United Kingdom NGO advised firm on how to disguise director's criminal records
UK Trade and Investment (UKTI) told the reporter, who was posing as a businessman, to obscure directors’ criminal records to circumvent regulations and admitted that British embassies are available for hire to impress would-be customers.
An adviser representing UKTI, which the Duke of York represents as a “business ambassador”, said that a director with a criminal past could be taken off company records and replaced with another name to avoid breaching accreditation rules for firms selling abroad.
He also boasted that Embassy and High Commission buildings were available, at a price, to give a “perception” that a company was endorsed by the British Government.
His comments were secretly filmed by Heydon Prowse, the film-maker whose investigations led last year to the sacking of Alan Duncan, the Tory frontbencher, after he was caught on video claiming MPs were “living on rations” after the expenses scandal and that they had been “treated like —-”.
The UKTI said it was taking the allegations “extremely seriously” and was considering launching a full investigation.
Prowse posed as the boss of “Frank Arthur Security”, a fictional firm which claimed to offer ex-British Army servicemen as private security guards.
He confided to a UKTI international trade adviser that his co-director had a criminal record which could cause problems when accrediting the firm.
Mike Gavin, the adviser, said: “If you’ve got different directors, different directors can be put on the accreditation. So things can change and you can avoid them. It’s not the end of the world.”
The British Association of Private Security Companies requires its members to prove that directors have no convictions, and the Iraqi Ministry of the Interior requires similar guarantees from any private security firm working in their country.
Mr Gavin also advised the fictional firm on how it could draw on a range of commercial services offered by British embassies.
“You can also use that embassy to present your company. So you can invite people to a reception or a presentation. Again, you pay for the room but it’s all arranged for you,” he said.
“There is a perception that you’re endorsed by the government because it’s a government building. Of course it’s —-, we don’t.
“All we do is due diligence to check that you’re not going to appear in the Telegraph on Sunday embarrassing the hell out of the British Government.”
He explained that in countries such as Nigeria using the embassy was the “easiest way to get everybody together”.
Prowse asked: “Because of the security situation?”
Mr Gavin replied: “No, because in places like Nigeria they love to show off that they have got this card from the British Embassy, it’s got Ambassador invites, British Government logo and they say ‘Look I’m going to a garden party’.
“It’s all ——–, but everybody in Nigeria wants one because they want to be seen getting out of the car, going into the High Commissioner’s office.
“It’s all perception and that’s part of what you don’t have at the moment.”
The £323-million-a-year UKTI was formed from two other bodies in 2003 and reports jointly to the Foreign Office and the Department for Business, Innovation and Skills.
Its website advertises the services it offers to British companies and says: “Sometimes it’s just pure luck that helps your company win its first overseas contract. And sometimes it’s not.”
The Duke of York has been Special Representative for International Trade and Investment since 2001, previously representing the bodies which merged to form UKTI.
Last year he was criticised for spending £140,000 on hotel bills, food and entertaining, plus £435,000 on travel.
The Duke’s supporters mounted a PR campaign to try to justify his expenses, claiming that he had played a role in winning contracts worth £3 billion for British companies, including a £2.43 billion contract for Airbus and Rolls-Royce from AirAsia which came about as “a direct result of his lobbying”.
In a meeting with Prowse, which was filmed with a buttonhole camera, Mr Gavin also stressed the benefits of a contacts service offered by the organisation’s officials in British embassies.
“They are tasked to ring that guy up, send them out your brochure. And then they will arrange an appointment for you,” he said.
“Rather than ringing them up [yourself] and not getting past the receptionist, most people think ‘What the bloody hell does the British embassy want?’ and will at least answer the phone.
“Then it’s the guy’s or the commercial officer’s … task to get them interested in what you do and arrange an appointment. They can’t guarantee it but I’ve used that in many different countries and it works.”
Mr Gavin, who works in the UKTI’s London-based international trade team, suggested that Afghanistan could be a source of short-term contracts but warned that the country’s situation would deteriorate rapidly after the “Americans pull out in 18 months’ time”.
He predicted that “no one is going to want that —-hole any more” and that the US would be forced to negotiate with the Taliban.
He also advised that Algeria could be a “gold mine for a lot of companies” but warned that it was “God damn dangerous”.
The adviser told Prowse that corruption in Africa may mean having to pay bribes, but suggested he should “walk away” from such situations.
“If you’re doing business in Africa, sod’s law there’s going to be some corruption in it somewhere and you may have to bung someone. We don’t want to know that. We don’t want to get involved in it.
“And I would if I was you walk away from it. It’s just not worth it. One, if you get caught here you can go to prison and, two, do you want the hassle of not being paid?”
Last year a report by the National Audit Office found that most exporting companies represented by UKTI said it made little or no difference.
The poll found 40 per cent of companies felt the quango made “no financial benefit”, while another 29 per cent had no idea whether the body was any financial help at all. Just 30 per cent said UKTI “made some financial benefit” to their trade.
A UKTI spokeswoman said: “UK Trade and Investment takes these allegations extremely seriously.
“We would never condone the obscuring of criminal records. And, while Embassies are legitimately used to promote British business abroad, we would not condone this being misrepresented as official endorsement.”
She added: “The person named is not a civil servant and not a member of UK Trade and Investment staff, but is a contractor employed by one of UKTI’s delivery partners.
“We are making our own enquiries and, if appropriate, we will carry out a full investigation.”
Oliver Sprague, a spokesman for Amnesty International UK, said: “Private military and security is a serious business that needs proper regulation – we are talking about men with guns.
“Yet the UK government has already rejected proposals that the industry should be regulated by law, saying that self-regulation will be enough.
“If this is their idea of how it should work – with government advisers helping companies to get around the rules – then heaven help civilians in the countries where these companies operate.
“A body like the UKTI should certainly not be offering to help companies exploit legal loopholes. We need to improve the regulation of this industry, not undermine it.”
The investigation was conducted by Prowse and John Green as part of the Don’t Panic Quango Awards which features in the Yahoo! website’s election blog.
By David Barrett and Robert Mendick
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