Monday, September 16, 2002
Guardian Unlimited Observer | Special reports | For sale to the highest bidder: Britain's secret weapons labs
Words fail me. Read for yourself.
Sunday September 15, 2002
Not even Tom Clancy could have dreamt it up. The government plans to sell a stake in its top secret defence laboratories - responsible for inventing the sort of hardware that would make 007's Q green with envy - to a shadowy American organisation that boasts ex-Presidents and Prime Ministers as special advisers and has invested millions of dollars for the bin Laden family and Saudi royalty.
This is not paperback fiction, however. It is the Government's latest plan for QinetiQ, the rebranded Defence Evaluation and Research Agency (Dera) that in recent years has developed a diverse portfolio of inventions, including a plastic tank that avoids radar, a new system for mapping the seabed, and technology that allows third-generation mobile phone masts to be installed in churches.
Having opted against floating the company on the stock market because of the global economic downturn, the government decided instead earlier this month to invite venture capital firms to take a stake in the business, which employs more than 9,000 people.
The deal is hugely controversial. The government's plans to privatise the defence laboratories drew fierce criticism when they were announced four years ago. Experts warned it was a way of allowing Ministers to distance themselves from allegations that Britain was underfunding such research.
Now, by opening up QinetiQ to outside interests, the government is accused of sacrificing the crown jewels of the UK defence industry because of the Treasury's addiction to public private partnerships at the expense of all other funding alternatives.
Few were surprised when the Carlyle Group emerged at the head of the stampede to acquire the QinetiQ stake, beating fierce competition from a reputed 40 firms. Carlyle is one of the biggest venture capital groups, a leviathan that commands respect and inspires awe in equal parts. Chaired by former US Defense Secretary Frank Carlucci, the group's tentacles spread far and wide.
John Major, George Bush Sr and his former Secretary of State, James Baker, are on its payroll. Arthur Levitt, former chairman of the US Securities and Exchange Commission, and ex-Bundesbank president Karl Otto Pohl are among its advisers. Besides the bin Laden family, which has disowned Osama, it has managed funds for Prince Alwaleed and the likes of George Soros, earning its investors spectacular returns by taking strategic stakes in everything from Socpresse, parent company of French newspaper Le Figaro, to a subsidiary of the Japanese supermarket giant Daiei.
posted by lazarus |