MoD rejects fears over defence sell-off
Philip Pank and agencies
Thursday September 5, 2002
The Guardian
Ministers today defended plans to sell part of the defence research industry
to a US-based company that has several former
international leaders on its payroll.
George Bush senior, his former secretary of state James Baker,
the former prime minister John Major and many other figures
from international big business and politics are employed by Carlyle Group,
a US-based private equity and defence group.
The government has dismissed union fears that the British national interest may be
compromised by the influence of diverse
overseas lobbyists linked to the company.
It announced earlier this week that Carlyle was
the preferred bidder to take over its
research and technology division, Qinetiq. The
former defence research agency has developed missile-tracking software,
radar technology and other defence systems
The announcement immediately raised concerns that
national defence research
may be subjected to increasing influence from
overseas interests, notably the US arms lobby.
Fiona Draper of the trade union Prospect, which represents scientists at Qinetiq,
said: "The fact that they are a foreign company
will obviously exacerbate my members concerns, given Carlyle's fairly
opaque structure, there must be concerns over whether
undue influence may be brought to bear which may not be in Britain's interest."
She told BBC radio: "I do understand that in the past at least they have
had investors from 'interesting' areas of the world, shall
we say."
In addition to the list of influential names from US politics, the company
has been linked to the Saudi royal family and until last
year maintained links with the half-brother of Osama bin Laden.
However, the defence minister, Lewis Moonie, insisted today that Britain's national interest
would not be compromised by the
partial sale of the agency.
"It is very important that half truths and shades like that should not be allowed
to cloud the name of a respectable company and
one we have investigated in great detail, as we have any other company
with who we would be going into partnership," he said.
"I can assure you that we have gone into this in very great detail and
anything of a sensitive nature will not be exposed to foreign
eyes."
The government is selling off a significant stake in the agency, having dropped plans
to float the company on the stock market
earlier this year.
Like other private equity groups, Carlyle has a history of taking short-term stakes
in companies. Industry observers have predicted
that the company would be likely to prepare QinetiQ for full sell-off within five years.
The previous Conservative government shied away from full-blown privatisation of the agency.
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