· Arms manufacturer in dispute with sultan
· Lord Powell denies conflict of interest
Ewen MacAskill and David Leigh
Saturday October 8, 2005
The Guardian
Tony Blair is employing Charles Powell as his special envoy to Brunei, the Guardian can disclose, despite the fact that the businessman is on the payroll of BAE Systems. BAE is embroiled in a dispute with Brunei over the purchase of three warships.
The sultan of the small, oil-rich southeast Asian state, Hassanal Bolkiah, was persuaded to order the top-of-the-range vessels for his navy at a cost of £680m, but is now refusing to make the final payments to BAE and take delivery of the ships, which are marooned on the Clyde.
The three patrol boats were built and equipped with missiles at BAE's Scotstoun yard, and the first of them was launched by John Reid as Scottish secretary. The British taxpayer guaranteed the deal and may have to pick up a tab of more than £20m for any outstanding default.
Lord Powell denied yesterday that he had a conflict of interest by being a consultant for BAE while acting as the prime minister's special envoy to Brunei. Lord Powell's brother, Jonathan, is Mr Blair's chief of staff at No 10, and Lord Powell was previously Margaret Thatcher's foreign affairs adviser.
He told the Guardian: "There is no conflict of interest with BAE. Any consultation with BAE specifically rules out anything to do with Brunei." He said he had been acting in the unpaid role for three to four years. Asked how he got the job, Lord Powell said: "You do not advertise it and you do not apply." Asked how often he met the sultan, he said: "That is a matter between him and me."
http://www.guardian.co.uk/armstrade/story/0,10674,1587728,00.html