Saturday 29 August 2009

War Is A Racket

As part of J7's ongoing research into the events of 7 July 2005 and our work on the campaign for a truly independent public inquiry, held outside of the scope of the Inquiries Act 2005, we have discovered many interesting pieces of related information.

One such piece of information is the notable, obscene and undeclared conflict of interests of the chairman of the Review of the Intelligence on Weapons of Mass Destruction, Lord Butler. With the recent announcement of a further Inquiry into the war in Iraq, it is worth reflecting upon this confirmation of the analysis of another Butler that War Is A Racket.

The Kroll company has benefited considerably from the war in Iraq, not least from the British government:

25% of UK Iraq aid budget goes to security firms

· £165m bill includes guards for staff and police training
· Leading beneficiary is company headed by MP

David Pallister
Monday April 2, 2007
The Guardian

The UK has spent £165m on hiring private security companies in Iraq in the past four years - the equivalent to around a quarter of the entire Iraq aid budget, it has emerged. A further £43m has been spent on private guards in Afghanistan since 2004.

The security costs, mainly for guards for British staff and facilities, were revealed in a parliamentary answer from the Foreign Office minister Kim Howells. They reflect the huge quantities of money that Britain and the US have had to divert from humanitarian and reconstruction resources to deal with the deteriorating security environment in both countries.

In Iraq, a total of £145m has been spent on security guards to protect British assets, with a further £20m going on police training and security advisers to the Iraqi government.

Britain's Iraqi aid budget over the same period was £644m.

The big beneficiaries have been the New York-based risk consulting company Kroll and the UK companies ArmorGroup and Control Risks. ArmorGroup, which is headed by the Conservative MP Sir Malcolm Rifkind, earned 50% of its £129m revenues from Iraq last year.

Source: The Guardian
As part of Kroll, Kroll Security International (KSI) has developed a new security architecture that places your risk management in the context of increasing global insecurity. With an evolving, international capability across a broad spectrum or risks and services, KSI offers a coordinated approach that matches your needs, however they may develop. By working with clients at the outset of the planning phase KSI can provide a holistic strategy, critical in hostile business environments. From a thorough understanding of your risk management needs to creating a dynamic and focused security solution, KSI can take the risk out of your management.

Within Kroll’s portfolio of services, KSI has been actively providing protection and security in Iraq for government agencies and companies involved in the reconstruction. Since April 2003 KSI’s knowledge and understanding of the risks involved in operating in Iraq has resulted in invaluable protection to our clients. The security risk throughout Iraq ranges from very high to high across the country. The deterioration in the security situation throughout Iraq over the past six months has been marked. Various factions are seeking to make Iraq ungovernable by the Iraqi government, with a view to disrupting the pending Iraqi elections scheduled for January 2005. Consequently this is impacting on US Presidential elections and precipitating the eventual withdrawal of foreign forces from Iraq.

The risk is multi-faceted, being both terrorist and criminal in nature. The terrorist aim is to discourage Iraqis from cooperating with the IIG and MNF, through a series of tactics. These include indiscriminate suicide bombings of Iraqi security forces, the assassination of officials and locals deemed to be assisting the interim government and the taking of western hostages with a view to discouraging foreign governments, humanitarian and commercial organisations from participating in stabilisation and reconstruction efforts in Iraq. Security is the key to success by generating stability and encouraging inward investment.

KSI, with its wealth of experience of operating in hostile environments, offers a variety of services to create a secure environment in which clients can operate in relative safety. These services range from advisory and security audits, intelligence audits and summaries, risk and project management, hostage and kidnap resolution, emergency medical and evacuation/repatriation, the provision of highly experienced security details and training amongst others. Kroll’s services are tailored to suit client requirements.

Kroll was acquired in 2004 by MMC (Marsh McLennan Companies):

MMC News


$1.9 Billion Transaction Enhances MMC's Position as World's Leading Provider of Risk Services

NEW YORK, NEW YORK, May 18, 2004 - Marsh & McLennan Companies, Inc. (MMC) and Kroll Inc. announced today that MMC will acquire Kroll, the world's leading risk mitigation services firm. The transaction will broaden significantly the range of MMC's risk and insurance services businesses and enhance its leadership position in risk management services.

MMC News


NEW YORK, NEW YORK, July 8, 2004 - Marsh & McLennan Companies, Inc. (MMC) announced today that it has completed its previously announced acquisition of Kroll Inc., the world's leading risk mitigation services firm.

The International Advisory Board of MMC (Marsh McLennan Companies) included:

The Hon. Lord Butler of Brockwell, KG, GCB, CVO (United Kingdom)
Master, University College, Oxford
Former Secretary of the Cabinet and Head of the Home Civil Service

Presumably the members of the Advisory Board, including Lord Butler, were consulted about the acquisition of Kroll.

Lord Butler held this position at MMC since at least 2003:

Rt. Hon. Lord Butler of Brockwell, KG, GCB, CVO
Senior Independent Director

Appointed a Non-Executive Director in 1998. He is the Board’s Senior Independent Director.

Lord Butler is currently Master of University College, Oxford, a Non-Executive Director of HSBC Holdings plc and is a member of the Advisory Panel to the UK Management Group of Marsh & McLennan. He has recently been appointed to chair the Review of Intelligence on Weapons of Mass Destruction. He is also a trustee of the Globe Trust, a trustee of the Rhodes Trust and Chairman of the Churchill Museum Appeal Committee. Aged 66.

The Sunday Times of February 8th 2004 confirms that Lord Butler was paid for his advice to MMC from December 2003:
THE MAN appointed last week to lead the government's inquiry into intelligence on Iraqi weapons is a paid adviser to an insurance company with multi-million pound contracts throughout the Middle East.

Lord Butler of Brockwell, the former cabinet secretary who will have access to some of the most up-to-date intelligence as part of his inquiry, accepts there could be a potential conflict of interest. He does not intend to resign, but said yesterday he and the present cabinet secretary, Sir Andrew Turnbull, would review his business contacts after the inquiry is completed.

Butler is a director of ICI and the banking group HSBC, but it is his recent appointment as an adviser to Marsh & McLennan in Britain that could cause most embarrassment. The US-based group is the world's biggest insurance broker and also earns millions of pounds advising companies on international risk and crisis management. Although it has refused to insure businesses in Iraq, it does advise companies hoping to do business there.

Butler accepted the adviser's role in December and notified the House of Lords interests register. Last night he referred inquiries about his business interests to the Cabinet Office. A spokesman said: "Lord Butler is not aware of any conflict of interest at this stage. If a conflict of interest did emerge (he) would discuss with the company how this may be resolved."

Although this article states that the House of Lords interest register was notified, an examination of that register using shows that his regular remunerated employment from MMC did not appear in that register until 3rd January 2006, and that the date given for the appointment was 13th December 2005. It appears that the information supplied to the register was neither timely nor truthful.

Glen Rangwala also commented upon Lord Butler's paid employment by MMC in an article that appeared in Labour Left Briefing in early 2004 (but is no longer available online):

As even his most devout supporters covered their faces in embarrassment at Blair's confession, a new inquiry was set up. And who better to put in charge than Lord Butler? This was, after all, the man who told the Scott arms-to-Iraq inquiry in 1996 that "half the picture can be true". Blair must be hoping that a tiny corner of the picture can be true as well. In the time since his days of loyally serving Blair as cabinet secretary in 1997, he has been acting as a paid advisor to Marsh & McLennan, the insurance brokers. Their other famous employee is Paul Bremer, chief executive of a subsidiary of Marsh & McLennan from October 2001 until he took up his appointment in Baghdad in April 2003. So the man supposedly investigating why Britain went to war on Iraq works for the outfit that provided the person who rules by consequence of that war.

So in 2004 Lord Butler was receiving regular renumerated employment from a company (MMC) with a beneficial financial interest (via Kroll) in the Iraq war.

At the same time, he was chairing a Review of the Intelligence on Weapons of Mass Destruction.

On February 3, 2004, the British Government announced an inquiry into the intelligence relating to Iraq's weapons of mass destruction which played a key part in the Government's decision to invade Iraq (as part of the U.S.-led coalition) in 2003.

The committee met in secret and only its conclusions were published on 14 July, 2004.

Source: Wikipedia
When MMC acquired Kroll between 18th May and 8th July 2004, there was a direct conflict between Lord Butler's private interests as a beneficiary of the Iraq war and his role as a public servant reviewing the intelligence relating to that war. Lord Butler never declared this conflict of interest, nor did the government replace him on the review committee because of it, nor did anyone in the media bring this to the attention of the public.

J7 acknowledges the lead given to it by the Kelly Investigation Group for this story.

For more information about Kroll, please see Truth and Justice for Richard Chang.