The millionaire civil servant: Chris Blackhurst on how Gordon Foxley grew rich through backhanders from foreign munitions firms at Britain's expense

THE THING about Gordon Foxley, say those who met him, is that you would never suspect him of anything. Quiet, unassuming, obsequious, he was a typical member of that solid, comfortable Home Counties mass who devote their lives to middle management.

He was a tall, distinguished- looking, white-haired gent who used to work at the Ministry of Defence. He lived in Henley- on-Thames, where, in the time- honoured tradition of such cases, residents report that he kept himself to himself. His wife was something in the NHS. He had seven children, four of them in the Army.

With hindsight, there were signs that he was different: when he didn't get his way, said one former weapons manufacturer, he could be 'oily and persuasive', perhaps a mite too much so for a civil servant with just a pension to care about. Then there was the house. If anyone from Whitehall had bothered to check they would have found a pounds 750,000 six-bedroom mansion backing on to the golf course - not bad for someone who, when he retired, was on pounds 20,000 a year.

On Friday, Foxley, 67, bade farewell to his Henley homeand its swimming pool; and to his Wiltshire country retreat, and fleet of luxury cars, not to mention his other properties and assets around the world that detectives are still trying to trace, and headed for Snaresbrook Crown Court, east London. A month ago the judge had warned him to prepare for a custodial sentence. He was able to return home for now: sentencing was adjourned to 7 February, pending investigation of the former Grade 6 civil servant's wealth.

His barrister, Roy Amlot QC, said the prosecution was acting to confiscate more than pounds 2m of his assets, covering 'no less than nine properties, including his own home and the homes of members of his family . . . and five of their vehicles'.

As well as his Henley and Wiltshire homes there is a property near Henley belonging to his daughter Caroline worth pounds 350,000, and money from the sale of a Sussex property that used to belong to his daughter Alison and her husband, plus five lots of land in Henley and Sussex. The vehicles include a Range Rover belonging to Foxley, a Jaguar belonging to his son Paul, a Ford Cabriolet belonging to Alison, and a Ford Sierra Cosworth belonging to son Andrew.

Asked if members of the family would be homeless if property were seized, DS Colin Rogers said: 'I would doubt it. This is all that we know about. We suspect there are other things but we can't prove it.'

Foxley's crime was simple: while working at the MoD, in charge of buying ammunition, he took bribes from foreign manufacturers in return for orders. He received at least pounds 1.5m, although the police estimates are far higher. But Britain had its own ammunition makers capable of equipping the Army. And every time the foreign firms picked up an order, the British missed out. Inevitably, some people lost their jobs.

In Blackburn, Lancashire, the Royal Ordnance fuse factory covers 44 acres and is part of an industrial heritage.

It is now part of British Aerospace - and the workforce is now just 399. Three-quarters of the site is being sold to Barratts for new housing.

In 1979, Foxley had finally reached the top of his civil-service ladder. From a working- class family in Liverpool, he had become a civil servant after national service and training as an engineer. He worked his way up to director of ammunition procurement at the MoD.

It sounded good, but in Whitehall terms it was not much of a job. Ammunition was conventional and boring. The only aspect that was exciting was fuses, using mechanics and electronics to delay explosions. Fuses were expensive and sophisticated items.

Foxley and his six-man team at the MoD's offices in Southwark Street, south London, were left pretty much to themselves. The career civil servant knew how to play the game, and to give his masters what they wanted. To emphasise his Thatcherite approach and his interest in new methods, he invented a nice catchy name for his team: Fuse Focus. He also displayed an unerring ability to drive prices down.

But the managers at Blackburn saw him differently. Especially those on the fuse side. The factory prided itself on its ability to delay explosions. Mike Stone, 53, an engineer who, until his redundancy, ran the fuse production line, describes himself as one of the 'last of the watchmakers', who built timers capable of losing no more than three- hundredths of a second in 24 seconds when fired from the barrel of a gun and spinning at the rate of 30,000 revolutions a minute.

He said: 'Everyone in the world, especially in America and Germany, told us we were the best. When you fired 1,000 Blackburn shells, 1,000 went off. In artillery testing competitions, the Americans came second best - 910 of theirs went off. When you're down to your last round, that sort of precision engineering is priceless. There was no man in the world more knowledgeable in the field of artillery fuses than Les Kennedy, our chief executive. We knew we were good.'

But that view did not seem to be shared by Fuse Focus. Blackburn appeared to be losing orders it might otherwise have received.

Worse, it was sometimes not being invited to bid for them at all. A former senior Royal Ordnance manager - he is bound by the Official Secrets Acts and refuses to be named - recalls that the first murmurings of discontent were made in 1980.

They set the pattern for what was to follow: the second- in-command of Royal Ordnance went to see a general at the MoD. He listened . . . and referred the matter to Fuse Focus.

What had so upset the Blackburn manager was the mortar proximity fuse. A Scandinavian firm won the order. 'We complained, 'You can't do this', ' said the manager. 'The MoD went off and checked with Fuse Focus and told us there was no other proximity fuse available. We said, 'Oh yes there is, we can do it, in partnership with some Americans.' The MoD thought again, and told Fuse Focus to make it competitive. It never was.'

Then there was the standard mortar fuse, a Royal Ordnance stalwart. During the Seventies, Blackburn supplied tens of thousands of the 162 fuse at pounds 9 apiece to the MoD. Unknown to Royal Ordnance, Foxley started ordering the DM111A3 fuse from the German firm Gebruder Junghans, at pounds 12 each. 'We asked him what was going on,' said the manager. 'He said the Army wanted a safer fuse - the 162 did not have delayed arming, as soon as it hits anything it goes off.'

Royal Ordnance later made private inquiries and discovered that the initiative for the DM111A3, a delayed-action fuse, had come from Foxley. He had gone to the Army and suggested they look at the German model. 'We'd been conned,' said the manager.

The DM111A3 order is a rolling, five-year, pounds 25m contract. Faced with the loss of a major slice of business, Royal Ordnance had a choice: develop its own version or - and this was an audacious twist - follow Foxley's advice and negotiate a manufacturing licence with Junghans.

As a short-term expedient it chose the latter and paid pounds 3m to Junghans. Police suspect that half that money went straight back to Foxley.

At the time, though, nobody really doubted anything. Royal Ordnance, for all its grousing, was viewed within the MoD as a nationalised industry that had seen better days - Foxley was seen as an MoD official who was doing a good job.

According to the MoD fraud squad, they stumbled across him while investigating something else. But others claim the police were tipped off about the lavish lifestyle of the retired civil servant. Whatever the truth, it took five years for them to move in. Slowly, they worked through Foxley's orders. Their attention was constantly drawn to three companies - Junghans, Raufoss of Norway, and Fratelli Borletti of Italy - and the way in which the three were often on the end of Fuse Focus business.

In September 1989, Foxley was arrested and charged with corruption. For want of solid documentary evidence, however, the charge was dropped. In August 1990, Foxley was again arrested; but again the charge was dropped. Undeterred, the MoD tried once more. Since retiring, Foxley had set up a defence consultancy business. Its books were prepared by his son Paul, working at H Foxley & Co, a firm of accountants in Henley. On 21 August 1990, armed with a search warrant, the police arrived at H Foxley's offices.

As they searched, DI Matthew Taylor noticed a concealed cupboard under a step. Inside it, and another adjoining cupboard, he found two plastic bags full of documents. He showed them to his colleague, DS Rogers. They put the bags in bin- liners and asked Paul to sign for them.

As he did, he grabbed the bin-liners and ran off. He locked the front door of the offices to delay the police and fled.

Other police gave chase but he escaped. He burned the documents on a farm near Henley. In May 1991, he was sentenced to six months' imprisonment for attempting to pervert the course of justice.

Paul Foxley also had a post office box in Reading. It was used by a Swiss company, Scientifik. When the police raided his father's home, they had better luck, retrieving, from a concealed cupboard, documents linking Scientifik with two other Geneva-based companies, Interep and Confrere.

All three companies were closely tied to Foxley. Confrere also had a post office box, this one in the father's name, in Henley. For some time the firm had been paying money into secret numbered Swiss bank accounts controlled by him. That money, at least pounds 1.5m, had come from three firms: Junghans, Borletti and Raufoss.

Foxley and his Swiss associates were not without a sense of humour. In one letter, Odon Gelbert, who administered Interep on his behalf, wrote: 'Scotland Yard or Sherlock Holmes has no possibility of making investigations in Switzerland.'

He was right: the Swiss have refused to help the MoD police inquiries.

But in Britain, Foxley, like the civil servant he was, wrote everything down. DS Rogers even found a poem, which referred to him as 'Roger the Bodger' and contained the boast:

'Up a creek minus a paddle,

Their little brains addled,

Of corruption they won't find

a trace.'

But police did find corruption, on a grand scale. They believe that Foxley bought seven houses, including one in Switzerland, for himself and family.

Other beneficiaries of his greed were, of course, the German, Norwegian and Italian companies. Since Foxley's conviction last month, Jonathan Aitken, defence procurement minister, has announced their removal from the MoD list of suppliers. They will not be used in future. It has also emerged that the MoD is phasing out an order with Borletti for fuses that do not work in the rain.

Junghans is continuing to supply the DM111A3 - an order that, if scrapped, could just save the last 160 fuse-makers' jobs at Blackburn. Redundancies are feared in the new year.

'Those fuses could be made here,' said Steve Wallis, an electronics technician and member of the factory's union working party trying to claim compensation after the Foxley revelations. 'We want the MoD to admit they were wrong to rob us of profits and jobs. They must put things right very quickly, before the next round of redundancies, which will surely be the end of fuse-making at RO Blackburn. Time is running out.'

The cost to the factory, he reckons, of the DM111A3 order alone, is 450 jobs. In total, the damage could be as high as 1,000 jobs. So far, though, the MoD has not budged.

Graham Knott, also an electronics technician and on the union working party, said: 'The present British Army consumption of fuses is more than the maximum capactiy of RO Blackburn, so they could save us at a stroke, but if 160 go in January it will be too late and fuse production will end.'

At Snaresbrook Crown Court, Mr Amlot asked Judge Brooks to ignore reports which claimed that British firms had lost out on MoD orders because of Foxley's activities. 'There was no allegation that Mr Foxley was somehow taking work away from the Royal Ordnance factory (in Blackburn) in favour of the three foreign firms. These allegations are very harmful and wounding to Mr Foxley, and I hope you will take no notice of them when you sentence him.'

Additional reporting by Andrew Rosthorn.

(Photograph omitted)