Dear Mr Vines

I have recently read your paper entitled 'Mercenaries and the Privatisation of Security in Africa in the 1990s', published earlier this year in a South African Institute of International Affairs pamphlet entitled 'The Privatisation of Security in Africa'.

Your paper discusses a number of companies with which I have had a direct involvement over the last few years, ie Executive Outcomes, Sandline International and DiamondWorks Ltd, with a degree of inaccuracy which is breathtaking for someone who enjoys the title of 'Research Associate'. Unlike other researchers and analysts, at no time have you contacted these companies to confirm or even explore some of the so-called facts that you have presented in the paper. Frankly, it is disgraceful that such misleading errors should be published without any attempt to check the validity of the information with the companies themselves. As you record in the article that the views expressed are personal to you, my complaint is with you and no-one else. However, since you also chose to publish the fact that you are employed by Human Rights Watch and are a Research Associate at University of Oxford your inaccuracies are clearly matters which ought to be brought to the attention of both those bodies and I have copied this email to them.

In this letter I have drawn your attention to the principal items of fact which are in error. I have not commented on the conclusions that you have drawn or the slant that you have adopted as your view, although one with which I generally disagree, is not the issue here.

Amongst the statements that you have made are:

'In 1993 [Executive Outcomes, EO] was contracted by the Angolan state oil company, Sonangol, to provide security for the Soyo oil installations against UNITA attack. Although EO lost these installations to UNITA, the Angolan government gave EO a one-year contract in September 1993....'.

Fact: Executive Outcomes did not 'lose these installations'. EO's intervention in fact resulted in the recovery of the installations. On completion of their assignment EO personnel withdrew leaving Soyo in FAA (government troop) hands. After EO's withdrawal Soyo was recaptured by UNITA.

'Michael Grunberg drafted the agreement with Buckingham and Barlow (for the above contract)'.

Fact: I was at that time a practising partner in a major international accounting and consulting firm and had not yet even met Tony Buckingham or Eeben Barlow.

'A number of EO's personnel stayed on (in Angola after EO departed in January 1996), redeployed to companies linked to EO, such as Branch Mining, Shibita Security, Stuart Mills Associates, Saracen and Alpha 5'.

Fact: Some of the above companies never even existed or operated, eg Branch Mining; others are independent of EO, such as Stuartmill International, which is a medical services company; and yet others hired EO personnel once their individual contracts expired - these people were not, as you put it, 'redeployed'.

'EO and its partners were rewarded with a number of economic concessions across the country, including diamond mines'.

Fact: Once again, a researcher who has not done his homework makes the statement that EO received diamond concessions. EO did not take mineral concessions in payment for their services. You have not defined EO's partners but I assume that you are alluding to Tony Buckingham, who brokered the arrangement between the government of Angola and EO. In fact, Branch Energy negotiated and was awarded in 1996 two diamond exploration concessions. Apart from the fact that these concessions were not in the gift of the government to award as they had already been granted to Angolan companies who were seeking international partners to develop the areas, Branch Energy was required to commit millions of Dollars to their development as they were not, as you say, 'diamond mines', but exploration areas requiring substantial levels of investment before any payback could be generated. You have adopted a simplistic view that a diamond concession is virtually a cash asset but, as one very successful mining entrepreneur once explained, 'a concession is a liability, not an asset': only after substantial sums have been invested is there any opportunity to generate a return - it is not instant cash and it is not zero risk as some would have it. As I have tried to demonstrate, even if mineral concessions were awarded in payment to EO, which they were not, unless they are operating mines they can hardly be considered a quantifiable 'reward' for services rendered.

'EO's involvement in Angola's war did not create peace or stability. Three years later the Lusaka process is dead and the country is back at war....'.

Fact: EO's involvement allowed the country to reach a point where the Lusaka Protocol could be negotiated and signed. The company cannot give a warranty that the situation will not deteriorate once they are prevented from playing a role. To try and put this in simple terms, if you have a problem with your car and get it fixed then the car will work fine but if you do not then have the car regularly serviced it is hardly the fault of the people who fixed it three years ago when it now breaks down.

'Because the government (of Sierra Leone) was cash-starved, EO negotiated mining concessions in return for its services'.

Fact: This is an audacious and totally untrue statement to make. EO, to this day, is owed $19.5 million of its $35 million fee for services rendered, the balance having been paid in cash, with the full knowledge of the IMF. If the company had taken mineral concessions in part payment would this not be reflected in the quantum of the amount still due? Perhaps you should have contacted me and I could have shown you the originals of the EO contracts with the government of Sierra Leone - as I have done with other analysts and researchers - and then you would not make such inaccurate statements or simply relied on similar statements made by others as you appear to have done in your 'research'.

'....as in Angola, around 100 of the 285 EO personnel stayed on in different companies, some of them, such as the security firm, Lifeguard, linked to EO'.

Fact: At the time of EO's withdrawal from SL in January 1995 and for the previous nine months the company had 85 operators on the ground. How '100' stayed on in different companies is a mathematical impossibility.

'EO's claim to have returned stability to Sierra Leone was short-lived. In May 1997 the newly elected government was overthrown in a coup....'.

Fact: In November 1996 President Kabbah confirmed (to me) that he intended to retain EO until at least March 1997 when he anticipated the arrival of a UN contingent in accordance with the freshly signed peace accord. Within three weeks of making this commitment the Attorney-General of Sierra Leone wrote to the EO Commander terminating the contract with effect from the end of January 1997. It is believed that this action was taken to mitigate the cost of EO's continued deployment, which was then running at $900,000 per month. EO implored the President to reconsider, warning him that there would be a coup within 100 days of their departure if there was no smooth transition to another force capable of maintaining the peace. In the event these words were ignored and the predicted coup duly occurred on the 95th day following the departure of EO. The attempt to save a couple of million Dollars has, in the event, cost Sierra Leone literally hundreds of millions of Dollars in the resultant destruction caused by the coup as well as the loss of thousands of lives, not to mention the numerous, unspeakable human rights atrocities committed by the rebel groups.

'What Shearer and Howe fail to acknowledge in their writing are the serious human rights abuses that occurred in Angola, and were documented by groups like Human Rights Watch. The looting of a town by EO is even captured on a video diary. Howe himself has said in public that EO introduced an indiscriminate weapon into Angola - fuel-air explosive'.

Fact: It appears that you and I have watched two different versions of the documentary film that you used as a reference for the video footage. I do not recall seeing any footage of looting - perhaps you would like to be a little more specific? You refer to 'an indiscriminate weapon' and, although I am not a military man, I would assume that a weapon is only indiscriminate if it is used indiscriminately. For example, a mortar can be indiscriminate if it is not handled by a trained team. Perhaps I am missing your point but I suspect that you are simply trying too hard to be sensationalist here.

'Ballesteros (the UN special rapporteur on 'mercenaries') states that: 'the hypothesis .... is that the presence of the security company which was partly responsible for the security of Sierra Leone created an illusion of governability, but left untouched some substantive problems which could never be solved by a service company'.'

Fact: No security company in its present form pretends to be equipped to address the underlying social and economic issues in a country. This is the job of others and it is not the security companies that fail in dealing with this issue but the international community. EO did the job that it was contracted to do in Sierra Leone but in 1997 the support and follow-up from the international community was sadly absent.

Another Ballesteros comment on which you draw is, 'Retaining [EO] for [security] until late 1996 was a mistake and a waste of valuable time....'.

Fact: EO was the only stabilising resource in Sierra Leone during the period of its presence there - a fact even recognised by President Kabbah, who renewed their contract upon his appointment. Perhaps you would have preferred EO to have withdrawn even earlier than January 1997 so that the start date for the eventual coup could have been brought forward?

'EO possessed shares in Ibis Air'.

Fact: Not true. May I suggest that a quick glance at that company's share register would be in order?

'....there is some evidence that EO worked with UNITA in early 1993 and was employed briefly for intelligence-gathering purposes by the RUF in Sierra Leone'.

Fact: As EO was deployed at Soyo on behalf of the MPLA government in Angola in early 1993 I would hardly give credit to the statement, cross-referenced by you to Human Rights Watch, that they were working with UNITA at the same time. These Machiavellian themes can be stretched beyond reason. I would be most interested to have sight of the 'evidence' that you refer to for both Angola and Sierra Leone, that is if it truly exists. I also caution you about making such unsubstantiated statements as they directly impact on the ethics and reputation of the people involved in the company. Unless you can provide evidence to underpin your statement a public retraction would be in order.

'[Sandline] has been operational since 2 July 1993, when Sandline International (formerly Castle Engineering) was incorporated in the British Virgin Islands and acted as a parent administrative company'.

Fact: Castle Engineering, which had been a dormant shell since its 1993 incorporation, was renamed Sandline Holdings (not Sandline International) in December 1996. This was in preparation for anticipated receipts from the impending contract between Sandline International and Papua New Guinea. Sandline International had been formed from scratch earlier in 1996 - the actual year that the company began to trade and not 1993. The statements you have drawn from Tim Spicer's evidence to the UK Parliament Foreign Affairs Committee in November 1998 reflect a correct representation of Sandline International's structure.

'....it emerged that a US$18 million forward payment by the Papua New Guinean government to Sandline was paid on 5 February 1997 into a Sandline Holdings Hong Kong bank account. The signatories to the account were Eeben Barlow, Anthony Buckingham, Simon Mann and Lafras Luitingh, revealing that Branch Energy, Sandline International and Executive Outcomes are at the least a Joint Venture'.

Fact: The above four people were signatories to the dormant Castle Engineering account until such time as the name was changed to Sandline Holdings when all but Tony Buckingham were withdrawn from the mandate. A letter from the bank where the account was held confirming this fact is available and was, at the time submitted to the Papua New Guinea Commission of Inquiry, should you care to read a copy.

'Sandline in reality is the successor of EO: its management and personnel are largely the same....'.

Fact: EO was run by South Africans and Sandline is run by UK and US management. Not one ex-EO person is employed on Sandline's full-time payroll.

'The contract (between Sandline and the Independent State of Papua New Guinea) was worth US$36 million, and part of the payment was a stake in the Panguna Mine'.

Fact: The contract document has been widely published on the Internet. It was covered in great detail at two Commissions of Inquiry held in Papua New Guinea. It does not make a single reference to any part of the US$36 million being paid in any other way than by the transfer of cash funds. Your statement is pure fiction. If you would like to refresh your memory you can read a copy of the contract through a link on the Sandline website.

'The Government also undertook to instruct its civil servants and members of the Defence Forces to recognise the military ranks of Sandline and to obey their orders'.

Fact: Perhaps you are referring to a different contract to the one I personally drafted. The relevant text states: 'All officers and personnel of Sandline assigned to this contract shall be enrolled as Special Constables, but hold military ranks commensurate with those they hold within the Sandline command structure and shall be entitled to give orders to junior ranks as may be necessary for the execution of their duties and responsibilities. The State will ensure that full co-operation is provided from within its organisation and that of the PNG defence forces. The Commanders of the PNG defence forces and Sandline shall form a joint liaison and planning team for the duration of this agreement. The operational deployment of Sandline personnel and equipment is to be jointly determined by the Commander, PNG defence forces and Sandline's commander, taking account of their assessment of the risk and value thereof'.

'The government (of Papua New Guinea) was forced to cut budgets in health and education drastically to raise money for the Sandline venture'.

Fact: The payment received by Sandline in 1997 originated from the extraordinary receipt of funds resulting from an asset privatisation, funds which we understand had not yet been incorporated into the national budget for any specific purposes.

'The project fell apart when the commander of the armed forces publicised the plan, which caused a military revolt'.

Fact: The plan had already been reported in the Australian press almost one month before the commander of the armed forces alleged that the contract was corrupt (despite having been a party to its negotiation and implementation), thus inciting dissent amongst elements of the armed forces. As it happened, and as you state later in your paper, the commander was in fact subsequently exposed as the sole recipient of corrupt payments, coming from a 'rival organisation'. Perhaps you would like to reconsider who had the best interests of Papua New Guinea at heart, the government of the day or the commander of the armed forces?

'Sandline's behaviour in PNG was aggressive, pushing for business and advocating the use of force'.

Fact: Sandline responded to the requirements of the client, investing considerable time and money in preparing outline plans and visiting the prospective client to progress matters. I suggest that you are confusing commitment with aggression.

'The paradox was that Sandline's abject failure has been its greatest ever contribution to the enhancement of peace and stability' (as their deployment in Papua New Guinea galvanised the international community into facilitating talks which led to the Lincoln Agreement and peace in January 1998).

Fact: Sandline did not fail Papua New Guinea; the commander of the armed forces failed the country he had undertaken to serve. However, it is refreshing that you acknowledge that Sandline was the catalyst for peace.

'President Kabbah (of Sierra Leone) decided that he did not want more arms in the country (at the time that government forces were preparing in early 1998 to expel the coup-makers from the country), so the shipment (delivered by Sandline) was impounded at Lungi (the airport near Freetown) and the arms turned over to ECOMOG forces'.

Fact: President Kabbah personally signed the End User Certificate for the shipment. ECOMOG organised the clearances for the overflights and arranged the refuelling stop in Nigeria en-route. The shipment was delivered to ECOMOG. It is hardly reasonable to suggest that they were 'impounded'.

'One Sandline and one EO pilot were the main personnel involved in the operation. The rest were personnel already working in the country for Lifeguard Security'.

Fact: Without disclosing too much of an operational nature, you are completely wrong by a factor of almost 10 in suggesting that only two personnel were employed on the contract. Furthermore, EO was not involved.

'Part of the payment negotiated for the activities of Branch Energy's private army has been lucrative mining concessions in Angola and Sierra Leone. Consequently, Diamond Works (sic) is developing mining concessions in Angola and Sierra Leone obtained as payments for the activities of EO'.

Fact: Your personal prejudice is clearly showing through with terms like 'Branch Energy's private army'. Branch Energy does not have a private army although you are clearly suggesting that this is the role undertaken by EO and Sandline, albeit they are independently run and managed and will only accept payment in a monetary form. You also repeat the allegation that Branch Energy and, hence, DiamondWorks, which acquired the company in 1996, has received its mineral concessions in part payment for EO's services. If this was true then why, for example, is EO still owed $19.5million in Sierra Leone today? Why has this debt not been acquitted by the assignment of mineral concessions? The answer is very clear - EO and Sandline only accept payment in a liquid form. How does a Private Military Company pay its personnel and support the costs of an operation if it accepts payment in the form of mineral concessions? Do you think that its employees and suppliers will accept parcels of exploration ground in lieu of cash funds for the provision of services and materiel? Your allegations may incite an emotive reaction from the uninformed or biased reader but they are hardly supported by the practicalities of business.

'In Sierra Leone, [DiamondWorks] holds three major properties: the Koidu diamond mine, the Sewa diamond concession, and the Sierra Rutile mines, the world's largest titanium mine'.

Fact: DiamondWorks' supposed ownership of Sierra Rutile will come as quite a shock to MIL Investments and Westralia Sands, an Australian listed company, who each own 50% of that company and concession. MIL, a company controlled by Jean Boulle, acquired its 50% earlier this year from Nord Resources, a New York-listed company. The gross inaccuracy in ascribing ownership of Sierra Rutile to DiamondWorks is demonstrative of the fundamental lack of basic research underlying the paper.

'Bruce Walsham, the CEO of Diamond Works (sic), has denied many times that his firm has any links to EO or Sandline. This denial is made despite the presence of Michael Grunberg on its board of directors; Simon Mann as its Southern Africa director; Tim Spicer being asked to liaise with the British Foreign Office in November (1998) over the kidnapping .... of a British employee; and despite the offices of Diamond Works and Sandline having been in the same building in London'.

Fact: Mr Walsham has made it clear that there is no cross-ownership between DiamondWorks and Sandline or EO, not that there is no business relationship. Indeed, up until the coup in Sierra Leone in 1997, DiamondWorks employed the services of Lifeguard to protect its assets in that country. Just because I am on the board of DiamondWorks and am a consultant to Sandline does not mean that there is a direct link between the two because, if it does, then as I am a consultant to a major international airline, this must imply that they are also 'linked' to Sandline or DiamondWorks? In addition, should DiamondWorks be precluded from employing the expertise of Tim Spicer to resolve the hostage situation in Angola to ensure that there are no 'links'? The point you are trying to make is extremely unclear.

I could go on taking issue with you over other details but I think that the above is sufficient to demonstrate the inadequacy of the research you undertook in preparing your paper. I sincerely hope that, before you write about these companies again, and indeed others that take your interest, you will make contact first to establish the validity of the so-called facts. Better still, Tim Spicer and/or I would be prepared to meet with you and address any questions you may have, assuming you are continuing to take an interest in private security issues, at a mutually convenient date.

Yours sincerely

Michael Grunberg

cc Colin Lucas, Vice-Chancellor, University of Oxford
cc Sharda Sekaran, Human Rights Watch

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