Gang jailed for stealing bank card details worth £16m

Vasile Pop, 30, one of the four people jailed over the fraud. Photograph: UK Cards Association/PA
Almost 1,000 bank accounts compromised by Harrow-based fraudsters in 'highly sophisticated' scheme

A gang of fraudsters have been jailed for between 21 and 64 months for stealing bank card details potentially worth up to £16m from more than 60,000 people in the UK and abroad.
Three men and a woman appeared at the Old Bailey in London for sentencing after pleading guilty to a string of fraud offences after police uncovered what they described as a "fraudster's utopia" in Harrow, Middlesex.
The prosecutor Catherine Pattison said the defendants – who were living at addresses in the area – were responsible for "a large-scale, highly sophisticated, well-executed ATM and counterfeit fraud".
The criminal operation was stopped in December last year when police seized an array of gadgets including cards traps, cloned cards and spy cameras in raids.
The gang from Romania were involved in three stages of fraud – stealing bank card data from cash machines, downloading it on to a computer and then copying the details on to counterfeit plastic cards, Pattison said.
In all, 953 bank accounts had been compromised and a total of £161,607.47 was taken, although the potential loss was far greater, she said.
Money was then transferred overseas to Panama, Romania, Italy and Colombia using MoneyGram and Western Union, the court was told.
The prosecutor said Florin Silaghi and Vasile Pop were the key players in the conspiracy, and Ovidiu Metac and his partner Adriana Turc had lesser roles.
They all pleaded guilty at earlier hearings to conspiracy to defraud between 1 January 2012 and 11 December 2013 and various other related offences.
Silaghi was jailed for 64 months, Pop for 61 months, Turc for 21 months and Metac for 43 months.
Jailing the four on Thursday, the recorder Douglas Day QC said: "Electronic card fraud is one of the scourges of the technological age both nationally and internationally. It causes significant loss to the banks and distress and inconvenience to the cardholders whose cards have been compromised."
Silaghi, 30, of Kenton Lane, Harrow, also admitted possessing criminal property relating to bank details, making a scanning device and possession of an identity document with improper intention.
Metac, 25, of Welldon Crescent, Harrow, pleaded guilty to having bank details on a computer, having counterfeit plastic cards, cash machine card slots and a fake photo identity card.
Turc, 27, also of Welldon Crescent, pleaded guilty to having bank account details on a computer and two counts relating to the transfer or acquisition of money.
Pop, 30, of Kenmore Road, Harrow, pleaded guilty to two counts of the transfer or acquisition of money.
Following the sentencing, police said 36,000 of the more than 60,000 card details found belonged to people in the UK.
Many of the cards found had the number of the stolen pin written in black marker pen on the back for easy use by the criminals, said a spokesman for the dedicated cheque and plastic crime unit (DCPCU), a specialist police unit.
The cards recovered had a street value of £16m based on the amount stolen on average from a compromised card, they said.
As officers investigated the case, evidence of a method never seen before in the UK to steal card details came to light – spy cameras fitted to the side panel of cash machines, rather than the top panel.
This method allowed fraudsters a better view of people's pin numbers when the keypad is only partially covered by the customer's hand.
DI Sarah Ward, who led the investigation for the DCPCU, said: "We are delighted that with these arrests and convictions we have been able to completely dismantle a criminal organisation that was stealing millions from people's bank accounts.
"The premises we raided really were a fraudster's utopia, with a dizzying array of machines and gadgets designed to commit serious fraud.
"These convictions send out a strong message to would-be fraudsters but there is also a word of caution for customers – always cover your pin closely with your hand when using a cash machine to beat the criminals."
Virgil Spiridon, director of the organised crime department at the Romanian national police, added: "Close co-operation between the DCPCU and our own officers played a key part in successfully securing these convictions.
"It was an excellent example of law enforcement agencies from different countries working together to ensure fraudsters' activities are brought to a halt and their crimes are punished."
Since the DCPCU was set up in April 2002, it has saved around £450m by clamping down on fraud activity.
SOURCES: www.theguardian.com

Scam victim who lost £80,000 set to take legal action against Santander

Bad move: scammers rely on calling the telephone number on back of a bank card. Photograph: Alamy
The bank is accused of failing in its duty of care as thousands are duped into moving their cash.


Santander stands accused of failing two customers who were duped by conmen to move their life savings into what they were told were new secure bank accounts – and is facing a possible legal action from one customer who has lost £80,000.
In recent months, Guardian Money has highlighted a particularly nasty scam that sees customers rung up by fraudsters who pretend to be phoning from the bank. They are first warned they've been the victim of a bank card fraud, and are then persuaded to move all their money to a new "secure" account set up by the bank – one that turns out to be the scammer's account.
Thousands of people have fallen for it – mostly because the victims are invited to call the telephone number on the back of their bank card, and therefore believe they are talking to their bank. The fraudsters rely on the UK's outdated phone system which allows the crooks to call you, and ask you to ring the bank's number. But when you dial it, the crooks have kept the line open by never putting the phone down at their end, and the call goes directly to them.
It also relies on a banking system flaw – the fact that money can be moved between UK accounts even if users put a completely different name on the transfer request.
Some older victims have lost life-changing sums – more than £100,000. However, victims are asking whether the financial regulators and banks have been negligent in not doing more to stop it going on, or to track the stolen money.
Sarah Moore was at home in February when she received a call from a man saying he was calling from Verified by Visa. He told her that her bank card was suspected of being used fraudulently. When asked which card, he said Santander, and suggested she call her bank using the number on her debit card.
Unhappy about calling the 0845 number, she used the SayNoto0870 website to find an 0800 number, heard a dial tone and the call was answered by a woman with a Scottish accent. All the time, the fraudsters had simply kept her line open. She was then subjected to a convincing tale of how her card had been used in several shops – being put on hold for several minutes at a time.
Eventually, she was told that the bank feared that the fraudster would try and make direct debit payments to a foreign account, and that she should move all her money to a secure account the bank had set up. As a result, she made several online payments to the account number and sort code she'd been given – totalling just over £80,000. In each case she put her own name in the transfer request – to what she thought was a Santander account, but was based at Lloyds.
When she rang Santander at 8am the follow morning (initially the bank's fraud department would not speak to her) it soon became clear what had happened. She says fraud staff knew all about the con, and even asked if the fraudster had a Scottish accent. As with previous cases, Santander has refused to refund her saying that she voluntarily handed her money over.
In an almost carbon copy case in January, Phillip Clark from Bath lost £20,000. He realised very quickly he had been conned and rang Santander 15 minutes after making the transfer to halt it. Despite this, the bank did not contact Barclays – host of the fraudulent account – for a further 12 hours, by which time all but £6,000 had gone.
Both he and Moore feel that Santander failed in its duty of care, and Moore is considering legal action to retrieve her money.
Clark took his cases to the Financial Ombudsman (FO) but it sided with Santander having decided the 12-hour delay was not a factor in him losing the cash. He is now bringing a second case against Barclays. The FO is still looking at Moore's case. * Names have been changed.
SOURCE: www.theguardian.com

"Homes for votes" gerrymandering scandal (1987–1989)

In the process of setting electoral districts, gerrymandering is a practice that attempts to establish a political advantage for a particular party or group by manipulating district boundaries to create partisan advantaged districts. The resulting district apportionment is known as a gerrymander  however, that word can also refer to the process. When used to allege that a given party is gaining disproportionate power, the term gerrymandering has negative connotations.
In addition to its use achieving desired electoral results for a particular party, gerrymandering may be used to help or hinder a particular demographic, such as a political, ethnic, racial, linguistic, religious, or class group, such as in U.S. federal voting district boundaries that produce a majority of constituents representative of African-American or other racial minorities, known as "majority-minority districts."


Gerrymandering is effective because of the wasted vote effect. By packing opposition voters into districts they will already win (increasing excess votes for winners) and by cracking the remainder among districts where they are moved into the minority (increasing votes for eventual losers), the number of wasted votes among the opposition can be maximized. Similarly, with supporters holding narrow margins in the unpacked districts, the number of wasted votes among supporters is minimized.
While the wasted vote effect is strongest when a party wins by narrow margins across multiple districts, gerrymandering narrow margins can be risky when voters are less predictable. To minimize the risk of demographic or political shifts swinging a district to the opposition, politicians can create more packed districts, leading to more comfortable margins in unpacked ones.

This controversial proposal has come to light just days after the District Auditor recommended in his preliminary report that 10 former councillors and officers (including one who is now a Tory MP) should be forced to pay back the pounds 21m their policies cost ratepayers, and be disqualified from standing as local councillors. That case involved an attempt to manipulate elections whereas the new proposal does not, but a common theme links the two: in both cases the council demonstrates a determined reluctance to accept responsibility for housing the poor people within its boundaries.
Last week's revelations about what the auditor, John Magill, variously described as the 'disgraceful', 'wilful', 'unlawful', 'unauthorised' and 'improper' decisions of Westminster Council, were based on events between 1986 and 1988. His report describes how Dame Shirley Porter, the heiress to the Tesco fortune who was then council leader, with her Conservative colleagues and some council officers, produced a two-track strategy to ensure that the Tories were returned to power in the marginal local authority.
One track dealt with the homeless, whom the Labour Party had organised and put on the electoral roll before the closely fought 1986 council election. They were regarded as a danger to the Conservatives, and a policy document drawn up for the local Tory leadership said in 1986 that the council must examine the costs of 'homeless / down and outs who are not our natural supporters'.
The other track involved house sales. The Conservatives decided that home ownership - at very low levels in central London - should be increased so that a natural and permanent Conservative majority could be manufactured in Westminster. This was to be achieved by setting aside 10,000 council homes for sale to Westminster residents or to people from outside. Vacant council homes - where tenants had died or moved on - were to be sold at a rate of 500 a year. Most of the 'designated' homes were in eight electoral wards with fragile Tory majorities. By promoting owner-occupation in the target wards, a paper for the Tory leadership explained in 1987, the politicians would encourage 'a pattern of tenure which is more likely to translate into Conservative votes'.
Gerrymandering, the word used by the auditor, is not quite the right term to describe this policy. Technically, the word means drawing electoral boun daries to the advantage of the governing party. Westminster was more ambitious: the council was not merely changing the boundaries it was attempting to change the electorate.
These policies, the council and the Conservative Party maintain, are all history now. Lady Porter left in 1992 and the council is under new management - although it is still Tory management.
But Labour politicians, housing associations and workers for the homeless claim that Lady Porter's successors are still shipping such people out of Westminster to leased accommodation in the East End of London and down-at-heel suburbs.
This would matter less to the rest of the country were Tory Westminster not secretly using its considerable influence with Conservative ministers, who have praised it to the skies over the past eight years, to press for a change in the law. A confidential document, Home lessness: a Shopping List for Early Change, shows that it is urging the Government to clamp down on the rights of the homeless to be put on a council's housing list. The council recommends that the Government should make it harder for young single mothers, battered wives, immigrants and the mentally ill to obtain council homes.
Later this month, Sir George Young, the Housing Minister, whose civil servants are being lobbied by Westminster, will announce a review of council housing policy. It is likely that he will reflect some of Westminster's hardline views. In one of the 'back to basics' speeches at the Tory Party conference last October, Young indicated that he wanted to restrict the rights of single mothers to priority on council house waiting lists.
Gavin Millar, the Labour spokesman on housing on Westminster Council, said: 'What we are seeing is a battle to escape from responsibility for the homeless. First, the Conservatives tried to ship them out . . . now that policy has failed, they are trying to change the definition of who is homeless and has the right to be cared for by the council. They want the centre of London to be like the centre of New York - a British Manhattan where the rich can walk without being troubled by conscience and the poor are safely tucked away in their ghettos.'
TO MOST people, Westminster is merely the Houses of Parliament, Buckingham Palace and West End shops. But for all its apparent glamour, the area has its fair share of metropolitan poverty. Westminster pushes north into Kilburn, the traditional London home for the working-class Irish, and west into Bayswater, where Peter Rachman had his slum housing empire in the 1950s.
As offices and shops moved into the richer part of Westminster and wealthy homeowners moved out to the suburbs, the Conservatives found that they were left with an electorate overwhelmingly comprised of tenants. In 1981, just 21 per cent of residents owned their own home compared to 65 per cent nationally. In 1986 local elections, the Tories came within a handful of votes of losing control of the council. Homeless ness was, and remains, high in central London, where the council had to cope with people coming from all over the country looking for work.
The Magill report shows that the council leadership's response to this unfavourable demographic trend combined two themes: a passionate belief in privatisation and an attitude to the poor which might most charitably be described as high-handed.
On 2 September 1986, a note of a meeting of senior politicians shows that the blunt question was asked: 'How can we get them (the homeless) out of Westminster City Council?'
A few days later, Porter sent senior Tories a confidential paper which included the warning that 'we are spending an extra pounds 1.52m this year' on meeting statutory responsibilities to house the homeless. The paper advised that the council should 'test the law to its limits', and move the homeless to 'property outside Westminster'. The aim was to encourage 'gentrification' within the area. In this case, gentrification was defined as 'ensuring that the right people live in the right areas'. The right areas were to be identified 'on the basis of electoral trends and results'.
Porter wrote to colleagues: 'When you've read the documents . . . it would be helpful if you swallow them in good spy fashion otherwise they might self-destruct]]' Her instructions were apparently not obeyed.
By 18 September, a homeless action plan had been drawn up and approved by Porter and six other Tory councillors. The policy was summarised by officers as 'mean and nasty'. In 1987 the two elements of the strategy were in place. Westminster would not just sell council houses to tenants; it would 'gentrify' the key marginal wards by selling empty properties to anyone with a connection with Westminster who wanted to buy. The homeless and priority families on the housing list, who might normally be expected to take the homes, were to be shunted out of the area instead. A council draft paper proclaimed that targets were to 'stop housing Westminster homeless in Westminster with immediate effect (and) to move all homeless out of Westminster starting with key wards by end 1988'.
The homeless were treated as meanly and nastily as Porter and the rest intended. Some went out to Essex and the London suburbs; others were left in hostels and on the street. The consequence was a steep rise in the number of people Westminster could not house but who were entitled to a home. In the five years from 1987 to 1992 the number rose from 210 to 871.
When it was asked to account for this, Westminster claimed that it faced special burdens because the council is in central London. But Westminster's own analysis of housing applicants showed that only a quarter were immigrants, refugees or people from other parts of Britain. Most had been thrown out of asylums in the community care programme or thrown out of their homes by friends, relatives and landlords. They were not scroungers who had come to London hoping that the streets were paved with gold, but ordinary people looking for a council to provide them with housing.
Porter said from California last week that she would return in February and clear her name. She denied that her conduct was illegal or improper. She said of Magill's report: 'I have received legal advice to the effect that his view is neither correct in law nor in fact.'
The central Porter policy - the targeting of key wards - was exposed and the auditor's investigation was instigated when Patricia Kirwan, the former Conservative chairwoman of Westminster's housing committee, admitted to the BBC in 1989 that gerrymandering was taking place. The plan was 'to increase the number of upwardly mobile Conservative-type voters in specific key areas to ensure the vote went up', she told Panorama.
WHILE the Magill report has exposed the policies of the 1980s to public scrutiny and condemnation, local Labour politicians in Westminster allege that the spirit of those policies lives on, because the Conservatives are still failing to build cheap homes for rent in Westminster and are continuing to move the poor out.
Council figures support the opposition claim. They show that in the past year 524 homeless people were sent to flats outside the area. In Westminster itself, just 147 cheap, public homes for rent were built.
Meanwhile, opportunities to force developers to build affordable homes in Westminster have been missed. The Government encourages councils to insist that developers provide some socially useful buildings - a 'planning gain' in local authority jargon - when they are given permission to develop a profitable site. But even though Westminster has big developments under way on the sites of two former hospitals and in the Paddington basin near the railway station, housing activists allege that opportunities to construct new homes have been ignored.
'It is not even willing to go along with Government policies,' said the chairman of one housing association. 'Westminster still has the view that planning gain is a nasty socialist policy.'
The present Tory leadership strongly denies that there is anything wrong in this. They are not gerrymandering but making the best use of limited resources by buying homes outside Westminster that are better value for money.
But there is a growing recognition that these policies are not sustainable. Westminster, like councils across the country, is running into the problems created by the council house sales programme which proved such a great vote-winner for the Conservatives after the 1979 general election. Councils are allowed to use only a small percentage of the receipts from the sale of houses to build new homes. As housing associations have been unable to meet the demand left by the collapse in council house building, there is nowhere for the destitute to go apart from bed-and-breakfast hostels or shop doorways.
Worse still, Westminster can no longer offer tax relief to encourage the developement of leasehold properties for its homeless in other parts of London. This is because subsidies under the Government's Business Expansion Scheme ceased to be available for this purpose at the end of 1993. As a result, Westminster has about 850 homeless families in temporary accommodation at present and 1,000 on a transfer list waiting to move from bedsits.
Rather than seeking new ways to build or find homes, the council's response to this crisis has been to ask the Government to reduce its obligations to house homeless people. The 'shopping list' it has sent to ministers calls for Whitehall to make a string of legal changes.
Pensioners should not be automatically regarded as having a 'priority need' for a home. 'Old age should not, in itself, establish a priority need,' the council document says. Councils should not be forced to put people who seem 'vulnerable' - often the mentally ill and battered wives - in hostels until their cases have been assessed and their vulnerability established to the satisfaction of council officers.
Westminster also wants to make it harder for homeless immigrants to claim a house. Councils should be able to consider whether an applicant has access to accommodation abroad and has deliberately made himself homeless, it said.
Meanwhile, children who are thrown out of their homes by their parents, mainly pregnant teenagers, should not automatically be given priority on waiting lists but should be compelled to go to the courts and demand re-entry to the family home, regardless of whether they want to or not.
THE ULTIMATE irony of the policy of the 1980s, and perhaps the lesson for today's council, is that many of the people who were supposed to benefit have turned into bitter enemies of Tory Westminster. Alan Duncan, Teresa Gorman and other Tory MPs have done well buying smart town houses, but for most of the supposed beneficiaries - ordinary people who bought modest flats - the experience has been a disaster.
About 800 have formed a pressure group and are demanding that the council buys their homes back. Mark Green, 35, a medical researcher, explains why. He paid pounds 45,000 for a flat on the 15th floor of a block on the Warwick estate in 1989. The flat was valued at pounds 62,000, but because he was a Westminster resident he got a pounds 17,000 discount from a council that was desperate to sell. Now estate agents have told him that his home is effectively worthless.
Green makes the key point that he had no choice but to buy. 'I and many others would have been happy to rent a council flat. But as they were all being sold off we would never have been able to rent in a million years.' He was assured that the whole estate had been designated for sale and that he would soon find himself surrounded by owner-occupiers rather than 'problem families'.
But within weeks of moving in, the council quietly dropped its plans to sell more flats in the block. It was only three years later, when a neighbour tried to move, that owner-occupiers discovered estate agents and building societies would have nothing to do with the properties.
The other victims are of course the homeless, who wanted to find somewhere to live in Westminster. Maxine Sandford was born and brought up in the area. She and her two young children have now been dumped by Westminster two hours away in a leased flat in the East End of London, where they know no one.
'They moved me away from my family and friends without any regard for my, or my children's, health and happiness. It's miles from anywhere and very hard for anyone to visit me. It's become a nightmare, I want to be moved back to Westminster,' she said.

SOURCES : independent.co.uk

Egg industry fury over salmonella claim

Edwina Currie in 2009
Health minister Edwina Currie has provoked outrage by saying most of Britain's egg production is infected with the salmonella bacteria.
Mrs Currie, MP for south Derbyshire, made her remarks during a television interview.
She has angered farmers, politicians and egg producers, some of whom have been calling for her resignation and are threatening to sue.
"Most of the egg production in this country, sadly, is now affected with salmonella," she told reporters.
Ministry of Agriculture ministers are reported to be extremely "angry" at her comments.
A spokesman said more than 30 million eggs were consumed every day last year.
Edwina Currie initially received support from Prime Minister Margaret Thatcher and Health Secretary Kenneth Clarke.
She weathered the political storm for a further two weeks before mounting writs against her from the farming industry forced her resignation.
As egg sales plummeted, the government was forced to offer a compensation package of millions of pounds to cover the cost of purchasing surplus eggs and for the slaughter of unwanted hens.
Mrs Currie remained an MP for her constituency until she was ousted in the 1997 General Election.
She has carved out a lucrative career as both a novelist and a broadcaster.
The publication of her autobiography in 2002 sensationally revealed she had a four year affair with the former Prime Minister John Major in the late 1980s. 

'Highly irresponsible'

This is compared to 26 outbreaks of salmonella reported during that time.
Mrs Currie's officials in the Department of Health have been unable to provide evidence that most chickens are infected with salmonella.
Her comments have incensed the farming industry and egg producers who are expecting a sharp fall in egg consumption as a result.
The British Egg Industry Council said it was seeking legal advice on whether it could sue Mrs Currie over "factually incorrect and highly irresponsible" remarks.
A spokesman said the risk of an egg being infected with salmonella was less than 200 million to one.
The National Farmers' Union said it might seek legal damages.

Legal action
Mrs Currie has been unavailable for comment since her remarks were made.
She has represented her constituency since 1983 and was made junior health minister in 1986.
During her short time at the Department of Health, Mrs Currie has courted controversy with her outspoken opinions.
She upset northerners when she claimed they were dying of "ignorance and chips".
And she was branded patronising and callous for advising the elderly to broach the winter months with a pair of long-johns.
One of her most controversial remarks was on the subject of Aids.
She said: "Good Christian people who would not dream of misbehaving will not catch Aids."
SOURCE :bbc.co.uk

Jeffrey Archer And The Prostitute Allegations

In 1987 Jeffrey Archer successfully sued the Daily Star newspaper for libel after it reported he had slept with prostitute Monica Coghlan. He was awarded a record £500,000 damages.
Mr Archer was made a life peer in 1992 for his services to the Conservative Party.
In 1999 Ted Francis revealed that an alibi he provided during Mr Archer's case against the Daily Star had been false.
Although the alibi was not used in court it was well documented and the police began perjury investigations.
The trial that followed ended with Lord Archer being found guilty of perjury and perverting the course of justice. He was sentenced to four years in jail.
He was released in September 2003 after serving half of his sentence. 
Jeffrey Archer has stepped down as Deputy Chairman of the Conservative Party.
His resignation comes as a result of reports in a Sunday newspaper alleging he tried to pay a prostitute to go abroad to avoid a scandal.
Mr Archer said in a statement he had "foolishly" allowed himself to fall into a trap to offer money to Monica Coghlan, a prostitute whom he said he had never met.
"For that lack of judgement, and that alone, I have tendered my resignation to the prime minister," he said.
Secret photographs
Miss Coghlan contacted Mr Archer to tell him one of her clients was going to release information about an alleged meeting between them.
When he realised the story was in the hands of the press, Mr Archer agreed to help pay for her to go abroad and avoid being questioned by journalists.
An aide acting on behalf of Mr Archer was secretly photographed by the News of the World handing over the money at Victoria Station in London.
Mr Archer is said to have consulted with Party Chairman Norman Tebbit before informing the Prime Minister, Margaret Thatcher, who was said to be "extremely gracious and kind" over his decision.
The prime minister is due to meet with senior party members to discuss the matter on Monday.
Mr Archer had held the post of deputy chairman for just over a year.
Last night he said he was very sad to leave and it had been "very thrilling, as well as a privilege" to hold the position.
This is the second time Mr Archer's career has been tarnished. In 1974 he was forced to resign as an MP after a business deal with a Canadian company fell through, leaving him with massive debts.
SOURCE : bbc.co.uk

Westland Affair

The Westland affair in 1985-86 was an episode in which the British Prime Minister Margaret Thatcherand her Defence Minister Michael Heseltine went public over a complex cabinet dispute with questions raised about integrity and which senior official was not telling the truth.
The argument was a result of differences of opinion as to the future of the British helicopter industry. The struggling Westland Aircraft company, Britain's last helicopter manufacturer, was to be the subject of a rescue bid. While the Defence SecretaryHeseltine favoured a European solution, integrating Westland and British Aerospace (BAe) with Italian (Agusta) and French companies, the Prime Minister and the Trade and Industry Secretary Leon Brittanwanted to see Westland merge with Sikorsky, an American company. Heseltine refused to accept Thatcher's choice and suggested she had lied about it. She had leaked a confidential letter, then tried to cover that up. It resulted in resignations in January 1986 by Heseltine and Brittan. The episode embarrassed the Conservative government ofMargaret Thatcher in 1986 and hurt her reputation.

April 1985

The Westland affair originated with Alan Bristow's bid for the company in April 1985. By June, Bristow was threatening to end his bid unless the Government assured him that there would be future orders for the company from the Ministry of Defence and that the repayment of over £40 million of launch aid for Westland's newest helicopter from the Department of Trade and Industry was waived.
At a Government meeting it was decided thatNorman Tebbit, the then Trade and Industry Secretary, should persuade the Bank of England to cooperate with the main creditors in the hope that a recovery plan and new management would end the threat of receivership. Bristow withdrew his bid andSir John Cuckney became chairman of Westland.

November 1985

Shortly thereafter an American company was thought to be preparing to bid for the company. Cuckney opposed this particular bid, as did Tebbit and Heseltine. Cuckney proposed that a new minority shareholder of 29.9% be introduced. No British firm was willing to enter this but an American company, Sikorsky, was interested. In November 1985, Sikorsky made an offer and Westland's management were favourable.
Heseltine was opposed to the offer from Sikorsky and called a conference of the National Armaments Directors (NAD) of Britain, France, Italy and West Germany to sign a document which would commit each country to only purchase helicopters designed and manufactured in Europe. If Westland went ahead with Sikorsky its helicopters, under this new agreement, would be unable to be bought by the four governments. Thatcher's and Leon Brittan's view was that it was up to Westland to decide which deal it wanted, and not the Government.

December 1985

Thatcher then convened two meetings to discuss Westland with Heseltine, Brittan, Tebbit, William WhitelawGeoffrey Howe and Nigel Lawson on 5 and 6 December. Brittan, who had replaced Tebbit as Trade and Industry Secretary in September 1985, argued that NAD's opposition should be set aside, but Heseltine, Howe and Tebbit disagreed.
Thatcher called a Cabinet meeting for 9 December, which Cuckney also attended to give a speech. Cuckney said that it was the management's view that the Sikorsky option was the best one. A majority of the Cabinet meeting agreed to dismiss NAD's opposition but Thatcher gave consent to both Heseltine and Brittan to explore a possible European deal which Westland's management could accept. She gave them until 4 pm on 13 December and if by then Westland rejected the European package, NAD's recommendations would be formally rejected. Westland chose Sikorsky instead of the European firms but Heseltine wanted another Cabinet meeting. Thatcher rejected his demands because Westland had made up its mind on which deal it would recommend.
At a Cabinet meeting on 12 December Heseltine, without warning, tried to discuss Westland but Thatcher was not willing to without the necessary papers. Heseltine was angry and claimed a meeting on Westland had been cancelled but Thatcher argued that no such meeting had ever been scheduled. Heseltine wanted his views on the alleged cancelled meeting to be included in the Cabinet minutes; it was not going to be mentioned until the Cabinet Secretary noticed they were absent, and added it himself.
Later, the European consortium came up with a new bid and Heseltine thought the Government's policy should be changed to enable the European bid to succeed. The disagreements between Brittan and Heseltine over Westland became public and were widely reported in the media.

January 1986

Westland's management were worried about future business with European governments and Thatcher replied to Cuckney to the effect that the British Government would continue to support it.Heseltine wanted to include less supportive views, but Thatcher did not allow this.
In early January Lloyds Bank sent Heseltine a letter and in Heseltine's reply he listed the things which in his view would happen if Westland chose Sikorsky instead of the European alternative. Heseltine claimed, contradicting Thatcher's reassurances to Cuckney, that Westland risked losing future European orders if the Sikorsky option was chosen. Heseltine leaked this letter to The Times. The letter, on Thatcher's request, was referred to the Solicitor-GeneralPatrick Mayhew.
Mayhew sent a reply to Heseltine, noting "material inaccuracies" in Heseltine's letter. On 6 January Mayhew's letter was selectively leaked to the Press Association by the Chief Information Officer of the DTI, Colette Bowe on whose orders became a controversy. The Attorney-General, Sir Michael Havers, took a stern view of leaks and threatened to resign if an official inquiry was not set up to look into it. Thatcher agreed to do this.
A Cabinet meeting on Westland was scheduled for 9 January. Brittan and Heseltine both put forward their views. Thatcher concluded by saying that as this was a time of business negotiations all answers relating to Westland should be cleared through the Cabinet Office. Heseltine agreed. Nicholas Ridleyintervened and asked whether this included not only future statements but repetition of past statements too. Thatcher gave an affirmative to both. Heseltine argued that he should be allowed to reaffirm statements he had already made but Thatcher disagreed, arguing that Cabinet collective responsibility should be observed. Heseltine was then said to have replied that there had been no collective responsibility in Westland.
Peter Jenkins claims that Heseltine lost his cool, gathered his papers, got up from his chair and proclaimed "I can no longer be a member of this Cabinet" and then left the room. Heseltine then stormed out of Downing Street and announced his resignation to the assembled media. Within a few hours of his resignation, Heseltine produced a twenty-two minute statement of 2,500 words detailing his grievances. He blamed Thatcher's intransigence, saying his views were ignored. Thatcher sent a letter to Heseltine, as is customary on these occasions.
Thatcher then adjourned the Cabinet for a brief break. George Younger was then offered and accepted the office of Secretary of State for Defence, which Heseltine had just relinquished. The Prime Minister's office then requested Malcolm Rifkind to take up Younger's previous job, Secretary of State for Scotland, which he accepted. Cabinet then resumed. On 13 January, Thatcher held a meeting with Whitelaw, Brittan, Younger and John Wakeham to decide what should then happen. The conclusion was that Brittan, rather than the Prime Minister, should reply to Heseltine's statement on that day. When in the House of Commons, Heseltine asked whether any letters from British Aerospace had been received. Brittan did receive a letter from BAe but it was marked Private and Strictly Confidential so he said in effect that he did not receive one. He was forced to return to the House a few hours later to apologise.
On 15 January there was a debate on Westland in the Commons in which Thatcher replied to Neil Kinnock, the leader of the Labour Party. Thatcher listed all the ministerial, committee and Cabinet meetings on Westland. Heseltine then made a speech criticising the way collective responsibility had been damaged over Westland.
Sir Robert Armstrong, the Cabinet Secretary, held an inquiry into the leaking of Mayhew's letter and reported his findings to the Prime Minister on 21 January. Armstrong concluded that Brittan had told Bowe to leak Mayhew's letter through a telephone conversation to Roger Mogg, Brittan's private secretary. Thatcher is said to have asked Brittan four times: "Leon, why didn't you tell me." Havers, who demanded the inquiry, later claimed: "Unless the PM is the most marvellous actress I've ever seen in my life she was as shocked as anybody that in fact it was on Leon Brittan's instructions."
On 23 January, Thatcher had to make a speech to the Commons on Armstrong's inquiry. A meeting of the 1922 Committee, Conservative back-benchers, demanded Brittan's resignation. On 24 January therefore Brittan resigned because "it has become clear to me that I no longer command the full confidence of my colleagues."
On 27 January, Labour set down an adjournment motion. Whitelaw, Howe, Wakeham, John Biffenand Douglas Hurd helped Thatcher draft her speech for this occasion. Ronald Millar, one of the Prime Minister's friends, was asked to help revise the speech and Thatcher remarked to him that she might cease to be Prime Minister by six o'clock that evening if things went bad.
Neil Kinnock, the leader of the Opposition, was generally thought to have made a poor opening speech. Alan Clark recorded in his diary that "For a few seconds Kinnock had her cornered ... But then he had an attack of wind, gave her time to recover." Heseltine was frustrated at Kinnock's failure to exploit the moment and claimed that Thatcher's statement brought "the politics of the matter to an end" and that he would support the Government in the lobby.
Westland was bought out by Sikorski.
SOURCE: Wikipedia

Al-Yamamah Arms Deal Controversy

A central part of the Al Yamamah deal was the sale of Tornado fighters to the Royal Saudi Air Force.
Al Yamamah is the name of a series of a record arms sales by the United Kingdom to Saudi Arabia, which have been paid for by the delivery of up to 600,000 barrels (95,000 m3) of crude oil per day to the UK government. The prime contractor has been BAE Systems and its predecessor British Aerospace.
There have been numerous allegations that the Al Yamamah contracts were a result of bribes("douceurs") to members of the Saudi royal familyand government officials.
Some allegations suggested that the former prime minister's son Mark Thatcher may have been involved, however he has strongly denied receiving payments or exploiting his mother's connections in his business dealings.
In February 2001, the solicitor of a former BAE Systems employee, Edward Cunningham, notifiedSerious Fraud Office of the evidence that his client was holding which related to an alleged "slush fund". The SFO wrote a letter to Kevin Tebbit at the MoD who notified the Chairman of BAE Systemsbut not the Secretary of Defence. No further action was taken until the letter was leaked to and reported on by The Guardian in September 2003.
In May 2004, Sir Richard Evans appeared before parliament's defence select committee and said: "I can certainly assure you that we are not in the business of making payments to members of any government."
In October 2004, the BBC's Money Programme broadcast an in-depth story, including allegations in interviews with Edward Cunningham and another former insider, about the way BAE Systems alleged to have paid bribes to Prince Turki bin Nasser and ran a secret £60 million slush fund in relation to the Al Yamamah deal. Most of the money was alleged to have been spent through a front company called Robert Lee International Limited.
In June 2007 the BBC's investigative programmePanorama alleged that BAE Systems "..paid hundreds of millions of pounds to the ex-Saudi ambassador to the US, Prince Bandar bin Sultan."

1992 NAO report

The UK National Audit Office investigated the contracts and has so far not released its conclusions – the only NAO report ever to be withheld. Official statements about the contents of the report go no further than to state that the then chairman of the Public Accounts Committee, nowLord Sheldon, considered the report in private in February 1992, and said: "I did an investigation and I find no evidence that the MOD made improper payments. I have found no evidence of fraud or corruption. The deal... complied with Treasury approval and the rules of Government accounting."
In July 2006, Sir John Bourn, the head of the NAO, refused to release a copy to the investigators of an unpublished report into the contract that had been drawn up in 1992.
The MP Harry Cohen said, "This does look like a serious conflict of interest. Sir John did a lot of work at the MoD on Al Yamamah and here we now have the NAO covering up this report." In early 2002 he had proposed an Early Day Motion noting "that there have been... allegations made of large commission payments made to individuals in Saudi Arabia as part of... Al Yamamah... [and] that Osama bin Laden and the Al-Qaeda network have received substantial funds from individuals in Saudi Arabia."

Serious Fraud Office investigation

The Serious Fraud Office was reported to be considering opening an investigation into an alleged £20 million slush fund on 12 September 2003, the day after The Guardian had published its slush fund story. The SFO also investigated BAE's relationship with Travellers World Limited.
In November 2004 the SFO made two arrests as part of the investigation. BAE Systems stated that they welcomed the investigation and "believed that it would put these matters to rest once and for all."
In late 2005, BAE refused to comply with compulsory production notices for details of its secret offshore payments to the Middle East. The terms of the investigation was for a prosecution under Part 12 of the Anti-terrorism, Crime and Security Act 2001.

Threats by the Saudi government

At the end of November 2006, when the long-running investigation was threatening to go on for two more years, BAE Systems was negotiating a multi-billion pound sale of Eurofighter Typhoons to Saudi Arabia. According to the BBC the contract was worth £6billion with 5,000 people directly employed in the manufacture of the Eurofighter,while other reports put the value at £10billion with 50,000 jobes at stake.
On 1 December The Daily Telegraph ran a front page headline suggesting that Saudi Arabia had given the UK ten days to suspend the Serious Fraud Office investigation into BAE/Saudi Arabian transactions or they would take the deal to France, but this threat was played down in other quarters. A French official had said "the situation was complex and difficult... and there was no indication to suggest the Saudis planned to drop the Eurofighter." This analysis was confirmed by Andrew Brookes, an analyst at the International Institute for Strategic Studies, who said "there could be an element here of trying to scare the SFO off. Will it mean they do not buy the Eurofighter? I doubt it."
There were reports of a systematic PR campaign operated by Tim Bell through newspaper scare stories, letters from business owners and MPs in whose constituencies the factories were located to get the case closed.
Robert Wardle, head of the SFO, also stated (in a later High Court challenge, see below) that he had received a direct threat of a cessation of counterterrorist co-operation from the Saudi Arabian ambassador to the UK, in the first of three meetings held to assess the seriousness of the threat: “as he put it to me, British lives on British streets were at risk”.
Article 5 of the OECD Convention on Combating Bribery prohibits the decision to drop investigations into corruption from being influenced by considerations of the national economic interest or the potential effect upon relations with another state. This does not however explicitly exclude grounds of national security.
This prompted the investigation term to consider striking an early guilty plea deal with BAE that would minimise the intrusiveness to Saudi Arabia and mitigate damage. The Attorney General signed off on the strategy, but briefed Prime Minister Blair, who in a reply dated 5 December 2006, urged that the case to be dropped. Despite affirming his government's commitment to bribery prosecution, he stressed the financial and counter-terrorism implications. That same day, Prince Bandar met with Foreign Office officials, after spending a week with Jacques Chirac to negotiate a French alternative to the BAE deal.
A week later, after consultation with the SFO, the Attorney General met with Blair to argue against dropping the case. It was Blair's opinion that "Any proposal that the investigation be resolved by parties pleading guilty to certain charges would be unlikely to reduce the offence caused to the Saudi Royal Family, even if the deal were accepted, and the process would still drag out for a considerable period".
On 13 December, the Director of the SFO wrote to the Attorney General to inform him that the SFO was dropping the investigation and would not be looking into the Swiss bank accounts, citing "real and imminent damage to the UK's national and international security and would endanger the lives of UK citizens and service personnel."

Investigation discontinued

On 14 December 2006, the Attorney General Lord Goldsmith announced that the investigation was being discontinued on grounds of the public interest. The 15-strong team had been ordered to turn in their files two days before. The statement in the House of Lords read:
The Director of the Serious Fraud Office has decided to discontinue the investigation into the affairs of BAE Systems plc as far as they relate to the Al Yamamah defence contract. This decision has been taken following representations that have been made both to the Attorney General and the Director concerning the need to safeguard national and international security. It has been necessary to balance the need to maintain the rule of law against the wider public interest. No weight has been given to commercial interests or to the national economic interest.
The Prime Minister, Tony Blair, justified the decision by saying "Our relationship with Saudi Arabia is vitally important for our country in terms of counter-terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel and Palestine. That strategic interest comes first."
Jonathan Aitken, a former Tory government minister and convicted perjurer, who was connected with the deals in the 1980s, said that even if the allegations against BAE were true, it was correct to end the investigation to maintain good relations with Saudi Arabia.
Mark Pieth, director of anti-fraud section at theOECD, on behalf of the United States, Japan, France,SwedenSwitzerland and Greece, addressed a formal complaint letter before Christmas 2006 to theForeign Office, seeking explanation as to why the investigation had been discontinued.Transparency International and Labour MP Roger Berry, chairman of the Commons Quadripartite Committee, urged the government to reopen the corruption investigation.
In a newspaper interview, Robert Wardle, head of the Serious Fraud Office, acknowledged that the decision to terminate the investigation may have damaged "the reputation of the UK as a place which is determined to stamp out corruption".
Delivery of the first two Eurofighter Typhoon aircraft (of 72 purchased by the Saudi Air Force) took place in June 2009.

Judicial review

A judicial review of the decision by the SFO to drop the investigation was granted on 9 November 2007. On 10 April 2008 the High Court of Justiceruled that the SFO "acted unlawfully" by dropping its investigation. The Times described the ruling as "one of the most strongly worded judicial attacks on government action" which condemned how "ministers 'buckled' to 'blatant threats' that Saudi cooperation in the fight against terror would end unless the ...investigation was dropped."
On 24 April the SFO was granted leave to appeal to the House of Lords against the ruling. There was a two-day hearing before the Lords on 7 and 8 July 2008. On 30 July the House of Lords unanimously overturned the High Court ruling, stating that the decision to discontinue the investigation was lawful.

OECD investigation

The OECD sent their inspectors to the UK to establish the reasons behind the dropping of the investigation in March 2007. The OECD also wished to establish why the UK had yet to bring a prosecution since the incorporation of the OECD's anti-bribery treaty into UK law.

US Department of Justice investigation

On 26 June 2007 BAE announced that the United States Department of Justice had launched its own investigation into Al Yamamah. It was looking into allegations that a US bank had been used to funnel payments to Prince Bandar. The Riggs Bank has been mentioned in some accounts. On 19 May 2008 BAE confirmed that its CEO Mike Turner and non-executive director Nigel Rudd had been detained "for about 20 minutes" at George Bush Intercontinental and Newark airports respectively the previous week and that the DOJ had issued "a number of additional subpoenas in the US to employees of BAE Systems plc and BAE Systems Inc as part of its ongoing investigation". The Times suggests that, according to Alexandra Wrageof Trace International, such "humiliating behaviour by the DOJ" is unusual toward a company that is co-operating fully.
Under a plea bargain with the US Department of Justice BAE was sentenced in March 2010 by US District Court Judge John D. Bates to pay a $400 million fine, one of the largest fines in the history of the DOJ. US District Judge John Bates said the company's conduct involved "deception, duplicity and knowing violations of law, I think it's fair to say, on an enormous scale". BAE was not convicted of bribery, and is thus not internationally blacklisted from future contracts.
SOURCE: Wikipedia