals within his own company when he uncovered them. He's a decent man.

One thing I find startling, looking back, is that I seem to have worked on so many apparently connected stories (not always apparent at the time). At various times I was in Northern Cyprus investigating Polly Peck, in Florida covering money laundering at the Bank of Credit and Commerce International, in Pennsylvania working on the fraud at Ferranti, and in New York, Washington, Germany and Switzerland working on the arms-to-Iraq story. Oh, if only blip had been around back then!

Anyway we had a good chat about things today. Why does any of this still matter, you may ask? Gerald points to the way that government has sought to cover up or control information on one scandal after another over the years. Only today we have the fiasco of a second resignation in the inquiry in to long-running child abuse allegations. The whole public inquiry system, he argues, has been discredited by hand-picked inquisitors who are such a part of the establishment that they cannot be relied upon to get at the truth. “The big question," he says, "is can the British public always be treated as idiots?”