US computer giant to run BBC finances

Firm founded by Ross Perot gets pounds 40m contract to run Corporation' s accounting systems
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The Independent Online
An American computer company linked to the Iran-Contra scandal, and which once employed Mark Thatcher as a salesman, has picked up a 10-year contract with the BBC worth pounds 40.5m in the first year alone.

This is the latest scalp for Electronic Data Systems, the company started by billionnaire and United States presidential candidate Ross Perot.

Mr Thatcher's appointment by the company while it was pitching for a pounds 1.6m Department of Social Security contract - and while his mother was Prime Minister - led to questions being asked in the Commons. It was the beginning of EDS' British connection and the multi-national firm has since gained half the British government's information technology contracts.

The BBC venture involves EDS, in alliance with the accountants Coopers & Lybrand, taking over the Corporation's 30 financial systems and turning into a single shared unit.If the first-year project is successful, the BBC will give its whole financial operation to the EDS and Coopers.

The BBC has stated that no staff will be made redundant as a result of the EDS-Coopers project. But many of the 700 employees due to be transferred are believed to be on short term contracts.

The Corporation stresses that substantial savings are expected by the re-structuring, and the money will be ploughed back into programme making

The move represents a major, and potentially politically sensitive scaling up of the BBC's use of outside consultants.

Last year it provoked Parliamentary action after adopting a plan outlined by management consultants McKinsey to restructure the World Service.

John Birt was forced to back down by Foreign Secretary Malcolm Rifkind and Overseas Aid minister Baroness Chalker who insisted on a blueprint of 20 safeguards to prevent the integrity of the World Service from being compromised.

The deal has brought the activities of the EDS into focus. Since arriving across the Atlantic, the company has infiltrating into some of the biggest instituitions and industries in Britain supplying information technology (see panel).

EDS has long been embroiled in controversy. In l987, a Congressional report on the Iran-Contra affair detailed how Mr Perot had supplied more than pounds 1m for Colonel Oliver North's attempts to bribe hostage the Lebanon.

Two Perot aids had flown the cash to Cyprus in suitcases. A print in the company's headquarters illustrated a previous international adventure where, it is claimed, former naval officer Ross Perot personally " sprang" two EDS executives from an Iranian jail. The operation was used by thriller writer Ken Follet as the basis for his l983 bestseller, On Wings of Eagles.

The British connection with the controversy began when Mr Perot put up Mark Thatcher at his Dallas mansion. Mrs Thatcher's son has just been "let go" by General Motors who had taken over his previous employers, Lotus Cars.

Mr Perot stated he was "ashamed" of the way Mark Thatcher had been trearted after his mother's loyal support of the United States.

At the time EDS was aggressively attempting to break into the British Government market for contracts on defence and information technology. Mark Thatcher was taken on its books as a sales consultant, although this was initially not known publicly.

The conduct of EDS had already been raised in the House of Commons by Labour MP Tam Dalyell over allegations that the company had misled immigration officers to avoid problems over temporary work permits.

Following this, Michael Casey head of London firm of lobbyists, Sallingbury Castle, who had been hired by the company, informed the Cabinet Office of Mr Thatcher's work with EDS.

There were repeated clashes in the House when Labour MPs questioned the ethicacy of the arrangement.EDS claimed that Mark Thatcher's work concerned the Far East, and not British contracts.

Mrs Thatcher is said to have discussed the affair with her son, people close to her maintained that she was not aware of Mark Thatcher's work for the company.

She visited Dallas four months later to see Mark, his new wife Diane Bergdorf, and their baby son. She was introduced to a number of her son's business contacts.

By l984 the company had been bought by General Motors from Ross Perot. In turn the automobile giant split from it in l996, it now trades on the New York and London stock exchange with its own independent board of directors.Its client list includes the Ministry of Defence, the Department of Transport, the Lord Chancellors Department, the Civil Aviation Authority, the Driver and Vehicle Licensing Authority and the Metropolitan Police as well as Rank Xerox, Vauxhall Motors, and Rolls Royce. It employs over 10,000 staff, and last year declared revenues of pounds 765m.

Globally EDS straddles 42 countries, employing 100,000 employees. Last year its turnover was pounds 9bn.

How EDS rules the world

EDS was formed in 1962 and bought by General Motors in 1984. Split off from General Motors in 1996.

It employs more than 10,000 staff and serves more than 250 customers in UK, where its client list includes:

Civil Service: Department of Social Security's Benefits Agency, London (runs computer systems to support 2.5million benefits and pensions payments each week); Child Support Agency, London (system maintenance and support); Inland Revenue, London (pounds 1bn contract to cover all IT including new system for tax self-assessment); Ministry of Defence, London (co-ordinating army logistics systems); Paymaster General, London (processes pensions for 500,000 civil servants and more than one million other public sector workers - in conjunction with Hogg Robinson); Lord Chancellor's Department, London (establishing new systems for storing court records); DVLA, Swansea (processing licence details).

Health: South and West Regional NHS Executive, Bristol (runs computer services): Grampian Health Authority, Aberdeen (creating a patient health card system)

Services in London: London Underground (information systems); Metropolitan Police (creating computer network to link crime records for all London police stations); London boroughs of Brent, Kingston and Wandsworth (manage revenue and benefits systems)

Other: Rolls Royce Plc, Crewe (overall business improvement scheme); Airtours, Manchester (develop reservations and finance system); Rank Xerox, Uxbridge, Middlesex (worldwide programme to link company IT systems); Royal Bank of Scotland, Edinburgh (Funds transfer system); Shell UK, London (process control); UK Civil Aviation Authority, London (administration systems); Virgin Atlantic Airlines, Crawley (information systems and services); Vauxhall Motors (GM), Luton (support all IT services); Alliance and Leicester & Girobank.

Offices in 42 countries worldwide - 23 countries in Europe, Africa and Middle East. Turnover in this region was $3.4bn in 1996 and clients include: Netherlands: Dutch Railways. Italy: Ministry of Education. Sweden: Saab. France: France Telecom. Belgium: European Parliament administration records. Poland: Polish Power Grid. Germany: Deutsche Telecom. Former Yugoslavia: Set up multimedia system to help UN High Commissioner for Refugees reunite families separated by war.

Also runs IT systems in New Zealand and for the government of South Australia. United States: IT for Medicare and Medicaid, General Motors, American Express Bank. South America: (Argentina, Brazil, Chile, Colombia and Venezuela) Asia (Singapore, Indonesia, Taiwan, China and South Korea).

Technology services supplier to 1992 Barcelona Olympics, 1994 World Cup in United States and for 1998 World Cup in France.