MoD rapped over official's fraud

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Westminster Correspondent

Ministry of Defence officials were hauled over the coals by a powerful committee of MPs yesterday for lapses that led to one of the biggest ever frauds in Whitehall.

The Commons Public Accounts Committee said the case of Gordon Foxley, the former head of ammunition procurement at the MoD, jailed for taking pounds 1.3m, and probably much more, in bribes from three foreign defence manufacturers anxious to secure orders, was "one of the worst cases of corruption" it had examined.

Mr Foxley had several houses, both in Britain and abroad, and luxury cars, yet the MoDfailed to spot anything amiss. "We are concerned that the Department's vetting arrangements failed to identify the lavish nature of Gordon Foxley's lifestyle," the committee said.

As a priority, it recommended, the Government should introduce the same vetting arrangements for officials in a position to benefit from fraud as already applied to those who could pose a threat to national security.

Procurement staff had been in their jobs for a long period, said MPs, which "can increase the risk of fraud". Postings of five years, or even less, should be the norm. Where that was impossible, management checks should be strengthened.

The Foxley affair is still being investigated by MoD police. The full extent of his corruption is still not known - something MPs found hard to stomach. They urged the MoD to redouble its efforts to identify all the bribes he received - the police think he received far more than pounds 1.3m - and to gain access to his Swiss bank accounts.

MoD claims that total fraud of pounds 22m in the last decade was small, in the context of a total defence budget of pounds 23bn, failed to impress the all-party group of MPs. "We are concerned that in absolute terms very large amounts are involved."