Papers `show Aitken link to arms deals'

Former BMARC boss says documents held by MoD police may be `a smoking gun' for the Treasury Chief Secretary and many others

STEVE BOGGAN, TIM KELSEY and JOHN RENTOUL

The extent of government knowledge of illegal arms shipments to Iran may be revealed by crucial documents rediscovered by police last week, according to former directors of BMARC, the company at the centre of the scandal.

The papers, which the Ministry of Defence police (MDP) denied possessing until a surprise announcement on Saturday that they had been found, may also shed new light on information about the shipments available to Jonathan Aitken, a former director of BMARC. Mr Aitken, Chief Secretary to the Treasury, has denied knowing about the company's breaches of arms embargoes.

Yesterday it was revealed that Sir Richard Scott's arms for Iraq inquiry, had asked to see the MDP files. Christopher Muttukumaru, the inquiry's secretary, said he had requested the files on Friday night.

Details of the discovery emerged as more embarrassment was heaped upon Mr Aitken. A letter to him from a right-wing public relations adviser was faxed to the wrong number and passed to the Independent on Sunday. In it, the adviser, Patrick Robertson, acknowledges Mr Aitken's fears that "one more bad story will break the camel's back"; he gives advice on handling an anticipated "nasty" tabloid story and he warns that the BMARC allegations are the Chief Secretary's "fundamental problem". The rediscovered BMARC papers were seized by the MDP during a raid on the company's headquarters at Grantham, Lincolnshire in April 1990 by officers investigating allegations of corruption. Most of the documentation was handed to Coopers & Lybrand, BMARC's receivers, but the MDP said on Saturday that it had found more papers that had gone astray during a move to new headquarters.

Gerald James, former chairman of BMARC's parent company, Astra Holdings, said the documents were potentially explosive. "If there are shipping and sales documents and correspondence it could be extremely significant," he said. "For Jonathan Aitken and a lot of other people there could be a smoking gun."

Mr James, who insists Mr Aitken knew of Project Lisi - the codename for the shipments of naval cannon to Iran via Singapore - said the papers would almost certainly contain minutes of board meetings and details of reports sent to directors. Those, coupled with sales and shipping records, were likely to show who knew what and when. "I think they will demonstrate the company was selling weapons, ammunition and tooling illegally to countries like Iraq and Iran but the company was doing it with the full blessing of the Government," he said.

The release of the papers does not automatically mean they will come into the public domain. They will be handed to Christopher Barlow, the receiver, who is refusing to allow access to former BMARC directors without a court order.

If Labour's calls for an independent inquiry are successful, Mr Barlow has promised to make them available to "anyone who has a legitimate interest".

Today there will be an Opposition debate in the Commons when Labour will call for an independent judicial inquiry.

John Anderson, a former director of BMARC, was among executives whose papers were seized during the MDP raid. He was cleared of corruption and has since been trying to recover his documents. He said: "The papers will certainly embarrass the Government but why didn't they release them six months ago? ... I think somebody is trying to become a little bit clean."

Aitken fax, page 3