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How they "cooked" the Navy's Books
The "Navy case"—"a blatant and downright fraud on
the public," as Mr. Justice Bridge described it yesterday
—was simplicity itself. And it was turned into some-
thing approaching a fine art by Andrew Cathcart, a pro-
duct of the Glasgow slums who was drafted into the
Navy in 1946, shot up to the rank of lieutenant within
15 years, and who was gaoled for four years at Win-
chester yesterday.
Official reports fairly glowed with admiration of the
"zealous" and "hard-working" Scot who was rapidly
rising through the ranks of the Navy's catering branch.
Gathcart was superefficient. He had to be. If he had
been anything less he would have been unable to build
up a surplus so big that the Navy could not detect the
frauds to follow.
To this day, no-one knows just how big the fraud
was, or for how long it had been going on. But Mr.
Justice Bridge said yesterday that the trial, had revealed
a "horrifying picture of catering departments and naval
establishments which for long years, it seems, have been
riddled with corruption and dishonesty."
The swindle centred around fake invoices and
worked in one of three ways. Supplies either sent
invoices for goods that were not delivered, or they listed
inflated prices on the invoices. The third twist involved
catering officers destroying correct invoices and making
out new ones listing ficticious items. This jacked the
bill up to something approaching the per capita cater-
ing allowance.
There is still no precise information on where or
when the fraud began, although it more than probably
grew out of the "backhander" system—cash payments
of around five per cent of the total value of orders
placed—given to caterers by their suppliers. The back-
hander system did not directly affect the process of
goods bought by Navy establishments.
It is thought that the backhander system has been
in operation for at least 25 years, and probably a lot
longer. In some cases, the sums involved amounted to
about £1,500 a year. (The Navy spends £1.7 millions
a year with private food merchants. The yearly cater-
ing bill for a frigate is about £10,000.) What is known
is that Lieutenant Cathcart began operating some time
in 1968, when he was catering officer to Britain's largest
naval shore establishment, HMS Collingwood, between
Portsmouth and Southampton.
And when Cathcart came to trial a few weeks ago,
amost every one of his co-defendants from Colling-
wood and, later, HMS Raleigh, claimed that the grey-
ing, be-spectacled and slightly-built Scot had started
them on the road to arrest and charges of conspiracy
and deception.
Cathcart quickly got into his stride, printing stacks
of blank invoices bearing the letterhead of Frederick
Wain Ltd., a Portsmouth food supplier who was gaoled
for two years yesterday. When the genuine invoices
came in. Gathcart simply destroyed them and typed out
new ones. (A careful man, he realised after filing the
fake invoices away that if they had come in the post—
as they were supposed to have done—they would be
folded. His fake invoices had no fold. So he took them
out of his files, carefully folded each one in the right
places, and then replaced them.)
Supply officers would then sign cheques for the
amounts shown on the invoices—and, indeed, roughly
half of the money was in fact spent on food for the
ship or establishment concerned. But the rest was split
between the catering officer (usually, 80 per cent) and
the wholesaler.
The catering officers—by this time, the fraud had
"spread like wildfire", as the court was to be told—
needed the bigger share; they had their overheads to
take into account. At Collingwood, for instance, Cath-
cart had a group of petty officers and chief petty officers
working under him. And he had to also pay a "good
housekeeping" bonus to his cooks.
(The Navy did not keep delivery records, so there
wa no way of checking the discrepancy between the
price on the invoice and what was actually delivered.)
As business boomed, Cathcart expanded. His monthly
take-home cut (his Naval salary was just over £3,000)
enabled the former Glasgow kitchen boy to buy four
cars, expensive hi-fi and stereo equipment, a large
house in the trendiest suburbs of Plymouth and costly
photographic equipment.
According to Sub-Lieutenant Barrington Blogg, who
replaced Cathcart at HMS Collingwood when the
latter was posted to Plymouth, the fraud was bringing
in £2,500 a month when he—Blogg—took over.
The fraud was finally exposed on December 3rd last
year when a new officer replaced Blogg. He was told
by the men in the section about what was going on,
and he promptly reported it to senior officers. The word
reached the Ministry of Defence, and at that point
Portsmouth police were called in.
For five weeks, a squad of detectives "did their home-
work", keeping their work under the tightest of wraps.
One whisper would have led, almost certainly, to the
destruction of vital documentary evidence. On January
4th, the police learned that Collingwood's new catering
officer was due to receive a payout from Frederick
Wain.
He agreed to become the bait, driving under surveil-
lance to Wain's warehouse in Middle Street, Ports-
mouth, where he was given a cheque for £766.
Then the raids started in earnest; offices and ware-
houses were visited, as were the homes of navy men,
and thousands of bills, invoices and receipts seized
linking the fraud to bases and depots throughout
Britain.
—Guardian,
15th November 1972
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