Former spy on arms charge is denied bail

ROBERT BLOCK

Johannesburg

Paul Grecian, the former British spy, will be spending Christmas in a South African jail after a magistrate yesterday refused him bail on the grounds that he was likely to abscond.

Interpol agents arrested Mr Grecian, 40, when he arrived in Johannesburg for a holiday with his South African fiancee, Elizabeth Powell, eight days ago. He now faces possible extradition to the United States, where he is wanted on charges of fraud, perjury and conspiracy to sell weapons components to Iraq.

US prosecutors from New Jersey asked South Africa to oppose Mr Grecian's application for bail, pending an extradition hearing, and were supported by the court's magistrate, Dion Schnetler.

He said the accused's background in espionage made him a significant flight risk. The magistrate said even if Mr Grecian surrendered his passport and agreed to report to police every day, he could still call on his experience as a spy to help him flee the country, especially with his MI5 connections. The extradition hearing was set for 22 January.

Mr Grecian's barrister, Lawrence Hodes, said he would appeal against the decision at the Supreme Court in Johannesburg on Friday.

Mr Hodes rejected prosecution claims that his client had huge resources, saying that Mr Grecian was insolvent after his long battle against almost identical charges in Britain. He was finally acquitted last month.

The acquittal by the British Court of Appeal followed admissions by the Government that it condoned Mr Grecian's deals with the Iraqi government in return for information on Baghdad's military capabilities.

Mr Grecian told the court hearing that he had no intention of jumping bail. He said he had never run away from anything in his life and did not want to jeopardise his status in South Africa because of his fiancee.

Mr Schnetler said yesterday that Mr Grecian could face a possible 25-year jail sentence if he were convicted on all US charges.

According to the US indictment, Mr Grecian and his firm, Ordnance Technology, had a contract in the late 1980s to supply Iraq with a factory capable of producing 600,000 artillery fuses a year. The indictment accuses him of obtaining fuse components from a New Jersey-based US firm and pretending that the end-user was Jordan.