Westland denies weapons deal conspiracy: British firm says proposed contract to supply armed Black Hawks to Saudi Arabia was not part of conspiracy to evade US arms export controls. Rosie Waterhouse reports

IN AUGUST 1989, executives from a select group of defence companies were summoned by telephone to Ministry of Defence offices in Castlewood House in New Oxford Street, London, to discuss a project they were told was 'strictly confidential'.

The meeting was chaired by Stephen Bonde, a senior official involved in the Yamamah programme to supply weapons to Saudi Arabia, assisted by another civil servant, Tom Goff.

Present were senior executives from Westland Helicopters, and the companies that Westland had earlier that year invited to tender for a proposed contract to 'weaponise' a consignment of Black Hawk helicopters which Westland makes under licence from the US company Sikorsky.

High on the agenda was the forthcoming firing trial of an armed prototype to be staged in Belgium for potential Saudi customers.

The companies represented included British Manufacture and Research Company (BMARC), a subsidiary of the munitions company Astra, which was to manufacture and fit some of the weapons, and Computing Devices, which was to provide the electronic interface between the helicopter and the weapons, known in defence circles as 'stores'. Staff from British Aerospace, the main contractor on the Yamamah programme, were also present.

Confidential documents show the MoD must have known that the project to arm the Black Hawks included US- made weapons whose export would have been banned by Congress. The MoD was in control of the export and all technical specifications had to be submitted for approval. Westland denies the proposed contract was part of a conspiracy involving British and US companies to get round US arms controls.

There is no suggestion that what Westland and the MoD proposed was illegal under UK law. But if American companies conspired to avoid US law this would be in breach of the US Arms Export Control Act. Following disclosures uncovered by the Independent, Congress may question all the companies about their roles in the deal.

Lee Hamilton, chairman of the European and Middle East sub-committee of the Congress Foreign Affairs committee, said: 'If the allegations . . . are true, that US companies were seeking to circumvent US law, that's a very serious departure (from the law)'.

Congress could block any future armed Black Hawk exports to Saudi Arabia, even if the weapons were all British. Mr Hamilton said: 'If in fact the Black Hawk helicopter of any type with substantial US content and with the ability to have military applications were sold to Saudi Arabia or any other country, Congress would have to be notified regardless of where the weapons for the helicopters came from.'

Westland and Sikorsky had to get congressional approval to extend Westland's licence so that Westland Black Hawks could be exported to the Middle East. This was granted in February 1988.

Westland refused to comment on whether, when applying for the the extension, they or Sikorsky declared to Congress that the Black Hawks would be armed with US weapons such as anti- tank missiles.

The Ministry of Defence declined to comment on the allegation that it knew some of the helicopter's proposed weapons would have been banned by Congress. A statement read: 'It is not our practice to comment on detailed aspects of defence sales, potential or otherwise. However, in this case we can say that no contract has been concluded for the sale of Black Hawk helicopters under the Yamamah programme.

'Any export sales of US weapons are subject to US export control regulations in the normal way and these are a matter for the US government.'

The confidential list of preferred weapons, sent out by Westland in January 1989 to the companies tendering to arm the helicopters, said: 'The Westland WS-70 (Black Hawk) helicopter will be equipped with air-to-surface missiles, selected from the following.'

The list includes three US-made or designed anti-tank missiles - the Rockwell Hellfire, the Emerson/Saab Helitow and the Hughes/British Aerospace TOW missile.

The contract would have cost the Saudis dollars 5bn ( pounds 2.67bn) for 88 armed helicopters. The unarmed helicopters or 'platforms' would have cost dollars 1.5bn ( pounds 800m) and the remaining dollars 3.5bn ( pounds 1.87bn) for supplying, fitting and integrating the weapons system would have been shared between Westland, the suppliers and sub-contractors.

All the UK companies have confirmed that they tendered for the Black Hawk contract. Computing Devices, Frazer Nash, an engineering company, and M L Aviation (which tendered to make the weapons carriage and release system), would not have been involved in supplying weapons so would not have had to secure export approvals from the US authorities. BMARC, British Aerospace and Royal Ordnance, which were invited to supply weapons, would have had to apply for US export approval if they had imported or made American weapons under licence.

British Aerospace and Royal Ordnance admit they were involved in negotiations to supply exclusively British weapons to fit on the Black Hawks. These would not have required US approval. However, they and the munitions company Astra were also allegedly involved in talks with American defence companies to manufacture their weapons for export under licence in Britain. This was allegedly suggested as an alternative way of getting round the US arms restrictions.

British Aerospace and Royal Ordnance deny this. A spokesman said: 'It would not be possible to engage in any licence agreement without the appropriate consents.'

But Gerald James, the former chairman of Astra, said: 'Discussions certainly took place in which it was proposed that Astra would make the Hellfire at our site in Faldingworth, Lincolnshire, under licence from Rockwell.' Although he was not involved in the talks, he said: 'The whole point of the proposed Hellfire licence deal was to get round Congress arms export restrictions.'

Astra was also granted a licence from General Electric, with Congress's approval, early in 1988 to make the Gecal 50, a high-grade Gatling machine gun that can fire between 1,000 and 2,000 rounds a minute. The Gecal 50 was one of the guns fitted at the firing trial in October 1989.

Experts knowledgeable about Congress's attitude to arms exports are unsure whether it would oppose the export of the Gecal 50 to Saudi Arabia but they say approval could not be guaranteed.

Westland says the 'requirement' document was not specific to Saudi Arabia, but admits the only countries that negotiated to buy the armed Black Hawks were Saudi Arabia and Kuwait. Christopher Loney, a press officer, said Westland still hoped to win the Saudi contract.

Westland insists that the tendering excercise included anti-tank missiles only to show potential customers the sort of weapons that could be fitted if and when the US ban was lifted.

Mr Loney said: 'We would not have been able to provide even Kuwait . . . with the Hellfire because that was not exportable from the States.

'All our requests to suppliers say that it is their responsibility to get any necessary export licences and therefore the request to Rockwell on the Hellfire would have come back, I'm sure, with the statement which said they could not supply in those markets.'

Howewever, Mr Loney also said: 'A customer defines the requirement, not us, and in the case of military sales overseas that is done through the MoD . . . 'As far as the actual weapons that we have fitted to the aircraft to date go, we haven't fitted the Hellfire. I'm not suggesting that we couldn't . . .if there was a requirement for it to be fitted.'

Mr Loney said the project to weaponise the Black Hawks was part of the Yamamah programme. 'I don't think there has ever been any dispute that the Saudis have been in serious discussion through the MoD for Black Hawk helicopters.

'Nor do I think it has ever been disputed that the Westland variant of the Black Hawk was perceived as an armed variant if that's what the customer wanted . . . What we may or not have done for the Saudis would be a question for the Ministry of Defence, not us, because they would have been the interface with the Saudis.'

Mr Loney maintained that any alleged conspiracy to allow British companies to make US designed weapons under licence in the UK to get round the US arms controls would not work because the companies would need US approval for each consignment for export. If the companies said the end user was in the Middle East, Congress would refuse permission.

Allegations uncovered by the Independent have led to an intriguing theory about the Westland affair, which led to the resignations of two Cabinet ministers, Michael Heseltine and Leon Brittan.

The controversy centred on rival European and American-backed bids to rescue Westland when it was in severe financial difficulties in 1985 and 1986.

Michael Heseltine, then Secretary of State for Defence, galvanised the European consortium and Leon Brittan, then Secretary of State for Trade and Industry, supported the American offer from Sikorsky. The board of Westland, chaired by Sir John Cuckney, strongly preferred the Sikorsky deal, which shareholders eventually approved.

Informed sources in the defence industry speculate that the reason Sikorsky became interested in Westland was to use it as a conduit to facilitate the Black Hawk and other future sales to the Saudis. But this was dismissed by Westland as 'a perverse interpretation of the facts'.

The Independent's findings could influence the outcome of a dollars 130m ( pounds 69.5m) lawsuit in Washington in which Westland, Sikorsky and its parent company, United Technology Corporation, are accused of being part of a conspiracy to supply armed Black Hawks to Saudi Arabia in order to circumvent American arms export controls.

They are also accused of conspiring to bribe two Saudi Arabian princes to award them contracts worth dollars 6bn ( pounds 3.3bn) to supply a total of 101 Black Hawks - 88 armed from Westland, and 13 unarmed from Sikorsky.

The civil case is being brought by Thomas Dooley, a former US Army lieutenant-colonel and former Sikorsky employee who is suing for dollars 130m ( pounds 69.5m) damages, claiming he was wrongly demoted for threatening to blow the whistle on the alleged bribery and corruption conspiracy.

The judge, June Green, is deliberating on an application by the British Westland companies that the case against them should be dismissed. Her decision is expected within weeks.

Westland's admission that it was negotiating to arm the Black Hawks will not affect her decision as she is considering whether the American court has jurisdiction over British companies.

But Mr Dooley's lawyers confirmed that if the case proceeds against the Westland companies their disclosures to the Independent will be raised in court.

In their application to dismiss the case against them, the Westland companies state that a 'striking aspect of the lawsuit against the Westland UK companies is that it is founded largely on events that never actually occurred'.

'Even after four years there has been neither a signed contract nor a firm order with the British Government.

'Saudi Arabia has not contracted for Westland to arm any of its Black Hawks, and it is not known whether any have ever been armed, or ever will be. Thus, with no Westland helicopter sales to Saudi Arabia, no Westland arming of any helicopters, and no Westland bribes, Dooley's action against Westland plc and Westland Helicopters is almost entirely hypothetical.'

(Photograph omitted)