What did Maggie know about John's drug entrapment?
What did Maggie know about John’s Drugs entrapment and when?
Margaret Thatcher vetoed a plan by a UK Consortium to save the DeLorean car company in Northern Ireland, then in receivership, which would have saved 1500 jobs and secured at least part of the UK government’s $160 million investment in the project. Weeks earlier she had been told that $17.65 million had been taken from the company’s coffers and that the likely culprit was John DeLorean and Colin Chapman Chairman of Lotus Cars.
“I can build you a factory, design and produce a car, employ two thousand people all in eighteen months” DeLorean declared to the British government in June 1978. The catch was that he needed $100 million. His offer was accepted, but in return he was told that the car had to be built in West Belfast, Northern Ireland. Despite setbacks caused by styling changes to the car’s original design and sectarian conflict, that brought Northern Ireland close to civil war, the project took twenty six months to the first car and $160 million of tax payer’s money. The company was continuously dogged by cash shortages and poor quality. It went bust in February 1982 due to over production and excess overheads, particularly in the US.
Just three months after signing the master agreement with the British government, in July 1978, well before the foundations of the factory were laid, DeLorean decided that he should benefit personally from the cash windfall, courtesy of the investors. A contract with Colin Chapman chairman of Lotus through an intermediary GPD, a Panamanian company with offices in Geneva, would be the conduit to move the cash out of the company. In all $17.65 million of payments went walkabouts to GPD and onwards. The money was split between Colin Chapman chairman of Lotus and John DeLorean with the loose change going to Fred Bushell the finance director of Group Lotus. The fraud would have gone unnoticed if not were not for receivership. It wasn’t too long before the receiver’s staff noticed a hole in DeLorean Motor Cars Ltd’s accounts and reported this to the government.
So what made The Iron Lady reject the sound business proposal made by a UK Consortium, a plan approved by the Receiver, Sir Kenneth Cork and the Secretary of State for Northern Ireland, James Prior? The UK Consortium’s proposal also limited DeLorean’s involvement in the project and added a second vehicle to the line-up at the plant in Belfast; it was a perfect plan, except the initial £80,000 to allow due diligence was to be funded by the Northern Ireland Office, which they had already agreed, but final approval from the Prime minister was necessary. Much to everyone’s consternation in a meeting in Downing Street in mid- August 1982 she rejected the plan outright.
It was now DeLorean’s turn to make proposals to fund the revival of his fledgling car company. In desperation he took the bait from the FBI posing as cocaine drug dealers during a phone call they made to DeLorean on 29th June 1982. Time after time the British government gave DeLorean more breathing space, a commodity they didn’t offer the UK Consortium, deadlines came and went; each week brought a fresh announcement of a new backer by John DeLorean non believed by the receiver to be real. During this period the home and business ‘phones of key employees were wired by authorities on both sides of the Atlantic.
Finally the last deadline was given as 19th October, if by then John DeLorean had come up with the money the company in Belfast would definitely close. DeLorean chose the easy route for funding and met the FBI that day posing as drug dealers. They met in a Los Angeles airport hotel room.
During DeLorean’s later drugs trial Gerald Scotti a former DEA agent involved in the entrapment of DeLorean said, ‘I knew from a long way back the (US) government would go to any lengths to prosecute Mr. DeLorean ’. Scotti also gave evidence that he overheard a heated argument the night before DeLorean’s arrest between the two law-enforcement agents, he said the name of ''Mr Meese'' was mentioned. Edwin Meese was then counselor to the President.
Was Margaret Thatcher aware of the impending drugs bust drama being played out in the US when she rejected the UK Consortium’s plan so DeLorean could be lured into the FBI trap? Catching DeLorean dealing with drugs would be a huge bonus for Ronald Reagan as he was about to launch an issue close to his heart, The war on drugs. His announcement of the programme was made during his weekly radio broadcast on 2 October 1982. DeLorean’s arrest and associated scalp would hit the headlines a few weeks later providing a kick start Ronald Reagan’s initiative.
Let’s look at the timescale of events:-
• March 1982 – The Receiver sir Kenneth Cork advises that investigations into the accounts of the DMCL reveal that $17.65 million is unaccounted.
• June 7 1982 -Margaret Thatcher and her staff meet Ronald Regan and his staff in London for talks on International issues.
• June 29 1982 - John DeLorean receives his first phone call from James Hoffman an FBI confidential informer this call initiates the drugs sting. From this day forward all of DeLorean’s phone messages were wired - but not this one.
• 23rd July 1982 –The UK Consortium submits a business plan to Hill Samuel the leading Investment Bank in the UK. The plan has the backing of James Prior secretary of State for Northern Ireland and Sir Kenneth Cork the Receiver.
• 12th /13th August 1982 – Meeting in Downing Street. Margaret Thatcher rejects the UK Consortium’s plan despite the backing of The Secretary of State and the Receiver. By default leaving John DeLorean as the only remaining option to save the company. Now that the UK Consortium have been eliminated from the picture this gives DeLorean substance and reasons to continue his dialogue with the FBI Sting operators. Had the UK Consortium been successful then there would have been no need for DeLorean to continue the drugs route to finance the rescue of his company all would have been lost for him at that stage.
• 7th September 1982 – In desperation, DeLorean mentions his IRA contact in Northern Ireland to the FBI sting team. The contact – says John DeLorean - that will fund the drugs transaction. The man mentioned was and still is a respected member of Northern Ireland Society. DeLorean writes in his autobiography DeLorean that the contact in Northern Ireland was subsequently cleared by the Security Agencies. Clearly at this stage the FBI would immediately contact the UK Government to research details of the person named. Officially the UK Government from this date now know about DeLorean’s drug entrapment actions by the FBI.
• September 1982 – I was advised by other senior managers that my home phone may be wired . We thought at the time that this was a result of the GPD fraud and associated enquiry.
• 19th October 1982 – John DeLorean was arrested on drugs charges.
What do you think?
Nick Sutton was a senior Manager of DeLorean Motor Cars, a junior member of the UK Consortium and later became a Director of Lotus Cars two years after Colin Chapman’s death. His book The DeLorean Story, the Car, the people the scandal is published by Haynes and available on Amazon as a hardback or e-book
©Nick Sutton 2014
