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CR Carruthers Report Into An Army Generated Letter

REPORT of INQUIRY into

THE PROPRIETY OF. A LETTER ALLEGEDLY GENERATED FROM WITHIN THE ARMY

and

AN E-MAIL ALLEGEDLY GENERATED FROM WITHIN THE NAVY

CR Carruthers, QC 18 March 2002

FORMAL ANSWERS TO TERMS OF REFERENCE

Note: -

The formal answers to the questions have been prepared and are given against the background of the Commentary which forms part of this report.

The answers are to be read in the light of discussion and analysis in the Commentary.

CONTENTS

FORMAL ANSWERS TO TERMS OF REFERENCE
page no.
1-7
BACKGROUND
- Terms of reference
- Scope of Inquiry
- Approach to Inquiry
- Process
- Timing of Inquiry
- 8
8
8
9
10

-THE GORDON LETTER
The circumstances in which the letter was written
The reason for the letter
Relevant passages from the letter
Cot Gordon's commentary on the letter
Brig Ottaway's reaction to the letter
How the letter was dealt.with
Other recipients of the letter
CGS' 1997 seminar
Reaction of those who saw letter prior to release
12 13 15 21 28 29 30 32 37 41 51 56
56 58 59 60 61 62
64 64 64
Release of the letter Reaction to letter following release Policy developments between date of letter and its release Policy
- and the meaning of policy Issues arising from investigation - the tensions Funding and Army's share Loyalty The A and 8
teams
Positions of influence - promotions and appointments Miscellaneous tensions Conclusion on tensions The relevance of the letter
- a conclusion

THE BUNCE E-MAIL
Introduction
The circumstances in which the e-mail was written
Mr Bunce's role
Analysis of the e-mail
Mr Bunce's explanation of the e-mail
Reaction to the e-mail
Appropriateness
How the e-mail was dealt with
Policy
Release of the e-mail
Conclusion
70 70 71 71 73 75 78 80 81 81 82

BACKGROUND

Question 1: What were the circumstances under which the letter entitled Influence in the Centre - Opening the Second, Front was written?

The letter was written by Col 1,1M Gordon when he held the rank of Lieutenant Colonel and was Assistant Defence Adviser for Army in London. His reason for writing the letter was his concern about the state of the Army. His concern was triggered particularly by the embarrassing experiences which Army had had with equipment in Bosnia. The letter was his own initl ative; he had had no discussion with anyone else before he set about writing the letter; and he did not discuss the contents of the letter with anyone before sending it.

Question 2: What was the status of this correspondence ?

The letter was intended as a personal letter to Brig RR Ottaway who was Col Gordon's superior officer at the time. It was not intended to be an official letter forming part of the Army system.

It does however have the characteristics of an official letter, both in terms of language and style.

Question 3: To whom was it intended to be disseminated?

The letter was written' for Brig Ottaway personally. Col Gordon did not intend that it would be disseminated further. However, the use which Brig Ottaway chose to make of the letter was a matter for him.

Question 4: To whom was it in fact disseminated?

This is a difficult question to answer with any precision.

Brig Ottaway maintains that he did not circulate the letter. He treated it as personal correspondence.

However, it is clear that he discussed the letter with others.

It is equally clear that copies of the letter were made and circulated.

This question is discussed in detail in the Commentary.

Question 5: What reply, if any, was made to the letter, and if so, by whom?

No reply was made to the letter.

Brig Ottaway did not respond in any way. There is no record of any other response.

Indeed, the only reference to Col Gordon's views prior to release of the letter is in minutes of the work of one of the syndicates at the CGS' seminar in 1997.

Question 6: Was Colonel Gordon counselled in respect of the propriety of such correspondence, and if so, by whom and to what effect?

No.

The context in which the letter was written has to be appreciated in order to make any judgement about issues of "propriety" or appropriateness of the letter.

This aspect is also discussed in detail in the Commentary.

Question 7: Was the letter acted upon?

No.

2 Question 8: Does Colonel Gordon now subscribe to the views expressed in the letter?

Col Gordon subscribes to some of the views expressed in his letter. He describes these as "mainstream".

There are aspects of his letter however which he acknowledges were inappropriate. These include initiatives which he has discussed in the letter and some of the language which he has used.

This answer is elaborated on in the Commentary.

Question 9: Do the views expressed in that letter represent, in whole or in part,'NZDF or NZ Army policy?

Taking the letter as a whole, the views do not represent the policy of NMF or NZ Army.

There are views in the letter which are consistent with the policy of NZ Army. There are others which do not form any part of the policy of either NMF or NZ Army.

The answer to this question and the subsequent one are discussed in the Commentary.

Question 10: To what extent did the views expressed in the letter hold currency in the Army at the time it was written? To what extent do they hold currency now?

Some of the views expressed in the letter held currency in the Army at the time and continue to hold currency. Others do not.

Additional term of reference: To report on any information which is obtained in the course of the Inquiry which may lead to the identification of any person who disclosed without authority the letter entitled Influence in the Centre - Opening the Second Front The letter was disclosed by Brig IAJ Marshall who was AC Dev in HQ NWF. He had no authority to do so.

A copy of the letter was sent by Brig Marshall to Mr RV Johansen who had previously been employed by Ministry of Defence as Deputy Secretary for Defence Acquisition. Mr Johansen provided a copy of the letter to Mr MR Bradford MP. A copy of the letter was tabled in the House of Representatives on 28 August 2001.

This answer is explained fully in the Commentary.

The BUNCE E-MAIL

Question 11: What were the circumstances under which the e-mail entitled Embarrassing items was written?

Mr RJ Bunce held the position of Corporate Relations Manager for Navy.

There had been two breaches of formal naval policy concerning dealing with the media.

He had a practice of sending e-mail messages-to senior members of Navy to keep them informed of publicity involving Navy. This was an established practice. The e-mail under enquiry is an example.

Question 12: What was the status of this correspondence?

The e-mail was an informal report. It had no status in the system; there was no formal filing of it; and it was not in response to any reporting requirement. It was a communication between Mr Bunce and the senior naval management team.

Question 13: To whom was it intended to be disseminated?

It was intended to be disseminated to those who are named on the face of the e-mail.

Question 14: To whom was it in fact disseminated?

It was disseminated to those named in the e-mail.

When he responded to the e~mail, R Adm RJ Gillbanks distributed the original message by forwarding it to five named recipients, one of whom had received it previously direct from Mr Bunce.

Cdre A Peck, one of the recipients of the e-mail, forwarded it to four retired senior officers. This course was approved by two of his superiors.

A proper inference is that the e-mai( was disseminated more widely than those identified already. 1 have not been able to identify any other recipients prior to release of the e-mail.

Question 15: What reply, if any, was made to the e-mail, and if so, by whom?

A formal reply was made by R Adm Gillbanks. There were other acknowledgements as discussed in the Commentary..

Question 16: Was Mr Bunce counselled in respect of the propriety of such . correspondence, and if so, by whom and to what effect?

No.

There is no issue concerning "propriety". The e-mail was a proper and appropriate communication of information concerning two breaches of naval policy.

The language of the e-mail has drawn comment in the course of my Inquiry, as discussed in the Commentary.

Question 17: Was the e-mail acted upon?

Yes.

Steps were.taken to reinforce naval policy concerning dealing with the media.

6 Question 18: Does Mr Bunce now subscribe to the views expressed in the e-mail?

Yes.

They relate to his role in dealing with relations between Navy and the media.

Question 19: Do the views expressed in that e-mail represent, in whole or in part, NWIF or IRWN policy?

The policy issue which underlies the e-mail concerns communication between Navy and the media.

The views expressed in the e-mail reflect that policy.

Otherwise, no policy issues arise in relation to the e-mail.

Question 20: To what extent did the views expressed in the e-mail hold. currency in the IRWN at the time it was written? To what extent do they hold currency now?

The answer to Question 19 applies equally to this question.

Additional term of reference: To report on any information which is obtained in the course of the Inquiry which may lead to the identification of any person who disclosed without authority the e-mail entitled Embarrassing items 1 have been unable to identify the person who disclosed the e-mail.

The information which 1 obtained in the course of the Inquiry does not point to.or suggest any likely answer to the question of identification.

CR Carruthers, QC

18 March 2002 i Terms of reference

1 1 accepted appointment to conduct this Inquiry on 21 September 2001. The terms of my appointment are set out in a letter dated 28 September 2001 from the Judge Advocate General's office. My terms of reference were delivered on 2 October 2001. A copy of them is attached as Annex A.

2. On 10 December 2001, 1 was asked to enquire into a further term of reference namely, "To report on any information which is obtained in the course of the Inquiry which may lead to the identification of any person who disclosed without authority the letter entitled Influence in the Centre Opening the Second Front and/or the e-mail entitled Embarrassing items.

Scope of Inquiry

3. The Inquiry involves two distinct pieces of correspondence. The first is a letter dated 21 March 1997 to Brig RR Ottaway from the then Lt Col 1,1M Gordon ("the Gordon letter" - Annex B). The second is an e-mail sent on 19 March 2001 to 17 named naval officers or navy personnel by Mr RJ Bunce ("the Bunce e-mail" - Annex C).

4. Each piece of correspondence has required a separate inquiry. There is no connection between the events or subject matter referred to in them. The only feature which they have in common is that similar terms of reference have been formulated for the inquiry into them.

Approach to Inquiry 5. The course which 1 adopted in relation to the Gordon letter was as follows.

COMMENTARY ON INVESTIGATION INTO TERMS OF REFERENCE

6. 1 interviewed Cot Gordon as the writer and Brig Ottaway as the recipient of the letter. 1 then interviewed all those who at the date of the letter held the positions referred to in the letter. In each case, 1 asked them whether they had any information or could suggest any line of investigation which would assist me with my Inquiry. In the course of t,he' Inquiry, names of others who might help me were suggested: others came forward to volunteer information. In every case, 1 interviewed those whom 1 thought would assist my inquiry. Others were given the opportunity to appear before me or provide me with relevant information as they wished.

7. In relation to the Bunce e-mail, 1 followed a similar procedure.

8. 1 have attached schedules of those whom 1 have interviewed in relation to each of the Gordon letter and the Bunce e-mail - Annexes D and E.

The schedules also show those whom 1 have invited to app~>ar before me or provide information, but who have not done so.

Process

9. The procedure for the Inquiry was set out in CW Directive .2912001 - Annex F.

10. At the commencement of each interview, 1 drew attention to the Directive and asked the witness whether there was any question or issue arising from it.

11. 1 also outlined the procedure which 1 intended to adopt in the interview. 1 recorded each interview and.had a transcript rnade. 1 explained to each witness that the tape recording and the transcript were for my use to enable me to report to the Judge Advocate General and to follow through on any information which had been provided in the course of the interview. 1 explained that 1 would not be releasing any information publicly. 1 would be reporting to the Judge Advocate General. 11 was then a matter for him as to what was done with my report.

12. There are two aspects of the process which I need to explain.

13. First, there has been criticism of the fact that the procedure laid down for the Inquiry did not call for witnesses to give evidence on oath. Services personnel are bound by the Directive and are liable to discipline if they fail to comply with the Directive, for example, by failing to tell the truth. In the case of civilian personnel, no issue arose as to their credibility in the course of the Inquiry. If it had, 1 would have taken steps to obtain their'evidence in a sworn form, either orally on oath or by affidavit or statutory declaration. The need did not arise.

14. Secondly, 1 have edited the transcript so that errors in transcription have been corrected, and the grammar has been altered in order to make it more easily understood. The substance has not been altered in any way.

Timing of Inquiry

15. 1 began formal interviews on 15 October 2001. The process continued intermittently until my final interview on 12 February 2002.

16. The length of the process has been dictated by availability, both of witnesses and me. The nature of the process also resulted in it being extended. It was an incremental process in the sense that witnesses were asked for, and invariably provided, other lines of enquiry which had to be followed through. In the course of the investigation, a number of allegations were made by later witnesses which affected some of the information 1 had been given by earlier witnesses. Apart.from the need to follow through on new information, as a matter of natu ral justice 1 interviewed some of the witnesses a second time in order to put new material to them for comment.

17. When 1 was appointed, i was given a reporting date of 27 October 2001. From the moment 1 commenced the Inquiry, it was clear that there was no prospect of being able to make the requisite investigation and complete the report by that date. At the end of October, 1 suggested that my reporting date should be extended until 20 December 2001. This was agreed to. In early December, an additional term of reference was added (as 1 have noted already).

Inevitably, thi s widened the scope of the Inquiry and delayed its completion.

18. , Another feature which has contributed to the time and care that has. gone into the Inquiry is the sensitivity of the issues involved. There are not only issues of national politics but also, pol itical tensions involving Army, New Zealand Defence Force (NZDF) and Ministry of Defence (MOD). Indeed, 1 consider that these political factors have led to interpretation and use of the Gordon letter for purposes for which it was never written, and in a manner in which it was not intended to be read.

The GORDON LETT ER

The circumstances in which the letter was written

19. The letter was written while Col Gordon was in London as the Assistant Defence Adviser for Army. Col Gordon explained that the Defence Adviser (also Head of NZ Defence Staff, London) reported to HQ NMIF in Wellington and was responsible for defence representation to the UK, as well as to numerous other European countries. Col Gordon was his assistant but with the designation of Army issues only. He dealt with Army issues both in the UK and in the designated European countries. He reported back to Army GS in Wellington on Army-only matters. His reporting line was to DCGS, who was then Brig Ottaway.

20. As it becomes relevant to his explanation of the letter, 1 note that after his return from London in December 1997, Col Gordon was appointed ACGS (Dev) and then in December 2000, ACISS (Logistics), both positions in Army GS, Wellington.

21. There was no single event which triggered the letter. I.shall discuss the reasons for it in a moment. It was written over a period of a number of weeks. Col Gordon explained that his thoughts -would have been quite some time in the making- He estimated that the period of writing was possibly three or four weeks.

22. The procedure which he used. was to draft the letter on his work computer. The letter went through several drafts over the period. Once corrected, the printed drafts were ripped up and thrown out.

23. He signed only one copy of the letter. He did not keep a copy of it. The letter was left on his computer, that is on his personal drive which could only be accessed by using his password. 1 add for completeness that a check was made in the course of the Inquiry but the computer system had long since been changed and no record of Col Gordon's correspondence could be located.

24. Col Gordon regarded the letter as a personal letter to Brig Ottaway. It was not an official letter. If it had been, it would have had a file reference number and been dealt with formally on arrival. His approach to the letter was "I guess what 1 am saying is that these were some thoughts.of mine which 1 considered were personal for Brig Ottaway".

25. 1 note in passing that although Col Gordon describes it as a personal letter, it is couched in official terms and conforms to the NZIDIF Service, Writing Manual for official-style correspondence. And after all, official facilities were used to write and dispatch the letter.

26. He said he had had no discussion with anyone else before he set about writing the letter: it was his own idea.

Similarly, he did not discuss the content of the letter with anyone before sending it: it was his own work.

27. Once finished, the letter was put in an envelope addressed to Brig Ottaway, DCGS, and placed in the bag of post going to New Zealand.

The reason for the letter

28. 1 set out below passages from my two interviews with Col Gordon in which he explains his reasons for writing the letter - 1 want you to explain to me how it came about that you wrote the letter dated 21 March 1997.

1 wrote the letter off my own bat because of concerns 1 had with the state of Army's capability at that time. At the time of.writing, Army were either just in the process of pulling out of Bosnia or had just pulled out. We'd had a couple of years experience in Bosnia as part of the UN Peacekeeping Mission. The Bosnian experience had shown us that Army's capability was well below what was expected, even in a peacekeeping environment. In other words, we were having difficulty with delivering Government outputs. This was because the state of the kit was not good, and the amount we had wasn't sufficient to equip the size of the force. 1 felt that something needed to be done so 1 wrote the letter to express my views. 1 also offered suggestions as to how the effect could be put in place.

Can you identify any particular event that triggered the writing of the letter?

There was no particular event but the issues which 1 alluded to earlier were not unique to New Zealand. Certainly, the British forces were experiencing the same problem. They were going through a transition period not .dissimilar to our own where they were looking at what capabilities Arnly had to deliver, the resources in which to deliver the capabilities, and how they were going to go about it. Because 1 was quite close to them, 1 attended a number of their conferences and meetings and observed the way in which they were dealing with the problem. There were other Attaches in London, particularly from the US and Australian Armies, who were also experiencing similar difficulties. It wasn't unusual for us to sit down as a group and discuss.the issues and how we could deal with them.

If I put it to you that it was really nothing to do with you, what would your answer be?

1 would answer that in two ways. First, 1 believe Army capability and any thoughts on Army capability are something to do with most senior officers. After all, the ownership of Army resides in its senior management. There are both formal and informal bodies through which to solicit the views of individuals. One is an annual CGS' conference where junior officers (that's from Major to Lieutenant Colonel rank) get together and are encouraged to share and discuss their thoughts on topics such as this. An agenda is put on the table and views are sought. So from that perspective, yes, 1 believe every senior officer does have a responsibility.

And secondly, one of my roles as ADA was to pass on information, in my case from London, on issues that were important to the British Army; particularly where there was an overlap of issues between what the British Army were experiencing and what was happening in the NZ Army.

One of the comments that has been made to me is that you wrote the letter because you were in a foreign posting and were anxious to keep you~ name in the ring. Do you have a comment on that?

Yes, 1 was in a foreign country. Kiwi Company was'attached to the UK Battalion so the Brits had a good feel for what its capabilities and vulnerabilities were. 1 guess my level of awareness had, up until that point, been derived from officers who had served in Bosnia. But 1 got a somewhat different perspective while serving in the UK. They agreed with what our officers were saying and reinforced in my own mind that this issue was real. 1 was a Lieutenant Colonel. 1 felt that 1 had the qualities to be a full Colonel, but 1 am not sure whether at this stage 1 had been cleared for promotion. It certainly.had been indicated that 1 was in the promotion circle. When 1 went to the UK, 1 made a conscious effort not to sit around doing nothing. You can go to a country for two, three or four years and never be heard of - you come back and no one is any the wiser. On the other hand, Britain is a culture similar to our own in many ways; certainly militarily it is. Our doctrine is based on British doctrine, our structures are based on British structures, and our heritage goes as much down the British path as it does any other. It therefore afforded me an ideal opportunity to have a look at what. the Brits were doing, particularly in their developmental areas, which direction they were heading, what doctrine they were embracing, where they thought they were going in the future. They also had access to some very high-powered conferences and conventions that 1 could never get in New Zealand. 1 made a conscious effort to report back what 1 was observing and to add my own analytical thoughts to it. That to me is just part of the professional job. There is nothing untoward about it but yes,l was aware that by doing it, 1 would be noticed.

29. Col Gordon's approach was that the letter covered what he described as "issues of the day". He regarded them as major concerns which the Army was facing and he was simply taking the opportunity to air his views.

He felt it was appropriate for him to express his own views.

30. He had no qualms about voicing his personal thoughts to Brig Ottaway. His view was that the Brigadier may see some of his thoughts as being appropriate, reasonable or useful. It was up to the Brigadier whether he applied them or not. His position was that if there was thinking in the letter which the Brigadier felt was useful to the process, he was in a good pos ition to apply it.

31. When asked if he was surprised that the letter was simply received and noted by Brig. Ottaway and not used by him in any way, he responded; "No it doesn't because the letter wasn't a policy paper as such; it was just a collection of ideas that 1 had gathered and thought through and decided to express to him-

Relevant passages from the letter

32. The purpose of this analysis is to identify those parts of the letter which may attract criticism. 1 emphasise that the passages are deliberately taken out of context. But this is a necessary step for the sort of examination of the. letter that is required. In the final analysis, these passages must be brought back into context and the letter read as a whole -

32.1 The heading is "Influence in the Centre Opening the Second Front";

32.2 The essential proposition is put in this way - "One of the fundamental requirements of Army General Staff is to be able to influence the centre in such a way as to ensure retention of a level of land capability that is useful as an instrument of Government policy";

32.3 After describing the "limited utility" of the Army - "This situation has not arisen because the Army has miscalculated its capability requirements. Rather, it has arisen because funding allocation by NWI` (the centre) has been to Navy and Air at the expense of Army. Army appears to lack influence in the centre and a different approach is now required to regain this influence. It is contended that to gain the requisite influence Army must now open a .'second front" in it's [sic) war with the centre";

32.4 Three aspects to the problem are identified - "First, the Army must identify it's [sic] critical mass. The development and protection of the critical mass is the front's strategic purpose.

Secondly, the Army must identify the centre of gravity (CoG) for Defence policy, plus the pathways to this centre. The ability to exert pressure on these pathways will provide a level of control over the CoG. Thirdly, the strategy will need to be implemented through a number of campaigns. These campaigns, for the control of the pathways, need to be identified, articulated and coordinated at the highest level to ensure each advances the strategic purpose. The breadth and number of campaigns implies that a statement of overall intent (a vision) is required to focus and synchronise the work. In addition, a mechanism is required to oversee the work";

32.5 He settled a statement to "crystallise the intent of the campaigns whilst at the same time identify clearly the strategic purpose "To attain a level of control over NMF policy making in order to ensure that the capabilities of the NZ Army evolve in such a way as to be able to meet the future challenges likely to be imposed by Government";

32.6 He then identifies the first of his three aspects, 7he Critical Mass" - "The Army's critical mass incorporates two aspects, first that required from the Defence Outputs and secondly the minimum structure required to both support the output and provide the requisite level of professional expertise, particularly within the officer corps";

32.7 The next section of the letter deals with the second of his three asp ects, the "Centre of Gravity for Defence Policy" - "Clearly this requires the centre of gravity (CoG) for Defence policy to be identified and then for Army to gain the requisite degree of control over the policy making process. The requisite degree of control is best gained by influencing the pathways to the centre of gravity; both internally and externally. Therefore the pathways to the CoG need also to be identified".

He identifies the DIPS as the preferred option for the CoG for Defence policy and then continues - "The single most important aspect to the DPS is that it has as it's [sic] core the maritime strategy. This strategy is not suited to a land force capability although, for our island nation state, it has a degree of logic that is irrefutable.

Politicians and academics alike appear to be able to relate easily to a maritime strategy therefore there is little point in attacking it head on. Perhaps it is in Army's interests to appear to support it with a view to more clearly articulating the role of land forces within it. Importantly, control of the sea is not the end purpose of a maritime strategy. this must be to exert influence or project power from the sea onto the land. Therefore, it ip important not to confuse Navy with a maritime strategy. Clearly the Navy will be the major beneficiaries [sic] of such a strategy and will consume the majority of the resources. However. the next major beneficiary should be Army. When comparing the requirements of New Zealand's maritime strategy with the current capability of the three services, those that stand out as most vulnerable belong to Air, in particular the air strike capability. Therefore within the CoG, the vulnerability of the air strike capability needs to be exploited to the Army's advantage".

A footnote then examines the Australian approach to air strike capability and invites consideration of disposing of the capability to a regional neighbour (Singapore) and purchasing air hours off the Singaporeans;

32.8 He says the "internal pathways to the CoG are those from within NWP' - "Critical appointments will reside along each decision flow. Influence is best achieved by positioning selected individuals in these critical appointments as and where the Army is able. Individuals selected to hold these appointments will need to meet certain criteria".

He sets out three criteria, the third of which is - .c. Understand and be an advocate of the war on two fronts and the role of their appointment in supporting Army's cause";

32.9 Looking at "decision flows" in the "internal pathways", he says - a general observation is that for Phases 1 and 11 of the DPS appointments within MOD and Development Branch are essential. For Phases Ill and IV appointments within Development Branch, again, and within Resources Branch appear logical. In these areas the more senior the appointment the more influential will be the individual, particularly as many decisions are taken in a committee forum. Therefore, Army should aim at always holding at least one of AC Development ' AC Resources or WDS appointments. For Phase V of the DPS Army should attempt to hold the NZI)F IG appointment. It is considered that this appointment, with the correct person, could be of significant value";

32.10 He then examines the "external pathways to the CoW by identifying six of them and setting out how to influence them - Maori MPs, Select Committee, Other services, MOD, Academic Institutions, and The public.

There are two passages which are relevant. Under the heading "Other Services" - "There will be officers from the other two services who either support the Army to various degrees, do not support fully the views of their own service or who are joint in their thinking, even to the degree of opposing some arguments put forward by their own service. These officers offer an opportunity for the Army to exploit", and under the heading 'WOW - "Because the MOD is part of the DPS, it should be viewed as both an internal pathway and an external (to Army) one. Greater integration between the MOD and the NZDF, particularly in policy making, is required. Army should lead the push in this area by having officers appointed to the MOW;

32.11 The third of his three aspects is "The Campaigns" - "The battles for control of the pathways need to be conducted within the framework of a campaign";

32.12 Five campaigns are identified - The Intelligence Campaign, The Personnel Campaign, The Public Relations Campaign, The Cost/Expenditure Campaign, and The Capability Development Campaign.

Again, there are passages which need noting. Under the heading "The Intelligence Campaign" - "Those who support the Army's cause should themselves be supported by the Army in their individual career development. This campaign could be run by D Coord(A)", under the heading "The Personnel Campaign" "The purpose of the personnel campaign is to position appropriate officers in military appointments on the pathways to the CoG. This requires the identification of the appointments and the identification and preparation of selected officers. There are a number of aspects to this preparation. Officers need to be identified early in their careers to ensure that they receive appropriate "background" postings and have priority for attendance at the better staff colleges. They.should also be actively encouraged to gain a post graduate qualification in a subject suited to their future employment., The career structure of such officers should be mapped out and they should not'be posted as a reaction to other officer movements, but rather it is their requirements that should drive the officer plot. This campaign could be run by the MS", and under the heading "The Cost/Expenditure Campaign", the purpose is to ascertain the cost of each Defence Output and concludes - "in this way a comparison -of the cost effectiveness of land forces as opposed to Air and Navy will be visible and the Army will be better ,place [sic] to lobby for its cause during periods of reduced funding";

32.13 The letter then deals with Mverall Implementation" - The focus is on "an overriding structure and a mechanism to oversee the worV, "Someone needs to head the council and it is considered that the options are narrowed to one, DCGS", "The council meets periodically to ensure that the effort is co-ordinated, information is passed and any particular successes are exploited and weaknesses defended", 1n this way it is considered that the CGS, and therefore hopefully the Army as a whole, will gain a degree of control and influence over the direction in which he wishes the Army to develop";

32.14 The final section is the "Conclusion" and the following passages are relevant -

"For those who do not accept the need for a second front then this paper will make little sense. More is the pity", "A statement of intent for the second front is important and one should be sought from CGS", "Such a statement will also serve to illustrate CGS' support for the process overall. It is also hoped that as many senior officers as possible will be supportive of the process, for. as potential CsGS, the longevity of the programme is in their hands", "Army must now seek greater influence over the NZIDIF decision making process to ensure it's [sic] own development. It is argued that Army can gain greater influence by identifying the DIPS as the CoG for NZ13iF decision making and then by exerting pressure on the pathways to the CoG", lt is important that Army officers hold appointments at critical stages along these decision flows. In this way the Army "view" stands a better chance of survival and opposing views can be challenged and destroyed before they are set in policy", "Influence along one or a few pathways will not in itself bring about the desired degree of control of the centre.

However, a minimal level of control on all the pathways may well bring about a synergistic effect that better forwards Army's strategic purpose".

Col Gordon's commentary on the letter

33. When 1 first interviewed Col Gordon, he handed me a signed statement setting out his position. 1 put that to one side for the purposes of the interview and questioned him about the various passages in the letter which 1 regarded as relevant to the Inquiry.

34. In fairness to Col Gordon, 1 set out his own explanation in full - "THE CONTENTS OF THE LETTER Introduction The 21 March letter was recently tabled in Parliament with consequent assertions being made by a number of individuals. These assertions have placed me in a negative light publicly and linked me to inappropriate military and political activity. Examples include: - a charge of sedition made by the Leader of the Opposition an accusation by the Opposition Spokesperson for Defence that my letter set out a covert campaign waged outside the Defence arena that resulted in the loss of the Skyhawks, the loss of the Aerornaachis and the gain of the Army at the expense of the other two services an accusation by the Chief of Defence Force (CDF) that the letter has created despondency within Army as a result of an A and a B team.

A thorough analysis of the document would show this to be false. Aspects of the paper have been taken out of the context within which they were written, had a certain spin applied and then linked to events that have occurred since. Yet 1 have had no control over these events.

While it is easy to take isolated sections of the letter and highlight them to best advantage, it is difficult to add material to the letter in hindsight. The following is therefore an explanation of the contents of the letter when viewed in its entirety. 1 consider that it is only in this way that the contents of the letter can be fully understood.

It is also timely to define what 1 meant by using the term Second Front in the letter. All Government Departments are faced with capability and purchase issues. The Government not only purchases outputs from a Department but also seeks advice on policy and long term retention of capability issues. The NZDI` is no exception to this. The majority of members of the NZDI` have as their primary occupation the delivery of outputs. NZDI` outputs are couched in terms of force elements.

However, HQ NZDI` and the single service staffs also must function as a Government Department. They must provide advice to Government on policy and capability related matters. Officers whose primary training has been in the delivery of force elements are rotated through the staffs, traditionally as a secondary appointment. This Government Department function is in this sense the Second Front.

Specific Comments

1 Government intent. The introduction sets the scene and articulates that, at the time of writing, the Army was unable to deliver the outputs required by Government (as stipulated in the strategic guidance of the day, the Defence White Paper, Defence of New Zealand 1991 (DONZ 91) and the Purchase Agreement (PA) between the Minister of Defence and the Chief of Defence Force (CDM. It identifies the purpose of the letter as being to identify a methodology of evolving capabilities in accordance with Government policy.

These capabilities are further explained in the consequent paragraphs and reinforced at paragraph 20. It is difficult to see how a letter with a stated intent of delivering Government policy can be used 43/2 years later as a basis to accuse me of subverting Government plans.

2. Arguing capabilities. The paper then goes on to explain that the Defence Planning System WPS) is the most appropriate forum within which to argue the Army case for an increase in its share of Defence spending. It even specifies that discussion in the paper is predicated on using the DPS. The DPS is a formal planning process that is internal to the NZDF. It requires input from all the single services, HQ NZDF and Ministry of Defence (MOD) personnel. Its overall purpose is to interpret Government's requirements and turn these into a capital plan. The steps of the DPS are laid out in a booklet. The link the letter makes between 'intent and the DPS reinforces that subversion or any other inappropriate behaviour was never my intent.

3. Air Combat Capability (ACC). The paper makes a single reference to ACC.

It identifies that this capability needs to be argued within the DPS, that is by discussion between the single services and the MOD. The basis being suggested for that discussion was ACC vulnerability, that is the high cost verses low depioyability factor. The footnote refers to an initiative the Australians were pursuing at that time and commences with the words Perhaps it is possible to take a leaf from the Australian book .... This minor part of the document has taken on sinister proportions only because of the subsequent. recommendations of the Parliamentary Select Committee and the decision by the current Government to withdraw the ACC, taken early in 2001. The letter in no way sets the scene for a campaign back in 1997.

Rather, it suggests following the normal staffing process.

4. Aligning Individuals to Appointments. What is expressed here is no more than commonsense, although it was not the practice in 1997. Officers whom the Army nominates for senior appointments should have the appropriate skill-sets, the tertiary education argument. They should understand the role of the NZDF as a Government Department (this is the second front), and they should know and believe in their own service, the vision statement argument. This does not conflict with NZDF policy or practices; rather it complements them. The NZDF appointments identified were those that, at the time of writing, 1 considered to be central to the DPS process.

5. External pathways. The external pathways identified in the paper appear to be controversial. However, the points made at paragraph 13 need to be read within the context of paragraph 8 which states ... all discussion within the paper is predicated on the use of the DPS. What 1 was saying was that a single message should be conveyed outside the NZ13F so that as an organisation we cannot be divided and conquered. At the time of writing i saw this as an appropriate activity for a Government Department. More specific comment on why the pathways were, at the time of writing, cons idered appropriate is as follows:

(a) Maori MPs. Intent to highlight the benefit to Maori of a military career.. This could lead to funding of Army activities from other Government Departments and also raise the level of awareness of the utility of the military i.e. the Limited Service Volunteer Scheme (LSV) This scheme is now more regionaily based.

(b) Select Committee. Since writing the paper, all three services have been called upon to brief the Select Committee, thus,giving the opportunity for each to express their thoughts and aspirations.

(c) Other serv ices. At the time of writing, 1 considered that some individuals within the NZDF/MOD did not hold balanced views (balanced in accordance with, Government Policy). As an example, the Land Capability Requirement Statement (CRS), the key document within the DPS upon which Army could argue its equipment purchases, had never been ratified by either the NZDF or the MOD, whereas the corresponding air and maritime documents had been. This was a major.stumbling block in the procurement of equipment for the Army. A small number of officers from within the other services had sympathised with the Army on this issue. The letter does no more than suggest that officers from the other services could be lobbied to support the endorsement of a Land CRS.

(d) MOD. This is simply an observation. 1 believe that the recent Auditor-General's Report on the LAVILOV issue supports the observation.

(e) Academic Institutions. The observation being made is that discussion should be open and biased assertions challenged, whatever side of the fence one sits.

(f) The Public. The public provides our personnel. All services conduct PR campaigns; particularly aimed at recruiting, and [11 believe this to be an appropriate activity.

6. Campaigns. The use of the term campaigns, although in hindsight it may have been overly aggressive and controversial, did no more at the time of writing than articulate the need to co-ordinate the various activities and functions. More specific comments are.

(a) Intelligence. Within the context of this document, intelligence is about information gathering. It suggests the need to identify those who support the Army, those who are against it and which Army officers work behind the scenes in opposition to current Army policies. Army has traditionally suffered from the divide and conquer syndrome. It has always been easy for external (to Army) policy makers to find opposing views from within Army which have continually led to the criticism of not being able to make up their minds. The wheels verses [sic] tracks argument that raged within Army for years is an example of this.

What is evident now is the impracticality of the unintended implications to the other two services. No one in the Army has any control over the promotions or appointments of officers from the other two services. This is a matter for individual services. No one in the Army has any influence over which officers from the other two services are appointed to HQ NZ13F positions. This is a matter between the service head and the CDF. This aspect of the campaign could not have been run, even if there was a will to do so. 1 have observed no such will in the Army since 1 returned from the UK.

(b) Personnel. What is being described here is no more than sensible career management. It suggests the aligning of skills to appointments and providing both training and education. Logical as it appears now, this was not happening at the time the letter was written.

The recent suggestion of an A and a B team has not occurred. This is because all officers within the NZ Army are treated in an equitable manner. The system for promotions and appointments for senior officers is through the Army Promotions Board (APB), which is open and transparent. The APB comprises a wide range of colonels and brigadiers who grade officers on their abilities, as they are known to the Board and recorded in their annual reports. Recommendations and decisions on each individual are recorded and are a matter of record. Out of session decisions are rare and arise as a matter of expediency. In my appointment as ACGS Dev, 1 was never a member of the APB.

(c) Public Relations (PR). ' Whereas intelligence was about gathering information, the PR campaign was about passing it on. Once more this is considered a normal activity and the Army does have a PR campaign aimed at creating an appropriate image ' in order to assist recruiting. This is managed by the Chief of General Staff (CGS) through the Public Relations Officer (Army). However, other aspects suggested in the letter as being part of the PR campaign have not occurred serving officers cannot be involved in public debate and, to the best of my knowledge, this has not occurred. 1 have not entered into the public debate on Defence Policy.

engaging politicians in the manner suggested in the letter would require the original initiative coming from myself.

This has not occurred. As the ACGS Dev, 1 have had contact with politicians as a result of social interchange in the course of discharging my representational duties or as part of my normal business delivery. 1 have had no other contact with politicians and am unaware of anyone with the Army who has.

in 2001, 1 am lost as [to] what 1 meant by subliminal messaging, both its purpose within PR and the means by which this could be accomplished.. Whatever it meant, it has not occurred.

(d) Cost Expenditure. Within the'NZI)F costs are now attributed to Defence Outputs. This is now a routine activity and no longer an issue.

(e) Capability Development. Having an intellectual (as opposed to personal assertion) basis upon which to make recommendations regarding capability options is now considered a routine activity. Surprisingly, at the time of writing the letter one did not exist within Army. However, an operational analysis capability does now exist nicknamed TEKAP0 MANOEUVRES. This process is fully endorsed by the MOD and HQ NZI)F and as such is considered a routine activity.

7. Implementation. Implementation s uggests that the CGS needs to control the direction in which the Army develops and that he should use his staff to assist in the co-ordination. This is a normal staff function.

8. Conclusion. The comments within the conclusion have all been addressed earlier. Reading the conclusion highlights that the process proposed was not subversive, was open not secret and gains were not intended to be at the expense of the other two services.

Conclusion

Having now re-read the letter some 4Y2 years after its writing, 1 make the following observations: the purpose of the letter was clearly to intr oduce ideas about how the Army could implement the land aspects of Government's Defence Policy; it never sought to alter the policy.

the method proposed was to be smarter in arguing Army's case within the N2DI` DPS; there was no hidden agenda.

the second front proposed was the routine work required from all Government Departments; this was not sinister.

The terminology used in the paper, although consistent with the military style, of writing, is not conducive to public consumption. It is overly aggressive and, in the eyes of those who would criticise it, infers something sinister. A TV One newsreader used the term straight from a boys own manuaL This is an inaccurate portrayal. The language could in. hindsight have been toned down, although 1 would point out t ' hat it was written with the intent that there would only ever be one reader. The style of writing and the way it has since been played in the media should not distract from the actual content.

The letter refers to external pathways and campaigns. However, the message is derived totally from with the DPS. This is crucial to an understanding of the letter. Anything derived from within the DPS cannot be attempting to undermine Government.

In this light 1 fail to see how, as a result of writing the letter, 1 can now be blamed for the loss of the entire ACC, Army's gain at the expense of the other two services or creating despondency within Army.

1 had never held an appointment either within HQ NMF or indeed in Wellington prior to writing the letter. 1 had. no understanding of the Government Department processes within which the UDF engaged (the second front). Consequently, one or two thoughts contained within the Campaigns section of the letter are now 1 accept impractical. In itself, this is in my view not a crime although a cause and effect allegation based on hindsight has now been made against me. Yet the letter had no more authority then [sic] some thoughts to a friend which were never acted upon.

35. 1 have reviewed the transcript of my interviews with Col Gordon. Although the interview was in less formal terms than his signed statement, the substance of his explanation remained the same.

36. During the first interview, 1 asked Col Gordon whether he still agreed with and supported the views expressed in his letter. He said - The letter was a collection of ideas that went to DCGS. 1 consider a number of the ideas to be quite mainstream. 1 consider a number of them to be necessary. 1 also know that 1 pushed the parameters of, acceptability in a couple of areas. After reading it again, and having now worked in Army GS for some four years, 1 am also aware that, in the campaigns area in particular, a -nurnber of my suggestions were improper. If somebody wrote this to me now, it wouldn't go any further. Not only would 1 not condone it, 1 know it to be improper.

37. 1 asked him to elaborate on the issue of impropriety in relation to the letter. He said - It would be helpful to have comments on your present view of the letter.

Paragraph 16 is about how to pass information on to tho~e groups already identified in paragraph 13.

But having now worked in Army GS for four years, 1 know there are aspects of my letter that are improper, such as the intelligence campaign. 1 used military terminology in the letter because both the reader and 1 understand it. 1 know that it may sound aggressive, but 1 ask that the context of the letter be looked at, rather than the individual expressions used. For example to me, 'campaign' just means co-ordinating, tying up loose ends, and having one plan. To me, 'exploitation' is an area to move into, an area that needs to be looked at. And what do 1 now know to be improper? The issue of who is part of the NWI` is not an issue for Army. Army will second its own officers to NWF. Any other officers that are seconded to NMF are an issue between MF and the single service chiefs. And that's right and proper. There'll never be any other way of doing it. 1 know that now - I've seen it.

38. His comment on paragraph 16 was based on his experience since his return from his position as ADA in London. In the intervening four years, he worked in Army GS. He continued - And based on that experience, you are making your critique of your paper now?

Yes. 1 hadn't been to Army GS or HQ NMF before. So what I'm saying now is that some aspects of the letter are improper.

The Personnel Campaign is pretty well tied, although I've now observed how the Army Promotions Board works. It is based on an individual's performance and ability, as identified and recorded through the chain of command. And that is right and proper. 1 don't have any concerns though with comments like "Officers need to be identified early in their careers to ensure they receive appropriate "background" postings". We have to second our officers. They tend to be senior. But 1 say don't leave their training u ntil they're too senior. Train them first so they can properly conduct themselves and do the job well when they get there.

The Public Relations Campaign we have is aimed at recruiting. 1 see that as a routine and proper activity. But 1 agree, lobbying a Select Committee group or Maori MPs is an improper activity. 1 now have the benefit of seeing how NMF functions with MPs. There is a way of doing it. But J agree that in my paper, it be could be wrongly interpreted. Army did address the Parliamentary Select Committee, at their request. And we do engage external agencies to brief them. on issues surrounding Defence ~ and that is a right and proper activity. But when 1 talk in my letter about the individual lobbying of MPs, that is an improper activity. However, NMF engaging parliamentarians as part of their public department role is a proper activity.

The Cost/Expenditure Campaign. 1 do not believe this is an issue because it's the way we do business now. Our costing model attributes cost to outputs. Back then, it didn't. There was a big bucket, a lot of money went in, and nobody knew where the costs were coming from. Now, the costing model attributes all costs to outputs, across the three services. it is the Defence Planning System model.

The Capability Development Campaign. Yes, there are a couple of points here. Look, Tekapo is a right and proper activity but the second sentence, "This reflects that the end state of the second front is not in itself to compete with the other two services but more, that the Army has something of utility to offer", is going away from an assertion-based request for capability to one that is a bit more intellectually based.

Overall ..Imple mentation. Once more, words like 'council' and ,campaign' are not seen for what 1 believe they actually are.

Co-ordinating is a right and proper activity of DCGS. The intent of my final sentence in paragraph 22 is that Army should speak with one voice in order to work within the DPS.

Brig Ottaway's reaction to the letter

39. Brig Ottaway had no indication that the letter was going to be written. But it did not come as a surprise to him. He explained there was an atmosphere of encouraging people to express themselves, to provide ideas for discussion; it was actually an environment that we had been trying to encourage in the Army, for people to participate in the process of developing the service" In relation to Col Gordon he said 7 don't think anyone would have been terribly surprised that he was giving some thought to the future of the Army. 1 suspect we were trying to encourage people to give thought to where we were going in matters of doctrine, in matters of organisation, and actually trying to look ahead into the future" 40. When asked about his reaction to receiving the letter, he had difficulty recalling its entire contents. He was not conscious of any great reaction to it at all. As he explained "... there were possibly other more important affai~s taking up my time rather than my trying to rifle through what was a very long paper- 41. When asked about his attitude to Col Gordon communicating with him, he said "My attitude to people such as Col Gordon was that 1 believed they did have a role to provide input into our profession. 1 don't think it's appropriate that we should think that simply because we sit at the top, we have a complete mortgage on knowledge and information".

42. When analysing the letter, he made two observations: first, "... it seemed to me to be a piece that was simply expressing a series of ideas. 1 suspect other people have drawn other inferences from X,. and secondly, Tm somewhat disappointed in the way this has got into the public arena. 1 think it may well have the effect of strangling people from expressing very sound opinions on a wide range of subjects in the future. We were trying to become an organisation endeavouring to capture the academic and practical experiences which our people have, we were encouraging them to give us ideas that were intended. 1 believe, to be for the benefit of not just NZDF, but also for the security of the nation. 1 have a feeling now that people may well think twice about offering opinion in the future".

How the letter was dealt with

43. Brig Ottaway did not recall what he did with the letter. He made a number of assumptions based on what would have been his usual practice.

44. He explained that he did not think he had done a lot with the letter. He recalled it being quite a lengthy letter running to a number of pages. He thought he probably read it with a degree of interest and then filed it. He did not recall discussing the letter with anyone. His recollection is that he did not bother to reply to the letter.

45. On. the basis that the letter was addressed to him personally, he thought that he would have put it out for his secretary to file on a file of personal letters which she held for him. He is of course aware now that a number of people saw a copy of the letter. But he cannot exp . lain how copies of the letter came to be released.

46. The then CGS, Maj Gen PM Reid, thought he had seen the letter at the time, but his recollection was not at all clear. He thought that he had seen the letter on what he described as a "float file". He described these as files which were compiled with documents that were circulated to Army personnel. Alternatively, he may have seen the letter on a record of inward correspondence which was referred to him.

47. He put his position this way - 1 believe 1 saw a copy of this letter -sometime in April 1997, some five years ago. I'm having difficulty recalling, but 1 do remember seeing a copy of the letter. I'd completely forgotten about it until such time as it hit the headlines but when 1 read it, 1 knew 1 had seen it before.

Do you recall the circumstances in which you came to see it in 1997?

1 probably saw it on a float file or on a record of inward correspondence. Beyond that 1 really can't recall. 1 certainly don't have a copy of it - I've never had a copy of it. 1 suspect it may have been in a pile of inward mail. 1 used to receive a weekly, sometimes daily, copy of all letters that came into Headquarters and major signals, matters of relevance and so on. 1 suspect 1 saw it on that.

Other recipients of the letter

48. The course of the letter cannot be traced with any degree of accuracy.

49. Lt Cot CP Richardson, who was D Coord (A) at the time, was shown the letter by Brig Ottaway in the Brigadier's office just after the Brigadier had received it. He was given the opportunity to have a quick and cursory look at it. What he saw was the original letter; he did not see a copy or copies; and he was unaware of copies having been made until later.

50. He recalled a comment that Brig Ottaway made to him at the time which was complimentary about Col Gordon's initiative in thinking about the issues and coming up with ideas. He felt that the Brigadier was chiding the other Lieutenant Colonels. Brig Ottaway did not remember the remark but accepted that it may well have been made.

51. Lt Col Richardson did not have the opportunity to read the whole of the letter. He got about half way through it when Brig Ottaway took the letter off him and made the comment about Cot Gordon's initiative.

52. There were other copies: three in particular can be identified and warrant discussion.

53. The first was under the control of Col ---IB Vryenhoek who was ACGS Rsc at the date of the letter. When 1 interviewed him, he was Commander of 2 Land Force Group based at Linton Military Camp, Palmerston North.

54. He told me, "As far as 1 can remember, 1 don't think 1 saw the letter at the time. The first time 1 got a copy of it was off the National Party web-site 55. However, his successor as Chief Financial Officer, Mr JR Griffiths, found a copy of the letter on what had been Col Vryenhoek's files. The timing of the discovery was between April and July 1998. He read through the letter, thought it was a very interesting document, but not something he would leave on a file. He destroyed it.

56. The background on Mr Griffiths' account is that Col Vryenhoek had passed over about a dozen Eastlight folders of documents. They were a series of files which Col Vryenhoek had collected which he described to Mr Griffiths as desk files. Col Viryenhoek told Mr Griffiths that he should go through them, keep what he wanted as there would be some useful information in them, and discard the rest. There was no formal handover. Col Vryenhoek did not go through the files with Mr Griffiths. The copy of the letter fell into the category of documents which Mr Griffiths discarded.

57. 1 deal with the reaction of both Col Vryenhoek and Mr Griffiths to the contents of the letter in more detail later in the report.

58. The second was a copy of the letter held by Brig J Mateparae. When he first saw the letter, he was Director of Force Development in HQ NMF. He was responsible to AC Dev. He could not remember how he came to get a copy of the letter, but he was clear that he had received it in his official capacity as Director of Force Development. He read the letter and then took another copy because he intended to write to Army about the letter.

59. 1 deal with his interpretation of and reaction to the letter later in the report.

60. The third copy is the one which was tabled in the House of Representatives on 28 August 2001. This copy was taken from a copy which was left on Brig IAJ Marshail's desk on. about 20 August 2001. Brig Marshall was then AC Dev in HQ NZW. He does not know who left the copy on his desk. He made enquiries at the time, but was unable to identify who was involved.. He sent it to Mr RV Johansen who between the date of the letter and July 2000 was employed as Deputy Secretary for Defence Acquisition. Brig Marshall dealt with him on a regular basis in his position as AC Dev.

61. The highlighting on the letter was made by Mr Johansen. Mr Johansen sent it in turn to Mr MR Bradford, MP. It was then tabled in the House by the Leader of the Opposition, the Rt. Hon. Jenny Shipley.

62. 1 deal with the circumstances of the release of the letter more fully later in the report.

63. No one else whom 1 interviewed had a copy or had seen a copy of the letter at about the time it was received.

The probabilities are though that there were other copies.

CGS' 1997 seminar

64. 1 deal with this topic for two reasons. First, CGS Reid's address to the 1997 seminar is referred to in the Gordon letter. There is language in the letter which is similar to the language of the address. There is reference for example to the "centre of gravity" and to the "critical mass". However, the theme of the address is rather different from that of the letter. Indeed, the letter draws the distinction between the CGS' approach and his own (see para 3 of the Gordon letter). Secondly, the address points up Army policy at the time.

65. Some passages from the CGS' address demonstrate the reasons for referring to it - 65.1 The title to the address is "Keeping Army Ready, Relevant and Capable";

65.2 At the outset, CGS re-capped on his address the previous year, particularly his emphasis on the need for change. His intent concerning change was put in these terms - "The Army is to change, it is to think winning, it is to be resourceful and self-reliant, it is to be resource disciplined, it is to demand much of its people and particularly its officers and it is to be equally concerned for them, it is to take care of its own, it is to reward enterprise and eliminate conservatism, it is to demand a rock-solid foundation, of ethics and integrity and it is to build a leadership climate at all levels that can implement commanders' intent and withstand the test of combat";

65.3 The address then turned to the frictions in the way of progress, both external and internal ones. In introducing his discussion of the frictions, Maj Gen Reid gave an assessment of the present state of the Army. The emphasis was on the cuts in spending which he said "eventually. swept away one third of defence funding in real terms". He outlined the Defence Assessment which was being undertaken at tha,t time and emphasised the problems arising out of the lack of funding;

65.4 The theme then turned to Army's position where he said we need to be aware that Army has not been as successful as it might be in the struggle to capture the capital dollar". He identified three reasons: first, a perception that the Army was exclusively a fight infantry army, a term which had been interpreted in a number of different ways to the disadvantage of his concept of a modern New Zealand Army; the second was what he described as "the scarcity of defence capital resources". Importantly, he went on immediately to identify "the need to share these to keep a balance of capabilities among the three services. 1 do not deny the need for a balance of capabilities, nor the need for us to adequately equip the Navy and Air Force although 1 will squabble over the details".

65.5 There is then an analysis of the disproportionate expense involved in equipping Navy and Air Force;

65.6 In the context of the Inquiry, the third element is the most important. CGS Reid put it this way - "I believe it is our failure over the years to clearly identify where the decisions are made and to ensure an adequate role in these. For too long we have adopted the view that real soldiering is out in the bases and units and that Wellington is to be avoided. Let me assure you that the battles over the future of the Army, the battles over equipment are fought and won in Stout Street and the Beehive, with several buildings on The Terrace thrown in. If Army is to succeed in preserving its future it must send its best and brightest into the cauldron of the Defence debates. The other services have long known this and have benefited from it. 1 have already put in place steps to raise the academic qualifications of our officers, and now 1 have started hand-picking the officers we need placed in the centre. Good officers on their way up can expect to, in fact must, show their abilities in working in the Defence environment, but must also fully understand the Army position and vigorously advocate it";

65.7 In this context, he identified one of the significant internal frictions in this way - "All too often lengthy preparation, weighty submissions and requests for funding are lost, because someone has a bright idea or an alternative which - "oddly" you may say - advances their cause ... and relays this thought to those outside Army ... especially to NZDF the MOD or the control agencies ...

resulting in lengthy litigation and loss of procurement opportunity. It really does not help our cause to have our own people shouting advice from the sidelines as battle closes ... "sidewalk superintendants" [sic] the Americans call them. Over the fast two years we have seen three major procurement and works projects lost due to alternative and "better" proposals from others in Army";

65.8 He summed up the point by saying "a# too often we are divided and conquered by services with an unswerving and unified aim 66. Maj Gen Reid was adamant in his two interviews with me that his objective throughout his term as CGS was not to interfere with the legitimate aims and objectives of Air Force and Navy: his sole objective was to promote the position of Army.

67. The other feature of the 1997 seminar which calls for comment is the work which was done by various "syndicates".

68. In the course of the seminar, three sessions were devoted to syndicate work. A series of questions had been set as part of the seminar programme. Participants divided into eleven syndicates and discussed the questions. Each group had a leader. Notes were kept of the discussion. They were then provided to a secretariat. A report in the nature of minutes was prepared subsequently of the discussion.

69. The eight questions reported on were as follows - A. With. Army on a reduced budget, what would be your options for change to reduce the Army or NZDF command and control infrastructure?

B. What is the centre of gravity for Defence policy and where should Army's main effort be applied?

C. What do you consider to be Army's critical vulnerability as it nears the 21 st century? How would you overcome it?

D. In order to meet its' defined Outputs, Army must recognise its 'Critical Mass'. What do you consider Army's critical mass to be? How would you justify it to .external agencies?

E. Recognising the implications for Army following the Development presentations and your study of the 'Battlefield Functions and Characteristics', comment on the draft DCRP and minor capital programme. Is the emphasis correct? Are there projects missing?

F. Identify key areas which a public relations campaign should target in order to effectively enhance Army's image both within the political decision making sphere and in a wider community context.

G. The Logistics Corps amalgamated three CSS branches of the Army. Should a similar move be considered for the combat and/or combat support corps of the Army?

How could corps be better structured to meet future Army requirements?

H. What key issue or issues that have not been covered at this seminar do you believe Army needs to address and why? If you had the power to rectify it, how would you go about it?

70. CGS regarded the questions as important. In his address he said - "These are not idle thoughts -, these are at the heart [of] the Defence debate. We are dealing with the keys to how Army will handle itself, sell itself and advocate itself for the next decade. We must have your confirmation as to how we have identified the centre of gravity, where our main effort should be applied and what our critical mass is. These are genuine problems in both strategic aims and tactical handling and at stake is the future of the Army".

71. The report of the syndicates' work was prepared by Lt Cot AM Hayward who at the time--- held the position of GS02 Dev, Army GS. He explained that the syndicate leaders were given a week or a fortnight after the,seminar to provide their reports to him. He then compiled his own report. This took about a month.

72. The reason for my enquiry into the report of the seminar is that in it, there is a reference to the views of the then Lt Col Gordon. In answer to ,j Question B, the following passage appears in para 6a - "This question has generated a degree of thought which could be built on to form a more substantial plan. Though debate can continue about what constitutes the Defence centre of gravity (the writer is aware of Lt Col UM Gordon's contribution on the matter and the merit that is articulated in his argument), there is a need to attack the issue in a structured, deliberate and dynamic way".

73. The timing of the seminar and the letter were clearly at odds.

However, Lt Col Hayward explained that while he was preparing his report of the seminar, he was required to go to London. While there, he spoke with Col Gordon and read a copy of the Gordon letter. He incorporated the reference in his report accordingly.

74. When 1 interviewed Cot Gordon a second time (to put material to him which 1 had obtained in the course of the Inquiry after my first interview with him), 1 asked him about the report of the seminar and the reference to him. In dealing with this topic, 1 queried his connection with Lt Col Hayward. He explained that he did not "reall~ have a one-on-one connection".

75. 1 should explain that the documents concerning the CGS' 1997 seminar were found in a file in Army Development Branch in November 2001. A search for relevant documents had been undertaken following the tabling of the Gordon letter in the House. The documents were not part of the official records of Army.

76. 1 add also that Maj Gen Reid said he had never seen the report prepared by Lt Col Hayward until 1 showed it to him at our second interview.

Reaction of those who saw letter prior to release

77. The first person who saw the letter after Brig Ottaway. was Lt Col Richardson. His reaction is a combination of what he read at the time, and the discussion which there has been about the letter since its release.

78. His position is best summarised from this passage in his interview - Whether those attitudes still hold, depends. There's been a very negative slant put on the discussions that surround it. Some of the ideas that Col Gordon put in his letter were things which were readily apparent to the vast majority of individuals who were thinking about Army and it's situation at the time. One of them was why do Air Force and Navy do well in terms of working through the system and getting projects up and running, and why do Army do so badly? We identified that one of the reasons we did so badly was that we weren't sending people who were motivated about staff work per se. It has long been regarded that service in HQ is something you do in between real soldiering. We felt that we needed to get away from that attitude and start doing what Navy and Air Force were doing very well. It wasn't about targeting what they were doing. Rather, we were recognising what they were doing well and thinking we ought to do the same ourselves. Col.Gordon said we ought to be looking at getting into key posts. That was a fairly common thought. 1 wrote a paper on the subject myself when 1 was at Staff College. But the main issue being highlighted in the press involved targeting the Air Force or the air strike capability. Now that's not an idea which is going to get much support from field Army as it were. Air power is a combat multiplier as far as we're concerned. We would much rather have aircraft supporting us than not. Those are Government decisions which we have to abide by but, as potential combat soldiers, we are not terribly happy with.

Do you see any issue of impropriety arising from what Colonel Gordon did?

Again, this is entirely speculative. If the letter is deemed to be a communication between Col Gordon and Brig Ottaway (who is an old friend, or has been his boss on a number of occasions - they've known each other well throughout their service), then possibly not. 1 mean if we don't start trying to widen the debate and think about what we're doing, then we're never going to get anywhere. The easiest way to cut off debate is to cut people off at the knees the moment they say anything that might be a little bit lateral. 1 believe one of the greatest weaknesses we have in Defence at the moment is our lack of a broad-based defence debate. So in terms of the Gordon letter being improper, only if it was intended that we should target a single group of politicians. If the intent of targeting politicians is to ensure they are ALL informed to make whatever decisions are needed, then no,1 don't think it's improper at all.

79. Maj Gen Reid's reaction was put in this way - My reaction at the time was twofold. First, in my view it's hopelessly out of line with regards to what it proposes, what it states and the avenues that it follows. It's totally out of line of course from a constitutional point of view. Therefore as a proposal, it was of no real assistance. Secondly, 1 felt to a degree that this could have been born out of some of my own statements. 1 have here a copy of my address to-the seminar in Linton. It would appear that some of the expressions Col Gordon refers to in his paper were expressions 1 used. However, he has picked up and contorted them in other ways. 1 was a bit concerned that an officer a long way from home, obviously feeling on the back foot, had probably been passed reports (or even a copy of what 1 said at the seminar in Linton), had decided perhaps to build on these in order to get himself noticed (which is an unkind interpretation) or perhaps out of frustration, and written this letter. In a way, 1 was totally disapproving of the contents but 1 can understand the degree of frustration that led him to write it.

1 asked you if you could recapture your reaction to the letter when you saw it in 199Z Are you answering me as at 1997, or as a result of having looked at the letter recently?

1 only vaguely remember seeing the letter and as 1 relayed to you earlier, I'm not exactly sure how 1 came to see the letter.

To be honest, my reactions are probably my reactions now, reflecting on the circumstances of the time. 1 can't honestly tell you how 1 felt when 1 saw this letter in 1997, although 1 have no doubt that the proposals in it are something 1 would not have sanctioned for a minute.

80. He elaborated on the appropriateness of the letter in this way - 1 think there are two aspects that leap out. First, the attitude towards and ,the lack of understanding about the role of the other two services; the need for unity within Defence and an understanding of the roles and tasks of Air and Navy. Secondly, 1 thought that it gave a clear impression that Army should do something that, to my mind, bordered on circumvention of the proper channels (as they existed) and the relationships that were maintained both within Defence and between Defence and Government. 1 felt those were infringed on to some degree.

81. He also sounded a cautionary note about reading too much into the terms which he used in his address to the 1997 seminar, and which are used also in the Gordon letter - He seems to think that my address was not going to solve the problems that he saw. But 1 use terms which are military terms that I'm not sure people understand, for example, 'centre of gravity', 'tactics', 'main effort' and so on. These are very much military terms that, to be honest, have been around for nearly 200 years but which might be totally misunderstood in the public arena.

82. Maj Gen MF Dodson, who became CGS after Maj Gen Reid, heard of the letter at the time. When the Gordon letter was written in March 1997, he held the position of AC Rsc in HQ NZIDF, Wellington.

83. I mention him at this point only to clear away any involvement on his part at the time the letter was received. He saw the letter for the first time when a copy was made available after the letter had been tabled in the' House. He recalled however that there had been some discussion among Army officers in 1997 about a paper by Col Gordon. He thought the discussion had taken place with Brig Ottaway and that CGS Reid may have mentioned it.

84. I deal with his comments on the letter in a subsequent section.

85. At the time the letter was received, it provoked the greatest response from Brig Mateparae.

86. He explained what happened in these terms - 1 don't remember how 1 came to get a copy and who gave it to me, but 1 had a copy handed to me in my capacity as Director of Force Development in HQ NZDF. 1 took the letter, read it and then took another copy because 1 intended to write comment back to the Army. 1 was concerned about the tenor of the letter and was appalled with some of the notions that were being espoused. 1 gave a very short outline of my concerns to the then AC Dev, Air Cdre John Worden, and advised him that 1 would see to the matter. 1 also showed Dr Cathy Downes a copy of the letter just to see whether my concerns were valid. She was the Senior Research Officer for the Defence Force. She agreed that it was inappropriate and from there, 1 set about constructing a response to Army. 1 don't recall a response being released out of Development Branch so 1 can only assume that having started to form the rebuttal, 1 then went to Army GS and asked "What the hell's going on?" 1 can only assume that at that stage, someone allayed my fears and confirmed that the whole thing had been put to rest.

87. He could not remember to whom he spoke but, as to timing, he said - It would have been fairly soon after. 1 mean 1 was not happy with the content of the letter. 1 had real problems with some of the language used. It was very manoeuvrist in its construct; talking about wars against the Defence Force or within the Defence Force, fronts, centres of gravity. 1 also thought that it showed a level of naivetd on ]an's part - on his understanding of the processes that are extant within Defence Force and the committees that go on.

88. After Brig Mateparae received the letter, he made a copy of it and started framing ideas in response by making notes on the copy. He started with a blue pen and, as he put it, he "... then also took to it with a red pen". I have a copy of the letter with his notes on it. I do not think I need to report further on the notes other than to record that they reflect the Brigadier's indignation with the contents and tone of the letter.

89. He emphasised that he had concerns with the integrity of the letter which he expressed in this way - There are probably three areas. First, 1 view the way that it is couched as an affront to my/our professional integrity; secondly, 1 was also concerned with some of the notions that were exposed in the document; and thirdly, as 1 said before, 1 thought it was a bit rich of fan to be writing about what was going on here when he hadn't served in HQ NZDF. Some of the things he was talking about impacted directly on me - it came across.as you're either with us or agin us and if you're agin us, we're going to cut you away. 1 can see where lan's coming from. There has * been an issue about having a long term plan to work to and yes, in the past (about every two or three years) there has been a change of direction. We'd just arrived back from Bosnia and there W . as some criticism about the state of our equipment. 1 think that was behind the whole genre of this.

I was concerned about the comment "To attain a level of control" over the NZDF and the statement saying that once accepted, something should no longer be open for discussion. But things change - something should always be open for discussion. I had concerns about the reference to the air maritime strike. I had concerns too about how Army should influence postings - to me that's totally inappropriate.

I think it was a very ill-informed, naive letter from fan. I didn't see it as an official Army policy document. I had strong sentiments about it and planned to rebut it back to Brig Ottaway.

90. In the event, Brig Mateparae did not respond to the letter. He cannot remember why now but he assumes that "having got a head of steam" and gone to see Brig Ottaway about it, he is likely to have been reassured that the re was nothing to be worried orconcerned about.

91. 1 note before leaving Brig Mateparae's account, that his copy has the letters "AlPW' beside paragraph 21, as does the copy which was tabled in the House. There are other versions of the letter in circulation. 1 mention this point only because it suggests, along with other evidence to which 1 shall come, that the letter which was released was in fact held in Development Branch.

92. Although. Mr Griffiths saw the letter just over a year after it had been received, it is instructive to note his reaction - I read through it. I thought it was reasonably sensitive. I presumed this was a copy of the document. I wondered what,it was doing on a file sitting in my office because it's not the sort of thing I would *hold.

What was it about the letter that made you deem it 'sensitive'?

Just the way it talked about what 1 would term a PR-type strategy. In my experience within a few Government Departments, that would be the sort of thing you wouldn't write down. Maybe the sort of thing you'd think about and discuss; but not write down.

You described the letter as setting out a PR strategy. Can you just elaborate on that for me. What did you see as being the strategy of the letter?

1 saw it as influencing the future direction Army was taking - how they could take a greater share of the Defence pie in resource terms.

Release of the letter

93. 1 have explained already, how mechanically the letter came to be released. 1 turn now to the r easons for its release. 1 also deal with the circumstances in which 1 obtained the evidence concerning the release.

94. The starting point is Brig Marshall. When 1 first interviewed hirll, he told me that the first time he had seen the Gordon letter was when he obtained a copy by downloading it from the Internet. By the time 1 interviewed him a second time, 1 had information which indicated that he was the person who had released the copy of the.letter which was ultimately tabled in the House. It became apparent very quickly at the second interview that he knew 1 had that information also! He put his position this way - When was the first time that you saw the Gordon letter?

I'm very glad you asked that question - it has worried me for some considerable time. In the fast interview, 1 told you that the first time 1 saw the Gordon letter was when 1 downloaded it off the net. But this is not true. Somewhere around the 20th August (either the Wednesday or the Thursday before the letter hit the media), 1 came into my office about 3pm. 1 sat down at my desk and started tidying it. The first piece of paper 1 came to was turned upside down on my desk. 1 turned it over and there was the Gordon letter. Now how it got there, 1 haven't got a clue. 1 read it, 1 took it home, 1 thought about it, and then 1 made the first of two mistakes. Robin Johansen and 1 had worked on Army projects for about 2Y2 years before he left. During that entire time, we had had problems with Army. We talked about this in relation to the LOV tender and the fact that there was an awful lot of manoeuvring. We knew about problems the CDF was having where there seemed to be considerable interplay between the Minister and CDF and Gen Dodson.

We talked in general and quite specific terms about some sort of orchestrated campaign. It is my assessment that Robin left MOD both bitter and puzzled. 1 sent him a copy of the Gordon letter. 1 said that as we had discussed the Army situation off and on in the past, it may give him some resolution about what had happened during his time there.

1 asked him to protect the letter. In hindsight, 1 think that was a mistake. The second mistake 1 made was not declaring all this to you during our first interview. Nobody likes to admit they've made a mistake. 1 was reluctant to become the whistleblower. 1 was ' extremely annoyed and disappointed with Robin. 1 felt he had betrayed my trust.

but having said that, 1 never set out to leak the document; 1 never set out to gain anything personally from it.

Well why did you lie to me?

This has caused me a number of si eepless nights. 1 know Gen Dodson has, for a long time, accused me of being a leaker. This was my one and only breach of security. Now it's fine to say in hindsight that it's not classified, and all of that is true. But 1 trusted a friend and that trust was compromised. 1 feel extremely embarrassed about that.

You knew those facts at the stage you came to he interviewed by me?

Yes 1 did. At the time, 1 thought "Well, it doesn't matter where the letter came from". It's regrettable that it happened and 1 now feel incredibly embarrassed about it.

The way it looks to me is that you told me a lie about the letter on the basis that you didn't think 1 would find out.

1 don't necessarily agree. You deliberately asked me five very interesting questions at the end. 1 knew there was a possibility that you would find out.

But how would 1 explain the letter getting on my desk? Frankly, 1 can't -other than somebody felt 1 should know about it. 1 already knew of the existence of the letter. 1 was formally told by Brig R Mortlock that a letter had been written - 1 knew a lot about what it purported to say. 1 talked to CDF about it during my time as AC Dev and he told me to get Prozac, get a life, get a sense of humour, life isn't that black.

Do you have any idea as to who put the letter on your desk?

Not a clue. 1 read the letter, walked out of my office and said to my PA "Has anybody beep in my office?" She said "Nobody that 1 know oC. 1 walked out into the main office and said to the guy there, "Has anybody been into my office"? He too said "Not that I've been aware oC. 1 mean, how do you trace this. It's face down on my desk, just sitting there. Then 1 thought it doesn't really matter where it came from, it's the information it contains that's important. 1 did not set out to leak the information. 1 did not act inappropriately. 1 sent it to a friend and asked him to protect it.

95. There is a curiosity to which 1 draw attention. 1 asked Brig Marshall about copies of the letter which he had seen and the copy which he released. He said - The only copies of the Gordon letter which 1 have seen include the one that was left upside down on my desk (which is a photocopy) and the one that 1 downloaded off the net. 1 took the photocopy home. The only marks that were on it were on about page 3 or 4: it had "APCC" written in the margin in very neat handwriting.. 'Before 1 sent it to Robin Johansen, 1 whited that out and re-photocopied it. i was concerned that it may have been butterflied. Do you understand the term butterfly?

No, can you explain that.

To "butterfly" is to make a very subtle change or place an identifier on a document so that if it is leaked, you can tell where it came from. 1 wondered whether "APCC" was a butterfly.

What happened to the copy that you had then?

1 shredded it.

96. The copy which Mr Johansen received and which was later tabled in the House in fact has the "butterfly" beside para 21. 1 can only infer that Brig Marshall made a mistake as to which copy he sent to Mr Johansen and which copy he shredded.

97. 1 shall return in a moment to Brig Marshall's evidence in relation to his justification for the release of the letter.

98. 1 turn now to Mr Johansen's position. At the time 1 interviewed him, 1 did not know that Brig Marshal] had released the letter to him. He recounted the events in this way - Tell me about how you received this letter.

1 received this letter through the mail in an envelope.

Any identification on the envelope?

It must have come out of Army, but 1 don't know where it originated from.

Why must it have come out of the Army? .

Well, that's a supposition on my part 1 suppose. It's because it's written to Ottaway; it's because had this document fallen into the hands of either Air Force or Navy, they would have immediately blown the whistle. 1 just can't conceive that Navy or Air Force would have looked at this letter and stayed silent. So that's the basis of my supposition.

Do you have any clues to who sent it to you?

1 know who sent it to me - fan Marshall.

Have you spoken to 8,dg Marshall about it?

Yes 1 have.

Where did he get it from?

He doesn't know. That's why 1 say 1 don't know who the source is. He tells me that it appeared on his desk. He doesn't know where it came from.

99. 1 turn now to the reasons for release of the letter, both by Brig Marshall and Mr Johansen.

100. Brig Marshall put his position in this way (the references are to Mr Johansen) - From what he said to you in your discussion after the letter was firstreleased, do you understand that his approach was a principled one?

We had talked in terms of 1or the good of the organisation". Both of us have fought long and hard to make sure * that Government got the best information it could. 1 was really sad when the air combat force was taken out of service. But that's Government's right. Government did it with full knowledge, having done the Quigley review in 1999/2000. They were exposed to what 1 would consider fair, unbiased information which allowed Quigley to make an informed decision. To me that is the role of the Defence professional; to provide Government with the. best possible information in the most timely fashion, to allow Government to weigh the responsibilities of its portfolios and make decisions that it believes will best suit the short- and long-term needs of the country. Before this letter was released, 1 spent four years seeing Government being fed information that was not balanced, was not complete, and which was driving them to a selective response which was also outside constitutional means. That made me angry. 1 despise seeing process circumvented.

Both Robin and 1 had the same point of view. He shared the same views of protection of information as 1 did. In my view, 1 was simply providing a degree of closure to a friend who had experienced similar problems to me. He was as vilified on the 5th floor as, 1 was. While this in no way makes excuses for what 1 did, it hopefully provides some context for why 1 did it.

101. Mr Johansen's reaction and reason for releasing the letter to Mr Bradford were explained in these terms - 1 was absolutely stumped. I'd left Defence feeling pretty wounded. It had become a very caustic and unpleasant place. 1 endured an attack which suggested I'd been sacked. This is simply not true. And when 1 read this letter, suddenly all the pieces fell into place. I've never been a political activist. It's not my nature.

1 don't go looking for trouble. But 1 looked at this and thought it to be the most incredible display of unethical behaviour. And I'd endured the rough end of it in MOD. 1 asked myself whether 1 should make a stand or let it go. 1 decided to get counted. So 1 spoke with Max. 1 told Max how troubled 1 was, how it really unsettled me because it was the most unethical thing 1 had ever seen.

102. As 1 have noted already, the highlighting on the letter tabled in the House is Mr Johansen's. It was an instantaneous reaction to the letter.

103. There is a long history which led to Mr Johansen's reaction. As it is relevant to some of the tensio ns which exist in Army and ArmV's relationship wit h MOD to which 1 shall' refer later, it is helpful to set out Mr Johansen's analysis. 1 capture the principal points made. Each was supported by an extensive explanation 1 was advised earlier that you were someone that 1 should speak to about the source of the letter written by the then Lt Col Gordon on 21 March 1997. Can you lust outline for me what you know about the letter.

The thing that is fascinating for me is that 1 see lots of elements of the letter which now fit part of my experience or part of my knowledge - things that 1 didn't know about at the time. A whole range of things happened between MOD Acquisition and Army which dovetail very closely with what that letter outlines.

Can you identify for me the points

The letter is largely about controlling policy in order to enhance Army capability. It is therefore largely about controlling the DPS and Defence Acquisition. 1 was on the critical path because 1 was in control of the acquisition element of that process. It is fair to say that my relationship with Army was very difficult. Army, unlike the other services, had a completely different approach to acquisition. My job, as 1 saw it, was to compete in the market place and get the best value for money. 1 had trouble implementing that process with Army. We got into serious stand-offs.

The date of the letter now links a tot of anecdotal evidence to suggest this thing really got started with Piers Reid at the CGS' address of that year. Reid was angry that Army wasn't getting a fair s~are of the resources and thought some action ought to be taken to put that right.

Army, unlike the' other services, doesn't have a strong cadre of engineers But acquisition is largely.

about, engineering projects. 1 am a trained engineer. My role involved getting..good specifications and competing for them in the market place. But Army couldn't put together good specifications. A specification would come to me, 1 would question it because things weren't satisfactory and it was invariably sent back. Army dGiveloped an impression that .1 was just being difficult. But from my experience, if you get the specification wrong, you can never get it right.

Looking now.at paragraph 10 of the letter - the vulnerability of 'air strike capability needs to be exploited to Army's advantage. 1 was the guy who set up the F1 6 programme. 1 know the programme and its demise intimately. Traditionally, what Government has looked at, is acquisition cost. It did not look at acquisition cost plus the cost of s ustaining something through its entire life. But that's what happened with the F16s.

Politically, and in the media, talk started about.a billion dollar project. However, it VVasn't a billion dollar project at all. certainly not on the termspreviously used. And that was one of the reasons it was kicked into touch - because it was hugely expensive. However, if the proje6 had been merasured.by the traditional sticker price' method, it was only about three hundred million -dollars.

Paragraph 11 of Gordon's letter refers to positioning selected individuals into critical appointments - influencing the DPS. 1 note with.soffie considerable interest that Army chose to second one of their officers into Treasury. 19an't recollect his name. I'd been in' MOD for almost a decade before 1 resigned and I'd become pretty experienced. But from about 1997 onwards, we were plagued with leaks. Army were also trying very hard to second people into my team long before we had, the two vehicle projects up and underway. That fits rather neatly with what the letter lays out as an important way to influence process.

Paragraph 13 talks about the need to influence external pathways. The connection with Maori is noted and 1 can see exactly*that having been acted out. Army has.taken an extraordinary strong position with Maori. It refers also to the Select Committee. 1 think 'without too m.uch doubt,. the report 'Defence Beyond 2000' was very ArmyTcentric. Notable people to appear before that Select Committee were Roger Mortlock and Maur.i.ce Dods on. Both key players. To me, the Gordon letter proposes influencing the Select Committee. 1 would put it to you that they did' just that, and quite successfully too. Secondment to the MOD is also given special mention and again, that is consistent with my experience of the Army wanting to get their people seconded into. my team very early.

Paragraph 16 refers to the identification of individuals or groups who can further Army's cause, or who are particularly obstructive toward it. 1 note with interest the rewards for support through individual career development and rapid promotion.

And there is little doubt that I was obstructive in. Army's eyes. That's certainly how I was seen.

Specifications for both the LAVs and LOVs came to me. I was quickly of the view that I was being set up to run a tender for which there could only be one answer. I thought that was inappropriate; that it didn't demonstrate getting value for money. We initiated an independent verification and validation process and brought in a company called HVR from the UK to assist. That made Army furious because I was not playing the game their way. I have a strong belief that Army had a go at smearing me. In my view, and in terms of the Gordon letter, I was definitely tagged 'obstructive'. Army then used some other tactics on me. They adopted a process of leaking to 'colour the battlefield' (a military term); where you send a subtle message to people who are bidding on projects that they aren't going to win. The result is that they stop bidding. It was done in a number of ways. They went through the Army News and they put words in the mouth of the then Minister. Max Bradford was quoted as saying LAV3 was the preferred vehicle; at which point 1 hadn't even finished the tender process. I rang his Military Secretary and said "What on earth is going on?" He said "Max didn't say that - it didn't happen*.

Paragraph 17 relates to a Personnel Campaign and the encouragement of post-graduate qualifications. Dodson has made a very big thing about education; about degree training for Army officers at the expense of the public.

That wasn't there before and it dovetails quite neatly with the letter.

Paragraph 18 refers to a Public Relations Campaign. It's pretty clear to me that Communications Trumps formed an integral part of the PR campaign outlined in this letter and there are some interesting correlations there.

The Cost/Expenditure Campaign at paragraph 19 specifically talks about contrasting the cost effectiveness of Army's capabilities against Air Force or Navy. Well here we go again.

Paragraph 21 relates to the co-ordination of campaigns. 1 have little doubt that CGS himself was coordinating these activities. 1 had a direct problem with Maurice Dodson regarding people seconded into the Acquisition Division of MOD. To, my immense surprise, 1 found out that whilst they were working with me, they were also regularly reporting back to him. 1 hit the roof about that. 1 read the riot act. to those concerned and said "While you are seconded to me, any information you get stays here - it's not the property of all and sundry"! Dodson and 1 had a direct stand-off over him accessing information. In the tenders process, we took a lot of trouble trying to keep sensitive information out of the view of the public; we were trying to run a competitive tender after all. And he was directly interfering in that process.

]an Gordon was working directly with us during a process of vehicle tenders. He headed up Development for Army, and MOD were doing the acquisitions. Some extraordinary situations occurred on a number of operational projects;

in my view, direct interference from the Army which, unfortunately, wasn't supported by a subsequent MOD Evaluation Division Inquiry. But 1 think they got it wrong. Through the tender process, 1 got three bids for the Hummer. The Army had made it very clear from the outset that the Hummer was the vehicle they wanted. And in my entire life, 1 had never had a tender from one manufacturer with three separate bids - all of which happened to be for the Hummer. Army were up to their armpits in this. The tender was so compromised that my advice to the Secretary was to suspend it. Simply because 1 thought it could never, ever stand up - it was so seriously flawed.

And that's in fact what happened. There was very clear evidence that Army had interfered with the process to try and get the Hummer.

Essentially, the relationship between MOD Acquisition and Army was extremely difficult. This was because our process was designed to be a level playing field. But that strategy simply didn't deliver the result Army wanted.

104. By the time 1 saw Brig Marshal] for the second interview, he, and Mr Johansen had had a conversation about release of the letter. Brig Marshall put it this way - Did you have a discussion with him after he released the letter?

Yes, 1 asked him why he did it. He said he felt it needed to get out. All the sentiments one would normally expect, "This is bigger than the conversations held in my office" - that sort of thing. The next thing 1 know, Robin comes into my office and says he's been sent for. This morning 1 rang him and said "What did you say, I've been asked to see Mr Carruthers again". He said "I told him where 1 got the letter from - 1 know I've dropped you in C. But I'm not angry. In fact part of me is just very glad it's out in the open.

105. Mr Bradford, MP gave me an extensive and helpful description of the issues and tensions which existed in relation to Army during his terryl as Minister of Defence. Because the issues are picked up sufficiently in the passages from Mr Johansen's interview (which 1 have set out above), 1 do not need to recount Mr Bradford's description of them.

106. He went on to explain how the Gordon letter came to him - Robin [Johansen] and 1 had been talking about this. He no longer works for MOD. He was puzzled why we had had so much difficulty dealing with Army during 199811999. There were sources within Defence Force who were prepared to let him see a paper that helped explain the dysfunctionality, and why certain things were going on..._ 1 visited Robin and he gave me a copy of the Gordon letter. 1 read it and suddenly all sorts of things fell into place. Because when 1 relate what was actually happening then to what is set out in this extraordinary document, there are several events that, by and large, fit the framework of the Gordon letter.

It is going to help me if you identify.the passages in the letter with the sort of events that you are talking about.

1 will just explain what happened after 1 reviewed the letter. We had been putting a tot of questions in the House to the Minister at this stage - off the back of this report and a few other things, and we weren't really getting any sensible answers. I'd written to both Cullen and Burton saying "Look, on the basis of what was in this letter and some of the things that were going on, there are some very serious issues involved". 1 said 1 thought they should regard them seriously and that we should deal with them in a non-partisan way. After all, it wasn't during their period in Government so the politics if anything were against me and the National Party rather than them. 1 didn't hear a word. 1 continued to get the same sort of reaction in Parliament. Whether there are some deeper politics in this or not, 1 don't know. There is a lot of suspicion around but 1 can't prove any of it. But in any event, we decided that what was set out in the letter was sufficiently serious to warrant release of a formal press statement.

107. Because of his involvement in the public release of the letter, 1 asked Mr Bradford to explain the issues which for him, arose out of the letter. The following passage sets out his reaction to and interpretation of the letter' Lots of things which have happened seem to relate back to lots of things that were said in this document. In paragraph 1, Gordon sets out a view, perhaps not surprisingly, that suggests Army has been hard done by in Defence purchasing and Defence funding. The third to last sentence says, "Rather, it has arisen because funding allocated by NZDF (the centre) has been to Navy and Air at the expense of the Army". And that's the flavour of the whole thing. Paragraph 2 talks about the need to "open a second front" to capture the funding for Army. It identifies a number of campaigns which need to be set up to control the pathways; to make sure everything that is done is either engineered or performed in such a way that it ensures it's to Army's benefit. It's clear in paragraph 3 that the then CGS, who was Piers Reid, had a very similar view.

It really starts to come together in paragraph 8 where Gordon talks about the centre of gravity for Defence policy. He starts off with a very high level proposal (which nobody will disagree with) to determine the future military capabilities required by NMF to support the Government's national security objectives. In paragraph 10 he goes on to talk about which parts of Defence should be attacked in order to release funds which can then be picked up by Army for their purposes. He has a view that the Army could not in all logic contest the fact that we need a Navy. He says, "therefore there is little point in attacking it head on" (it being the maritime strategy). He concludes this point by saying that the vulnerability of the air strike capability needs to be exploited to Army's advantage. There is no consideration about whether the air strike capability is needed for the purposes of a balanced Defence policy. Put simply, if there is only going to be a fixed pot of money, then whose share shall we raid.

Gordon continues with talk about pathways to the centre of gravity (that's the CDF's office), effectively stacking people into critical positions both within Army and HQ NZ13F who buy into Army's particular strategy - getting the right people and educating them; almost brainwashing them through a variety of programmes. He identifies a number of key appointments which are crucial to secure if, Army is to get it's viewpoint across. We've tracked the individuals who have been appointed to these positions and there is a very close match between the A team (which is the team that ultimately was brought together to put in place the strategy) and the positions that they fill or are about to fill.

in paragraph 13, he sets out a number of particular strategies which are designed to influence various groups to the Army's cause. He starts off with the Maori MPs. As the Army is substantially staffed by Maoris, he is clearly looking at ways in which Maori MPs can be influenced. And that strategy did in fact take place. The second issue is the Select Committee. About this time, the Quigley Committee was established which ultimately arrived at a set of conclusions that are remarkably similar to what the Army seemed to have wanted as a result of its overall strategy. Get rid of the Air Force, undermine and question the need for its future, reinforce support for Army as its role is to change and so on. The third strategy is to influence the other services. But 1 haven't got any information to indicate the other services actua y bought into this Army strategy. Certainly MOD was seen as a potential threat and Army set out to 1ead the push by having officers appointed to the MOW' so as to get across an Army viewpoint.

The next point is about academic institutions and essentially, influencing those bodies. It's important their publications reflect the Army view. Well, that's happened. Particularly through Piers Reid who in turn established a Military Studies Institute at Palmerston North. But in any case, anybody who stood in their way was attacked.

The next strategy looks at influencing the public and you don't have to be a rocket scientist to see the amount of money Army has spent on PR campaigns; the way in which they have attempted to mould public opinion. But 1 freely admit that all three services do that. To some extent 1 encouraged them to go out and talk about themselves so that the public could see the reason for a Defence Force. But where the Army went off the wire was that it was never co-ordinated.

What they were doing was never really advised to CDF.

Gordon goes on to talk about the particular campaigns themselves and how they can be managed. There is some rather extraordinary language in the letter. For example, the purpose of the intelligence campaign was to identify individuals and groups - both internally within the Army and externally - that were either going to help the Army cause or be obstructive in the process and deal with them in different ways. Then 1 look at the way in which David Dickens in particular is being attacked pretty mercilessly by a whole lot of people, including Piers Reid. And the Personnel campaign. 1 can give you evidence such as who was appointed to certain positions; you will discover that most of those people are A team members.

Paragraph 19 describes some of the things that ultimately help explain why things were leaked during my term as Minister. It outlines what they call the Cost/Expenditure campaign. Effectively, this was a comparison of the cost effectiveness of the land forces versus the Air Force and Navy; some Army people were appointed to provide information through Treasury to effectively demolish the combat wing by over-presenting the figures and raising concerns in the minds of the public which, in turn, this Government picked up on.

There's a couple of paragraphs on the overall implementation of the process. In other words, assuming this broad strategy was acceptable, you then had to have a group of people to put it in place, do all the appointing of personnel and training and, in a rather secretive way, implement the policy. Paragraph 21 suggests a council be appointed with a DCGS as its chair. At this stage, Rick Ottaway was the DCGS and the letter seems to propose that he be head of the council. The letter originates from London where Gordon was at that stage appointed as an ADA; and quite soon after this, Rick Ottaway left to become the DA in London. I'm not sure what role he played in this at all, but there is no doubt that the people who were appointed to the positions which formed the council were, by and large, those who were in the A team or subsequently became the A team. They reported regularly to CGS.

Paragraph 22 talks about the mechanism to fight the second front now being straightforward. Individuals are informed about components of the campaign that they have to implement. The author concludes 1n this way it is considered that the CGS, and therefore hopefully the Army as a whole, will gain a degree of control and influence over the direction in which he wishes the Army to develop".

This statement is the telling point in all this because if you relate that thought and that intention and everything that precedes it, to what is set out in the Auditor-General's report concerning dysfunctionality, plainly there is the problem of MOD and the CW not being able to work together.

108. 1 cannot leave this topic without commenting on the behaviour of Brig Marshall.

109. The short point is that Brig Marshal] lied to me del iberately. 1 am disappointed that a senior, experienced and competent officer should have behaved in this way.

110. Obviously it reflects adversely on his judgement and inevitably, colours the view which 1 have taken of his various complaints about the behaviour of others.

111. Whether his conduct in lying to the Inquiry should be the subject of Army discipline, is a matter for Army.

Reaction to letter following release 112. In the course of the Inquiry, 1 asked those whom 1 interviewed for a reaction to the letter. My terms of reference raised issues concerning the appropriateness of the letter, its influence and Army and NZDF policy.

113. 1 have set out already the react ion of those involved directly with the letter. There are others who by vir-tue of their position, should have their views recorded.

114. Because the essential allegation is that the letter reflected a policy of inappropriate influence to promote Army's position, 1 have focussed on those additional personnel who were in policy areas, or who were involved in HQ or Army Development Branch.

115. Dr CJ Downes holds the position of Military Policy Development Adviser. She explained that she "was a bit angry about the letter" when she read it. 1 asked her to identify the issues in the letter. which gave her concern. She responded in this way - The thing that struck me most was that this was a lettersent to Brig Ottaway as DCGS. What is in this letter, to my mind, is quite appalling in an ethical sense. 1 believe that immediately it was received, there should have been one of two responses: either to go straight back to lan Gordon and say, you obviously haven't got enough work to do; or alternatively, a more formal route saying this is a totally unacceptable situation to bring forward and to recommend formal censure. Neither of those courses were followed and that really concerns me.

The Gordon letter promoted the setting up of a council of war to be headed by DCGS. It basically says that if we can successfully screw the validity of Navy and Air cases for funding, the money will come to Army instead. Now Army has never effectively developed a capability to robustly reason its cases for funding. And here it was saying we are victims because the other services are getting more money than we do. Well perhaps they do because their capital equipment needs come in big lumps, whereas Army's come in little lumps - so we get dumped on. And there is some truth in that. But that truth does not obviate the requirement on the part of Army to fully and comprehensively ... be able to justify, in a joint forum, the priorities of the whole organisation. The Gordon letter was saying we can't get there the proper way, so lets fight them ... how can we actually use this planning system to suit our own purpose when the entire logic of the planning system is actually integrated and joint.

The second thing that concerned me, 1 guess, is the components of the strategy. For example this personnel campaign. A notion that you are going to stack the decks by putting officers into the centre in order to ensure Army's needs are protected.

116. Maj Gen Dodson who was CGS throughout most of the relevant d between receipt and disclosure of the letter and during the Inquiry, perio described his reaction to the letter in this way - My memory is that a comment was made about Gordon demonstrating that he was alive and still thinking about Army. 1 think somebody might have said it was an interesting paper - but that's about all 1 can remember. There was no discussion about the actual contents of it. 1 had been to CGS' seminar earlier in the month and some of the language in the Gordon letter was language that was actually being used at that time - in relation to a number of areas that Army worked. My memory in 1997 as a visitor to the Army base in Linton was that there was quite a lot of frustration among officers about the low priority Army was getting from Defence. There was never any particular discussion about Defence policy; or about Army's need to play to get higher priority. 1 guess it was general frustration about the fact that all our equipment was getting old and nothing much seemed to be happening about it. There was quite a bit of criticism, 1 recall, with senior officers implying that certain people weren't perhaps fighting hard enough for Army's case. The whole point of the seminar was to try and get a communications strategy amongst the officers. 1 think it was a bit of a briefing on the whole of the Defence problem; the fact that there wasn't sufficient cake! for everyone. There was a lot of talk about what was really important to Army.

The writing of the letter itself may be looked at as displaying initiative. hs the letter though the sort of letter you would expect to come from an ADA in London to a Brigadier here?

It's unusual but it's not impossible. The two knew each other very well. It was in the language of the time, as 1 remember it. Some of the phrasing 1 remember. All our people go away to Staff Colleges overseas and pick up these sorts of words. You tend to hear them around - they have a currency of one, two or more years and then they die out. And then somebody else comes back with some good ideas and som e new words.

So was it unusual?

1 think that's what CGS or DCGS or whoever spoke to me thought. That tan was just trying to make a mark with the boss to remind him that he was still around. He had put some effort into it. It was quite interesting and generally, when you look at it, it was the sort of stuff that people were It looks inflammatory now but in 1997, people were talking talking about. like that - certainly the ones that had just come out of Staff Colleges and so on - it was the language being used. It's a bit out of date now. 1 don't think it could ever have been taken then in the way it's been put this year. 1 just don't think he ever meant it like this. It's hard to make that comparison over a four year gap, especially when I'd never read the thing back in 1997.

One of the words in the Terms of Reference is the word 'propriety'. Do you have any comment on the 'propriety' of Col Gordon writing to Brig Otta way in that way?

It happens in all levels of the Army. People try to make a mark for themselves, single out somebody.

Probably someone they know personally. 1 think that was definitely the case this time. There is often a vested reason. They try to demonstrate that they should be well thought of when it comes to the promotion board or whatever. And very often the individual will have a belief that this thing might make a difference, somebody might be able to use it. It's not unique and it's not discouraged. But it's not all that common either - most officers are probably too busy to sit down and write a comprehensive paper like that in their own time.

117. If the letter was to have any influence or affect on policy, it would have been as a result of action by HQ or Army Development Branch. 1 asked Brig Marshall two specific questions concerning the letter.

118. The first concerned his objections to the letter. He responded as follows - 1 am a firm believer that if something is logical and right, it does not need to use processes that subvert natural scrutiny or the requirements of Government and organisational process. To me, what they were trying to do was something that every CGS has tried to do ever since 1 came into Army GS in 1984. 1 have watched a series of very intelligent, very honourable men deal with this very problem. But the ends do not justify the means. In my opinion, they have engaged in a process of nepotism designed to destroy the culture of honourable service to our country and to circumvent the process of logical scrutiny by illegal (and 1 use the word illegal very carefully) activities. Illegal against the Defence Act because they're undertaking activities which are not sanctioned by CD17 or, where they should have gone to C13F first, they're trying to exploit opportunities to place unfair leverage on him. 1 know CD1F has been in the position where he has not been able to move on some things that CGS has put in place because he's been pinned by the Minister and the Prime Minister. 1 believe it is unethical, immoral and illegal.

119. I then asked him about his understanding of the letter. And he replied - The thesis of the letter is that we need a single vision for Army. And 1 agree. We need to modernise Army.

And 1 agree. We will use any means to achieve that. We will exert our full influence in the economic, political, military and social environment to achieve that. If that means destroying people, terminating careers, promoting at a rate where rank is not commensurate with experience or judgement but only because they support 'the team', then we will do it. We will exploit every opportunity we are given, including the ethnic card, political card and the promise of "We'li see you right". To me none of those points comprise the culture of service or the ethics of a defence force. Rather, our role to Government is a professional one; it is to ensure that through CD1F, the Government is given the best possible advice dealing with likely policy outcomes, costs and risks for a range of capability options. Government, the legally elected body representing New Zealand, will then choose, with the benefit of full knowledge about what our policy goals are likely to be, the costs of each option and the risks that each option exposes us to. Government then makes a capability choice. It is then our jot) to ensure that those capability goals are achieved, that our forces are prepared with the best equipment possible within the funds allocated, that we perform those tasks required of us by Government. But their way is about believing they are God - that they know better than anybody else.

120. Col Vryenhoek, who as 1 noted held a position in Army Resources when the letter was received and who evidently received a copy of it, described his reaction in this way - There was nothing different in the letter to the guidance provided by Adm Teagle some time earlier in 1994.

Army had been pretty slow to address the public relations issues of the new state sector environment. We had been working under Gen Reid to start looking at public relations and building on the sorts of lessons that were learned in Bosnia over the failure of our equipment. Another issue was the need to be closer with our constituency because we had run down the Territorial Force and they, generally, were our link to the communities. We also lookedvery closely at the other two services who had developed very good relationships with local communities. But as for starting a second front - that's talking about undermining politicians. 1 don't think that thought had really crossed our minds. By doing the first few things, by establishing those links, you can generally achieve the rest. And now, reading fan's letter in the context of the time, 1 think it was maybe him saying we had missed an opportunity. But he wasn't privy to the work that had been going on to build up links with the communities, with Government and within Defence. 1 remind people that the governing National Party made the decision that Army was to be the number one priority. And that logic has flowed through because we are being deployed on peacekeeping missions.

121. As to the appropriateness of the letter, he responded - It's a fin6 line. It sits in the grey area. 1 don't think these sorts of comments are quite appropriate. But 1 know if you took the formal wording away, it is the theme of regular discussions and academic papers written by a wide range of Defence officers for a wide range of courses. The attacks Army has had to take on the chin are now crossing the line between the political arm and the military arm; and the military arm will always be subservient to Government. With the allegations of conspiracies and the targeting of individuals in the military, there is now starting to be a belief, certainly amongst our junior people, that if a political party doesn't like you any more, you don't get funded and you see your people get attacked instead. We're now an easy target for Government. The problem our soldiers have is separating the political attack on Army from the job they're required to do on a daily basis.

This letter, if it was implemented, should be a source of worry. There was nothing while 1 was in Army GS (and 1 left in December that year), that. implemented a ' second front. 1 believe there would be a number of people saying that it's just in keeping now with the total Defence environment.

122. The evidence points clearly to the letter not having been acted on b y Army Development Branch. 1 interviewed lt Col J13 Bright who was AWS Dev at the time the letter was written. He explained that his position would have been "the natural appointment to have executed such a letter if it was going to be executed". He had no information to suggest that the letter was going to be executed. Indeed, he said 'I would have thought the information 1 had would have been to the contrary". As Maj Gen Dodson said, the letter "... wouldn't have got any actioning by Development Branch because he [Lt Col Bright] set the priorities for work- 123. 1 also interviewed Col RP Cassidy who explained that he was familiar with the issues in the letter. He held the position of GS01 Ops, Army GS at the time of the letter. He said V am very familiar with the events of 95, 96, 97 by virtue of being a Major in Dev staff at the time and being the initial drafter of a lot of documents or the re-drafter many times". He did not see the Gordon letter until it was released publicly after being tabled in the House.

124. 1 asked Lt Col Hayward who said "I think that the whole thing seems to be quite an amazing distortion of what was going on. There's a lot of innuendo, a lot of speculation ... 1 could probably say quite categorically that the Gordon letter had no influence at all on things like the Defence Assessment. The work we did was limited to just cutting and polishing words, making sure that the right themes were in there, and that there was a correct balance".

Policy developments between date of. letter and its release 125. Just over four years elapsed between the date on which the letter was written and the date on which it was released. In this period, there were numerous policy developments which eclipse the policy issues discussed in the letter.

126. Col Gordon identified the developments he was involved in in this way - What evidence can 1 produce to support that what 1 say now is what 1 meant then? And 1 guess the counter to that is what evidence can others produce to the contrary? But 1 won't go there. What 1 can produce is evidence showing that when 1 got back to New Zealand and was doing a job that was having to address (for CGS) all these issues that were raised in my letter, 1 didn't go and establish covert teams running campaigns behind everyone's back. Rather, what 1 did do is introduce a capability, a thinking and a model in order to better represent Army in NZDF. And it was successful.

127. Col Gordon's position is supported by others who have drawn attention to the policy developments in the intervening years. It is supported too by the public documents recording and reflecting Army policy.

Policy - and the meaning of policy

128. One of my terms of reference requires me to enquire whether the contents of the Gordon letter represented the policy of Army or NMF As will become apparent, there is plainly an issue about the meaning of the word "policy".

129. 1 begin by setting out C61 Gordon's view - The intent of the paper was to deliver Government policy. It's my view that the paper never, at any stage, deviated away from that intent. 1 also consider that it chose, as a means of articulating Army's role in that Defence policy, a DPS which is the approved NWF process. To that extent, it conformed with the policy of the day. However, cognisance needs to be taken of the fact that there are one or two areas where the means of conveying messages are improper.

130. As to whether the views still hold currency, he said - 1 believe a number of the views expressed were not only mainstream, they have since become both Defence and Army policy. Examples are that both the previous and current Governments identified priority of funding to the land capability and Army now has a very good and rigorous operational analysis capability in place. So to that extent, the views held currency then and have been reinforced by what's happened since. However, there are other issues relating to how the message should be delivered.

131. In dealing with the question of policy, 1 propose to set out the views of both CGS' involved on the basis that they are in the best position to spe*ak for Army policy.

132. Maj Gen Reid answered the question about policy in this way - To the best of my knowledge, the views expressed in this letter do not in any way reflect the views of the New Zealand Army or NWF as at March 1997, or at any date before or after. My views are stated very clearly in my address and, in retrospect, 1 feel some responsibility for what Cot Gordon has done here. The address 1 gave to the seminar clearly says that we need to take into account the equipping of Air Force and Navy, that we need to work through the channels, that we need to fully participate in such activities as the Defence Assessment, and that we need to ensure we advocate and argue our case very clearly in the centre of Defence and with the control agencies we deal with.

133. Maj Gen Dodson dealt with the issue in this way - It doesn't represent in whole the policy of either Army or NWF in 1997. I'm not sure it actually represents it in part either, but 1 do.remember the seminar in March 1997 where we talked a bit about critical mass. 1 know we talked about a centre of gravity for Defence policy too. I've got a funny feeling that some form of strategy document was presented by CGS concerning poor communication/public relations, but 1 can't remember the details of it.

Were they policy?

Not really. They were discussion points in the seminar as 1 recall. The expressions were 'flavour of the month' in 1997. Since I've been CGS, we haven't actually been using that terminology. So 1 don't believe it's been Defence or Army policy, in whole or in part.

And the Terms of Reference go on to ask to what extent do the views hold currency now?

It's not just the language that's out of date. 1 think as an Army we have moved on. There was a lot of frustration in Army at the lack of priority it was getting from Defence. But there was also a divisiveness amongst the officers. There was a belief that there was more than one way Army should go into the future; an approach to be taken with Defence in terms of getting higher priority. When 1 came in 1998, 1 tried to pull the officer corps together. It's been reported in a pretty miserable fashion, but the theme 1 used wasthat we have to speak with one voice. We need to be saying "this is Army's position". In 1998, the accent was on a vision for the future which we now have achieved. But it wasn't just about saying we've got to speak with one voice. 1 arranged a whole series of seminars with a whole range of different people to try and involve as much of the officer corps as possible in the discussion. So when decisions were made, no one could stand back and say they~ hadn't been asked. I'm really saying we've moved on. In 1998, we had a long-term plan for the Army, but no such thing existed in 1997.

134. Having regard to his early receipt of the letter and his seniority, 1 also set out the views of Brig Mateparae - To the best of my knowledge, it didn't reflect the views of those in the Army, certainly not those who 1 was talking to. But there were some -underlying things, like the changes of CGS, which gave an appearance that Army couldn't get its act together.

135. CIDIF, Air Mshl CW Adamson, was not involved in any way with the Gordon letter or the issues which arose from it. As far as he was con cerned, the letter did not represent the policy of NMF.

Issues arising from investigation---the tensions

136. What has emerged from my investigations is that the Gordon letter has had meanings and interpretations attributed to it which were not ~intended. The position taken by readers in many instances can be traced to tensions arising from events occurring in or dealings with the Army. The theme of their experience has then been associated with the Gordon letter.

137. It is probably helpful for me to canvas the various issues which have emerged in the course of my investigation, and which illustrate the tensions that exist. 1 deal with them under a series of headings.

Funding and Army's share

138. There can be no doubt that the tensions which have been exposed by release of the Gordon letter result in part from the effect of Government policies on defence spending- 139. In the passages which 1 have set out from my interviews with Maj Gen Reid and Maj Gen Dodson, the effect of the cuts has been identified. The illustrations given by Brig Marshall and Messrs Johansen and Bradford demonstrate the practical effects of the policies.

140. The tension that resulted, particularly following Army's embarrassing experience in Bosnia, led to demands for modernisation of equipment which because of Government policies on spending, could not be met. The interplay between Army, HQ NZDF, MOD and Government simply heightened the tension.

141. The press by Army for funds has led to another tension. It arises from the proposition that Army Was seeking to undermine the other services in order to get a larger share of funding. The proposition is disavowed by both former CGS' (Reid and Dodson) and by Col Gordon as a proper interpretation of his letter.

But of course it derives support from the evidence of Brig Marshall and Mr Johansen.

142. There is something of a subtlety if not a sophistry in the way in which the argument is put. Where there is a finite amount of funding availab le, the argument for it must necessarily involve an analysis that the case of one of the services is more deserving than the others. Such an argument must involve a proposition that for reasons which would have to be set out and justified, the merits of the service seeking the funding outstrip the merits of the others.

143. The very subtlety of the argument has led to the conclusion that Army has been seeking to undermine the other services, with the result that yet another tension has been created.

Loyalty

144. One of the real tensions within Army and between Army and HQ NWIF is the question of loyalty. More particularly, the issue comes down to responsiveness and obedience to orders.

145. 1 have set out Maj Gen Reid's view already. A graphic illustration which he gave in his 1997 seminar address was in the following terms - in one case the final papers had been prepared for Ministerial approval when we were confronted by our higher Headquarters telling us that a unit commander had proposed an alternative purchase that would - to use those words that strike terror into my heart - "be more economiC. Needless to say, the capability remains unpurchased and is now months if not years away as we go back to a full justification against the unsupportable alternative proposal - ail the result of a few injudicious words over some drinks.

146. Maj Gen Dodson put the position this way - There has been and clearly still is a cult of disobedience in Army. It was done by either not carrying out CGS' directions or, even more popular, telling Defence direct that the position taken by Army wasn't viable for whatever reason. Defence was only too happy to accept a contrary view and when CGS came in and said this is what Army's position is, they'd attack it on the basis of what another Army officer had said about it not being the way to go.

Several CGS' in the last decade have been paralysed because of this cult of disobedience. So 1 said, if we are ever going to get anywhere, we have to speak with one voice. 1 undertook to engage first in full and frank discussions on issues which needed to be addressed but said that once a decision was made, the requirement was that you stay with Army's position. 1 have not made any unilateral decisions on anything significant. It has always been after a process of consultation with senior people. Now that is not to say of course that everybody's opinion or view can be accepted - we all have to compromise, including myself.

147. The sort of issue raised by the two CGS' is illustrated by Brig Marshall's attitude to his position in Development Branch of HO NZDF. He put it this way - In February and early March, 1 went and talked to Ge ' n Dodson in my new capacity as AC Dev. He told me that 1 was his man in the centre and his aim was to slide Army projects through the system. 1 told him that my responsibilities were no longer to CGS but were instead to CDF; that in fulfilling my responsibilities, 1 may very well wind up having to clash with Army. He needed to understand that 1 would fulfil my obligations to C13F scrupulously and would treat all services exactly the same. 1 told him 1 could give him the weather forecast but would never give him the news: by this 1 meant that 1 could tell him what he needed to do, but 1 could not write the material for him. Equally, 1 would not tell him what CD1F was doing. 1 said finally that 1 would not act in Army's interests if 1 deemed them to be illogical, unbalanced or against Defence's wider interests.

The A and 8 teams

148. Another tension which 1 identified in the course of the Inquiry was a proposition that within Army, there were A and B teams.

149. This was'one of Brig Marshall's complaints but he was by no means alone in articulating the proposition.

He identified a number of personnel whom he described as being in the A team. He regarded himself as being in the B team.

150. 1 investigated this concept.

151. CGS Dodson dealt with the position in this way. He began bluntly - 1 am just getting a little bit fed up with being told that the Army is running an A and B team system He elaborated - The very first time that 1 heard it was an issue, 1 was actually overseas in Malaysia. It was when C13F, as part of a press release concerning these Inquiries 1 think, announced that one of the problems with the dysfunctionality in the Army was due to there being an A and a B team. That was the first time 1 recall anyone articulating that view. Some of my officers have said the sentiment came from lan Marshall (and perhaps others), but that was all very much in-house and a long way below public level.

When 1 came back, 1 actually asked CDF why he'd said that. His answer was that other people were saying it. And yes, we do have an A, B, C and D team. But so do the other two services. It's a requirement of the Promotion Board. In 1998, 1 was given instructions by the then MF that 1 had to put senior officers on contract - that is limited term engagements -for all promotions to Colonel, as well as those above the retiring age for rank. It was also my decision at that time to take the approach of giving merit more importance than seniority. 1 talked a lot about that in 1998199. 1 interviewed every officer from the rank of Lieutenant Colonel upwards and talked about their respective careers in relation to this policy. I've had most thank me for the information. But undoubtedly, there are going to be some people who are disturbed by the fact that despite having a clearance for promotion, they are told instead that somebody else will be coming through ahead of them. I've identified three officers recently of senior rank (Colonels and above) who 1 think are probably disgruntled and have some sort of grievance.

152. The concern which 1 have about Maj Gen Dodson's explanation is that the impression there is an A and a B team has a considerable degree of currency. Having regard to the seniority and experience of some of those expressing the view, it is hard to reach the conclusion that there is no foundation for it.

153. There are of course laudable features of gathering a loyal team who promote the proper objectives of Army. Inevitably, in the choices which are made, there will be those who are disappointed and become disaffected.

154. The issue seems to be deeper than that. 1 raise it only because it is a tension of a kind which, in my view, needs to be investigated further so that the real position can be exposed. Any issues arising f rom such an investigation can then be dealt with.

Positions of influence - promotions and appointments 155. Another tension associated with the A and B team concept was a proposition that promotions and appointments were manipulated by Army in order to achieve Army's objectives.

156. 1 enquired into the system for Army promotions and also appointments. 1 made the enquiry because of the references in the Gordon letter to the positioning of Army personnel in key positions and supporting their career paths.

157. There is an established and elaborate process for considering and deciding on promotions. The procedure was described to me by Air Cdre BR Ferguson who was at the time. AC Pers. 1 was concerned to ascertain whether there was scope for influencing promotions in an improper way.

158. He explained his role in this way - 1 sit on each of the three promotion boards. 1 sit on two as a non-voting member, but as a voting member on Air. 1 also report back to CDF if 1 notice any inconsistencies. That has occurred on occasions.

So if there was anything in the Army promotions system that was outside the rules or an inappropriate process, that is for you to deal with?

Yes. That is the formal process for the promotion confirmation boards. 1 don't make a judgement on the material put forward. My role is process. 1, do not interfere with the evaluative judgements of the officers who know the candidates better than 1 do. It is not my role to comment on the correctness of the evaluation. My role is to ensure fairness. And 1 have to say also that 1 have never, until reading this letter, had any cause to worry about my dealings with the three services.

159. In the course of my Inquiry, a number of criticisms were made of promotions and attributed to the procedure which was adopted.

160. 1 asked CGS Dodson about the system for appointments. Again, my objective was to deal with the issue of influence. He described it in this way - The process is that 1 would have to recommend somebody for a Defence appointment. A number of people get to see it. There is a veto system; if no one says this person is unsuitable for any reason, then one would assume the posting goes ahead.

So the initiative starts with ArmY.

That's a moot point because it can occur in a mixed way. We all know there's a vacancy coming up.

Discussions about senior appointments take place between the Chiefs and we end up 'knowing' which service is likely to take it. It doesn't matter whether Defence prompts us to make a recommendation, or whether Army decides to put forward the recommendation because the final decision rests with CDF. He has to concur with the appointment. 11 is fair to say though that probably, ' in a lot of cases, he wouldn't have enough personal knowledge about the candidate and will readily accept the Chiefs' recommendation.

Miscellaneous tensions 161. In the course of my Inquiry, many other issues reflecting tensions similar to those which 1 have been discussing have been brought to my attention. 1 identify the relationship between Army and Communications Trumps, the operation of the Management Initiated Early Retirement Scheme, anonymous correspondence concerning conduct within the Army, an anonymous paper purporting to reflect the views of an Army Colonel, a personal grievance complaint, reports of conversations reflecting views which, when put to those involved, have been denied; all of which 1 have investigated and which 1 record simply to illustrate the nature of the tensions involved.

Conclusion on tensions

162. 1 have deliberately recited the tensions and not drawn any conclusions about them. 1 do not see that as a function of my Inquiry, particularly because of the scope of my terms of reference.

163. 1 set them out because plainly, there are matters which need to be aired and dealt with in the interests of the proper administration of a. defence force.

164. 1 deliberately disavow the description "dysfunctionaV in relation to the issues which 1 have been discussing, although the word has been used frequently in the course of my Inquiry and elsewhere. 1 describe the issues deliberately as "tensions". The former CGS Reid described those which he identified as "frictions".

1 see the justification for that description.

The relevance of the letter - a conclusion

165. The letter needs to be brought back into context.

166. The context is this. The Gordon letter is dated 21 March 1997. It was correspondence between a Lieutenant Colonel who was then ADA in London to his Brigadier in New Zealand. The letter was not treated as official. Some copies of it were circulated and dealt with in various ways by Army personnel.

167. In the material disclosed to me in the course of the Inquiry, there is no reference to the letter at all. But there is a reference to Col Gordon's views in the minutes of the CGS' 1997 seminar (as 1 have noted).

168. The letter was not dealt with in any official way until its release in August 2001, more than four years after it had been written. In the meantime, Army and NWF had worked through a. series of policy initiatives which capture what can be described strictly as policy (as 1 have discussed already).

169. There is no doubt that interpretations of the Gordon letter and views held about its relevance to Army initiatives in the intervening years are genuinely held. The evidence though points to this being a coincidence in the sense that the Gordon letter did not formulate or fashion the views or approaches complained of. They seemed to exist rather as a result of the tensions which 1 have identified. The letter did not intend to reflect those views or approaches. The. letter was seeking. a new initiative. But the letter has come to be regarded as tangible evidence of the complaints which 1 have identified.

170. 1 return to Col Gordon's own views as to the context and relevance of the letter, which he put in this way - The only point 1 would make is.that, in my view, the letter needs to be read in its entirety to understand its contents. It develops in a certain way. To extrapolate bits of information from certain parts can put it in a different context - can put a spin on it - which then misleads its intent. 1 ask also that you take into consideration the fact that it is a collection of views. The letter was not intended to be policy. Just because it addresses a number of issues doesn't make it policy. Some of the views may well push the boundaries of acceptability, some may have gone beyond the boundaries of 65 acceptability but, in the end, they are only the views of one person to another. They were never intended for anyone other than the addressee.

171. In the second interview, he elaborated on the context of the letter in this way - I'm extremely concerned with the interpretation that has been placed on my letter. 1 am of the view that it has been deliberately misinterpreted. 1 agree now and appreciate that. the letter could be interpreted in a number of ways. But of course, 1 know the way in which 1 wrote it; 1 know why 1 wrote it; and 1 know the way 1 intended it to be interpreted. The person who leaked the letter must have believed that Army was forwarding its position at the expense of Air and Navy. He obviously thought, "there's the proof - I'll give it to the Opposition".. That's erroneous because first, if a senior officer saw my letter and felt there was something wrong with it, there are numerous things that could have been done. For instance you can charge another officer; if you feel that a wrong.has been done, you are actually obliged to do so. And if a senior officer felt that the evidence should be looked at further, then other avenues could have been explored (such as referring it to CGS or CDF). So 1 ask the question: why did it go there? And the answer isn't what Mr Johansen said, i.e. 1 felt they were doing something wrong and 1 wanted to rectify it". Rather, it was 1 want to create an effect and the only way 1 can do it is by handling it this way".

I've said all along that there are views in my letter which, when read in hindsight, you just wouldn't follow through on. And especially when they are taken out of context. However, the main thrust of my letter is that Army is not heard within the DIPS. Why aren't we heard? Because our message is wrong. We develop it the wrong way, we deliver it the wrong way, and we keep changing our minds. And how do we rectify that? We gain control, or the requisite degree of control, over the DIPS. But control isn't about controlling people.

Control is about process. You develop a rigorous process so that the decision-makers accept. your arguments. Nowhere have 1 said that Army officers should be replacing Air and Navy officers in the purple plot, or that they should have a greater degree of representation. What 1 am saying though is that the Army officers who sit in key positions need to be skilled to do the job. You don't take someone who is good at something else and put them there simply as part of their career development. They've got to be skilled before they go. That's the point 1 was making. That is what using the DIPS is.

Never in my letter did 1 suggest that something should be done at the expense of the other two services. In fact, my paper reinforces the point that what we do is not at the expense of the other services. What we do is make our case better. 1 really need to reiterate that point. We don't grow at the expense of Army and we don't grow at the expense of Navy or Air; that's not the intent of the paper. The intent of the paper is that the direction we take is the direction that Government wants.

And proof of the pudding: when 1 took over as ACGS Dev, 1 introduced JANUS, a simulation capability tool which allows us to do operational analysis. 1 turned thinking from replacing like with like, to one of analysing future operational concepts and future operational environments. In the good old days, you had a piece of equipment, it came to the end of its life, and it was replaced with the same but newer. It was - we've got 113 APCs, we now need to replace them with 113 upgraded APCs. But that never met our future operating concepts. So 1 introduced a force development cell that addressed those issues.

The point is, what evidence can 1 produce to support that what 1 say now is what 1 meant then?

And 1 guess the counter to that is what evidence can others produce to the contrary? But 1 won't go there. What 1 can produce is evidence showing that when 1 got back to New Zealand and was doing a job that was having to address (for CGS) all these issues that were raised in my letter, 1 didn't go and establish covert teams running campaigns behind everyone's back. Rather, what 1 did do is introduce a capability, a thinking and a model in order to better- represent Army in NZIDF. And it was successful.

172. Apart from issues of context, there is another dimension which is important in drawing conclusions about the letter. There are some serious implications in criticising initiatives taken. by officers holding the rank of Lieutenant Colonel who take it upon themselves to express views to their immediate superior on issues which to them seem to be relevant.

173. This theme was captured by several of those whom 1 interviewed.

174. CGS Dodson put it this way - 1 think the fact that it was leaked to politicians in the first place is a disgrace. 1 think the fact that it's been reported and held out to the public as having a sinister meaning is a disgrace. 1 think it's sad that a young Lieutenant Colonel has got to be mindful of the fact that somebody might take a document he writes out of the spur of his own professionalism, probabl~ in the interests of being helpful. I'm sure there was no real belief that he was going to change Army policy. And to find it's been thrown back in his face four years later as a mark of sedition against the Government is appalling. The whole thing has been overstated and 1 feel for lan Gordon over this. 1 have asked him what his views are. He said 1 know now it couldn't have flown, but at that time I'd never worked in Wellington". People are going to have to watch what they write, even in the staff papers they do as part of their education process, just in case somebody looks at them in five years time. And a good career is threatened as a result of it. In my mind, the fact that the politicians took it seriously is even worse than the fact that somebody leaked it in a mischievous fashion in the first place.

175. Similarly, Brig Ottaway took up the same theme - All 1 can say really is that I'm somewhat disappointed in the way this has got into the public arena. 1 think it may well have the effect of strangling people from expressing very sound opinions on a wide range of subjects. 1 think that's a real danger for Army, particularly in the years ahead with the challenges we're going to have to face and which we were always going to 67 have to face. Army was - and 1 think this is true of NZDF - trying to become an organisation endeavouring to capture the academic and practical experiences which our people have. We were encouraging them to give us ideas that were intended to be for the benefit, not just of Defence, but also to the security of the nation. People may well think twice about offering an opinion in the future.

176. Looking at the issue from a more junior, level, Lt Col Richardson commented on the role of staff officers and then went on to examine the quandary which exists for junior officers as a result of episodes like this. He explained - As an Instructor at the Staff College, we tell our students this: as a Staff Officer, your key responsibility is to advise caution and give free and frank advice on any matter. However, once the decision is made by your commander, it is also your responsibility to bang your heels together, salute smartly and line-up behind that decision - not to re-litigate it and not to re-debate it. And if asked, it is your responsibility to present the decision your commander has made as if it was your own and to argue it accordingly.

And then in dealing with the implications - This is a matter of some four years ago and, to the average crop of young Majors and junior personnel that 1 deal with on a day-to-day basis, it doesn't really cross the threshold. But some of the rest of us who are more immediately affected by it have talked it through. The thing a number of us are finding really very frustrating is that it is almost impossible to prove that nothing happened if nothing happened. It's very easy to prove that something did happen because it will always leave a 'trail of evidence. However, if it doesn't leave a trail of evidence, then it's just "you've covered yourselves extraordinarily well", and "Oh you would say that wouldn't you". We seern to be up against a political perspective - 'that because the air combat arm has been taken out, there must be an immediate causal link between the Gordon letter and that event taking place.

177. This passage captures neatly the polarised position of those involved in the Inquiry. Col Gordon's position*is that he was setting out a strategy which he thought Army should follow to achieve results. Critics of the letter maintain instead that it in fact reflects the way in which Army was conducting itself; indeed, they point to a number of instances which they say support their argument.

178. The one conclusion which can undoubtedly be drawn from all of this is that Col Gordon rues the day he wrote the letter. He recognises now that aspects of his letter can be justifiably described as improper, but argues; that it is being made into something it is not.

179. Despite the explanations which he has given, 1 consider that Col Gordon displayed a significant lack of judgement in writing the letter.

180. Some of the language is intemperate. Indeed, it has been commented on adversely by a number holding senior positions in Army as 1 have discussed already. Words like "exploit", "campaign", and attack" in their context are more than normal use of military terms. The language of.the letter is, in my view, divi sive and antagonistic. There is an element of brutality in the language.

181. 1 think Col Gordon is right to acknowledge now that some of the initiatives which he proposed were improper. What is of concern is that he admits he did not have the requisite experience at the time to appreciate that they were improper. He acknowledges this now as a result of his subsequent experience in Army GS.

182. However, the explanations which he now makes of the letter cannot, in my view, excuse the lack of judgement which he displayed at the time. He was not an inexperienced junior officer. He was a Lieutenant Colonel holding a responsible position.

183. For me, his lack of judgement, even after considering his explanations, remains an issue.

The BUNCE E-MAIL

Introduction

184. The Bunce e-mail is in an entirely different category from the Gordon letter.

185. The essential feature of the Bunce e-mail is that it was a communication by Mr Bunce as part of his work within his job description. It was aimed at drawing the attention of naval personnel to the rules fo rmulated by Navy as guidelines for communicating with the media.

186. The essence of the e-mail is that it captures topics which should be promoted among' media for publicity, and warns of the dang ers of being reported in the media on topics which are against the interest of Navy.

187. 1 deal with my investigation under a series of headings.

The circumstances in which the e-mail was written

188. 1 asked Mr Bunce to explain the circumstances in which he came to write the e-mail. He responded as follows - 1 have here a copy of a clipping from The Press dated 13 March' - "Defence Change Disturbing". It reports on discussions with senior naval officers and quotes one officer by saying "however the officer believes the Government may be getting biased advice from the green mafia". The second item I've got is a letter that was published in The Evening Post on 16 March ... from John Ladd of Khandallah who is also a serving officer in Naval Staff talking about the fact that Defence views don't add up.

On Monday the 1 9th, in my role as Naval Corporate Relations Officer, i sent off an e-mail because 1 was concerned that two people, one whom 1 knew and one whom 1 didn't know, had broken our policy rules. Those are our guidelines for communicating with the media. Over the last two or three years, we ve had a lot of instances of material getting to the media which shouldn't have. 1 will qualify that - a lot of information that is not Navy information but is Defence information has got to the media. We've had a very strong push to train our people on what they can and can't say.

Mr Bunce's role

189. 1 then dealt with Mr Bunce's position and the scope of his work. He explained it in this way - I've brought along a copy of my Job Description. You will see that my responsibilities are managing public image promotion, resources, strategic planning. In Naval Staff, 1 would see myself as coach and mentor so far as dealing with the media goes ... 1 have this practice of sending an e-mail to senior members of Navy (i.e. Captains upwards plus one other) in order to keep them in touch with what is going on from a publicity point of view. Sometimes 1 send several a week; sometimes there will be a gap of a week or two. But they are a common pattern.

If the Minister puts out a press release, I'll circulate it. If anyone puts out material, my job is to get copies of it and make sure they all know what's happening.

In this case, 1 sent my e-mail. It was essentially a warning. It told staff not to break the rules. It said that we were concerned with promoting Navy. Publicity for Navy is quite important and 1 felt that if people did things like this, we would be closed down completely; we would be unable to continue with our normal publicity programmes.

After 1 sent it, things moved very quickly. 1 got a response from DCDS very promptly - in a couple of hours. He told me what he'd done with it. By then, it had obviously gone beyond Navy. It had been given to a CDF staff meeting the same day. 1 don't know how many people were in that meeting but obviously a number of them were aware of it. Within a few days, 1 heard it had moved across to Parliament.

Analysis of the e-mail

190. The features of the e-mail which called for discussion are these - 190.1 The heading: "embarrassing items";

190.2 The media attitude to defence investment;

190.3 The media view of politics;

190.4 The use of the media;

190.5 Caution with the media, both in relation to material discussed and language used;

190.6 The approach generally to the provision of information.

191. The following extracts call for discussion -

191.1 The heading: "embarrassing items",

191.2 "The media strongly oppose the prevailing approach to Defence investment",

191.3 "We must continue to engage with the media and we don't want to lose the momentum but a reminder is necessary that anything said to any.reporter (and sometimes, non reporters) or written anywhere can be published",,

191.4 a good example of the media view of politics",

191.5 "The pros see politics as war and the smartest (least caring?) party wins",

191.6 'It is crucial that we don't opt out of the defence discussion because we don't like the way the pros operate. As military people and professional ma riners we are often the only ones who can provide the technical input for the debate - think how historians will judge us in 50 years time if we keep quieC,

191.7 "Background chats can backfire as reporters have their reputations to maintain and won't worry too much about the impact their article has on you so the more emotional the quote, the better for the story (.The Press article used the words 'green mafia')",

191.8 "Don't stop - the Dom's article on ship types last week was very useful material - just avoid Long John Silver language",

191.9 Don't be tempted to vent by writing/sending items you think will not be published - STUFF, the regional news roundup website, has a dinky mechanism where you can respond to an item but it does not say it will be printed as a letter - which it was

191.10 "... talk slowly and clearly, breathing regularly";

Mr Bunce's explanation of the e-mail

192. 1 gave Mr Bunce the opportunity to deal with the e-mail in his own terms. 1 set out his explanation in full - First off, can 1 say this is an in-house e-mail written to a group' of people who were fairly close. For that reason, it is obviously going to have language and connections that someone else would not necessarily make. 1 t hink this is an important point to make; colleagues writing to each other write differently from strangers. We've been doing very . well with publicity. Part of our effort has been to educate the public of New Zealand about the role of Navy - we feel it's not very well known. If we are to be respected and valued, we've got to do something about it.

We want to keep on engaging with the media. And if people write things like this letter, we could end up with a blanket ban on talking to anybody. The third paragraph is merely me inserting something 1 see as educational in that politics, as seen by the media, is now a very black and white business. 1 put that in because our group doesn't always think the same way as the media about politics; a lot of our military people don't like dealing with the media. What 1 was trying to get at is that sometimes you will get caught out - "Yes, they're a tough lot, but we still have to deal with them". 1 go on to reinforce that we don't opt; that we're the ones with the technical information; that we can fill an educational role here.

The fourth paragraph says we still have a responsibility to play in educating the public (particularly on the technical side) about what Navy does and what it is capable of. 1 included the bit about historians because I'm a bit of an historian myself - it just tends to come up in my writings. The fifth paragraph stands by itself too. As 1 say, innocent talk can backfire.

What did you have in mind?

The Press article is obviously where the reporter got information from - it was initiated in the 'chats'. The officer was comfortable then but, after reading it in the paper, he would have felt he'd been dropped in it. 1 was trying to point out that this was a typical technique. Whilst we still want our staff to keep talking, we also want them to be very careful about what they say. it's what a coach or mentor might say to someone explaining the situation; that although these nasty things happen, we still want you to keep on engaging with the media.

That expression 'green mafia'is that a reference to the army?

Yes.

What do you mean by the expression 'Long John Silver language'?

Piratical, critical, blunt. Green mafia is not appropriate. You just can't go around calling your colleagues that sort of thing in public.

is that an expression that is used?

it's not widespread, but 1 have heard it a few times. You've got to remember that I'm not a military person. I've not got a military background. But 1 am interested in language and it's a phrase that 1 have heard around.

Let's go to the next paragraph The next paragraph stands by itself * . If you've got strong feelings, no matter how strong, don't write them down because it's a trap. My view is that it is better not to write anything down because it can come back to haunt you.

Is that a reference entirely or only to the Ladd incident?

Yes.

What's the fatherly advice in the last sentence of the fast paragraph?

Just keep your head and think before you speak - don't rush in and do something. The letter suggested that the writer was pretty steamed up about something.

The Navy is doing some really good stuff. This year has been fabulous in terms of organisational change, focus, getting it's act together. It's been terrific. It's bonded together. We've had another group doing strategic planning.

I've got a feeling that this is an organisation that's finally coming together. We don't want to be distracted. We don't want to be put off track unnecessarily. This is why we coach our people to keep in touch, but under very clear guidelines. It is something pretty important to me - we want and need to do the right thing.

193. He made an additional comment about the use of the subject heading "embarrassing items" in these terms - Because it was. That describes it exactly. We have this process of trying to keep open channels with the media about non-sensitive items concerning day-to-day stuff; about keeping Navy in the public eye. Unashamedly, that's my job. And then when someone does something like this, it's very embarrassing because 1 can immediately see the repercussions. One of our senior captains makes a comment about Government policy - 1 didn't want anybody making comments about other forces; 1 didn't want anybody using throwaway lines. And 1 haven't tracked down the first one yet. I'm beginning to think it might even have been part of a general discussion in a bar - that it wasn't a direct interview. It was embarrassing to Navy to have two comments made. It made us look critical of the other forces and of the Government.

1 expect this wasn't the first time there had been an embarrassing item Well in actual fact, we've got a very good track record. 1 can't really think of any of our stuff that has leaked out - 1 mean this is a bit over the top how did it get to Government? 1 still cannot believe that any of our people would send it across. We are a cohesive service. We have got a fairly collective philosophy, apart from the odd mistake which we all make. Because of our very good track record, the subsequent events are quite amazing to me.

Reaction to the e-mail

194. The e-mail was sent to 17 naval personnel; namely Cdre A Peck, Cdre AD Clayton-Greene, Capt B Pepperell, Capt CM Beentjes, Capt DV Anson, Cdre DI Ledson, Cdre DC Wright, Capt EV Good, Capt JO Ladd, Cdre MJ Wardlaw, Mr NA Williams, Capt PJ Williams, R Acim PM McHaffie, R Acim RJ Gillbanks, Mr R Bunce, Capt SJ Streefkerk, and Mr SM Duff.

195. The e-mail was intended only for the named recipients in the heading. Apart from the additional recipients to whom R Acim Gillbanks referred the e-mail, Mr Bunce did not know whether it had gone to anybody else. He received "a couple of replies". 1 set out the exchange with Mr Bunce concerning the response - 1 have a reply from R Adm.Gillbanks. And 1 have a reply from Capt Ladd. 1 have a note of sending the message on to Warren Inkster (Warren is not a good clearer of his e-mails so 1 wanted to make sure he had received it). 1 think 1 might have got some acknowledgements, but no comments or anything like that. 1 don't usually get replies; in fact 1 know some of them come and tell me quite often to stop sending them - they go in the rubbish bin. But 1 feet 1 get enough positives from other people to know the exercise is worth doing. And particularly people like Cdre Clayton-Green who's in Australia. I've had feedback from him, for instance, that it keeps him in the picture about what's happening here.

Among those recipients, was there any comment on the information in the e-mail?

One response was from the person who wrote the letter. And he knew it was aimed at him. He made a comment, yes.

And what was that discussion with Capt Ladd?

Yes. One of his sentences reads, "The teacher in you is coming through with the politically correct public anonymous chastise". And it was. And he was embarrassed. But there wasn't a lot to discuss.

There it is in black and white. The messages are there. You can't go and over-anaJyse it. A couple of guys had screwed up and 1 made my point. We still don't know who the other one was. So, a few platitudes from me on how to carry yourself, and then get on with it.

196. His summary of the status of the e-mail was this - Informal e-mail. There is no status in the system; no filing, no reporting. It is just a communication between me and the senior management team.

197. 1 followed through the issue of reaction with DCDS, R Adm Gillbanks. 1 dealt first with Mr Bunce's position in relation to information of the kind conveyed in the e-mail.

He's the Corporate Relations Manager, Communications Corporate Relations. His principal role is to be the point of contact for management corporate information within Navy. When he first joined Naval Staff, his principal role was to edit, produce, and publish NavyToday, the monthly in-house information booklet, intended to be for the information of those who are in the service, those who have recently left the service, and those who have no connection with the service at all. Therefore, the audience was going to be from politicians right down to the guy on the street.

Jo.has always taken the view that, without lobbying per se, the more people who know about what is going on in an organisation, the more comfortable they will be with that organisation. So he's been at pains to publicise Navy around schools, around service organisations and invite MPs to visit, particularly when the new ANZAC ships arrived here in New Zealand. The take-up on those invitations was always interesting, but there was no particular targeting going on. Jo obviously had a concern for the way Navy was presenting itself and wanted to ensure it was being represented to as wide an arena as possible. This was simply his way, and perhaps not a particularly subtle way, of giving people an update on what had recently occurred after a fairly major naval exercise based out of Auckland. What he's saying is, the media is interested in what we're doing; so go ahead and inform them in the proper way; don't back off and say "No comment". Jo has always said that saying "No comment" just elicits a lot of comment that it's better to say 7m not in a position to answer that; you'll have to direct that question to somebody else".

For my part, reading this e-mail was just a continuation of Jo doing his job. 1 put that comparison with other things that I've seen him produce around Naval Staff and this was really just for information, rather than anything sinister. Jo is not a sinister sort of a chap. He'll have an eye on the main chance, but always within the rules.

198. As to the circumstances in which he received the e-mail, he said - The e-mail was received as a general message to senior people in Naval Staff. It was unsolicited. Jo had obviously had some dealings with the media during a visit to the Naval base and there had been publication of an article in, 1 think, The Press. 1 can't recall clearly, but 1 believe the e-mail used some rather unusual terms which 1 interpreted as a "Joism" to draw to people's attention that we do have a relationship with the media and that people are able to comment on matters within their area of expertise. However while there is no limitation on that, they have to be wary of discussions with reporters and others in what was then a reasonably volatile environment in terms of the politics associated with Defence capabilities. My response to the e-mail concerned the obvious traps for the unwary associated with knee-jerk reactions to stuff that appears on web-sites. My concern was that people could get themselves into trouble by not thinking the thing through and taking note of the guides and directives that had been issued from a higher authority. As a result, 1 sent my message out to both Jo and Warren Inkster, the Director of Communications, to ensure that my APBs were broadcast and that people were made aware that they could get trapped or hooked or whatever. That was it. There was no 'big deal associated with it at all.

In my position, 1 am sensitive obviously to the way things look. 1 have no concerns with that particular message or the audience it was going to. My subsequent reaction to it was that it was unfortunate in the way that it was presented to CDF. He had absolutely no knowledge of it and neither did he need to have any knowledge of it.

But suddenly there was an accusation placed in front of him, which of course he was not in a position to make any comment on.

There followed some introspections as to how it could have got out of the circuit of addressees. We had no idea how that could have happened. We did our best to try and point out for CDF precisely what its import was; from our point of view, it was the essential *storm in a teacup'. However the fact that it followed the Gordon letter gave rise to concerns that it had been used to establish a second front as regards approaches to and relationships with the media, leakages etc. 1 then went away, you started your Inquiry and here we all are.

199. As to his reaction, he said - You drew a distinction between your reaction to it at the time and your position now as a result of the way things have developed.

My position on this has not altered. 1 still see it as being an internal memo to people who were part of the advisory group. The information is fine. It's not so much a concern as an understanding of having read all of the other issues concerning media relations,* the NZDF, the other services -and now political masters in the press, and all the spins and innuendoes, reading' between the lines, and misperceptions that have arisen. This is just one page in a hundred others that have been represented as being unauthorised disclosures of information. But in fact, a reporter has seemingly interviewed his typewriter and put his own perceptions across.

1 think our approach to media relations and public relations generally is one where we want to put the information out in.the public arena. This message represents a critique of what has been done and one or two traps that one has to be aware of - 1 mean here that although there are circumstances which you need to be wary of, don't cut yourself off from people and the press. However this information was essentially manipulated and somebody with a different mindset is going to read it quite differently from those of us who have the inside knowledge of the way we're doing business and the fact that we're complying with all of the requirements. Now if the Gordon letter hadn't emerged, if there hadn't been some other issue going on, 1 would suggest this e-mail would never even have been considered by anybody else - it's just another piece in somebody else's jigsaw.

200. Because of the extent of his involvement with the steps taken in response to the e-mail, 1 also asked Mr W Inkster who was Director of Communications for NZW (with responsibility for MOD too) about his reaction. He said - At that time, there was a lot of consideration or discussion about defence policy. It was one of my jobs to try and ensure that we weren't seen to be unduly influencing Government policy. 1 felt the language he used left open the suggestion that* his comments were designed to influence a policy discussion.. But in essence, it was just one way of Jo advising his senior officers to take care.

What were the expressions that attracted your attention?

1 think some of the references were a bit loose; that the Government was getting alternati ve views;

that there was a need to continue to engage with the media and not lose momentum. But the critical one was that it's crucial we don't opt out of the defence discussion because we don't like the way the pros operate. It was bordering on political, but was not strong enough to raise concerns for me.

201. There are no other relevant reactions which warrant recording.

202. 1 have interviewed all those who are identified as recipients of the e-mail. 1 have also interviewed Sqn Ldr Tony Davies and Mr W Davidson who received R Adm Gillbank's e-mail to Mr Bunce and Mr Inkster.

203. The reaction of all of them is unremarkable. They regarded the e-mail as being part of Mr Bunce's public relations' position to draw attention to any. issues which arise when dealing with the media. The e-mail was not regarded as having any importance or significance beyond emphasising the need for care when dealing with the media. Indeed, some of the recipients treated the e-mail more dismissively.

Appropriateness

204. One of my terms of reference raises the issue of propriety of the e-mail. 1 asked Mr Bunce for his comment on that. He replied - It seemed to me to be a perfectly acceptable message to send in terms of my role within Naval Staff. 1 had no issue about propriety. 1 don't think anyone else did either. As far as 1 am concerned, there is no question of propriety. 1 don't write like a naval person. 1 use language that they wouldn't use and 1 think it has been accepted that 1 provide a different role here. R Adm McHaffie said he. wouldn't have used one or two of my words but, as it stands, he's got no problem with it.

.205. In the course of the interview, he expressed surprise about the Inquiry into the e-mail. He put his position in this way - The theme that comes out in the media is the element of competition - that one service can only do well if another service loses. That has never ever been my way of thinking. 1 don't think it's ever been Navy's thinking either; that we would only get extra ships if somebody else lost something. My view is that if the country thinks we're worthwhile, then they'll support the politicians who will make sure Navy is a good, functional and workable one. And I'm absolutely taken aback to see the comments on the Gordon letter being linked up to us. 1 mean if one thing is to come out of this, then it should be that there was absolutely no attempt by Navy to put down any of the other services. We've got a very good track record of jointery and I'm a firm believer in this. Probably more so because 1 come from a civilian background and cannot understand the arguments military people put tip in favour of staying separate when it looks to me like there are definite areas where we could combine. The US Marine Corps can run everything from tanks to jets to boats. to soldiers in one force and in one uniform. 1 often think why can't we. So it's not a competitive thing at all. That's why 1 was so surprised when this came out when it was chucked in with the review of the Gordon letter.

206. On this issue, R Adm Gillbanks said - is there anything in that e-mail that concerns you on the issue of propriety?

At the time that 1 received it, no. But 1 can see now that, given certain circumstances, 1 could read it with all sorts of things in mind. However, 1 took this e-mail at face value. 1 don't think there was any impropriety involved. It could have been a bit more subtle perhaps in the way the message was expressed but he obviously sat down, crashed it out, and sent it off. It was only intended for the audience that it's addressed to.

What did you have in mind?

i think it's probably just his style. He's hit on various points "continue to engage, don't lose momentum". 1 don't see anything sinister in that at all because 1 know the parameters within which Navy and the media conduct their relationship. But 1 can see that an outsider would put a different interpretation on that in today's environment. It's simply Jo's style.

207. Mr Inkster commented on the issue of appropriateness in this way - From my perspective, as a communications person, i felt the language in it was a little ambiguous but nevertheless, 1 felt the intent of Jo Bunce on this occasion was to convey a warning to people to be careful.

1 took it at face value.

How the e-mail was dealt with

208. When R Acim Gillbanks received the e-mail, he responded to Mr Bunce and thanked him for the e-mail.

He asked him to discuss the item on "STUFF" with Mr Inkster.

209. The same e-mail in response was sent to Mr Inkster. The message for him was in the following terms - "CDF was apprised of this at Branch Heads today and in view of the trap it represents, for players young and old, he wants the N=F to be formally advised. 1 recommend an e-mail APB followed up by a Minute to the single service CoS for inclusion in their 'communications with the media' guidance. Liaise with EA DCDS on production of the latter please".

210. For his part, Mr Inkste r carried into effect the steps required of him by R Adm Gillbanks. He described the process in this way - Do you remember getting the R Adm's e-mail which forwards the original message from Mr Bunce?

1 do recall that. 1 responded late afternoon that 1 would carry out the action required of me which was in relation to preparing an advisory about the need to be careful using internet response systems and other electronic trapping.

As 1 understand it, Jo Bunce had written his e-mail following the publication in The Evening Post of Ladd's views about the Government policy on defence. As a consequence, 1 took action along with my staff to try and plug the hole that had appeared to become a problem - in the sense that no one was aware you could actually respond through a website and have a letter published in the newspaper. The Stuff website people confirmed that there was no warning to people who were responding to their internet site that information may be put forward for publication; at that stage, they agreed that it looked as though this was a problem. However, it was subsequently shown that The Evening Post itself had taken the effort to advise people responding through the internet site that they were seeking approval to receive a publication in their newspaper.

I'd like to identify the document that you're talking about. 1 have a minute dated 23 March under the hand of Air Mshl Adamson. Is that the minute that you're referring to?

Yes, that's the minute 1 drafted up which was then developed into the final minute signed by the Air Marshal.

Policy

211. 1 asked Mr Bunce for comment on whether the views expressed in the e-mail represented in whole or in part NMF or MZN policy. He said - If we move through the message; the first paragraph says that RNZN is wanting to educate the public. We certainly did that; we have policy about how we deal with the media. Second paragraph;

it's very definitely still RNZN policy that we don't talk about Defence policy. Third paragraph; 1 don't think that's a policy thing - 1 think it's an opinion. So is the fourth one, so is the fifth one, and the sixth one is dealing specifically with web-sites. And that's now very much both NZI)F and RNZN policy because you've got printed documents there that refer to it. The last one about breathing regularly, that's probably policy but it's not written down.

To what extent do the views expressed in the e-mail hold currency in the RNZN at the time it was written.

There's only two areas of policy that 1 refer to; education and dealing with the media. They were policy then and they remain policy now.

212. R Adm Gillbanks dealt with the policy question in this way - My interpretation is that it is not policy per se. What it's doing is reminding people that there is policy and that they need to be aware of the framework within which they were working. 1 don't see anything related to capability and position or any other of the policies that we have in our Defence policy framework.

213. Mr inkster put his position in the following terms - We have a very strong position that we do not refer or comment on political issues, particularly given the environment in which we're currently operating where the Government is developing policy; we do not want to be seen. to influence Government policy.

Release of the e-mail

214. 1 have already identified those who received the e-mail directly.

215. There is only one other release which 1 have identified. Cdre A Peck forwarded a copy of the e-mail to four retired senior officers who had enquired what all the fuss was about. This course was approved by R Adm Gillbanks and C13F. The event has no significance to the Inquiry.

216. The first indication that there was any issue about the e-mail was when CIDIF was at a meeting in the Minister's office. Reference was made to the e-mail. Initially, C13F thought the Minister was talking about the incident involving Capt Ladd. However, in the course of the discussion, he realised that the Minister was referring to something different. He took a copy of the e-mail and set in train an investigation headed by CNS.

217. Despite my enquiries, 1 have not been able to ascertain how the e-mail came to be released from NZ13F or Navy.

Conclusion

218. The background to the e-mail is important. It arises from Mr Bunce's role as Naval Corporate Relations Manager. What triggered the e-mail was two incidents in which material had been disclosed to the media in breach of. naval pol icy. One of the incidents has been dealt with as a matter of naval discipline.

219. The whole concept of the e-mail was to caution naval personnel about the way in which they deal with the media. The e- mail promotes the use of the media in order to convey the work which Navy is dding. Mr Bunce drew on the publicity of recent Navy contact with politicians and the public and encouraged building on that base. However, he did so by emphasising and by drawi.ng attention to the media guide which Navy has for dealing with the media.

220. He has pointed up his view of the then current media attitude to defence investment; he has reminded personnel of the circumstances in which material not intended for publication may be disclosed and published;

he has illustrated his view by referring to what he has described as the .media view of politics", and invited naval personnel to exercise care both in relation to the circumstances in which they disclose information and also the language which they use.

Navy is a public relations role. His job is to promote Navy and to get his message across to naval personnel. And the language of the e-mail reflects the personal style which he uses.

222. In the end, it is difficult to fashion any credible criticisms of the e-mail. Perhaps, there is much to be said for the view which has been expressed in the course of the Inquiry that the reaction to it is a spin-off from the Gordon letter.

CR Carruthers, GC

18 March 2002


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