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Full Hearings

Hearing: 24th June 2008, day 40

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held at:
The Interpoint Centre
20-24 York Street
Belfast BT15 1AQ

on Tuesday, 24th June 2008
commencing at 10.15 am

Day 40









1 Tuesday, 24th June 2008

2 (10.15 am)

3 Opening submissions by MR PHILLIPS (Part 2)

4 THE CHAIRMAN: Yes, Mr Phillips.

5 MR PHILLIPS: Sir, on the first day of my opening

6 submissions in April, I gave a necessarily brief

7 overview of Part 2 of the Inquiry. The transcript

8 references are Day 1, 73/14 to 82/15.

9 At that stage, for various reasons, the Inquiry was

10 not able to release to the Full Participants the Part 2

11 Bundle. I am happy to say that the main impediment to

12 this has now been removed and, as a result, the majority

13 of the documents which comprise the Part 2 Bundle have

14 now been distributed to the Full Participants.

15 The exceptions are, broadly, a very small quantity

16 of material which has been held back whilst an issue in

17 relation to a potential witness to the Inquiry is

18 resolved, and secondly, some documents which post-dated

19 the murder in relation to which consultation is

20 continuing.

21 However, we have now arrived at the point at which,

22 as foreshadowed in my comments on the first day of these

23 hearings, it is now appropriate for me to provide a more

24 detailed introduction to this part of the Bundle.

25 But before turning to the details, I would like to





1 make some general remarks. The first is about witness

2 statements. Although the Part 2 Bundle, or the majority

3 of it, has now been distributed, the Full Participants

4 have still not had the benefit of seeing the Part 2

5 witness statements. In my introduction to this

6 in April, I explained the process which the Part 2

7 documents had undergone, and clearly the same sort of

8 process has been necessary in relation to the witness

9 statements which deal with that material.

10 It is perhaps obvious that the more detailed the

11 statement, the more time consuming the redaction

12 process.

13 The Inquiry team, with assistance from the Security

14 Service, the PSNI and the MoD and from the witnesses and

15 their legal advisers, have been heavily engaged in this

16 process over the last few months. Good progress has

17 been made and we hope to be able to release a batch

18 containing all the Security Service statements and the

19 majority of the Army statements in the near future. The

20 remainder, comprising the rest of the Army statements

21 and a large number of statements from Special Branch

22 officers, will of course follow as soon as possible.

23 Sir, the second point I want to make at the outset

24 is simply to remind you of the main focus of this part

25 of the Bundle and of the evidence which relates to it.





1 On the first day of hearings I set out what I think

2 I called headline issues with which the Inquiry is

3 concerned in this area. And I hope you will forgive me

4 if I repeat them now, as it is important to maintain

5 a clear sense of the relevance of this material to the

6 Inquiry's work.

7 They are as follows: the extent to which

8 Rosemary Nelson was of interest to the intelligence

9 agencies; why she was of interest and at what level,

10 which, I should add, brings in the important question of

11 dissemination: how intelligence was passed around within

12 and between the various agencies and to what levels

13 within each. Next, the extent to which any intelligence

14 reporting on Rosemary Nelson may have affected the

15 attitudes of the security forces or other state agencies

16 towards her; the extent to which intelligence reporting

17 on Rosemary Nelson may have been known outside the

18 intelligence agencies or government departments and may

19 thereby have affected her safety; whether there was any

20 intelligence relating to any threats to Rosemary Nelson,

21 either in general or specific terms prior to her death;

22 and finally, whether there was any intelligence after

23 her death, either in general or specific terms, which

24 might have indicated who was responsible for the murder.

25 As I said in April, those issues themselves give





1 rise to a host of more detailed questions, many of which

2 I will be highlighting during my submissions today.

3 Sir, may I make some further general points in

4 relation to this material. The first concerns the place

5 of the material, and indeed of the evidence relating to

6 it, in its proper context. What has been collated in

7 the Bundle represents only a part of the intelligence

8 material which the Inquiry has considered and which is

9 relevant to the issues which are you are investigating.

10 As I noted in my opening submissions, an arrangement was

11 reached for members of the Inquiry team to interrogate

12 the PSNI databases, and in relation to that material

13 searches were detailed and thorough.

14 Now, only those documents within all of the

15 documents searched in this way, which are of particular

16 relevance to the Inquiry, have been included in the

17 Bundle. Clearly, the material which has been searched,

18 the smaller amount of material within the Bundle, itself

19 only represents a fraction of the intelligence material

20 generated at the relevant time by any and all of these

21 agencies. And there is a resulting danger here that the

22 issues raised in these pages, the pages of the Part 2

23 Bundle, will be seen to take on an importance in the

24 overall field of intelligence which would not truly or

25 accurately reflect their actual significance or





1 perceived importance at the time.

2 The questions with which the Inquiry is concerned

3 were some of no doubt many, many issues which crossed

4 the desks of intelligence officers at the various

5 agencies, and indeed of others to whom the information

6 was passed during the relevant years. And it is

7 important, I would suggest, to bear this particular

8 point in mind at all times when considering this

9 material.

10 Secondly, the documents only take us so far. They

11 raise questions, they raise obvious lines of inquiry,

12 but in many cases those can only be followed up with the

13 witnesses, the witnesses who in due course you will

14 decide to call to give evidence to you. And it follows

15 in this respect also that the picture presented by the

16 documents is itself incomplete.

17 During the course of today, I will be able to touch

18 on only some of the main themes which emerge from that

19 material. Clearly, these issues can only fully and

20 properly be assessed in the light of all of the material

21 and of the witness evidence that relates to it.

22 Thirdly, the documents contain intelligence. That

23 is not the same as fact. The documents are not put

24 forward by the Inquiry as evidence of the truth of the

25 many allegations and assertions set out in them, nor, I





1 would suggest, is the Inquiry in general interested to

2 establish whether the allegations therein set out were

3 or were not in fact true. They show what was being

4 said.

5 They may show what was believed by those who wrote

6 and disseminated and read and evaluated and analysed and

7 relied upon them. They reveal, you may think, a great

8 deal about how Rosemary Nelson and others with whom she

9 was associated were regarded by the intelligence

10 agencies. They disclose a good deal, you may decide,

11 about attitudes to her: to her work and to the way she

12 lived her life. They are in these ways of significance

13 to the Inquiry, but I repeat: the Inquiry will not spend

14 time and energy trying to prove or disprove whether

15 allegations made in these pages about Rosemary Nelson or

16 about others with whom she was linked in various ways

17 were in fact correct. That is not, I would suggest, the

18 Inquiry's concern; nor is the Inquiry a trial of these

19 or any other issues about Rosemary Nelson, or anyone

20 else.

21 Finally, I would like to stress this point: although

22 this material is presented in its own discrete part of

23 the Inquiry Bundle, the documents contained in these

24 files relate to or have a connection with many of the

25 issues which we describe as part 1 or Part 3 issues. I





1 will flag up particular examples later today, but at

2 this stage I would like to stress that in a sense the

3 Part 2 material should be seen not as separate from the

4 part 1 material, but as sitting behind it.

5 The full context of many of the events about which

6 you have already heard and read can only be seen when

7 the Part 2 material and related evidence on those issues

8 is taken into account. And the same is true, you may

9 think, of Part 3, as I'll endeavour to explain in due

10 course.

11 In short, the questions to be asked of some

12 witnesses who are yet to give evidence will include:

13 whether and to what extent they were aware of the

14 matters which appear in these pages and to what extent

15 were their views of Rosemary Nelson shaped or influenced

16 by that knowledge; to what extent was the way in which

17 they dealt with her or with matters relating to her

18 shaped or influenced by that knowledge; to what extent

19 were conclusions reached or decisions made which were

20 themselves shaped or influenced by that knowledge; and

21 equally, in relation to some issues, the question will

22 be whether witnesses ought to have taken such matters,

23 or some of them, into account and if they did not, why

24 that was and what the effects of any such omission were.

25 To give an obvious example, these questions, or





1 questions very like them, arise in the context of the

2 threat assessments which were undertaken in relation to

3 Rosemary Nelson in February and March and then

4 in August 1998. The questions arise for all of those

5 involved in the process of assessment and subsequent

6 reporting, consideration and decision-making, from those

7 concerned, as it were, at the bottom of the chain, on

8 the ground, all the way up the chain to the top of the

9 RUC and to those dealing with such matters at the NIO.

10 To what extent was their view of the nature/kind of

11 the threat to Rosemary Nelson influenced or determined

12 by any, and, if so, what, intelligence about her. If it

13 was not so influenced or determined, should it have

14 been? If they were not aware of such intelligence, why

15 was that? Should they have been so aware? What

16 difference would it have made to their views?

17 Those are just two examples, but the same might also

18 be said of the meetings with the Chief Constable, which

19 we have been hearing about in the evidence to date; for

20 example, with the Special Rapporteur in

21 late October 1997 and with the LAJI delegations

22 in February 1998 and 1999.

23 To what extent were the Chief Constable and any

24 other senior officers present at those meetings aware of

25 that intelligence? To what extent did it shape or





1 influence the views which were expressed by them at

2 those meetings? To what extent did it shape or

3 influence their attitudes to the points, the criticisms,

4 the concerns expressed by others at those meetings?

5 So also with the post-murder period. Although, as

6 I have explained, we have to hold back some of this

7 material while consultations continue, the questions

8 which will arise include: to what extent did the Part 2

9 intelligence shape the attitude of the RUC or of

10 Special Branch to the murder of Rosemary Nelson and to

11 the murder investigation? In particular, did that

12 material lead to something less than full cooperation

13 with the murder investigation team? Specifically, was

14 information withheld from the murder investigation team

15 on the basis that to reveal it would potentially expose

16 or prejudice or put at risk sources of intelligence?

17 These are the sorts of questions which arise in

18 relation to the issue set out in the Inquiry's Terms of

19 Reference as to whether there was any actual or

20 attempted obstruction of the investigation.

21 Sir, with those general points and questions,

22 I hope, in mind, may I now explain how I intend to

23 outline the contents of the Bundle today.

24 I am going to first look at the structures, the

25 structures of the intelligence community in





1 Northern Ireland at about the time of Rosemary Nelson's

2 death, and focus in particular on the three principal

3 providers of the Part 2 material: namely, the PSNI or

4 RUC, the Security Service and the Army.

5 As part of that, I intend to introduce the

6 documentary and, in general terms, the witness evidence

7 and to highlight the main issues which will be addressed

8 in the coming months. I hope that that will help people

9 to make their way round these bundles but also to put

10 the material in a proper context.

11 Then I propose to look in particular at the material

12 which deals with Rosemary Nelson and with the question

13 of how it was that she came to the attention of the

14 intelligence community. And then finally, I intend to

15 say something about the material in these files, the

16 intelligence material, concerning the main Loyalist

17 paramilitary groups which were active at the time of her

18 murder.

19 So, sir, dealing with the structures first.

20 Historically, the allocation of responsibility for

21 intelligence and counter terrorism by the state has been

22 different in Northern Ireland to the rest of the

23 United Kingdom. From 1976, the RUC and, more

24 specifically, Special Branch have taken the lead

25 responsibility for the direction of intelligence and





1 operations against terrorism here in Northern Ireland.

2 That can be contrasted with the position in relation

3 to the rest of the United Kingdom. Originally, that

4 role, the lead role, was undertaken by the

5 Metropolitan Police. However, in October 1992 the

6 Security Service added this responsibility to its

7 pre-existing role in countering threats from Irish

8 terrorism.

9 Now, sir, looking to the present situation, as is

10 well-known, the Patten Commission recommended that

11 responsibility for policing should be devolved to the

12 Northern Ireland Executive, albeit that that has not yet

13 taken place. However, the Patten Commission's view was

14 that national security was "an essential function of

15 national government" and was not suitable to be devolved

16 in that way. Accordingly, responsibility for national

17 security work in Northern Ireland was transferred to the

18 Security Service in October last year.

19 Sir, returning to the time with which we are

20 concerned, you may think it clear that the RUC, in

21 particular Special Branch, had formal primacy with

22 regard to intelligence and counter terrorism matters in

23 Northern Ireland. In a statement which the Inquiry has

24 received and to which I will refer later, this primacy

25 is said to have been "by convention".





1 It is, however, more difficult to identify exactly

2 how this operated in practice, and this will be a matter

3 to be explored with witnesses in their evidence.

4 However, it is plainly important to the Inquiry to

5 understand the roles and responsibilities of the

6 different agencies and how they interacted with each

7 other.

8 The Inquiry has already undertaken a good deal of

9 work in this area and I will in a moment outline the

10 relevant structures and relationships in

11 Northern Ireland at the time of Rosemary Nelson's

12 murder.

13 But, sir, I should say immediately that in putting

14 those matters to you today, I, and indeed the Inquiry

15 team as a whole, have been particularly assisted by

16 a statement provided by a former senior security service

17 officer who discharged the duties of director and

18 coordinator of intelligence in Northern Ireland. This

19 statement was provided to the Full Participants at the

20 end of last week, although it is not yet on the Inquiry

21 display system in the chamber.

22 Some readers of the statement may also have noticed

23 that it doesn't conform with the usual run of Inquiry

24 statements and that the witness does not have a cipher

25 of the usual Inquiry kind. So perhaps I can deal with





1 that immediately.

2 The statement was originally prepared for the

3 Billy Wright Inquiry, but the Security Service have

4 agreed to its use in this Inquiry for it covers matters

5 of interest to us and deals with the relevant period of

6 time.

7 However, sir, although that statement has provided

8 us with a useful framework, it is, of course, written

9 from the perspective of only one of the intelligence

10 agencies, and in due course the Inquiry will be

11 considering both general and specific evidence about the

12 intelligence structure pertaining in Northern Ireland

13 from all three of the relevant agencies. And at that

14 point, of course, this statement will fall to be

15 assessed and tested in the light of all of that

16 evidence. It is simply convenient for me at this stage,

17 because it has been disclosed, to draw on it in this

18 brief outline.

19 Sir, may I begin with the RUC. Starting at a very

20 general level, you will remember, I think, that the

21 Patten Report described the RUC in their report, which I

22 think was issued in September 1999, as a:

23 "... police force with a complicated and

24 multi-layered command structure, the development of

25 which had been driven more by the response to security





1 threats than to the demands of community policing or

2 management efficiency."

3 It was noted in that report that historically police

4 forces were modelled on military lines and that the RUC

5 had retained this type of structure more than most

6 police forces at that time.

7 Now, as we all know, significant changes were

8 introduced and implemented as a result of the Patten

9 Commission's recommendations, but clearly our focus

10 today and throughout the Inquiry must principally be on

11 the structures as they were at the time; namely, in the

12 late 1990s.

13 Sir, can we look now, please, at the slides that I

14 think I took you to briefly in opening in April. I

15 think the one we want in relation to the RUC is slide 2

16 (displayed).

17 Sir, could I just say by way of disclaimer what

18 I said at the outset of our hearings, which is that

19 these charts, these diagrams, have been produced by the

20 Inquiry and they are based on our understanding of what

21 the position was. I invited comment, criticism,

22 amendment on them at the beginning when I first showed

23 you the slide. As far as I am aware, none has been

24 received, so I am going to assume for the moment at

25 least that they are reasonably accurate.





1 The structure is, I hope, very clear from this with

2 obviously the Chief Constable at the top. We have

3 looked in detail earlier at his office, the Command

4 Secretariat, and so far as we are concerned today, the

5 next relevant layer is at the Assistant Chief Constable

6 level and in particular, obviously, on the left-hand

7 side of the screen, the Assistant Chief Constable, who

8 is the head of Special Branch or, as it says in the

9 bracket there, "HSB".

10 At the stage with which we are concerned, the

11 late 1990s, the Special Branch consisted of about

12 850 officers, about 10 per cent of the overall strength

13 of the force, so it says in the Patten Report. And

14 indeed, it is in that same report that the Commission

15 observes that the Special Branch had been described to

16 them as "a force within a force".

17 Can we look, please, at side 4 (displayed), and see

18 what happens if we click.

19 There is the head of the organisation, as I have

20 mentioned, and below him his deputy. Can we go on to

21 the next line, please. Thank you. Here you will see

22 the three sections -- I hope that is the right term --

23 into which Special Branch was divided. I would like to

24 focus on those which seem particularly relevant to us,

25 and they are E3, all the way along, reading from left to





1 right, to E9.

2 So far as E3 is concerned, it was responsible, as we

3 understand it, for collating, assessing and

4 disseminating intelligence coming into Special Branch

5 headquarters and was itself divided -- and there they

6 are -- into a number of subsections or desks: E3A was

7 the Republican desk, E3B was the Loyalist desk. As far

8 as E3C is concerned, it was responsible, we believe, for

9 processing intelligence for dissemination. It appears

10 also, sir, to have had some role in relation to threat

11 assessments, and we will hear about that in the evidence

12 in due course.

13 Turning to E4, operations, as its name suggests, it

14 was the operational arm of headquarters, HQ, and

15 comprised inter alia, E4A, surveillance, and the

16 headquarters mobile support unit.

17 Now, moving along, E5 to E8 were the regional

18 branches of the Special Branch, and in a sense you can

19 see an echo here of the regional divisions of the RUC as

20 a whole, which we looked at in the opening.

21 E5, as it says, Belfast, E6, the North region, and

22 then E7, South East, and E8, South West, as we

23 understand it. And I will return to look at the regions

24 in a little more detail in a moment.

25 But E9 ran operations, including surveillance





1 against strategic level targets, predominantly, as we

2 understand it, on the Republican side.

3 Sir, can I say just a little bit more about E3 on

4 the left-hand side of the screen. At some point during

5 1997, the headquarters structure which I have just

6 outlined was partially modified. Following

7 the recommendations of the Warner Report in the

8 mid 1990s, E3 and parts, we believe, of E9 were

9 amalgamated into a new entity called the Intelligence

10 Management Group, or IMG, to which we will see reference

11 in the material.

12 During the course of the hearings, the Inquiry will

13 be looking more closely at the role of E3 and its

14 successor, the IMG, and we will focus in particular on

15 the following: first, the role of headquarters, HQ, in

16 analysing intelligence, including the following issues:

17 what intelligence did it receive, what intelligence in

18 particular from HQ operations, from the regions and from

19 external sources; who decided what intelligence should

20 go to HQ; how quickly did it receive it; to which

21 databases did it have access; what type of analysis did

22 it produce; who were the customers for its analysis; and

23 what was the purpose of its analysis.

24 We will also consider the role of HQ in

25 disseminating intelligence and the role of HQ in





1 directing, or to use the expression which is used in the

2 documents, tasking intelligence, specifically these

3 questions: could E3 task HQ operations; could it task

4 regional operations.

5 We will also, as I indicated earlier, look at the

6 role of E3 with regard to threats and threat

7 assessments, especially those undertaken

8 in February, March and August 1998 in relation to

9 Rosemary Nelson.

10 We will consider the relationship between E3 and the

11 regions and the extent to which officers in E3 liaised

12 with the rest of Special Branch and with the other

13 intelligence agencies. And finally, we will look at the

14 effects of the post-Warner changes, in particular what

15 was the purpose behind the creation of the IMG and to

16 what extent did this change or improve E3's ability to

17 process intelligence.

18 Now, sir, with a view to answering those questions,

19 the Inquiry has taken statements from, amongst others,

20 two heads of the IMG at around the time of

21 Rosemary Nelson's murder and a source handler who

22 subsequently moved to E3A.

23 May I just say a little bit more about E4. A number

24 of E4 operations are relevant to the work of the

25 Inquiry. In order to understand their significance and





1 the product which came from them, the Inquiry will need

2 to consider in particular the following questions: what

3 was the relationship between the operational arm of HQ

4 and the operational units at a regional level? Who

5 tasked E4? What sort of operations did they carry out?

6 Where were the E4 units based? And who was responsible

7 for collating, analysing and disseminating intelligence

8 product from their operations?

9 The Part 2 Bundle contains a number of documents

10 which are connected to E4 operations. I would like to

11 start by showing you one of them. Can we look, please,

12 at RNI-542-124 (displayed)? Now, this, as I hope is

13 clear from the heading, is a TCG tasking sheet for an E4

14 operation. You can see on the top right-hand corner

15 "E4A." That is all I wish to say about it at the

16 moment.

17 Can I just show you another E4 document, which is

18 a product document, if I can put it that way,

19 RNI-541-089 (displayed). Again, you will see the title

20 on the top left-hand corner, in this case, E4A South,

21 the name of two operations -- and I will say a little

22 more about them in a moment -- and here the results with

23 the times down the left-hand side of the relevant

24 surveillance. And in particular, you can see that this

25 is a document in which reference is made -- bottom





1 right-hand corner -- to Rosemary Nelson herself.

2 Sir, can we return to the slides, please

3 (displayed). I indicated I want to say something about

4 the South Region. Each region within Special Branch was

5 headed by a regional head of Special Branch, who was at

6 chief superintendent rank, assisted by a deputy who was

7 himself a superintendent. At each regional level, the

8 regional Special Branch comprised a tasking and

9 coordinating group -- and we have just seen reference to

10 the one in the South Region in that document -- and

11 a source unit, and you can see the two boxes in light

12 blue on the bottom right-hand corner. TCG could be

13 described as the operational arm of the region.

14 As its name indicates, it was responsible for

15 directing and facilitating intelligence operations at

16 a regional level. Some of them may have been initiated

17 at HQ level, but would be managed by the regional TCG.

18 A source unit, again, as its name suggests, was

19 responsible for collating intelligence from human

20 sources.

21 Now, as you'll see from the slides, each region was

22 also divided into a number of divisions. And, again,

23 these appear to have broadly correlated to the divisions

24 within the uniformed force as a whole. You will see

25 here that the South Region was divided into L, K, J, G





1 and H, and J is the division with which we are

2 particularly concerned.

3 As you will see, it breaks down into local offices.

4 As I think I may have said in April, it may be that

5 there was a further office, a Banbridge office, within

6 J Division, but so far as we are concerned, Lurgan,

7 Portadown and Craigavon, the ones at the bottom of the

8 slide, are the relevant local offices.

9 The regional Special Branch officers were, you may

10 think, clearly at the coalface of intelligence gathering

11 and counter terrorist operations in Northern Ireland.

12 And the Inquiry has taken a significant number of

13 statements from Special Branch officers of various ranks

14 of this kind, and it seems likely, if I can put it that

15 way, that you will decide to call some of them at least

16 to give evidence to you in the next session, and they

17 include the heads of Special Branch, the head of South

18 Region Special Branch, the detective superintendent in

19 charge of J Division, a detective inspector from that

20 division, the detective sergeants in charge of Lurgan

21 and Portadown offices and source handlers from both the

22 South Region and the Belfast region, as well as other

23 Special Branch officers.

24 Now, sir, as I have indicated, in addition to this

25 substantial amount of witness evidence, the Inquiry has





1 considered a very substantial number of intelligence

2 documents originating from the PSNI. So far as their

3 presentation in the Bundle is concerned, they fall into

4 two main categories. First, there are five files, 541

5 to 545, principally containing intelligence reports and

6 organised chronologically. This intelligence may have

7 come from human sources, a variety of technical devices

8 or surveillance operations. I should repeat at this

9 point that for the reasons I gave earlier, the Full

10 Participants have not yet received every single document

11 within those files, but they do have now the clear

12 majority.

13 Sir, the second category of material within the

14 Part 2 Bundle in relation to PSNI consists of

15 documentation relating to two distinct operations, which

16 I will discuss in due course. But before dealing with

17 those operations, can I return to a topic I mentioned

18 right at the outset of the Inquiry, which is the PSNI

19 databases.

20 Again, at this stage, coming now towards the end

21 of June, unfortunately my outline of the PSNI databases

22 is still slightly tentative, because the position, as

23 I explained it to you at the outset, still remains that

24 we have not received a statement dealing with these

25 matters from the PSNI.





1 My understanding is that the statement has been held

2 up while an application for anonymity is being made.

3 I gather that the issue is close to being resolved and

4 I hope that the statement will be received in the very

5 near future, as I am sure you do, sir.

6 In addition, however, the Inquiry has identified

7 a witness of fact who can speak to this issue, and has

8 instructed its solicitors, Eversheds, to take

9 a statement from that witness. And again, I hope that

10 that process will be completed in the near future.

11 Broadly speaking, the material in these bundles

12 comes from two databases, PRISM and MACER, and you may

13 remember in my opening submissions I also referred to

14 a later system called CHISM, which, as I understand it,

15 came into operation after the murder of Rosemary Nelson.

16 However, for today's purposes, and for the Inquiry

17 generally, the main focus will be on the two and not on

18 the three systems.

19 In general the position, as we understand it, is

20 that intelligence was usually entered first on to PRISM,

21 and this appears to have been the principal database

22 used by the desks in HQ. Some, but not all,

23 intelligence would then be transferred to MACER, which

24 was the principal tool for dissemination. Now, when we

25 look at the documents, we will see there are two





1 principal types of MACER document: secret intelligence

2 reports or SIRs, and secret intelligence dissemination

3 document or SIDDs.

4 It appears that in a typical case the PRISM, the

5 original version of intelligence, covers a range of

6 issues and they are then broken down into individual

7 pieces of intelligence and entered as separate SIRs.

8 Some of those may then be sanitised, by which I mean

9 that sensitive details are removed, and disseminated as

10 SIDDs to a wider readership.

11 Sir, what I would like to do is to show how that

12 process worked using an example of a document, which we

13 can trace through the various stages.

14 Sir, I see that we haven't yet come to the full

15 hour. I am proposing to carry on with the comparison.

16 I hope that that is all right with the shorthand writer.

17 So far as the example is concerned, I would like to

18 take, please, RNI-544-037 (displayed). This, sir, is

19 the PRISM document, as it appears at the very top.

20 So far as general points to be derived from this go,

21 can I first point out that this document -- and I think

22 all the documents in the Part 2 Bundle -- now bears the

23 marking at the top "RNI declassified". What has

24 happened, obviously, is that as a result of the

25 redaction process, documents that were originally





1 protectively marked have been reduced and are,

2 therefore, marked in this way, "declassified".

3 You will see a number of documents of this kind in

4 the Bundle. Can I draw your attention to, first of all,

5 the reference number, the document number, RNI-131-264,

6 (displayed) and the date. Although there has been

7 a redaction of the specific date, we have the

8 month, February 1999. Then you will see the title, the

9 subject matter of the document, which in this case is

10 "RHD", Red Hand Defenders. And can I highlight also the

11 rating: entry source rating, data rating, et cetera. In

12 this and all other PSNI documents these have been

13 redacted on the grounds of sensitivity, and I can't say

14 any more about those entries at this stage.

15 If and to the extent that the reliability of

16 intelligence has to be investigated with witnesses, this

17 may have to be done in closed or private sessions later

18 in the course of your hearings.

19 But, sir, this cover sheet -- for that is what it

20 is -- raises two particular questions to which I don't

21 at the moment have an answer, but which we will

22 obviously pursue with the witnesses in due course.

23 First, at the top right-hand side is recorded "group

24 number 10". That appears, at least to us, to be some

25 form of restriction on access, but that has not yet been





1 clarified.

2 Two lines down on the left-hand side, you will see

3 the word "dissemination" and then "ND". And it might

4 reasonably be thought that that indicated there should

5 be no dissemination of this intelligence. However, as

6 we will see, that isn't correct in this case because

7 there was in fact a relevant SIR, and indeed a SIDD. So

8 that expression, those letters, remain something of

9 a mystery.

10 Now, if we turn over to RNI-544-038 (displayed),

11 this is the body of the document and, again, in general

12 terms I should say that with the PRISM documents, you

13 have the cover sheet and then the meat of the report on

14 the next page.

15 You will see that some of the details we have looked

16 at appear at the top of this page, also, for example,

17 the document number and the title, et cetera.

18 We also see a reference at the top right-hand corner

19 "security level: 199". Again, that would appear on the

20 face of it to have something to do with limiting access,

21 but we haven't yet been able to establish exactly what

22 it means nor how it interacts with the group number,

23 which you will have noticed has changed. On this

24 document it is 11, on the previous cover sheet it is 10.

25 I am afraid I can't help you on that point either.





1 Turning to the substance of the report, you will see

2 the three lines beginning:

3 "It is the intention ..."

4 Then there are various comments. I should say that

5 under the first heading, "Comment", the extreme

6 left-hand of the first line is "NFD", no further

7 details. That is not a redaction; it is a piece of poor

8 photocopy. The comment comes in that:

9 "Members of the RHD and OV ..."

10 Which is Orange Volunteers:

11 "... are targeting leading Republicans."

12 At the very bottom of the page we will see what

13 appear to be instructions in relation to the onward

14 distribution or dissemination of this material.

15 Now, can we then turn to the next page, RNI-544-039,

16 which is the corresponding SIR (displayed). This, as

17 I hope I have made clear now, is a MACER document. It

18 contains similar details on its own cover sheet to the

19 PRISM document we have seen, albeit arranged in

20 a different format.

21 Sir, can I draw your attention to four particular

22 points about it, the first, at the top right-hand,

23 "DSL 19." That is the dissemination level which, as we

24 understand it, was the method for restricting access to

25 documents on the MACER system. Users would have access





1 to different dissemination levels according to their

2 rank, their need to know, et cetera. Again, we are

3 awaiting an authoritative explanation of these

4 dissemination levels, but as far as we are aware, 19 is

5 one of the highest, although there may possibly also

6 have been, we think, a level 23.

7 Now, moving down the page, you will see in the

8 second group of the text an entry "text caveat", then in

9 capital letters "NO DOWNWARD DISSEMINATION". Again,

10 this is also rather puzzling, because we will see in due

11 course that there was in relation to this

12 a corresponding, if I can put it that way, SIDD; and

13 that is clear, as you can see, from an entry just a few

14 lines below. So in fact, this information, or some of

15 it at any rate, was in fact disseminated more widely.

16 Sir, can I also draw your attention to the ciphers

17 which appear in the middle of the page, just above the

18 redaction opposite 3. Those are the ciphers of

19 Special Branch officers who were involved in the

20 creation of this report and who are witnesses to the

21 Inquiry.

22 If we turn over the page, we will see the substance

23 of this SIR, and it is an edited version of the text of

24 the PRISM document, although you can perhaps see that

25 some of the comment has not been repeated. And maybe we





1 can see that most clearly by looking at the two

2 together.

3 Can we have RNI-544-038 on the left-hand side,

4 please (displayed). Sir, the PRISM document is in fact

5 on the right and the corresponding SIR on the left, and

6 you will see that all of the comment section on the

7 right-hand side has been removed and what you are left

8 with is an edited and rather generalised version of the

9 opening three lines, which finds its way into the SIR.

10 I should say, sir, just looking at the left-hand

11 document, the SIR, as you go through the Bundle, you

12 will see that some of those SIRs have been redacted in

13 accordance with the Inquiry's normal policy. But as you

14 can see in this particular case, no redactions were

15 deemed necessary.

16 Now, moving down, if I can put it that way, to the

17 relevant SIDD, which is at RNI-544-041 (displayed).

18 Here, the cover sheet is not dissimilar to the SIR cover

19 sheet, but it is a rather abbreviated version, if I can

20 put it that way. Here, though, the dissemination level,

21 top right-hand corner, "DSL", is 7, a lower level,

22 indicating obviously that this is suitable for wider

23 dissemination. As I say, that raises the question of

24 what those initials "ND" were intended to mean in the

25 context of this intelligence.





1 If we look over to the substance of this SIDD --

2 that is at RNI-544-042 (displayed) -- and in fact it is

3 identical, as far as we can see, to the text of the SIR,

4 without, however, any comment whatsoever. In some cases

5 you will see that the text between the SIDD on the one

6 hand and the SIR on the other does differ, and this is

7 part of the sanitisation process that I mentioned

8 earlier.

9 But you won't be surprised to hear in going through

10 the Bundle, therefore, that there are relatively few

11 cases in which it has been necessary to redact any part

12 of the substance of a SIDD, because in a sense that has

13 already been done in the sanitisation process.

14 Now, sir, those are some examples of documents which

15 appear again and again and again in the PSNI, Part 2

16 Bundle. It is right to say, however, that of course not

17 all of the material in the PSNI part of the Bundle is in

18 those formats, and we will see in due course -- and

19 indeed have already seen in the context of the E4

20 operations -- documents of a very different kind. We

21 looked, for example, at the surveillance log a little

22 earlier.

23 So far as the question of the formats and the

24 material being produced in three different ways, I

25 should say that in cases where intelligence has appeared





1 in more than one format, the Inquiry has generally --

2 generally -- selected the best version, i.e. the version

3 with the most detail.

4 Sir, at this point I wanted to open to you some of

5 the detail of the two particular operations, where the

6 documents are set out in RNI-546 and RNI-547. Would it

7 be convenient to start that after the break?

8 THE CHAIRMAN: Certainly. We will have a break of a quarter

9 of an hour. 10 to 12.

10 (11.32 am)

11 (Short break)

12 (11.50 am)


14 MR PHILLIPS: Sir, I mentioned that material in files

15 RNI-546 and RNI-547 is of a different character. They

16 contain tasking sheets and reports arising from two

17 particular operations which were running at around the

18 time of Rosemary Nelson's murder. The first, which is

19 in RNI-546, was a surveillance operation carried out by

20 Special Branch and the military against the LVF in

21 mid-Ulster, and it was known -- and I hope I am going to

22 pronounce this correctly -- as Operation Shubr.

23 May I just say a few words about that operation at

24 this stage. Can we look, first, at the initial tasking

25 sheet, and that is at RNI-546-001 (displayed).





1 It is a PRISM document, and you can see from it that

2 this operation began in April of 1998. You can see the

3 origin there, the TCG (South), and the title of the

4 operation. As I say, I am pronouncing it "shoober". So

5 far as the intelligence case for the operation is

6 concerned, that is at RNI-546-003, and paragraph 3

7 (displayed):

8 "Mid Ulster LVF have some form of terrorist activity

9 planned for the near future."

10 Then various details are provided. You will see the

11 aims of the operation:

12 "Surveillance to identify: individuals involved

13 [and] possible targets."

14 It appears from the PRISM material that the Inquiry

15 has seen that this surveillance continued on an

16 intermittent basis until August 2000.

17 Now, the reports from April 1998 through to October

18 of that year indicate that the focus of the surveillance

19 in that period was Mark Fulton who was believed to be

20 the Officer Commanding of the Portadown LVF. However,

21 from about October that year, it appears that the

22 surveillance, or the focus of the surveillance, shifted

23 to other leading members of the Portadown LVF.

24 So far as the Inquiry is concerned, it is important

25 to note that the operation was running at various times,





1 it would appear, during March 1999. However, I should

2 tell you that on the face of the material which the

3 Inquiry has seen, it appears that the operation was not

4 running on the weekend of Rosemary Nelson's murder.

5 Plainly, that is at least potentially an important point

6 and one we will be testing with the relevant witnesses.

7 Sir, the significance of that is obviously that it

8 was indeed members of the LVF who were suspected of

9 committing the murder of Rosemary Nelson, and as

10 I indicated in my opening in April, those individuals

11 were, from an early stage, the focus of the murder

12 investigation itself.

13 Sir, the fact that members of the Portadown LVF were

14 the subject of a surveillance operation which was

15 continuing at the time of the murder raises a number of

16 questions which the Inquiry must address. For example,

17 what did the intelligence agencies hope to achieve from

18 the surveillances and did it achieve its objectives?

19 Why did the surveillance teams not go out on the weekend

20 of the murder? Did the operation, either before or

21 after the murder, produce any intelligence to suggest

22 that the LVF were or were not responsible for the

23 murder? Was the fact of this operation made known to

24 the murder investigation team, and if so, when, and if

25 not, why not? Finally, was any intelligence from this





1 operation provided to the murder investigation team and

2 if so, when, and if not, why not?

3 Now, clearly there is a substantial overlap here

4 with the Part 3 or due diligence aspect of the Inquiry,

5 and also -- and, again, obviously -- a possible overlap

6 with the issue of obstruction. However, the more

7 general aspects of this operation will be explored with

8 the relevant Part 2 witnesses, including a number of

9 Army witnesses and Special Branch officers.

10 Sir, the second operation, where the documents are

11 contained in file RNI-547, was known as Operation

12 Fagotto, and RNI-547 contains tasking sheets and

13 surveillance reports from this operation which, again,

14 I alluded to in my opening in April. And the reference

15 to the transcript there is Day 10, 109 at 11 to 110 at

16 22.

17 Now, sir, as I explained then, this was

18 a Special Branch operation which took place in the

19 vicinity of Rosemary Nelson's house over the weekend

20 before her murder, and as a result of that operation

21 there were Special Branch officers in the area,

22 including one who passed Rosemary Nelson's house at

23 around midnight on 14th March.

24 In my opening submissions, I mentioned a number of

25 significant issues which arise in relation to this





1 operation, including the question of whether there was

2 any connection between this operation, the officers

3 involved in it and the murder. That would, of course,

4 raise the issue of collusion in a particularly stark and

5 direct form.

6 Operation Fagotto is also relevant to the murder

7 investigation. It appears that the murder investigation

8 team were apprised of the operation at a fairly early

9 stage of their work, and Mr Port and his team

10 investigated it in some depth. And this in turn has

11 been considered by Mr Ayling in his report on the

12 question of due diligence. And as a result, a good deal

13 of material relating to it will appear in due course in

14 the Part 3 Bundle.

15 Sir, so far as the Inquiry's investigation of this

16 is concerned, the Inquiry has taken, and is in the

17 process of taking, witness statements from a number of

18 officers who were involved in this operation, both on

19 the ground, if I can put it that way, and at

20 a decision-making level. And those statements will, of

21 course, be disclosed to the Full Participants as soon as

22 possible.

23 In addition, the Inquiry has searched the PSNI

24 databases for documentation relating to it and in

25 particular in the period from the beginning





1 of January 1999 to the end of March 1999, and those are

2 the documents which appear in file RNI-547.

3 It is clear from those documents that the operation

4 was a long-term operation. It wasn't, as it were, a

5 one-off operation on the night of the murder. If we

6 look at the intelligence case for this operation, which

7 begins at RNI-547-001 (displayed), we will see the

8 background to it.

9 Again, a PRISM document, the same origin,

10 TCG (South), the title "Operation Fagotto" and the

11 intelligence case, again at RNI-547-003 (displayed),

12 states there that:

13 "An individual ..."

14 Whose name has been redacted:

15 "... was believed currently to be playing a major

16 role in PIRA [Provisional IRA] activity in the South

17 Region."

18 And the objective of the operation is given as:

19 "To conduct surveillance to identify that person's

20 associates."

21 So far as the product is concerned, we can see an

22 example of it at RNI-547-009 (displayed) in the same

23 bundle and this, which is a document of a kind which we

24 see also in RNI-546 in relation to Operation Shubr, sets

25 out, as it says there, a summary of operations; in other





1 words, of the surveillance undertaken on that

2 individual.

3 The material continues with product being recorded

4 as the days and weeks pass, until what is, so far as the

5 Inquiry is concerned, the relevant date, 14th March.

6 And we can see that product at RNI-547-061 (displayed).

7 Again, it is another PRISM document and you will see

8 there the destination, TCG (South), and the origin, E4A.

9 If we turn over the page to RNI-547-062 (displayed)

10 this, so far as the Inquiry is concerned, appears to be

11 the report of this form of Special Branch activity near

12 Rosemary Nelson's house on the eve of her murder. As is

13 obvious, the report has been quite heavily redacted and

14 it might fairly be said that it raises as many questions

15 as answers. However, you may think that this shows that

16 Special Branch were carrying out checks in the vicinity

17 of the home address of the surveillance target.

18 Now, in the Bundle there are various other reports

19 after this, which show that the particular operation,

20 Operation Fagotto, continued for some time after the

21 murder. However, on grounds of relevance, in

22 bundle RNI-547, we have the last report as being at the

23 end of March 1999.

24 Sir, clearly there is a good deal more to be

25 explored on this topic, but that will have to wait for





1 the witness statements and any evidence that you decide

2 should be called.

3 So, sir, can I try to bring some of the PSNI points

4 together at this stage and suggest some of the further

5 general issues which will need to be considered during

6 this part of the evidence. I would like to do so, as it

7 were, from the top down in terms of PSNI.

8 The first issue which arises in relation to this

9 sort of material is this: how was the Chief Constable,

10 or those in his office at the Command Secretariat,

11 briefed on intelligence matters? How regularly? By

12 whom and on the basis of what material?

13 And I should note here, sir, that as far as I am

14 aware, the Inquiry has seen very little, if any,

15 material evidencing the transfer of intelligence or

16 information about intelligence from Special Branch to

17 the Chief Constable. That will, therefore, be a matter

18 to be investigated in the evidence.

19 Next, and moving down, if I can put it that way, the

20 management and reporting structure between the regional

21 parts of Special Branch and HQ: How much autonomy did

22 the region have in terms of gathering, collating,

23 analysing and disseminating intelligence? What degree

24 of liaison was there between the region and HQ? What

25 role did the head of Special Branch play in monitoring





1 and authorising the activities of regional

2 Special Branch offices, and how frequently was HQ

3 informed of regional operations and of the intelligence

4 product of those operations?

5 Next, the management and reporting structure within

6 regional Special Branch: Who reported to whom? What

7 steps were required for operations to be authorised?

8 Who within the region was responsible for technical

9 operations? Who authorised them? Who implemented this?

10 What was the role of the source unit and of the TCG, and

11 what was the relationship between those two entities and

12 the regional offices? Who at regional level, if anyone,

13 was responsible for analysing intelligence? What was

14 the purpose of any such analysis and how was it

15 undertaken? How did it differ, such analysis, from the

16 analysis which was undertaken by E3 or IMG? How did the

17 intelligence analysis tie into operational tasking?

18 Then questions of dissemination: Who was

19 responsible for deciding what intelligence was

20 disseminated both within Special Branch and beyond, and

21 by what means was it so disseminated? Finally, and in

22 general, what was the relationship between regional

23 Special Branch officers and their uniform or CID

24 counterparts?

25 Sir, can I turn now to say something about the Army





1 and its material within the Part 2 Bundle. First

2 dealing with the question of structure, and taking it

3 very broadly first, as I think is very well-known,

4 additional troops were first deployed in

5 Northern Ireland in August 1969, initially being

6 deployed to assist the then RUC in restoring law and

7 order when the trouble first flared up.

8 Operation Banner, as it became known, developed into the

9 Army's longest continuous campaign lasting 38 years. I

10 think it was brought formally to a close at the end

11 of July last year.

12 The situation, as we understand it now, is that the

13 Army is no longer "operating in support of the civil

14 power in Northern Ireland", although there is still

15 a garrison of about 5,000 troops here. They have the

16 same status as their counterparts in the rest of the

17 United Kingdom.

18 So far as the period with which we are concerned

19 goes, in the late 1990s there were approximately 9,000

20 troops in Northern Ireland, together with 4,500-odd

21 members of the Royal Irish Regiment.

22 And as the Inquiry understands it, the Army at that time

23 saw its role as acting in support of the RUC. However,

24 the precise form of that support was not always entirely

25 clear, particularly in the most difficult and





1 challenging areas, such as south Armagh.

2 In broad terms, however, the Army's operations in

3 Northern Ireland can be divided into two categories for

4 our purposes: first, routine tasks -- vehicle

5 checkpoints, foot and vehicle patrols, providing

6 protection and support to the police in maintaining

7 public order -- and secondly, the provision of

8 specialist support; for example, bomb disposal and the

9 provision of military helicopters.

10 Now, as part of the Army's role in supporting the

11 RUC, it also had a role in intelligence. By the end of

12 the 1970s, it seems that one soldier in eight was

13 directly involved in intelligence. The Army received

14 intelligence from a number of different sources,

15 including observations from patrols, observation posts

16 and vehicle checkpoints, overt and covert surveillance.

17 Sir, so far as the structures in more detail are

18 concerned, I regret that at this point I'm not able to

19 deploy an open and disclosed statement in relation to

20 the Army in the same way that I have been in relation to

21 the Security Service, because, regrettably, we are not

22 yet in a position to be able to disclose one to the Full

23 Participants. So I am afraid that very brief outline is

24 all I can say about structure.

25 So far as Army intelligence documents are concerned,





1 there are examples in the relevant part of the Bundle,

2 which is files RNI-511 and RNI-512, of various types of

3 document, and I would just like to mention them briefly

4 at this stage.

5 The first documents, called daily briefs or "int

6 sums", which are intelligence summaries, produced daily

7 and for rapid dissemination of intelligence. We think

8 that int sums were also produced on a weekly and monthly

9 basis, and those reports contain more by way of

10 analysis.

11 Next, "int reps", incident reports, which were

12 produced following terrorist incidents. The Inquiry has

13 been provided with a number of these, for example,

14 including those produced in the aftermath of

15 Rosemary Nelson's murder.

16 Intelligence assessments intended to provide

17 a longer term outlook and based on identified patterns

18 of conduct or behaviour, and then military intelligence

19 source reports, or MISRs, which contain intelligence

20 gathered from sources. Finally, weapons intelligence

21 section reports or WISREPs which, again, were compiled

22 following terrorist incidents with a particular focus on

23 the weapons used. And, again, the Inquiry has seen

24 a WISREP which was produced after the murder.

25 So far as these two files, RNI-511 and RNI-512, are





1 concerned, I think it is fair to say that the

2 intelligence contained in them is at a relatively low

3 level. Much of the pre-murder material comprises

4 reports of sightings, presumably from foot patrols or

5 vehicle checkpoints. The reports were often voluminous

6 and it is, therefore, important to explain the approach

7 the Inquiry has taken to this material.

8 The initial searching for Army material of this kind

9 was undertaken by the Tribunal Inquiry's unit at the

10 MoD, and this search identified a large number of

11 documents referring to Rosemary Nelson. Those were then

12 reviewed by the Inquiry's team, who selected those of

13 relevance to your Terms of Reference and List of Issues.

14 There was then, however, a further filter, because

15 a number of the documents, as I have said, were very

16 long and the relevant parts of them were very modest.

17 So in this part of the Bundle, you will see examples

18 of where only part of a document -- that part relating

19 to the Inquiry's work -- has been included. Can I just

20 show you a example so that everybody is aware of this

21 from the outset. If we look at RNI-511-001 (displayed),

22 this is a brief. You remember the types of document

23 I mentioned. It is an extremely early document, and at

24 the top right-hand corner you will see "page 1 of 5".

25 So far as the Inquiry is concerned, the relevant passage





1 comes on the next page in the Inquiry Bundle,

2 RNI-511-002 (displayed) at paragraph (g). But you can

3 see already, I hope, from the top right-hand corner of

4 this document, that it is not page 2, but page 3 of 5.

5 So what we have here in the bundle of the five pages

6 of this document is, as it were, the cover sheet, page 1

7 of the bundle, and the relevant paragraph, which is set

8 out on page 2 of the bundle. We have not -- so

9 everybody is clear about this -- copied the other pages,

10 which contain material which is not relevant to the

11 Inquiry.

12 So far as the presentation of the document is

13 concerned, it has been processed in the standard way,

14 hence the various redactions. And when you look in more

15 detail at paragraph (g), this document being generated

16 at the end of May 1995, you will see the sort of

17 information which tends to be set out on documents of

18 this kind.

19 The Inquiry will be considering in due course what

20 the purpose was behind the collation of intelligence of

21 this kind, the basis of the comment made in this and

22 other cases, the extent to which the Army and its

23 intelligence gathering arm was interested in

24 Rosemary Nelson herself and the extent to which

25 observations such as those we see on this page and





1 others might have coloured perceptions of or attitudes

2 to Rosemary Nelson.

3 Sir, towards the back of this file there is a small

4 group of documents of a very different kind, and I would

5 like just to show you a couple of them. They begin at

6 RNI-511-169 (displayed), and as you can see from the

7 title, this is a pen picture. They tend to focus on

8 individuals of interest, in this case to the Army, and

9 this one, as you see, is about Mark Fulton. The detail

10 is set out on the next page -- I don't know if we have

11 that on the screen -- yes, we do -- and there is

12 information specifically about this named individual.

13 It goes on to page RNI-511-171, and another example

14 we can see at RNI-511-177 (displayed), and again, the

15 substance of the text is at RNI-511-178 (displayed) and

16 RNI-511-179 (displayed).

17 So far as file RNI-512 is concerned -- that is the

18 second volume of Army material -- this includes a number

19 of what are called "action sheets", alerting the Army to

20 threats from Loyalist, including dissident Loyalist,

21 paramilitaries. And we can see an example at

22 RNI-512-001 (displayed):

23 "Orange Volunteers are intending to continue their

24 attacks against Nationalists and Republicans,

25 particularly in the south Derry area."





1 Indeed, the same applies to threats from Republican,

2 including dissident Republican, paramilitaries, and we

3 can see an example of that at RNI-512-005 (displayed):

4 "Dissident Republicans are still very much intent on

5 mounting some form of terrorist attack. It is believed

6 that this may take the form of a VBIED."

7 In this, as you can probably just about make out

8 from the top right-hand corner, the second box down, its

9 origin is January 1999.

10 Taking the matter a little further forward, we can

11 see that at RNI-512-060 (displayed), it suggests, as at

12 12th March that year, very shortly before the murder:

13 "Dissident Republican elements are particularly

14 active at this moment in time. The possibility of some

15 form of terrorist attack cannot be ruled out."

16 And on the next page and the next day, RNI-512-061

17 (displayed):

18 "Republican elements are planning to mount a bomb

19 attack in the near future."

20 Now, as we understand it, those action sheets and

21 information they contain were themselves based on

22 Special Branch intelligence, and these are the sorts of

23 documents which will assist the Inquiry in considering

24 how threat information was disseminated between the

25 various agencies and what action was taken in relation





1 to them and whether there were, or should have been, any

2 action sheets warning of a planned attack or threatened

3 attack against Rosemary Nelson herself.

4 A second category of material in this file -- that

5 is RNI-512 -- consists of operational documents and

6 patrol reports relating to Army activity in Lurgan

7 around the weekend of the murder. An example here we

8 can see at RNI-512-023 (displayed).

9 This is a document relating, as you see, to military

10 deployments for the period between 1st and 14th March

11 this year, 1999. Now, sir, I mentioned in my opening

12 submissions that, of course, very shortly after the

13 murder a number of local residents said that there had

14 been an unusually high level of security force activity

15 in the area over the weekend before the murder and that

16 led to allegations, effectively, of collusion.

17 As I have explained already, the Inquiry will only

18 be looking at certain aspects of that in the evidence,

19 but as you know, the Inquiry has taken a number of

20 statements from Army personnel who were involved in

21 those activities over the weekend, and in particular in

22 the surge operation called Operation Improvise, which

23 again I have mentioned. And these documents form part

24 of the material to be considered in that regard. The

25 references in the opening are Day 10, 116/13 to 117/7.





1 As I explained then, it was in fact a long-running

2 operation with regular deployments over a period of some

3 months. Indeed, it looks as though it was activated, if

4 I can put it that way, on no less than 43 occasions in

5 the first five and a half months of the year, 1999,

6 which included the weekend before the murder.

7 The final category of MoD material which I would

8 like to mention consists of reports in relation to the

9 murder itself, produced in its immediate aftermath, and

10 they begin at RNI-512-078 (displayed) and were produced,

11 it would appear, for various different purposes, contain

12 different levels of detail. The Inquiry has taken

13 witness statements from a number of officers responsible

14 for these reports with a view to understanding, amongst

15 other things, the information on which they are based

16 and the basis which they had for any comments made in

17 these reports about Rosemary Nelson and, indeed, about

18 the murder itself.

19 Now, sir, can I mention at this point that within

20 these two files there are a number of MACER documents,

21 and I have already mentioned that system in the context

22 of Special Branch. In fact, as we understand it, that

23 database was originally created by the MoD and was used

24 both by the RUC and the Army. And again, as we

25 understand it, some of the dissemination levels I have





1 mentioned earlier were used by the Army and some, as it

2 were, belonged to the RUC and in particular to

3 Special Branch.

4 So the fact that material went on the system didn't

5 mean that it was open, as it were, to both

6 organisations; indeed, far from it.

7 If we look at one of the cover sheets of such

8 a document -- and this is the first document we looked

9 at, RNI-511-001 (displayed) -- you will see that it does

10 indeed look very much like the cover sheets of the RUC

11 MACER material we saw earlier. However, please note

12 that the dissemination level, top right, "DSL", is lower

13 still than anything we have seen so far: level 3.

14 Our understanding is that the Army, certain Army

15 personnel at any rate, had access to levels 3, 5, 7 and

16 13, of which 3 was, we believe, the lowest of all

17 security levels and, therefore, one assumes, the level

18 at which material was disseminated most widely.

19 Sir, in this case, you will see -- in this MoD

20 document -- the grade or reliability entry appears in

21 the document, unlike in others I have mentioned already.

22 It is given as A1. In the Army material, that entry has

23 not, generally at any rate, been redacted and appears

24 almost invariably to be A1, because as we understand it,

25 the intelligence was based on eye-witness reports from





1 soldiers.

2 Now, sir, so far as intelligence sharing and the

3 MACER database is concerned, can I show you another type

4 of document, which you will see in this bundle, and that

5 is at RNI-512-006 (displayed).

6 You will see it is referred to in the second line,

7 "document type: RIRAC", which we understand to signify

8 "RUC intelligence reports and comments". Now, although

9 these appear in this MoD bundle and they are properly

10 described as MoD documents, they are in fact based on

11 RUC intelligence. And as I have indicated earlier, one

12 of the issues we will be looking at with the witnesses

13 is the extent to which intelligence was shared between

14 these two organisations.

15 Sir, so far as witness evidence is concerned, the

16 Inquiry has taken statements from a number of Army

17 witnesses who were involved in intelligence gathering

18 and processing at all levels. They include two officers

19 with responsibilities for intelligence: the regional

20 military intelligence officer for the 3 Infantry

21 Brigade, covering counties Down, Armagh and East Tyrone,

22 and an assistant intelligence officer with the

23 3rd Battalion of the Royal Irish Regiment based

24 Mahon Road.

25 Through those statements, and no doubt in some cases





1 their evidence to you, the Inquiry will look at a number

2 of general questions, including, of course: the purpose

3 for which the Army gathered intelligence; the extent to

4 which it acted independently in that regard and the

5 extent to which it was tasked by the RUC; the way in

6 which Army intelligence was collated and analysed; the

7 extent to which it was disseminated internally; and then

8 finally, the extent to which Army intelligence was

9 disseminated amongst the wider intelligence community in

10 Northern Ireland.

11 Sir, turning then finally, in relation to the three

12 principal providers of material, to the Security

13 Service, as I have already mentioned, the Inquiry has

14 had the benefit of the statement from a former senior

15 Security Service officer, and much of what I am going to

16 outline to you at this stage is derived from that

17 statement.

18 The first point to make is that a distinction has to

19 be drawn between the Security Service's role in

20 Northern Ireland and its role in countering the threat

21 from Irish terrorism in the rest of the United Kingdom.

22 Now, outside Northern Ireland, the service had, as

23 I have explained, lead responsibility for gathering

24 intelligence on threats to national security from

25 Republican and Loyalist terrorists and for directing





1 intelligence operations to counter such threats.

2 This work was undertaken by T Branch, headed by

3 Director T, which was based at the services headquarters

4 in London. Within that branch, T2 had responsibility

5 for terrorist activity which threatened Great Britain;

6 T5 had corresponding responsibility for terrorist

7 activity overseas. These sections were organised into

8 desks, each of which focused on particular targets.

9 The service ran a number of sources or agents to

10 meet intelligence requirements set by T2 and T5. The

11 department responsible for recruiting, running and

12 supporting these agents or sources was known as T8 and

13 was principally based at the security services

14 headquarters in London.

15 T2 and T5 received intelligence from a variety of

16 sources, but relied in particular on intelligence

17 received from the RUC. Desk officers would liaise

18 regularly with E3 and with Special Branch officers in

19 the regions.

20 In this sense, the Security Service was both

21 a provider and a customer in relation to intelligence.

22 So far as Northern Ireland is concerned, and the

23 Security Service's role there, in accordance with the

24 concept of RUC primacy, which I have mentioned, the

25 Security Service's role in Northern Ireland appears to





1 have been more limited, although the precise parameters

2 of that is, of course, a matter which will be explored

3 in the evidence.

4 As with the preceding comments I have made about the

5 RUC, the following sketch is intended simply to provide

6 a framework for the issues which the Inquiry will be

7 addressing in the coming months.

8 The Security Service's primary responsibility in

9 Northern Ireland was to provide strategic intelligence

10 advice to the relevant government departments. In

11 addition to this, the Security Service provided support

12 to the RUC in a variety of ways. The most senior

13 Security Service officer in Northern Ireland was the

14 director and coordinator of intelligence, or DCI. His

15 role was advisory rather than operational. At a general

16 level, he was responsible for providing the Government

17 with strategic valuation advice; more specifically, he

18 had responsibility for advising the Secretary of State

19 for Northern Ireland in relation to the authorisation of

20 warrants for interception and eavesdropping operations.

21 He had a permanent representative in both the RUC

22 and the Army. The roles of these two representatives,

23 one referred to as DCI Rep Knock and the other DCI Rep

24 HQ NI, were largely concerned with liaison. DCI Rep

25 Knock also had a specific responsibility for processing





1 national security warrants on behalf of the RUC.

2 Now, perhaps the most important section of the

3 security services operations in Northern Ireland was the

4 assessments group. This comprised a number of

5 intelligence analysts headed by an assistant director

6 known as the head of the assessments group, or HAG, who

7 reported to the DCI. That group was also

8 non-operational, concentrating solely on reporting,

9 assessing and disseminating product of the intelligence

10 gathering operations.

11 The principal purpose of the assessments group was

12 to provide strategic intelligence reports and

13 assessments for government, and that was done

14 principally in the form of Northern Ireland Intelligence

15 reports, or NIIRs.

16 Sir, a number of NIIRs are included in the Part 2

17 Bundle and they can be found in file RNI-534, and I will

18 return to take you to one or two of those in due course.

19 The Security Service also had an operational role in

20 Northern Ireland. An outpost of T8 ran a number of

21 sources or agents in Northern Ireland. Although these

22 officers worked closely with the RUC and the Army, they

23 reported to a manager in London and their intelligence

24 requirements were set by T2, T5 and the assessments

25 group.





1 It seems that the focus of these intelligence

2 requirements was strategic intelligence relating to the

3 leadership of the paramilitary groups and intelligence

4 relating to threats outside Northern Ireland. In

5 addition, a number of officers from A Branch provided

6 specialist support to the RUC, for example, by

7 installing and managing eavesdropping devices. The

8 Security Service says that the RUC decided on targets

9 for technical devices and that any intelligence gathered

10 by such means was the property of the RUC.

11 Now, sir, a number of aspects of the Security

12 Service's activity in Northern Ireland around the time

13 of Rosemary Nelson's murder are of particular relevance

14 to your Terms of Reference. For example, the role of

15 the Security Service in advising government customers of

16 the strategic intelligence picture in Northern Ireland;

17 the content of that strategic intelligence; the role of

18 the Security Service in the warrant applications for

19 a number of technical devices; the question of who was

20 responsible for tasking the A Branch officers in

21 Northern Ireland in relation to technical operations;

22 the extent to which Security Service officers were

23 involved in the TCG; the extent to which the Security

24 Service liaised with the RUC and the Army, including in

25 particular the role of the officers embedded in the IMG





1 following the Warner Report; the extent to which other

2 Security Service officers worked alongside

3 Special Branch officers; and the question of liaison

4 between the assessments group and the RUC and the Army.

5 These issues, amongst others, will be considered

6 later in these hearings.

7 As I have already mentioned, the Inquiry has

8 received witness statements from a number of officers

9 who served in the Security Service in Northern Ireland

10 at the relevant time, including the DCI, the DCI Rep

11 Knock, the head of the assessments group, the directors

12 of T Branch and A Branch, several officers involved in

13 agent handling in Northern Ireland, several officers

14 involved in the intelligence assessment in

15 Northern Ireland and several officers involved in

16 technical operations.

17 Sir, so far as the documents are concerned, the

18 Security Service part of the Part 2 Bundle divides into

19 four files. The first two, RNI-531 and RNI-532, contain

20 a variety of material which has been arranged in

21 chronological order, and the division between them

22 occurs at the time of the murder and I am going to

23 return to those volumes in a moment, if I may.

24 So far as RNI-533 goes, that contains minutes of and

25 material prepared for the intelligence review committee,





1 and I will be explaining about that in a moment.

2 Then finally, and as I have mentioned, file RNI-534

3 contains a number of NIIRs.

4 Now, so far as RNI-531 and RNI-532 are concerned, I

5 am going to deal with some of the themes within those

6 files later on, but in terms of the type of document

7 which you will find in the two files, they are as

8 follows: first, there are a number of source reports,

9 and these contain intelligence from sources or agents

10 run by the Security Service, and for obvious reasons

11 those documents contain a number of redactions. Many,

12 but not all, of those reports are concerned with

13 Loyalist activity.

14 The second type of document is documentation

15 relating to a particular technical operation,

16 Operation Indus, which was directed against a house

17 owned by Rosemary Nelson and lived in by Colin Duffy.

18 And I will be outlining more detail in relation to that

19 operation later on today.

20 For the purposes of this introduction, however,

21 suffice it to say that the proposal for this operation

22 encountered some difficulties, and there are a number of

23 internal Security Service documents -- emails, loose

24 minutes, notes for file, et cetera -- which deal with

25 this operation.





1 A third category of documents belong in

2 file RNI-532, because they all post-date the murder, and

3 they relate to the murder investigation themselves and

4 these are some at least of the documents which are not

5 yet ready for disclosure to the Full Participants, as

6 the consultation process is still going on. And I hope

7 that it will be obvious from looking at file RNI-532 and

8 the missing pages within it where the omissions are.

9 Now, sir, may I just say a final word in terms of

10 providers about the Cabinet Office, because one of the

11 files in the Part 2 Bundle, file RNI-521, contains

12 Cabinet Office material; not a great deal of it, but it

13 is put in that separate file, RNI-521. And in a sense,

14 this material represents the very top of the

15 intelligence pyramid, if I can put it that way, for it

16 relates to the intelligence which was being provided,

17 discussed, analysed and then in turn requested at the

18 very highest level within government.

19 It contains only a small number of documents, as

20 I have said, and they are themselves a selection only of

21 the documents which the Inquiry has examined in

22 cooperation with the Cabinet Office. The documents

23 within this file, RNI-521, have been selected of course

24 because of their particular relevance to your Terms of

25 Reference and List of Issues.





1 But, sir, you have in fact already seen a

2 substantial amount of material of this kind, because

3 I opened it to you in the context of Drumcree, if you

4 remember, and in file RNI-308. Again, for everyone's

5 note, the relevant part of that was Day 9, 40/25 to

6 Day 10, 100/23.

7 Sir, the final topic I wanted to touch on in this

8 general part of my submissions is to talk about liaison,

9 and it seems that this is the right moment in which to

10 do it, because the Inquiry is concerned about the extent

11 to which intelligence was or should have been circulated

12 or disseminated within, between and beyond the

13 intelligence agencies.

14 That is something one can readily imagine will be

15 investigated with the witnesses, but we have material

16 within the Bundle which bears upon it as well.

17 That, in particular, relates to the work of various

18 committees which I would like briefly to introduce.

19 They are, in ascending order, the subdivisional or

20 divisional or, indeed, regional action committees, and

21 as we understand it, these committees provided

22 a mechanism for day-to-day coordination, primarily, we

23 think, between the RUC and the Army.

24 Next, the intelligence review committee. I have

25 mentioned it already. This was a weekly forum for





1 liaison in relation to intelligence production and

2 assessment. It was chaired by the DCI, it was attended

3 by senior representatives from Special Branch, the Army

4 and the Security Service. It was responsible for

5 setting the monthly priority intelligence requirements,

6 which were drafted by the assessments group and agreed

7 by the committee, the IRC. As I have said, the material

8 prepared for their meetings, and indeed the minutes of

9 those meetings, are in file RNI-533.

10 Next up the ladder, the Province Executive

11 Committee. The purpose of this committee was to provide

12 the policy oversight and coordination of counter

13 terrorist operations in Northern Ireland. Although the

14 main focus was on the RUC, it was also attended by

15 senior representatives of the Army and of the Security

16 Service, each of whom would provide a briefing.

17 Finally, the security policy meeting, held more or

18 less on a monthly basis, chaired by the Secretary of

19 State, attended by her security minister and by senior

20 NIO officials and also by the Secretary of State's chief

21 security advisers, namely the Chief Constable, the

22 General Officer Commanding and the DCI, who attended and

23 provided briefings. And as we understand it, at such

24 meetings, the, as it were, apex of the structure, the

25 DCI, usually provided an assessment based upon





1 consultation with the RUC and the Army.

2 So, sir, that is the general introduction that

3 I wanted to give to the Bundle, and it was in a sense an

4 attempt to help people to understand its contents, the

5 way it is structured and the context in which it is

6 properly to be viewed. What I would now like to do is

7 to focus in more detail on specific parts of the Bundle

8 and on the themes which emerge.

9 Sir, I would like to start with the Special Branch

10 material and in particular the Special Branch material

11 relating to Rosemary Nelson. Sir, before we look at any

12 of the documents, I would like, if I may, to remind you

13 of a point I made right at the outset of these hearings,

14 which is that no contemporaneous paper file on

15 Rosemary Nelson has been recovered from or disclosed by

16 the PSNI. And you will remember that the PSNI

17 disclosure statement, made by the relevant

18 Assistant Chief Constable, confirmed that the PSNI did

19 not hold a paper file on Rosemary Nelson prior to her

20 murder.

21 Sir, can we then look at the relevant material, and

22 I propose to do so in a part chronological and part

23 thematic way; in other words, not by any means to focus

24 attention on all of the material in this part of the

25 Part 2 Bundle, not by any means to deal with all of the





1 points which arise, but to concentrate instead on what,

2 in my submission, are the principal themes within this

3 material.

4 Now, sir, so far as the disclosure to the Inquiry is

5 concerned, it would appear that Rosemary Nelson first

6 came to the notice of Special Branch in December 1994,

7 and the way in which she came to the attention of

8 Special Branch was that it was reported at that stage

9 that she was attempting to construct a false alibi for

10 Colin Duffy, who was a suspected member of the

11 Provisional Irish Republican Army or PIRA. Mr Duffy had

12 been remanded in custody for the murder of the former

13 part-time UDR soldier, John Lyness.

14 Sir, we can see that first document, the first PRISM

15 document, within the PSNI disclosure, which refers to

16 her, at RNI-541-001. Sir, for all of these

17 documents I am hoping that the representatives of the

18 Full Participants have their hard copy files with them,

19 because I'm not intending to display any of this

20 material on the Inquiry system.

21 THE CHAIRMAN: Dame Valerie's RNI-541-001 is a blank sheet

22 of paper.

23 MR PHILLIPS: That appears to be a redaction more savage

24 even than any of the pages I have seen. Sir, it may be

25 a sensible idea to break now so that we can regroup





1 a little and make sure --

2 THE CHAIRMAN: Should we say 10 to two.


4 THE CHAIRMAN: Right. We will adjourn until 10 to two.

5 (12.51 pm)

6 (The short adjournment)

7 (1.50 pm)

8 THE CHAIRMAN: Yes, Mr Phillips.

9 MR PHILLIPS: Now, sir, before the technical hitch, I was

10 about to start the examination of the Special Branch

11 files and I was telling you, if you remember, that the

12 first document or report that we have seen referring to

13 Rosemary Nelson comes in December 1994. And again,

14 using the hard copy files, we can see the relevant text

15 at RNI-541-002.

16 This is, as I say, the first PRISM document the

17 Inquiry has seen. If there is or was earlier reporting

18 about her, we haven't seen it, and that would presumably

19 include reporting recorded in a different format, i.e. not

20 on the system. And obviously, the ambits of that will

21 have to be tested in due course.

22 But moving forward to April 1996, there are three

23 reports to which I would like to draw your attention, in

24 which Rosemary Nelson was the specific subject. The

25 first we see at RNI-541-009. The report here suggests





1 that she was using -- this is at RNI-541-010 -- her

2 position as a solicitor to gather information for PIRA

3 in Lurgan, including details of RUC members who she

4 comes into contact with. And you will see the comment:

5 "Nelson is known to represent a number of Republican

6 activists in the Lurgan area."

7 I should say that about this time it would seem

8 in April this year, 1996 -- and we can see it at

9 RNI-541-014, the same file -- there is a specific number

10 for Rosemary Nelson. We see it at the bottom of the

11 page, SB306132. The actual date on which she was

12 allocated that number and the reason for the allocation

13 to her of that number are both entirely unclear, but

14 looking at the substance of the matter again, you will

15 see a second document here, the substance of it, and it

16 repeats the document we have already looked at.

17 Next we see later in the same file, at RNI-541-016,

18 a document, again at the bottom of the page making

19 further reference to her, saying:

20 "She would take a very keen interest within the

21 Republican movement and especially Sinn Fein whom she

22 legally represents."

23 You will see on the next page, RNI-541-017,

24 a reference to her in a list of other names, which has

25 been redacted, with her number.





1 Now, it would appear based on this material, that

2 from this time onwards, from 1996 we have been looking

3 at, April, that Special Branch began to gather

4 intelligence specifically relating to her, and as far as

5 those reports are concerned, they can be conveniently

6 divided into three broad categories: first, intelligence

7 on her suspected or alleged association with Lurgan

8 PIRA, including with its suspected leader, Colin Duffy;

9 second, intelligence in relation to her association with

10 the Garvaghy Road Residents Coalition; and third, a

11 miscellaneous quantity of intelligence on her, including

12 her political associations, her friendships and her

13 family.

14 I propose to look at those categories in turn,

15 although you will note, sir, as we go through, that the

16 boundaries between the three categories are often

17 blurred.

18 But, sir, before starting on that, you can see just

19 on the basis of this very early material that it is

20 possible to reach at least the following provisional

21 suggestions. First, if the intelligence from this early

22 period we have just looked at was accepted as reliable

23 by Special Branch, then in these early years, between

24 1994 and 1996, a perception may already have taken root

25 there and, who knows, possibly more widely, that





1 Rosemary Nelson actively supported military or militant

2 Republicanism, specifically by thwarting the prosecution

3 of Colin Duffy and more generally assisting Lurgan PIRA

4 in its targeting of RUC officers.

5 Now, sir, in due course the Inquiry will distribute

6 statements from the officers who produced or received

7 the above reports, the ones I have mentioned, and we

8 will no doubt explore with some of them called to give

9 evidence whether that was in fact the case.

10 But, sir, I would also suggest that the reporting we

11 have looked at briefly will also need to be considered

12 in the context of the anti-RUC publicity, which was

13 generated by Colin Duffy's successful appeal against his

14 conviction for the Lyness murder, which, so it was said,

15 Rosemary Nelson was herself instrumental in organising.

16 Sir, returning to the three categories or themes of

17 the intelligence in this Bundle from this point, I would

18 now like to move to 1997. Sir, the background to this

19 is of course that on 16th June that year the two RUC

20 officers were shot and killed in Lurgan. It is clear

21 from the material that the RUC received information that

22 Mr Duffy was involved in the murders and he was arrested

23 on 23rd June and subsequently remanded in custody.

24 Within weeks of those murders, Special Branch began

25 to report on Rosemary Nelson's involvement in this case,





1 and I would just like to show you some of that material.

2 We can begin at RNI-541-147. Sir, you see the cover

3 sheet at RNI-541-147, under the title of "Republican

4 General", leads to the substance of the report at

5 RNI-541-148. And as you will see, the suggestion here

6 was that Rosemary Nelson was making contact via an

7 intermediary with a prosecution witness in the case.

8 The report there is that she was concerned that she

9 might be found out trying to make that contact.

10 Next, at RNI-541-150 is another SIR with the text at

11 RNI-541-151; this of an altogether blander kind, you may

12 think, a report that she and CAJ were formulating an

13 application to the European Court in relation to the

14 detention of Colin Duffy. And at RNI-541-153, SIR, with

15 content at RNI-541-154, a report that she had asked

16 a local priest to stand bail on the basis that if he did

17 so, it would enhance Mr Duffy's chances of being

18 released.

19 Now, the reporting continues into September at

20 RNI-541-164, the same type of document, the same

21 heading. And here, the suggestion is that

22 Rosemary Nelson had -- and I use the word in the second

23 paragraph -- "pressurised" a witness into making

24 a statement discrediting the key prosecution witness in

25 the case. And you will see in the third paragraph the





1 reported intention: to fax the statement all over the

2 world to prominent politicians, including the DPP's

3 office, the Secretary of State and the press.

4 Now, this is an example of a moment at which two

5 parts of the case come together, as you will remember,

6 because we have seen in looking at documents earlier and

7 indeed in questioning earlier witnesses, that indeed

8 a statement obtained in the course of this prosecution

9 was indeed distributed, perhaps not as widely as it

10 suggests it would be in this report, but something of

11 that kind did indeed transpire.

12 Sir, moving on in the same month and further in the

13 same file, RNI-541-167, this is again the cover sheet of

14 an SIR, the heading this time "PIRA"; the substance at

15 RNI-541-168. It is about the same case and appears to

16 report a conversation. You will see the comment at the

17 bottom that she is a solicitor who represents most of

18 the PIRA members in the greater Craigavon area and is

19 known to be sympathetic to the Republican cause.

20 Now, sir, as you will remember, in due course, at

21 the beginning of October this year, 1997, the

22 Director of Public Prosecutions decided not to proceed

23 with this prosecution. However, the reporting in this

24 area, which we see recorded in the Bundle, continued

25 throughout the next year, 1998. And again, if I can





1 just show you a few examples.

2 The first is at RNI-542-063. This is an SIR, the

3 heading again, title "PIRA", and turning to RNI-541-064,

4 the report here is that:

5 "Rosemary Nelson continues to have a close

6 association with Lurgan PIRA, in particular

7 Colin Duffy."

8 And it also says that:

9 "She regularly briefs Colin Duffy on the CID

10 investigation and actively assists him in creating

11 alibis for PIRA murders."

12 THE CHAIRMAN: Members.

13 MR PHILLIPS: I am so sorry, "PIRA members".

14 In the following month, in March 1998, there is

15 a further report, SIR, under the heading "Republican

16 General" at RNI-542-072, and it says that:

17 "Rosemary Nelson is aware she is known by certain

18 politicians and solicitors and also the security forces

19 to be a close associate of members of the Lurgan PIRA.

20 One wonders how long she can continue to be in this

21 position and not be reprimanded by the Law Society."

22 Then at RNI-542-089, the same month, March 1998 and

23 the substance at RNI-542-090. It is another SIR under

24 the heading "PIRA":

25 "Rosemary Nelson permits member of Lurgan PIRA to





1 read confidential legal case note documents in the

2 secrecy of her office."

3 Sir, the final March report or document I want to

4 show you is at RNI-542-087. It is a curious document in

5 a number of ways. First, please note the title "PIRA,

6 north Armagh, Rosemary Nelson". It says:

7 "Copy to IMG, share with E3."

8 And the subject is:

9 "Rosemary Nelson speaks to Chief Constable."

10 However, when you turn the page to see where the

11 substance of the report should be, to RNI-542-088, it

12 appears to be completely blank.

13 Now, the reasons why there is no text on this page

14 are at present unclear. I think I am right in saying

15 that there is no other material the Inquiry is aware of

16 which suggests that there was at any rate a meeting

17 between Rosemary Nelson and the Chief Constable at this

18 time. It remains, therefore, something of a mystery.

19 Now, in the next month, at RNI-542-116, there is a

20 SIDD and you will notice that the dissemination level

21 is 7, so a much lower level document, and which on the

22 following page, RNI-542-117, it is reported that PIRA

23 had briefed Rosemary Nelson to instruct an individual to

24 take responsibility for an illegal weapons find.

25 Can I just try to draw some of the threads together





1 from that material. As far as the Inquiry can make out,

2 during 1997 and to this point in 1998, there is

3 a significant increase in the volume of Special Branch

4 reporting on Rosemary Nelson, and that reporting has

5 a focus on the following: first, on her involvement in

6 the case concerning the murder of the two constables.

7 Now, sir, again, this is an aspect at which the

8 Part 2 material has to be seen in the wider context of

9 the issues we have already heard and read about in

10 part 1, because of course this was a murder about which

11 a number of witnesses have given evidence in relation to

12 its impact, the effect that it had on people in

13 Northern Ireland, and of course more particularly on

14 those in the local area, given the stage of the peace

15 process which had been reached at that point and the

16 fact that it appeared to run quite contrary to the

17 approach of the Republican movement at that stage.

18 Secondly, focus on Rosemary Nelson's alleged ongoing

19 role in providing assistance to Lurgan PIRA. This

20 reporting we have looked at appears to consolidate in

21 that sense the intelligence received in the previous

22 years. However, you may think that it is obvious from

23 what we have just seen that Rosemary Nelson by this

24 stage has become a person of interest in her own right;

25 hence the March 1998 reporting, for example, in which





1 she is the principal subject.

2 Now, sir, note, please, also that most, if not at

3 all, of these reports say that the intelligence within

4 them was passed on to HQ and specifically to the

5 Special Branch department E3, which was responsible for

6 the analysis of intelligence.

7 A couple of point arise at that stage. The first is

8 this: the Inquiry has not received any reports, notes,

9 memoranda or documents produced by E3 containing

10 analysis of the intelligence on Rosemary Nelson. It is,

11 therefore, unclear what conclusions were drawn by

12 Special Branch, either locally or centrally, as to her

13 suggested involvement with PIRA.

14 Secondly, reference to E3 brings in, as it were, the

15 part 1 issue which was going on at this precise moment,

16 by which I mean March 1998, when of course the first of

17 the threat assessment exercises that I mentioned

18 a little earlier was underway with input in that

19 exercise from Special Branch.

20 The other point to note at this stage is this: it is

21 unclear, at least to the Inquiry at this point, how

22 widely any conclusions or even suspicions about

23 Rosemary Nelson's association with PIRA were known. So

24 the following specific questions arise: Was this

25 intelligence shared, passed outside Special Branch?





1 Specifically, was it shared with or passed to the

2 Security Service, the Army or the

3 Northern Ireland Office? If it was, how did it affect

4 attitudes towards her and ultimately, of course, towards

5 issues affecting her safety?

6 Now, within this category, the next sub-issue, if I

7 can put it that way, concerns the material which focuses

8 on the incident involving Colin Duffy in November 1997.

9 You remember that led to him being charged with assault

10 and convicted after the murder, in fact, I think on

11 1st April 1999.

12 There are several reports in this part of the Bundle

13 in November 1997, suggesting that Rosemary Nelson was

14 closely involved in highlighting the alleged harassment

15 of Colin Duffy by the RUC. Now, the first of them is

16 back in file RNI-541 and it is RNI-541-203. This is a

17 SIDD, the heading "PIRA", the dissemination level, 7,

18 and the substance is at RNI-541-204:

19 "It is believed that Rosemary Nelson is making plans

20 for Colin Duffy to take part in a Channel 4 documentary

21 which will investigate police harassment of Republicans

22 in the Lurgan area."

23 Then moving on through this bundle to RNI-541-231,

24 this is an SIR, "Republican General" is the heading,

25 much higher dissemination level, 19. The substance is





1 at RNI-541-232, reporting that Mr McGuinness had

2 attended her office in November to be advised on two

3 matters: first, the Hamill case -- the murder had taken

4 place in May, you see; and secondly, the point

5 I mentioned earlier, the alleged harassment of

6 Colin Duffy by the security forces.

7 Then slightly further on in the bundle at

8 RNI-541-234, this is a SIDD, dissemination 7, heading

9 "Republican General", and the suggestion is here that

10 there was to be a meeting or conference at a hotel in

11 Belfast to discuss these matters. And it says:

12 "It is probable that Rosemary Nelson arranged the

13 meeting."

14 The next report is at RNI-541-236. It is an SIR,

15 dissemination level 19, "Republican General", the

16 suggestion here being that Rosemary Nelson and

17 Colin Duffy and another person are to meet with the

18 Foreign Affairs Department of the Irish Government to

19 discuss alleged harassment by the security forces in

20 Northern Ireland.

21 So far as the case more specifically is concerned,

22 you will see a PRISM document at RNI-541-241 and its

23 substance at RNI-541-242. The suggestion here is that

24 Republicans have been telling local residents, local to

25 the incident which had led to his arrest, not to make





1 any statements to the police but only to Rosemary Nelson

2 or her staff.

3 Now, so far as the incident is concerned, there are

4 a number of documents in this same file, RNI-541, in

5 which resumes or summaries of the incident, as seen from

6 the RUC perspective, appear. And some of them, I think,

7 are also in the Part 1 Bundle and we have looked at some

8 already, I believe. But can I ask you to look first at

9 the resume which appears on RNI-541-220.

10 This comes, as you can see from the next page,

11 RNI-541-221, from the divisional commander for -- I

12 think it is for J Division. Yes, you can see that on

13 the preceding page.

14 You will see the reference on that same page,

15 RNI-541-220, to Mr Duffy and Rosemary Nelson, described

16 as being a vociferous in this paragraph, and in the

17 passages I think we looked at earlier in the hearing, on

18 the next page, in the fourth paragraph down, you will

19 see reference there to a propaganda war against the

20 security forces.

21 This resume, as it were, makes its way up the chain

22 to the higher levels of the RUC, and I should make clear

23 that with it came a document from a lower level officer,

24 the subdivisional commander -- I will just give the

25 reference, RNI-541-222 to RNI-541-228 -- which contains





1 a very detailed account of the events said to have taken

2 place in mid November. That is interesting in this

3 context for the reference at the top of RNI-541-225 to:

4 "... Rosemary Nelson's PR machine going into

5 overdrive in relation to the 'ongoing harassment of

6 Colin Duffy'."

7 Which, as you can see now, fits into the other

8 reporting that we have been looking at just a little

9 while ago.

10 Anyway, all of this material from the divisional

11 commander, including that report, goes up the chain.

12 And we can see the next stage at RNI-541-219, and this

13 is addressed to the Chief Constable and signed by the

14 Assistant Chief Constable of South Region.

15 Now, that, in turn, appears to have informed the

16 drafting of a letter dated 10th December 1997 from the

17 Chief Constable to the Secretary of State, and this is

18 not something we have seen before. Could I ask you to

19 look at it, please, at RNI-541-214. It sets out its

20 purpose at the beginning:

21 "The following information relates to the most

22 recent incidents in which Mr Colin Duffy has been

23 involved."

24 And then sets out reference to the Lurgan police

25 officer murder case, to another incident in October and





1 then, finally, and at greatest length, RNI-541-215, to

2 the November incident we have just been looking at, and

3 ends with the paragraphs on RNI-541-216 in which the

4 Chief Constable's view of and attitude towards Mr Duffy

5 is clearly set out.

6 It is not clear at this stage exactly what the

7 purpose of this letter was, nor indeed what happened to

8 the information set out within it so far as the

9 Secretary of State is concerned. But can I remind you

10 of at least a couple of documents in the Part 1 Bundle

11 which may help to put it in context, and the first is at

12 RNI-101-176.501 (displayed).

13 This is a document we have already seen. It is

14 dated 4th December, so just a few days earlier than the

15 letter we were just looking at, and it suggests that

16 there had been a conversation between the civil servant

17 and the superintendent at Command Secretariat. And it

18 looks from this as though there had already been

19 a request for a report from the Chief Constable on the

20 Duffy case, but that that request had "fallen between

21 the cracks".

22 Then in the second paragraph there is a request for

23 detail on the arrest and charging and the various

24 allegations about detention, and a request for further

25 information.





1 Beyond that, it is difficult to think of any other

2 prompt for the letter from the Chief Constable that we

3 have seen. However, it is not easy to see, as I have

4 suggested, what use, if any, the Secretary of State made

5 of the information given to her from the contemporaneous

6 correspondence -- this is December 1997, if you

7 remember -- the salient one is at RNI-105-180. That, as

8 we will see, I hope, is a letter of 9th December, the

9 day before the Chief Constable's letter we have just

10 been looking at, although it is on the same subject.

11 And this is the letter, if we go over the page to

12 RNI-105-181, you may remember, addressed to Jane Winter

13 of British Irish Rights Watch about this case in which

14 it was revealed by the Secretary of State that she would

15 be speaking to the Director of Public Prosecutions and

16 the Chief Constable about security concerns, and that

17 she had spoken to the Chief Constable about the case, as

18 had her security minister, Mr Ingram, who had also met

19 Mr McGuinness and others to discuss the situation.

20 So, sir, so far as this incident, the November 1997

21 incident, is concerned, as with the June 1997 incident,

22 the two police officers' murder, the incident garnered

23 a significant level of attention, media attention, but

24 also, as we have seen now, other attention, not least as

25 an example of what was said to be RUC harassment.





1 You will remember in relation to this incident

2 correspondence involving NGOs such as Ms Winter, but

3 also the involvement of the Irish Government in this

4 matter. As we had already seen -- and this Part 2

5 material simply confirms it, you may think -- it went to

6 the very highest point, both within the NIO and the RUC.

7 Now, the Special Branch reporting appears to have

8 been focused on monitoring the efforts said to have been

9 made by Rosemary Nelson to publicise, to draw attention

10 to this case. You will remember the reporting in

11 relation to the Channel 4 programme, for example.

12 But again, as with the earlier reporting I showed

13 you, it is not clear from the documents we have seen

14 what effect this reporting had or indeed what

15 conclusions were drawn from the basis of it about

16 Rosemary Nelson herself.

17 The next sub-issue under this heading I would like

18 to turn to is the material in the Part 2 Bundle, which

19 deals more specifically with the relationship between

20 Rosemary Nelson and Colin Duffy. Now, it seems that

21 from late 1997, Special Branch also began to report

22 intelligence suggesting that Rosemary Nelson was having

23 a personal relationship with Colin Duffy.

24 In November 1997, for example, it was reported that they

25 had a very close relationship, which is more than





1 a client/brief relationship and that they were trying to

2 keep this relationship secret.

3 In February 1998, it was reported that Colin Duffy

4 and Rosemary Nelson continued to have a "close intimate

5 relationship and were meeting almost daily". There were

6 reports of their travelling together in particular to

7 Dublin in November 1997 and in March 1998.

8 Now, sir, the first document I would like to take

9 you to in this area comes from May 1998 and it is at

10 RNI-542-121. This, sir, as you can see, is a tasking

11 request form submitted by the TCG, and it requests the

12 targeting of the location where it was said that

13 Colin Duffy was meeting Rosemary Nelson. And at the

14 bottom of the page, you will see the intelligence case

15 and what is there stated: that Colin Duffy and

16 Rosemary Nelson are having an extra marital affair and

17 regularly travel in their own vehicles to pre-arranged

18 meeting points in the greater Craigavon area.

19 In other reports, a PRISM form and in a SIR and a

20 SIDD in the same month, there were reports of them

21 meeting up and driving off in Rosemary Nelson's car.

22 And in the same month, it was reported -- and this is at

23 RNI-542-134 -- the substance of this document, which is

24 a SIR under the heading "PIRA", at RNI-542-135 was that

25 Rosemary Nelson was to purchase a house in the Kilwilke





1 area where Mr Duffy would reside.

2 Now, this sort of reporting continues through the

3 summer of 1998 and, indeed, it forms part of the

4 application in relation to Operation Indus, which

5 I mentioned earlier, and I will take you to that

6 material in a little while.

7 But it continues later in the year into

8 September 1998 and then October, and I can show you just

9 one example at RNI-543-038. This is a SIR under the

10 title "PIRA" and the substance is at RNI-543-039:

11 "Colin Duffy and Rosemary Nelson continue to have an

12 intimate relationship and meet secretly on a regular

13 basis."

14 Sir, so far as other sources of reporting are

15 concerned, in the previous year, in 1997, at the behest

16 of the TCG, Special Branch were also carrying out two

17 surveillance operations, which indirectly led to further

18 intelligence relating to Rosemary Nelson.

19 The first was called Operation Partoid and was

20 directed at Lurgan PIRA with the explicit aim of

21 thwarting its terrorist activities. And we can see

22 material on that, for example, at RNI-541-075. It is in

23 a familiar form, familiar to us now, with the heading

24 "TCG (South)", the operation name, the agency tasked,

25 the intelligence case, "Lurgan PIRA advanced stages of





1 a terrorist operation," and then the aim, which is of

2 course surveillance on Lurgan PIRA:

3 "... to arrest persons involved in terrorist

4 activity."

5 The second operation of the two I mentioned, which

6 had the title Operation Idle, was directed at a single

7 suspected PIRA member, namely Colin Duffy, although it

8 would appear from the documents that the two operations

9 seemed to have been interchangeable at times. And we

10 can see examples of the surveillance material generated

11 for it at RNI-541-078.

12 This is the PRISM cover sheet, the title "Operation

13 Partoid", the date June 1997 and the product, if I can

14 put it that way, of this is RNI-541-079. Now, you will

15 see reference there to Mr Duffy, and then lower in the

16 page, about 10 or 12 lines up from the bottom, you will

17 see a reference to Rosemary Nelson's car and to the fact

18 that there was continuing surveillance effectively of

19 the two of them from that point until the end of this

20 particular part of the operation.

21 And in summary, sir, during the course of these two

22 operations, which lasted for several months,

23 surveillance officers from E4A repeatedly reported the

24 visits or apparent visits of suspected PIRA members to

25 Rosemary Nelson's offices and also reported observations





1 such as the one we have just looked at at RNI-541-079,

2 and included, for example, occasions where it was

3 reported that Mr Duffy had been seen driving

4 Rosemary Nelson's car.

5 In 1998, there is further surveillance which

6 includes observation about Rosemary Nelson. For

7 example, in March of that year during another operation

8 called "Cog", it is said that Mr Duffy was observed

9 driving Rosemary Nelson in her car late at night. And

10 later in the year, in June and July, during another

11 operation called "Repugnance", an observation of

12 Mr Duffy and Rosemary Nelson together late at night is

13 made on a number of occasions.

14 So far as this material is concerned, then, sir, the

15 following points arise. On the basis of this

16 intelligence reporting, together with the surveillance

17 reports, some of which we have looked at, Special Branch

18 officers may have concluded that in 1998,

19 Rosemary Nelson was having a sexual relationship with

20 Colin Duffy.

21 As with the more general reporting on what was said

22 to be her association with PIRA, it is quite unclear who

23 knew or suspected that this might be the case. We do

24 not know whether this intelligence and reporting was

25 shared outside Special Branch. It is not clear at what





1 point and whether it was passed to the other agencies to

2 the Security Service, the Army or indeed the

3 Northern Ireland Office.

4 An issue also arises as to whether members of the

5 local community -- and including, of course, local

6 paramilitary groups -- had suspicions of this kind, and

7 if so, what was the basis for those suspicions, and

8 indeed, what, if anything, was the information on which

9 such views or suspicions were based.

10 Then finally in this, as in all other areas that we

11 have been looking at, how did those views, those

12 suspicions or conclusions, affect attitudes towards

13 Rosemary Nelson and, of course, ultimately her safety?

14 The next aspect of this category of intelligence

15 that I would like to look at in some detail is that

16 concerning Operation Indus. Now, in August 1998,

17 Special Branch applied for a technical operation,

18 referred to as an attack, on a house in Deeny Drive

19 owned by Rosemary Nelson and occupied by Colin Duffy.

20 The proposal for Operation Indus was made by Lurgan

21 Special Branch and made its way up through the South

22 Region of Special Branch to the Security Service and

23 eventually to the office of the DCI.

24 The original written application was made by the

25 detective sergeant of Lurgan Special Branch, and we can





1 see it at RNI-543-013.

2 You will see the heading and the nature of the

3 application and the addressee, the detective inspector,

4 and reference to the fact that Mr Duffy occupied the

5 house, to the role within PIRA that he was alleged to

6 hold, and beneath it the intelligence case which sets

7 out a detailed profile, no doubt based on intelligence,

8 in relation to him and his alleged or suspected

9 activities.

10 That continues over the pages until page

11 RNI-543-016, which I would like to highlight for you,

12 because there is then a reference in the paragraph

13 beginning "this role has, however ..." to his contact

14 with other prominent and leading PIRA members. And

15 there is a list, which we don't have in the bundle,

16 appendix B, of meetings.

17 But if you look just a little bit further on, on

18 page RNI-543-016, there is another section beginning:

19 "Those Republicans closest to Duffy who would be

20 regular callers to his home include ..."

21 Then a series of redacted names, each of which has

22 a relevant appendix, of which the only one we can see

23 here is Rosemary Nelson.

24 Note also, please, on the next page, at RNI-543-017,

25 the concern expressed in the middle of the page that he





1 is associating with dissident Republican groupings. And

2 sir, just pausing here, it is obviously important to

3 bear in mind the date of this document, which

4 is August 1998; in other words, so far as the political

5 situation is concerned, some four months or so after the

6 Good Friday Agreement, about a month after the events at

7 Drumcree in July of 1998, which, as you remember,

8 sparked interest on both sides in those events, which

9 were of great concern.

10 Turning over to RNI-543-018, you will see

11 a reference here to false alibis, and this paragraph is

12 of some interest to us clearly but the reference is to

13 a particular case involving an arsenal of weapons. It

14 would appear, looking at the earlier reporting, there

15 may be an error here in the sense that the reporting in

16 relation to Rosemary Nelson about this case did not

17 suggest that a false alibi was to be created in that

18 case. Although, of course, we have already seen --

19 indeed, it was the very first document we saw --

20 a suggestion that she had been involved in creating

21 false alibis in other cases.

22 But secondly, note, please, the reference in the

23 last sentence of the paragraph to "CID were briefed on

24 the direction of their enquiries". This is a rare

25 recorded example of where intelligence is said to have





1 been disseminated beyond Special Branch within the RUC.

2 It is not, however, clear to the Inquiry what the result

3 of that reporting was in that case, whether in relation

4 to the case itself or more specifically in relation to

5 Rosemary Nelson.

6 Now, sir, if you turn on the pages of this

7 application, you will see the concluding section at the

8 bottom of RNI-543-019, where the case for authorisation

9 is put forward. And it continues over the page at

10 RNI-543-020, which is a heavily redacted page, but you

11 will see the assertion there about the nature of their

12 relationship which forms part of the summary of the case

13 made by this Special Branch officer.

14 So far as the appendix, which we saw reference to

15 earlier, is concerned, that is at RNI-543-033, the

16 penultimate paragraph suggests how it was that

17 Rosemary Nelson had come to the notice of this office,

18 and the two points are made: the association with

19 leading PIRA members in the north Armagh area, and also

20 the fact that she was the legal adviser to the

21 Garvaghy Road Residents Association. And then the blunt

22 assertion in the last paragraph:

23 "Nelson uses her legal training to assist PIRA in

24 any way she can. It is clear Nelson is a dedicated

25 Republican."





1 Now, this application, so far as Special Branch is

2 concerned, gets passed up the chain of command in the

3 way with which we are now familiar.

4 The next document is at RNI-543-012 in the same

5 bundle, and then the next steps up, you can see, at

6 RNI-543-011 and finally at RNI-543-010, which is

7 addressed to the head of Special Branch, the relevant

8 Assistant Chief Constable for E Department. And you can

9 see, I hope, from the handwritten comment lower down on

10 the page that this application is then passed on to the

11 DCI for the warrant application to be made.

12 Sir, we will look at the other side of this, if I

13 can put it that way, the Security Service side, in

14 a moment, but you will note in relation to the PSNI

15 material that no concern is expressed at any point in

16 any of the pages we have looked at about the fact that

17 Rosemary Nelson was Colin Duffy's solicitor, and also

18 that the concept of client confidentiality, the concept

19 of legal privilege is nowhere referred to. As we will

20 see, that first enters the thinking, enters the picture

21 when the application is considered at the DCI level of

22 the Security Service.

23 Now, sir, in relation to this operation, may

24 I suggest that it is significant for at least the

25 following reason: first, it provides the clearest





1 possible indication of received Special Branch opinion

2 of Rosemary Nelson, both as a dedicated Republican and

3 as someone with close associations to north Armagh PIRA.

4 At the very least, it also raises her profile both in

5 relation to Security Service, as we will see in

6 a moment, because of their involvement with this matter

7 but also -- and again, as we will see in due course --

8 in relation to the Secretary of State and such senior

9 civil servants at the NIO as may have been concerned

10 with the matter when it reached that point, as in due

11 course it did.

12 But, sir, in a way, perhaps the most important point

13 about this material concerns its timing, because at this

14 point in August 1998, as you will recall, the second of

15 the threat assessments which took place that year was

16 being undertaken, and as we have already seen in

17 considering the part 1 material, views were being taken

18 and expressed and passed up the chain in a very similar

19 way to the way that we have seen the chain operate in

20 the case of this application. And, of course, with

21 involvement of the same part of the same organisation,

22 namely Special Branch.

23 So, here, as I suggested right at the outset this

24 morning, is, you may think, a case where one must see

25 the material across the board. One simply cannot form





1 a judgment about these issues without knowing not only

2 about the part 1 material and evidence, but also in

3 considering the Part 2 material and any evidence which

4 is called in relation to that.

5 And the issue clearly arises here as to the extent

6 to which those involved in the threat assessment work,

7 as I said earlier, not only at the bottom of the chain

8 but all the way up the chain to the very, very top, were

9 aware of these matters, aware of the basis for this

10 application and of the intelligence reporting on which

11 it was at least in part based.

12 Now, sir, the next category of intelligence within

13 the PSNI part of the Part 2 Bundle concerns the question

14 of Rosemary Nelson and Drumcree.

15 THE CHAIRMAN: Would that be a convenient moment for the

16 stenographer, if not for you?

17 MR PHILLIPS: It would be for me as well, sir.

18 THE CHAIRMAN: We will break for a quarter of an hour to 20

19 past.

20 (3.02 pm)

21 (Short break)

22 (3.20 pm)

23 THE CHAIRMAN: Yes, Mr Phillips.

24 MR PHILLIPS: Sir, so far as Drumcree is concerned, as I

25 think I indicated earlier, the reporting in this part of





1 the Bundle begins in 1996, in fact in May, and we can

2 see that early document at RNI-541-021. This is a PRISM

3 cover sheet, May 1996, as I say, and the title is

4 "Republican activity at Portadown" and the subject

5 "Garvaghy Road parade, Portadown". The reference is

6 a brief one towards the bottom of the page of text at

7 RNI-541-022. The penultimate paragraph simply says

8 that:

9 "Rosemary Nelson was present in her capacity as

10 legal adviser."

11 And you will see at the bottom of this page in this

12 early document, as I said earlier, that there is already

13 an allocated number.

14 At various other points in 1996 there is reporting

15 of her in this particular context, but it has to be said

16 very much from the point of view of her legal work for

17 the Garvaghy Road Residents Coalition.

18 When one looks at the 1996 reporting, it is

19 possible, I would suggest, to see it as running in

20 parallel with the other intelligence, which we have

21 already seen from this early time, as to her alleged

22 association with Lurgan PIRA.

23 The way the material is presented and the way the

24 reporting is put forward suggests again that her

25 involvement was to give strategic legal direction to





1 a hardline Nationalist or Republican organisation with

2 an anti-RUC agenda.

3 Now, as to the exact purpose and effect of this

4 reporting, again that is a matter unclear at this stage,

5 which will require to be considered with the witnesses.

6 In particular, issues which emerge with greater clarity

7 as the years pass need to be considered right from this

8 early point; namely, first the extent to which the

9 Coalition was perceived to be directly connected to the

10 Sinn Fein, to PIRA, and was effectively thereby an

11 extension of the Republican movement, how her perceived

12 connection with the Coalition may have led to or

13 consolidated conclusions about her political or

14 paramilitary allegiances and, as ever, what it tells us

15 about possible effects on attitudes towards her and, of

16 course, to the question of her safety.

17 Finally, in this, as in other, areas, there is the

18 specific question of the extent to which her association

19 with the Coalition may have led, whether at this time or

20 perhaps more likely later in the history, to her

21 becoming a paramilitary target or being perceived as, in

22 the view of those in that world, a legitimate target.

23 Moving through to 1997, intelligence involving

24 Rosemary Nelson and Drumcree continues in that year and

25 I can show you an example from June 1997 at RNI-541-092.





1 This is a SIR under the heading "Republican General",

2 the substance at RNI-541-093, and in a sense the report

3 is rather low-key and simply says that she was present

4 in a legal capacity at a meeting between the Coalition

5 and the Secretary of State. Perhaps of greater interest

6 for us is the comment:

7 "Nelson has firm PIRA sympathies."

8 The reporting continues into the key month

9 of July, July 1997, when we see, for example, at

10 RNI-541-104 in the same bundle, RNI-541, substance at

11 105, reporting on her contact with the Secretary of

12 State's office. And again, sir, you will remember from

13 the part 1 material, I am sure, the uncertainty which

14 persisted to the very last minute in 1997 and her role

15 in seeking to find out from the Secretary of State what

16 the decision as to the march was with a view to the

17 possibility at least of getting an injunction to stop it

18 proceeding.

19 Now, I have just shown you a couple of examples, but

20 as far as one can tell, the reporting in this area,

21 Rosemary Nelson and Drumcree, does increase

22 significantly during 1997. There is another aspect

23 here, which we see in the following year; namely,

24 reporting of Rosemary Nelson taking a lead in drawing

25 international attention to Drumcree through her legal





1 connections. And again, it is, as it were, the Part 2

2 side of what we are already very familiar with in

3 relation to the international observers and other

4 visitors in the part 1 material.

5 Moving into 1998, the intelligence reporting

6 continues, and here, sir, of course, the wider political

7 context which I mentioned earlier is important, and in

8 particular the fact, attested to by a number of

9 witnesses, that the Drumcree issue and the violence, the

10 protest, the conflict that it sparked, was seen by some

11 as having the potential to halt or, at the very least,

12 to stall the peace process, because it had become a focus

13 of dissident activity on both sides, leading in turn, as

14 you remember, in the second half of that year to close

15 and high level political involvement by the UK

16 Government, culminating in the involvement of Mr Powell

17 in the proximity talks which continued into the

18 following year, 1999.

19 So in these reports we see a flavour of that. Can

20 we start with one from March 1998, and this is in the

21 next file, RNI-542-078. It is a SIR, under the title

22 "Republican General". And, sir, while we are on

23 RNI-542-078, which is the cover sheet, there is another

24 point which applies to a number of documents in the

25 Part 2 Bundle, the PSNI section of it, which concerns





1 dissemination.

2 You will see in the second part of text under "SIR

3 basic details" the text caveat -- again, we have seen

4 it -- is "no downward dissemination". But there is

5 underneath it a caveat qualification box, and this, in

6 this or other forms, indicates so far as the Inquiry is

7 concerned that this material was in fact disseminated,

8 passed to the Security Service. And sometimes we will

9 see, as we look through, there is a specific reference

10 to dissemination to the Security Service; sometimes the

11 expression "box" is used. There is confirmation of that

12 at RNI-542-080. If you look over the page, it says

13 "SIDD partial box only". And again, one sees that in

14 particular in relation to Drumcree-related intelligence

15 on a number of pages within this bundle.

16 But, sir, turning to the substance of this, the

17 reporting is at RNI-542-079 and it refers to a meeting

18 between two residents groups, in fact the Lower Ormeau

19 Road group and the Garvaghy Road one, attended here by

20 Rosemary Nelson and Mr Mac Cionnaith.

21 The next report I would like to show you is at

22 RNI-542-205. It is another SIR, the title this time

23 "PIRA", and here the first document of this kind we have

24 seen. The two strands of reporting that we have been

25 looking at are brought together, because this report





1 deals with the alleged role of Mr Duffy in orchestrating

2 the rioting. This is just before the marching season,

3 at the very end of June 1998, and then secondly

4 a reference to Mr Mac Cionnaith and Rosemary Nelson,

5 both of whom were said to have been present.

6 That then leads to a further report, which is at

7 RNI-542-208. The substance at RNI-541-209. Suggestion

8 that Rosemary Nelson was instructing local PIRA members

9 to open an incident room at the community centre to

10 record all complaints about the police so that she could

11 submit it to the Policing Commission -- I think that

12 must be the Patten Commission -- that was in session, if

13 I can put it that way, at this time.

14 Now, there are unsurprisingly a large number of

15 reports from July 1998, as it were, the key moment in

16 relation to Drumcree, and I would just like to look at

17 a couple of them. The first is at RNI-542-247. This is

18 the cover sheet of a SIR, "Republican General", and

19 here, as you see, the dissemination to the Security

20 Service is explicit in the second section of text. The

21 substance of the report is at RNI-542-248, and again, it

22 reports on intended legal action and what are said to be

23 Rosemary Nelson's plans in that regard.

24 Now, at RNI-542-266, we will see slightly later in

25 the story a reference in a SIR, same dissemination,





1 RNI-542-267, reference here to the proximity talks,

2 a list of people involved and Rosemary Nelson said to be

3 present as note-taker.

4 So, sir, that is just a small sample of the

5 reporting during July. The next document from July,

6 however, is of a different kind, and you can see it at

7 RNI-542-259.500.

8 This is an application written by the detective

9 sergeant at Lurgan Special Branch and we can see that

10 from RNI-542-259.503. The nature of the application

11 appears from the first page, RNI-542-259.500.

12 Now, unfortunately this is not a document which is

13 particularly easy to read, certainly in the second half

14 of this page, but I think it is clear enough that this

15 is an application for a telephone intercept at

16 Rosemary Nelson's work address. So the application was

17 to tap her phone at her solicitor's office.

18 You will see in the second paragraph the purpose of

19 the application, which is to obtain intelligence in

20 relation to the ongoing Drumcree situation in Portadown.

21 In the third paragraph, it points out that she is

22 a practising solicitor and refers to what was said to be

23 her client base: Republican movement, including PIRA,

24 Sinn Fein and residents groups, in particular the

25 Garvaghy Road Residents Coalition. Then the next





1 paragraph, as you see, describes her as being:

2 "A close confidant of Colin Duffy, Lurgan PIRA, with

3 whom she is in regular daily contact. She openly

4 supports their cause, and intelligence states that she

5 has 'flouted the law' by creating alibis and

6 'orchestrating witness evidence' [that appears to be in

7 quotation marks] for PIRA members arrested for terrorist

8 offences, including murder. Nelson's solicitor's

9 business success has been due to her commitment to the

10 Republican cause where she has since achieved status by

11 meeting United Nations representatives, invited to the

12 USA to meet congressmen sympathetic to Irish

13 Nationalists and in regular contact with the Irish

14 Government over the issues of Drumcree, the Hamill

15 murder in Portadown in 1997 and the alleged security

16 force harassment of Colin Duffy."

17 It then says that:

18 "She is undoubtedly a significant personality in the

19 Drumcree situation where she is readily available to

20 offer her expert advice to Breandan McKenna and

21 Colin Duffy, two of her closest associates at this time.

22 She also prepares statements on McKenna's behalf,

23 issuing to the media ... that a telephone intercept

24 against Nelson's office at this time would produce

25 valuable intelligence to greatly assist Special Branch





1 in keeping abreast of the Garvaghy Road Residents

2 Coalition's views and plans towards the ongoing

3 developments."

4 There follows, sir, a series of summaries of bits of

5 reporting, some of which we have now looked at with the

6 various SIR numbers to identify them, and at the end, on

7 the next page, RNI-542-259.503, the concluding paragraph

8 asks for urgent consideration to be given to this

9 application:

10 "I firmly belief it will produce valuable

11 intelligence to assist us at this time in relation to

12 the Drumcree situation."

13 Now, sir, the Inquiry has received no further

14 documents about this application, unlike in the other

15 case I have shown you, in Indus, we don't have the

16 documents which pass the application up the chain, and

17 we have been given to understand that there are no

18 documents, no further documents, in relation to this

19 application. On that basis, it would appear, therefore,

20 that the application did not progress beyond this stage,

21 the proposal stage.

22 At this point, sir, I simply make the observation

23 that in this document there is no comment on,

24 appreciation of or even reference to any possible

25 question of client confidentiality. The concept of





1 legal privilege is not one that found its way into this

2 application. It is not discussed, it is apparently not

3 seen as an impediment, still less a bar to the proposal.

4 Plainly, that means that all related and further

5 questions about this application will have to be pursued

6 in the course of the evidence.

7 So, sir, drawing some of the 1998 points together,

8 there is more reporting in 1998 on this issue. That

9 increase coincides, you may think, with the increase in

10 the political significance of Drumcree in 1998. There

11 are a number of reports on Rosemary Nelson's legal,

12 strategic and advisory role in relation to the Residents

13 Coalition and also on the alleged connection between the

14 Coalition and north Armagh PIRA, specifically through

15 the three individuals whose names we have seen:

16 Rosemary Nelson, Mr Mac Cionnaith and Colin Duffy.

17 So far as the application for a telephone intercept

18 on Rosemary Nelson's office is concerned, a number of

19 specific questions arise: first, what does it tell you

20 about the perception of Rosemary Nelson at that time;

21 why was it, if this is the case, not pursued; where the

22 idea for it originated; who it was who tasked the local

23 Special Branch with the role of gathering in

24 intelligence of this kind; and whether and to what

25 extent the Security Service were involved at any stage





1 of this application, given the political and strategic

2 significance of Drumcree at this time.

3 Sir, the third and final category is a miscellaneous

4 category of intelligence, which I propose to deal with

5 very briefly, because in 1997 and 1998, in particular,

6 there was a good deal of reporting which appears to have

7 focused on Rosemary Nelson herself, rather than on her

8 in relation to her work, as we have seen it with the

9 Drumcree case, or her other relationships and alleged

10 involvement or connection with PIRA.

11 You can break it down into five categories: First,

12 her work on, involvement with the family of

13 Robert Hamill; secondly, her family and home life;

14 thirdly, her social life; fourth, her professional,

15 political and religious associations; and finally, her

16 contact with politicians, with NGOs and with other

17 organisations.

18 Sir, because of the miscellaneous nature of this

19 reporting, I'm not going to take you to more than

20 a couple of documents, but simply to give you some of

21 the substance. In relation to the Hamill family, there

22 is reporting in May 1997, for example, that it was

23 Sinn Fein that had put the family in contact with her.

24 Later in that year, in December, the reporting is that

25 she was planning to launch an appeal for funds to bring





1 a private prosecution against those involved in his

2 murder. That is RNI-542-001.

3 In relation to her family, there is reporting at the

4 end of 1997 that she was considering having security

5 devices fitted to her house. And we can see that

6 briefly at RNI-542-013. It comes in the form of a SIR

7 under the heading "Republican General". It is when you

8 turn the page to the substance at RNI-542-014, that is

9 literally all there is.

10 In February 1998, there is a report -- and I am

11 going to show it to you -- RNI-542-053, the substance

12 being -- this is a SIDD, dissemination level 7, the

13 substance being at RNI-542-0534, which is about her

14 background and indeed her father, and contains the

15 information that he drives a mini bus.

16 Later in this same file, at RNI-542-055, there is

17 a similar short report, this time about Mr Nelson and

18 his work, a description of him and of his social habits.

19 There are a number of reports in relation to her

20 social life, trips with friends, holidays abroad, for

21 example, and then in the fourth category, a series of

22 miscellaneous reports about her professional, political

23 and religious associations, the fact that she was the

24 legal adviser to the Drumcree Faith and Justice Group,

25 the fact she was to become a member of the CAJ, again





1 reporting in relation to media coverage, the Channel 4

2 documentary. And at RNI-542-050, we see in the form of

3 a SIR, dissemination level 19, on page RNI-542-051 there

4 is a report about Nuala McCann. It just says:

5 "She is an associate of Rosemary Nelson, possibly

6 works for her in her capacity as a solicitor."

7 Now, in some later reporting we see what appear to

8 be slightly more substantial bits of information, and I

9 can show you a couple: RNI-542-075 in the same file,

10 dated from March 1998, the substance at RNI-542-076, and

11 here is a familiar theme from the part 1 material:

12 "Rosemary Nelson is alleging that the

13 Chief Constable recently informed visiting members of

14 the United Nations that a number of practising

15 solicitors actively work for and support PIRA."

16 And further suggestions there. And it is

17 a reminder, sir, that of course at this precise

18 time, March 1998, if I can put it this way, the part 1

19 world, the controversy surrounding the draft report of

20 Mr Cumaraswamy and what had allegedly been said at

21 the meeting at the end of November, had broken. And we

22 have heard already evidence about Rosemary Nelson's

23 personal involvement in that.

24 And we see later in that year, in August, at

25 RNI-543-004, in a SIR, dissemination level 19:





1 "No dissemination outside Special Branch level."

2 A report at RNI-543-005, saying that:

3 "Rosemary Nelson had recently lectured at Cambridge

4 University on issues such as alleged security force

5 harassment of Nationalists, Drumcree and the unfair

6 justice system in Northern Ireland."

7 And saying that whilst she was there, she befriended

8 members of Steven Lawrence's family.

9 Throughout the rest of the year her activities at

10 this level are tracked. There is reporting on her going

11 to speak at Congress. We have heard about that, her

12 address to the congressional subcommittee in October.

13 She is reported as meeting the Patten Commission, and

14 in November the topics she is said to have raised with

15 the Commission get their own report at RNI-543-096. You

16 will see at the bottom of the page, RNI-543-097, the

17 various points that she was said to be wanting to raise

18 at her meeting with the Commission, 1 to 4.

19 Sir, my submission is that this sort of rag bag of

20 reporting is best seen in the context of the other

21 intelligence on Rosemary Nelson which we have already

22 looked at. It provides a detailed, although one might

23 also say a somewhat distorted perspective on her

24 personal and political associations, and indeed on the

25 breadth of her national and international connections.





1 But the volume and the detail of the reporting gives

2 rise to a series of questions. Why was Special Branch

3 recording information of this kind relating to

4 Rosemary Nelson's private life, including details of her

5 family, friends, people who worked in her solicitor's

6 office? Why was Special Branch gathering information on

7 her political associations? Was her engagement, for

8 example, with the Patten Commission seen as part of

9 a wider Nationalist or Republican strategy? And what

10 happened to this sort of information? Was it

11 disseminated within the RUC? Was it shared? Was it

12 passed outside the RUC? Did the RUC Special Branch or

13 other intelligence agencies consider this reporting

14 alongside the other types of intelligence reporting we

15 have looked at earlier, and if so, what conclusions were

16 drawn and how did that in turn affect the question of

17 her safety?

18 But given the focus of this reporting and the

19 minutiae of her life which is set out in reports which

20 are solely devoted to her, in my submission, the

21 question arises again as it did at the opening of my

22 submissions on this part of the Bundle: how likely is it

23 in the light of this intense focus that there was in

24 fact a file on Rosemary Nelson in existence at the time

25 of her murder?





1 Now, so far as intelligence leading up to that point

2 is concerned, which takes us into the early part of

3 1999, there appears, on the basis of the material which

4 has been disclosed to the Inquiry, to be very little

5 Special Branch intelligence reporting either directly or

6 indirectly on her.

7 There are a couple of examples, and I will show you

8 one of them, and that is at RNI-543-136. That is

9 a PRISM document, January 1999, the substance at

10 RNI-543-137, referring to an ex-prisoners' centre in the

11 Lurgan area and how she and another person are liaising

12 closely with Colin Duffy and another person and are

13 making great efforts to help them in any way they can.

14 Then one further report at RNI-544-011 -- again,

15 from January 1999, the substance at RNI-544-012 --

16 refers to a campaign against the RUC, following

17 someone's alleged approach by Special Branch and how

18 Rosemary Nelson had been mentioned as being -- and it is

19 in quotation marks -- "on side" and that she would be

20 keen to do a TV interview.

21 As far as we can see, from this point there is no

22 further reporting, Special Branch reporting, about her

23 until the SIR dated 16th March, which briefly sets out

24 the circumstances of her murder the previous day and

25 refers to the claim of responsibility by the





1 Red Hand Defenders. Sir, I'm not going to take you

2 through that document, but for the note, as it were, it

3 is at RNI-544-121.

4 Sir, at this stage, it is not possible to reach even

5 a preliminary conclusion as to whether the apparent

6 tailing off of intelligence on Rosemary Nelson in the

7 early months of 1999 is significant or suspicious in any

8 way. However, what is apparent is that, so far as

9 Special Branch is concerned, on the basis of this

10 material there appears to have been no advanced

11 indication whatsoever that Rosemary Nelson was being

12 targeted by paramilitary organisations or indeed by

13 anyone else, or that she would be murdered. And that is

14 obviously a matter of significance for the Inquiry.

15 So, sir, at a later stage, when you come to consider

16 the evidence on this material, you will no doubt wish to

17 establish whether there was in fact no advance

18 intelligence in relation to the threat or the murder; or

19 alternatively, whether there was intelligence received

20 and recorded but it hasn't emerged in the process of

21 disclosure to the Inquiry; whether such intelligence was

22 received but not recorded or reported by Special Branch;

23 or whether it was indeed reported but subsequently

24 removed or deleted from the relevant databases as to

25 which the evidence which I mentioned earlier, the





1 statement in relation to the computer systems, will be

2 of great importance.

3 Sir, that is a run through of the larger of the

4 various parts of the Bundle, which relates to PSNI and

5 Special Branch.

6 I would now like to say something about the Security

7 Service material and in particular about file RNI-531.

8 Now, sir, as I think I have already explained, this

9 file contains Security Service material from 1996 to the

10 time of Rosemary Nelson's murder in March 1999. I would

11 like to deal with the material in three categories. The

12 first is the material that relates to Operation Indus;

13 the second is the intelligence on Loyalist paramilitary

14 activity; and the third, intelligence on Republican

15 paramilitary activity.

16 I have outlined what Operation Indus was and we have

17 looked at the application made by the sergeant at Lurgan

18 Special Branch. As I have said, the Security Service

19 was then involved with the operation and there were two

20 aspects to that: First, assistance was given with the

21 warrantry process required under the Interception of

22 Communications Act 1985; and second, Security

23 Service officers were involved with the technical

24 planning and implementation of the operation.

25 Now, it appears that the Security Service were first





1 notified of the proposed operation during a meeting with

2 the TCG (South) on 6th August 1998, and we can see that

3 at RNI-531-022 under the heading "Forthcoming Jobs: new

4 requirement", and the sentence in the second line:

5 "This is Duffy's new permanent address that he has

6 been installed in by Rosemary Nelson."

7 Now, thereafter, senior officers in the Security

8 Service, including the DCI himself, became concerned by

9 the fact that Rosemary Nelson owned this property and

10 was Colin Duffy's solicitor, and there were two

11 particular concerns: first, that if the operation were

12 compromised, it would be presented as a further example

13 of harassment by the RUC, both of Colin Duffy and of

14 Rosemary Nelson herself; and secondly, Rosemary Nelson's

15 connection to the property and to Colin Duffy meant that

16 the interception had the potential to offend principles

17 of legal professional privilege.

18 We can see those concerns outlined in an email,

19 which is at RNI-531-024, and you can see from the first

20 line that we have of it, its date is at the end

21 of August 1998, and in the text under "Message

22 Contents", you will see that at (a) and then (b), are

23 concerns said to have been expressed by the DCI about

24 the sensitivities of this operation.

25 You will also see, as it were, right at the





1 beginning, the way in which Rosemary Nelson was regarded

2 by the author of this email:

3 "Nelson is the solicitor and lover of Colin Duffy,

4 the target of the operation."

5 And note also, please, in the third line:

6 "DCI Rep has reported that [the Secretary of State]

7 has taken a particular interest in the case and similar

8 claims of harassment by Duffy himself."

9 Again, you may think that is borne out by the part 1

10 material involving the Secretary of State that we have

11 already seen.

12 You see in the succeeding sentences the concern

13 about a compromise could be presented as further

14 harassment, and the plan. The plan is that DCI should

15 speak to the head of Special Branch and the

16 Chief Constable before the warrant is submitted to the

17 Secretary of State to ensure "that they are fully signed

18 up".

19 Then (b) is the privilege concern. If there is

20 a successful installation, reference to similar issue

21 and the understanding from the DCI Rep Knock is that on

22 this occasion, the DCI is minded to include some

23 reference to the issue -- that is the issue of legal

24 privilege -- in the submission.

25 Now, sir, in summary, these concerns led, it would





1 appear, to very considerable debate and discussion at

2 the highest levels, it would certainly appear within the

3 Security Service and the RUC, and in due course to the

4 involvement of the Secretary of State herself. She

5 insisted, as we will see, on being fully briefed about

6 the operation's potential ramifications.

7 Can we just see how this works out. The next

8 document, RNI-531-025, at the bottom of the page; this

9 is one is 1st September, under the heading "Intelligence

10 Case", the last few lines before the final redaction:

11 "There are sensitivities which will need to be borne

12 in mind. The property is owned by his girlfriend,

13 Rosemary Nelson, who is also his solicitor. She

14 recently won a harassment case against the RUC.

15 Compromise of the operation could be presented as

16 further harassment. There could also be questions of

17 legal privilege to consider in the event of a successful

18 installation."

19 And then turning the page to RNI-531-026, we will

20 see here the various discussions going on at high levels

21 within Special Branch. In this case, if you see at

22 paragraph 1 and 2, with the regional head of

23 Special Branch south. And the point is taken in the

24 second paragraph that the original application -- that

25 is the one we have seen -- had not referred to the fact





1 that Rosemary Nelson owned the target property, and it

2 is stressed in the fourth line:

3 "It was, therefore, important that the head of

4 Special Branch and the Chief Constable were fully aware

5 of the operation."

6 Then a proposal as to privilege, i.e. that there would

7 have to be specific guidelines for dissemination of the

8 product to cover any legally privileged conversations

9 that might take place.

10 At the end, the author makes the point that the

11 Secretary of State was well aware of Nelson's complaints

12 to the PCA -- that, I assume, must be the ICPC -- and

13 getting the warrant signed could not be taken for

14 granted.

15 Now, at RNI-531-028 is the loose minute written by

16 the DCI. It is addressed to Director A and it sets out

17 what actually happened when he went to discuss the case

18 with the Secretary of State. It appears that that

19 discussion took place on 4th September 1998.

20 Just highlighting some of the content here, in

21 paragraph 3, the various concerns of the Secretary of

22 State are recorded by the DCI. She was anxious about the

23 operation, the extra mileage which could be extracted

24 from any compromise, including allegations of RUC

25 harassment and of interference with lawyer/client





1 relations.

2 Then further down the page, the question of

3 privilege is apparently discussed, and then over the

4 page the Secretary of State asks who in the RUC had been

5 consulted and the DCI reports himself as saying that:

6 "In addition to the normal process of consultation,

7 I had spoken personally to the head of Special Branch

8 and intended to mention it to the Chief Constable in

9 recognition of the sensitivities.

10 "On the basis of this discussion, but not without

11 further assertions of anxiety, the Secretary of State

12 signed the warrant."

13 Sir, you can see immediately from the next

14 sentences, her signature was conditional on two points:

15 one, that she wished to see the guidance on legally

16 privileged material as early as possible, and to be

17 informed if the entries under the warrant went ahead

18 before she could see it. And the minute ends with

19 a request to be kept informed of any developments in the

20 case:

21 "... as the Secretary of State is sure to ask at

22 future signings."

23 Indeed, we can see those two caveats recorded in

24 handwriting at RNI-531-027, an earlier page:

25 "Informed of all developments of the op at the





1 earliest opportunity and to be given guidance on the

2 aspects of legal privilege before the op deploys."

3 So, sir, you can see in the text of paragraph 4 that

4 this particular application is an application recognised

5 by the Security Service as being out of the ordinary.

6 It involved consultation with the RUC outside the normal

7 process of consultation, including the head of

8 Special Branch and the Chief Constable.

9 His comment that he would be discussing it with the

10 Chief Constable we can see coming to fruition at

11 RNI-531-030, and a meeting on the same day. Again, this

12 is a note by the DCI, and in the course of what appears

13 to have been a wider discussion, we will see in the

14 unredacted part of subparagraph 3 a reference to the

15 latest Duffy warrant and the Nelson connection.

16 It is interesting to see in the penultimate sentence

17 that he, the Chief Constable, didn't appear to have been

18 briefed before this meeting about Duffy and this

19 particular case, but was going after that, that evening,

20 to talk to the regional Special Branch heads.

21 Now, what appears to be the formal application

22 begins at RNI-531-031, and under the intelligence case

23 paragraph 3, there is material about Mr Duffy continuing

24 into paragraph 4. And note, please, the reference to

25 "possible or actual links with dissidents", the





1 suggestion "eagerness to return to violence", and

2 finally what I am going to call the Drumcree connection.

3 The points which have been the subject of all the

4 discussions we have been looking at are set out in

5 paragraph 9 at RNI-531-033, the reference there to

6 Rosemary Nelson and the question of privilege and the

7 way it was proposed to be addressed or dealt with.

8 In fact, as we can see from later material in this

9 bundle, the operation did not go into effect at any

10 point before the murder of Rosemary Nelson, and after

11 the murder a decision was taken, I think in July 1999,

12 that the operation should not proceed. So, in fact, as

13 far as one can see from the material in this bundle, it

14 did not progress beyond the planning stage, despite the

15 effort that had obviously had to be made to persuade the

16 Secretary of State to sign the relevant warrant.

17 Sir, looking at this material, which we have done

18 very, very briefly -- and we haven't looked by any means

19 at all of it -- may I make the following submissions.

20 It is, I would suggest, significant for a number of

21 reasons in addition to those that I have put to you on

22 the basis of the Special Branch material. It shows

23 again what was believed to be Rosemary Nelson's close

24 association with PIRA on the one hand and with Mr Duffy

25 in particular on the other, and that knowledge being





1 held at the very highest level within the NIO, within

2 the Security Service and within the RUC.

3 And I should say this: an aspect of the application,

4 when it reached the Secretary of State, that we will

5 wish to explore in the evidence is whether at that

6 point, if not before, there was also involvement by

7 senior civil servants within the NIO.

8 The application and the way it was considered and

9 addressed also, in my submission, illustrates

10 Rosemary Nelson's political importance, the concern, as

11 you will remember it, of the adverse publicity that she

12 could bring to bear to the operation if it were

13 compromised. And it also confirms, you may think,

14 a general acceptance of the view, obvious from the

15 Special Branch material, as to Mr Duffy himself: that he

16 was a dangerous and committed Republican paramilitary

17 who had the potential to become a dissident leader at

18 a time when mainstream PIRA leadership seemed more

19 positively to be engaged in the political process.

20 Sir, the other thing about it, of course, as I have

21 said before, is timing, because again, as these events

22 were playing out in early September 1998, the question

23 of Rosemary Nelson's own safety was under active

24 consideration. Remember that the August threat

25 assessment I have mentioned earlier, that episode, if I





1 can put it that way, came to a conclusion only with the

2 letter from the NIO, which was dated

3 24th September 1998. And the reference to that is

4 RNI-106-324.

5 Now, sir, that is the first of the categories of

6 material. The second is that concerning Loyalist

7 paramilitary activity, and the obvious caveat to enter

8 here in relation to this file is that plainly what has

9 made its way into this file does not represent the

10 totality of the Security Service's intelligence in

11 relation to Loyalist groups in the relevant period;

12 namely, 1996 to 1999.

13 This is a small selection focusing on Loyalist

14 activity in north Armagh and particularly on the issue

15 of the targeting of Nationalists.

16 Broadly speaking, there are two themes to be

17 discerned in this category of reporting: First,

18 intelligence on the targeting of Mr Duffy by

19 Billy Wright and the UVF in late 1996 and early 1997

20 respectively; and secondly, intelligence on the

21 formation and intentions of what appeared to be new

22 Loyalist groupings from late 1998 onwards, specifically

23 the Red Hand Defenders, RHD, and the Orange Volunteers,

24 OV.

25 Sir, can I just show you one or two of the documents





1 in this category. The first is at RNI-531-004, and this

2 is a targeting report. And in essence, I have given you

3 the substance of it because it relates to Mr Duffy, and

4 it is said that he is the planned target of

5 Billy Wright.

6 Now, the next document chronologically relates to

7 the LVF, and this is at RNI-531-011, the same file. And

8 this is, again, intelligence in relation to a planned

9 attack on him in April of 1997. You see the date at the

10 top of the page, 8th April 1997.

11 Just following this document through so we can see

12 the way these reports work, on this page, RNI-531-011,

13 we have a section A. At RNI-531-013, we have other

14 comments and you will see at the top of the page that

15 the intelligence was passed to the RUC. And in what

16 appears to be a later copy of the same document at

17 RNI-531-014, in handwriting the Security Service

18 officer, under this "Comment" heading, says:

19 "Thanks. As discussed, we are unable to do anything

20 with this except watch from the sidelines. It would be

21 sad if the RUC were unable to warn Duffy in time ..."

22 Now, on the question of Loyalist activity more

23 generally and moving through to the end of 1998, there

24 are a series of reports about the emergence of the new

25 groupings I have mentioned earlier; the first at





1 RNI-531-084. This is about the Red Hand Defenders. The

2 next at RNI-531-090, the same month, November, and this

3 is about the Orange Volunteers. And there are later

4 reports on these organisations through to March of 1999

5 in this bundle.

6 Can I just show you briefly the March documents:

7 RNI-531-118, 3rd March, about the Orange Volunteers, and

8 then the next report at RNI-531-121 about the

9 Red Hand Defenders saying at (2), the bottom of the

10 page:

11 "The title of the Red Hand Defenders was used as

12 a flag of convenience by Orange Volunteers and other

13 dissident Loyalist groups to claim attacks that

14 ordinarily they would not want to own up to."

15 And you will see again the comment which comes at

16 RNI-531-123 in the handwriting:

17 "This is further corroboration for our view that the

18 RHD is not an actual group, although the Chief Constable

19 takes a different view."

20 I think that says:

21 "The UDA has used the RHD to claim a number of

22 sectarian attacks."

23 Sir, we will look at one or two more documents about

24 Loyalist organisations in a moment, but so far as these

25 documents are concerned, the two categories, you will





1 see certainly in file RNI-531, there is some reporting

2 but not very much. It appears to be not particularly

3 detailed. As I have said, the key point about timing is

4 their emergence late in 1998, and the reports are still

5 coming in, as you see, right up to the month of

6 Rosemary Nelson's murder.

7 None of the reports, as far as we can see, refer to

8 the targeting of any specific individual and certainly

9 not to Rosemary Nelson. And again, there is nothing in

10 the Security Service disclosure that we have seen to

11 suggest there was any warning or intelligence in advance

12 that any such attack, whether by these organisations or

13 any other organisation, was about to be mounted.

14 However, so far as more general analytical work on

15 these groupings is concerned, we will see that in

16 a minute in the documents in RNI-533 and RNI-534. What

17 we have here are the source reports rather than the

18 broader analysis work.

19 So far as targeting and the earlier documents we saw

20 in relation to Colin Duffy are concerned, they seem to

21 show that the Security Service, when provided with

22 intelligence of that kind, passed it on to the RUC to

23 deal with, as it were, on the ground. And you will no

24 doubt draw whatever conclusions you feel appropriate

25 about the handwritten comment I showed you earlier.





1 This is early material. We don't see similar

2 material in relation to him in the service files in 1998

3 and 1999. And, again, to stress, there is no reporting

4 in these files referring to any targeting of his

5 associates, including Rosemary Nelson.

6 Sir, I haven't quite finished. Would that be a good

7 moment for a short break?


9 (4.30 pm)

10 (Short break)

11 (4.45 pm)


13 MR PHILLIPS: Sir, the third and final category of material

14 in this file, RNI-531, relates to Republican

15 paramilitary activity and, of course, as I pointed out

16 with the Loyalist material, what you find in the file

17 does not in any sense represent the totality of the

18 intelligence material on these groups in the relevant

19 period, which is 1997 to 1999. However, there is

20 reporting here on issues with a connection to

21 Rosemary Nelson. For example, intelligence in relation

22 to Colin Duffy, intelligence in relation to Colin Duffy

23 and Rosemary Nelson, and intelligence on PIRA and

24 Drumcree.

25 Sir, in the interests of time, I'm not going to take





1 you to any of the documents within that category, but

2 simply offer the following observations. I suggest that

3 the following preliminary views may perhaps be drawn

4 from this category of material: first, that it seems at

5 any rate that the Security Service was not actively

6 gathering intelligence on Colin Duffy, but were well

7 aware of his alleged status and activities in PIRA;

8 secondly, the Security Service was not actively

9 gathering intelligence in relation to Rosemary Nelson.

10 And it would seem, reading the documents, that most of

11 what the Security Service had on file and, in that

12 sense, knew about her must have originated from the RUC.

13 Sir, that concludes a very brief survey of that

14 file, RNI-531. I promised to say something more

15 generally about the intelligence in these files relating

16 to Loyalist paramilitaries, and that means having a very

17 brief look at files RNI-533 and RNI-534.

18 There is, throughout the Part 2 Bundle, material

19 which fits into this category and obviously there are

20 various ways in which such material is of interest and

21 indeed of importance to the Inquiry, not least in

22 relation to two of the headline issues, as I put it

23 earlier: first, whether there was any intelligence

24 relating to threats prior to her murder; and secondly,

25 whether there was intelligence after her murder





1 indicating who might have been responsible.

2 Now, in the light of the fact that the mainstream

3 Loyalist groups were on ceasefire at this time,

4 particular attention then, as now, has been paid to the

5 emerging dissident groups. And I have mentioned two of

6 them, the prominent ones already: the Orange Volunteers

7 and the Red Hand Defenders. Clearly, there is

8 a particular aspect of importance here; namely, the

9 claim of responsibility in this case, which was made

10 apparently by the Red Hand Defenders.

11 What I would like to do is just draw some of the

12 material together in relation to, first of all, the LVF

13 for the reasons I gave earlier -- they were a focus of

14 attention in the murder investigation -- and secondly,

15 to these two newer groupings: the Orange Volunteers and

16 the Red Hand Defenders.

17 The LVF first. They called a ceasefire in May 1998

18 and unsurprisingly, therefore, a lot of intelligence

19 following that time was directed to the question of

20 whether it was a valid ceasefire and whether it was, as

21 it were, holding, and later to the question of the LVF's

22 intentions in relation to decommissions.

23 Can I just show you first an extract from a document

24 of July 1998. That is RNI-533-007. We can see there,

25 these are the minutes of the IRC meeting on 8th July,





1 and on the next page, RNI-533-008, under a part redacted

2 heading "Meeting with ..." you will see in the third

3 line:

4 "The Government was not yet satisfied the LVF

5 ceasefire was complete and unequivocal."

6 Now, there are later reports that the LVF was

7 planning violence at the Drumcree time, and again,

8 by September -- sorry, those reports exist in relation

9 to Drumcree, i.e. in relation to July 1998.

10 By September that year, the meeting minutes of the

11 SPM, which we see at RNI-521-007, were recording that

12 the LVF leadership remained determined to maintain its

13 ceasefire; a reference there, as I say, RNI-521-007, at

14 the bottom of the page. It is paragraph 4, the third

15 line.

16 Clearly the political implications of this were, at

17 least potentially, significant, and they came through

18 later that year when, in November, the Secretary of

19 State recommend that the LVF be despecified. And again,

20 the reference to that in this same bundle is at

21 RNI-521-013, which is a letter to the private secretary

22 to the Prime Minister.

23 Now, that was obviously, as it were, the political

24 reward for maintaining the ceasefire. It looks from the

25 material later in the Bundle -- I'm not going to take





1 you to it -- as though progress on decommissioning was

2 limited. For example, the LVF offers in that regard

3 were linked to the release of Mark Fulton from prison.

4 However, looking just slightly beyond the time of the

5 murder, the picture is much more mixed, and I would like

6 to show you the first of the NIIRs, which I want to look

7 at, in RNI-534.

8 This one is at RNI-534-072, which, at paragraph 10,

9 under the heading "LVF", indicates in the second

10 sentence -- this is May 1999, as I think I have said --

11 that:

12 "Members of the group have been heavily involved in

13 attacks by dissident Loyalists, particularly those

14 operating under the RHD banner."

15 So that, as it were, takes the history through to

16 just after the murder and one year after the original

17 ceasefire was called by the LVF in 1998, May.

18 Now, in relation to the newer groups, they first

19 feature, it seems, in the autumn of 1998. And we can

20 see that in the minutes of a security policy meeting on

21 9th September of that year at RNI-521-007, the page we

22 were looking at a little earlier, but the next paragraph

23 down. It is paragraph 5. The Chief Constable is

24 recorded as saying:

25 "There was growing evidence of another Loyalist





1 group being formed in Portadown separate from the LVF.

2 Explosive devices used over the past weekend were not of

3 the same design as LVF ones and were extremely crude but

4 effective. An RUC officer was still in hospital

5 critically injured."

6 In the files there then follow a number of reports

7 assessing the provenance and indeed the development of

8 those groupings, and I referred to some of them in the

9 Security Service bundle a little earlier. Now, at this

10 stage, it seems to have been uncertain whether these

11 were actually new and separate groupings or merely, if I

12 can put it this way, flags of convenience.

13 However, it seems that by December in the same year,

14 1998 -- and again, you may or may not choose to turn it

15 up, but it is RNI-534-044, the NIIR reports -- there were

16 some reports to suggest that Orange Volunteers in

17 particular had begun to form more organised units.

18 However, the Security Service view as at that stage is

19 that they were not separate or discrete groups, but

20 rather flags of convenience used by others. And here --

21 this is at RNI-534-045 -- at the top, it says:

22 "Used by members of the Justice for Protestants

23 group and other militant Loyalists and are not discrete

24 structured groups."

25 Now, in later material, moving through





1 to January 1999, at RNI-533-028, there is a lengthy

2 assessment of both of these new groups or organisations,

3 and this assessment begins at paragraph 12 and continues

4 on the next page to paragraph 16. In summary, so far as

5 we are concerned, it says that -- this is a few lines

6 down:

7 "The RHD have continued to attack soft Catholic

8 targets, whilst the OV have demonstrated an ability to

9 target PIRA members."

10 Then you will see references there to the suggestion

11 that the OV have units across the Province and that

12 Loyalist paramilitaries, including former members of

13 other organisations you will see listed there, are

14 involved.

15 This continues, this reporting continues,

16 throughout February 1999. We have seen some of the

17 material earlier. There is reporting from both

18 Special Branch and the Security Service that Loyalist

19 militants were intending to attack Catholics in the

20 mid-Ulster area. It is general, as I have said before.

21 There is, as far as we can see, no indication of

22 specific targets.

23 However, again, the political level, by that same

24 month, the end of February, this is, 1999, the Secretary

25 of State had taken the view that both these





1 organisations should be proscribed, and the reference

2 for that is RNI-521-022. This is a letter from the

3 private secretary, in fact, to the Secretary of State

4 for Northern Ireland, dated 25th February, to the Prime

5 Minister setting out the case for the proscription of

6 both of those organisations. And it says in terms in

7 the letter that the recommendation had not been made

8 before because it hadn't been clear whether they existed

9 as separate groups. However, in accordance with what we

10 have just looked at:

11 "... recent intelligence indicated they had begun to

12 coalesce into distinct groups."

13 And you will see that that case was accepted by the

14 Prime Minister on 1st March 1999 at RNI-521-027.

15 So far as the Red Hand Defenders are concerned,

16 looking slightly after the murder, there is a detailed

17 assessment in the NIIR which was produced the next day,

18 on 16th March, and that is at RNI-534-056.

19 Sir, I would like to just highlight a couple of

20 paragraphs of that. The first is on RNI-534-057,

21 paragraph 4. It says:

22 "The RHD's claim of responsibility for this attack

23 is consistent with its stated objective to 'assassinate

24 the enemies of Ulster'. The RHD is likely to have

25 considered Nelson a legitimate target, because of her





1 involvement in representing prominent Republicans and

2 acting as legal adviser to the GRRC. Her high public

3 profile will have given the RHD the desired impact in

4 terms of damaging the peace process."

5 Then there is a lengthy section under the heading

6 "Who are the RHD?" Can I direct your attention in

7 particular to the passage at the bottom of this page,

8 paragraph 6. A few lines from the bottom, it makes the

9 point:

10 "The RHD has to date had an unsophisticated

11 targeting ability. Moreover, it was not previously

12 known to have developed a sophisticated explosives

13 capability, which would enable it to build and deploy

14 a viable UCBT. To date it has only deployed crude pipe

15 bomb-type devices."

16 Now, so far as the device is concerned, you will see

17 the further assessment here in paragraph 8 on the next

18 page, page RNI-534-058. In the last sentence, it says:

19 "We assess that there is a significant possibility

20 that individual UDA members provided the RHD with the

21 device which was used against Rosemary Nelson."

22 Now, the next section deals interestingly, from our

23 perspective, with the LVF under the heading "Was the LVF

24 involved?" The conclusion reached, for various reasons

25 which are set out there, is no, that it wouldn't have





1 accorded with the aims of that particular organisation

2 and would have jeopardised, as it is put here,

3 Mark Fulton's case, the case for his release from

4 prison.

5 Now, sir, can I just make these concluding remarks

6 about this. I have already pointed out there is what

7 appears to be a lack of very detailed reporting about

8 any of these new groups or organisations, if that's what

9 they were. Secondly, there was an absence, as I have

10 said already, of intelligence relating to specific

11 targeting, specific targeting of individuals. That is

12 in contrast to material which appears later in the

13 bundles after the murder of Rosemary Nelson. I'm not

14 going to look at the document now, but for example, at

15 RNI-532-137, two individuals appear -- in fact, it is

16 a summary of an intelligence document -- as being

17 targeted specifically by the Orange Volunteers.

18 Indeed, there is nothing in the files to suggest any

19 interest, targeting or otherwise, on the part of these

20 new organisations in Rosemary Nelson herself.

21 The final point is the point I have just drawn out

22 from this NIIR, which is certainly the assessment of the

23 intelligence agencies appeared to have been that these

24 new organisations did not have, themselves, the

25 capacity, the technique, if I can put it that way, to





1 produce a device of the kind which resulted in the

2 murder of Rosemary Nelson.

3 Sir, that is all I wanted to say about the Part 2

4 Bundle at this stage.

5 THE CHAIRMAN: Thank you very much. Well, we will rise now

6 until 10.15 tomorrow.

7 (5.07 pm)

8 (The Inquiry adjourned until 10.15 am the following day)





















1 I N D E X

Opening submissions by MR PHILLIPS .............. 1
3 (Part 2)