Spicer cleared to pursue £160m Iraq contract

Colonel Tim Spicer, the former Guards officer at the heart of the arms to Sierra Leone scandal, has survived attempts to strip him of a £160m security contract in Iraq.

Colonel Tim Spicer, the former Guards officer at the heart of the arms to Sierra Leone scandal, has survived attempts to strip him of a £160m security contract in Iraq.

The US Government Accountability Office (GAO), the powerful agency that audits US government spending, has rejected complaints that the lucrative contract was improperly awarded to Col Spicer. A parallel inquiry by the independent auditor of US spending in Iraq has been shelved.

It also emerged last week that Jack Straw, the Foreign Secretary, has revived proposals to regulate Britain's burgeoning private security industry, which has reputedly earned up to £1bn from the Iraq occupation. A new consultation paper is being drafted, prompted partly by concerns over the use of mercenaries in Iraq.

The GAO investigation was ordered after Col Spicer's Aegis Defence Services - which has included the novelist Frederick Forsyth as a shareholder - landed a $293m (£163m) deal to co-ordinate activities by security contractors in Iraq and provide 75 "close protection" teams for coalition staff and diplomats.

The deal - the second-largest won by a British contractor in Iraq - shocked executives in the British security industry because of Col Spicer's controversial history. In 1999 he was at the centre of the "arms to Africa" row after he tried to breach a UN arms embargo to Sierra Leone.

The fiercest criticisms of Aegis's Iraq contract came from the powerful US security firm DynCorp, which filed a formal "bid protest" against the deal. Last week, the GAO "denied" DynCorp's complaint because the Californian company had not made the shortlist for the $293m contract.

Roger White, the GAO lawyer involved in the decision, said this meant DynCorp did not have the "standing" to justify a fuller investigation. The GAO "found nothing improper in the army's determination to award to Aegis", Mr White said.

An inquiry by Stuart Bowen, the Inspector General of the former Coalition Provisional Authority in Iraq, was suspended because it would duplicate the GAO inquiry, clearing the way for Col Spicer to continue with his contract.