Intelligence firm with an air of mystery

IT HAS all the ingredients of cold war spy thriller - with a cast of characters including former Cabinet ministers, diplomats, spies, a Scottish oil company, the widow of Labour leader John Smith, and sensational allegations of murder and corruption in the Czech Republic.

At its centre lies a British-based private intelligence firm, with close links to MI6 - and a distaste for any sort of publicity.

But now Hakluyt is facing the spotlight as MPs called for its activities, and its connection to MI6, to be investigated following the company’s role in the collapse of a High Court libel trial.

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"This is an extraordinary tale which appears to have mushroomed because of the involvement of a secret company, Hakluyt," said Norman Baker, Liberal Democrat MP for Lewes.

"This is not the first time their fingerprints have been on strange matters. It would be helpful if a spotlight could be shone on them to show who they are, what their role was, what connection they have to MI6 and why they won’t answer questions about these particular events."

Set up by former MI6 executives after the end of the Cold War, Hakluyt has provided intelligence for 26 FTSE 100 companies and a number of US and European clients.

Its latest Companies House returns reveal a high calibre of directors, including Mike Reynolds, MI6’s former head of station in Germany, and Michael MacLay, a former journalist, diplomat and special adviser to former foreign secretary Douglas Hurd.

Baroness Elizabeth Smith was, until recently, a member of the Hakluyt Foundation, the equivalent of the company’s board. Little about the company finds its way into the public domain, but in a rare interview given to the Financial Times two years ago, managing director Christopher James, also ex-MI6, described his firm’s main commodity as "the truth".

"We give focused, timely intelligence," he said. But following an extraordinary libel trial last month, in which former foreign secretary Sir Malcolm Rifkind gave evidence, there were question marks over the quality of the intelligence Hakluyt provides.

In fact, a report produced by Hakluyt on Czech oil tycoon Karel Komarek and his father, which contained allegations of corruption and murder, led to Scottish oil company Ramco being sued for libel. Ramco employed Hakluyt in good faith on the recommendation of one of its consultants, Mr Rifkind and Baroness Smith.

During the libel trial, brought against Ramco by Mr Komarek, the chairman of MND, a Moravian oil mining company, it emerged that the company was responsible for allegations of "the gravest kind".

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In a report produced by Hakluyt for Ramco, which cost 40,000, the company even claimed the involvement of a Ukranian hit-man to murder a European businessman.

The allegations, described in court as being akin to a James Bond plot, were then passed by Ramco to the British Ambassador in the Czech Republic and later discussed with several high-ranking members of the Czech and British governments, including the then foreign minister, Robin Cook. Later, they found their way into a Czech newspaper and the internet.

During proceedings, the allegations were not tested. The legal argument was one of privilege, which acts as a defence to an action for libel or defamation, regardless of whether the allegations are true or false.

Following the collapse of the libel trial against Ramco, after the judge concluded that the case fell short of the legal standard, Mr Komarek said he was "disappointed" by the result and was aggrieved that no apology had been made.

"We came to Britain because we thought we could take our case to a jury," he said. "The defendants have never said any of the serious allegations they published about us in the Czech Republic and this country are true, but they have never been willing to apologise."

When contacted by The Scotsman, Hakluyt refused to answer any questions about its allegations, including where it got the information and whether it stood by its claims.

A company spokesman said: "We do not comment on any assignments we have undertaken, and therefore it would not be appropriate to say anything about the court case. The Komarek brothers (sic) have lost their libel case and we have nothing further to add."

Yesterday Baroness Smith, who was until the end of 2000 a member of the Hakluyt Foundation, set up to ensure it abides by its code of practice, said she knew nothing of the report.

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"As a member of the foundation I wouldn’t have access to that sort of information," she said. "Company reports and their activities were never discussed at meetings."

The foundation was set up to provide "reassurance that we are not just a tearaway bunch of ex-governmental officials", according to Mr James.

But when asked whether her former role included making sure the company abided by the rules, Baroness Smith replied: "Absolutely not. We were there to oversee general strategy."

She left the foundation, she said, because "my period of office came to an end" and she declined to comment further.

It is not the first time the publicity-shy company has found itself in hot water.

Last year MPs called on Jack Straw, the Foreign Secretary, to investigate the company following newspaper revelations that Hakluyt spied on green pressure groups in order to pass information about them to oil production companies Shell and BP.

It emerged that Hakluyt had employed a German spy, who posed as a left-wing sympathiser and film-maker, in order to betray plans by Greenpeace against oil companies.

The affair left MPs questioning whether secret intelligence services used the firm as a front to spy on green groups.

Hakluyt has denied claims by some in the intelligence community that it was started by MI6 officers to carry out "deniable" operations.