Customs had 'doubts' about DTI role in arms to Iraq case

CUSTOMS and Excise lawyers had deep reservations about the role of Trade and Industry officials crucial to the succesful prosecution of the Matrix Churchill trial long before the case came to court, the Scott inquiry was told yesterday.

Case notes by a Customs lawyer shortly before the defendants were committed to the Old Bailey revealed the prosecution team's concern. The notes included the reference: 'DTI are reluctant. Things are lurking] ie It was for military use]] In reality the DTI probably did suspect.'

Annabelle Bolt - a Customs solicitor - said she believed the reluctance stemmed from the fact the DTI's licensing department's shortcomings would be exposed.

'The impression we gained was because it might show up their practices and procedures in a less than favourable light and no department likes to be put through the mill. The whole licensing part of the DTI was going to come under the microscope.

'It was never my understanding they had connived or agreed to anything but they would have shown up to be less than brilliant. It was their lack of action which caused concern.' They also expressed fears over Anthony Steadman, a prosecution witness who was described as 'forgetful' and 'keeps quiet in all probability'. Miss Bolt described him as 'truthful but not robust'.

Asked whether one problem was that he too readily agreed to anything put to him, Miss Bolt said: 'He doesn't say 'yes' to anything you put to him but if you pressurise him he does become confused. He does in fact become less coherent than he will otherwise be.'

Despite misgivings she said he was the only witness they had 'like it or not'. 'He was the one involved.' If he was 'destroyed' in cross-examination, Alan Clark, former trade and defence minister, might need to be called as part of a 'damage limitation exercise' the notes said.

Alan Moses QC, counsel for the prosecution, wrote after the case collapsed: 'One problem was the total lack of any investigation or inquiry by DTI, either through lack of competence or time, into the true destination of the exports.'

Lord Justice Scott asked whether Customs had sufficiently investigated whether the DTI's failure was due to lax administration or because officials simply thought it not important enough.

Miss Bolt said she found it 'extraordinary' that the DTI did not take an opportunity to say before the prosecution started it was not valid because 'they didn't care' about export breaches.

When Presiley Baxendale QC, inquiry counsel, suggested witnesses said nothing because the Customs case was tightly framed around the question of 'special design', Miss Bolt said: 'I saw nothing which said they didn't care. In the statements they said they did care.'

Sir Brian Unwin, the former chairman of Customs and Excise, expressed concern that the Matrix Churchill case did not turn into a repeat of the 'supergun' fiasco.

Customs dropped charges in the supergun affair after lawyers - supported by Sir Patrick Mayhew, the former Attorney General - advised that the prosecution would probably fail.

The accused insisted that the Government knew and approved the exports of supergun parts described as oil pipes.