al-Yamamah: Bandar Bush / BAE Chronicles Go On

♠ Posted by Emmanuel in , at 4/13/2008 01:16:00 AM
This is the latest instalment of the never-ending saga involving a deal by British arms maker BAE's to sell Eurofighters and other military hardware to the House of Saud. An investigation by the Serious Fraud Office into alleged kickbacks to Saudi royal family member Prince Bandar bin-Sultan, better known as "Bandar Bush" to Americans due to his close ties to the Bush family, was discontinued in 2006. However, arms trade campaigners did not let this matter drop. Recently, a ruling was made that was highly critical of this halting of the investigation. It seems that the investigation was halted over, you guessed it, national security concerns. Apparently, the Saudi government intimated that Saudi Arabia would not cooperate with the UK over security matters if the investigation went on. From the BBC:

The High Court has ruled that the Serious Fraud Office (SFO) acted unlawfully by dropping a corruption inquiry into a £43bn Saudi arms deal. In a hard-hitting ruling, two High Court judges described the SFO's decision as an "outrage". Defence firm BAE was accused of making illegal payments to Saudi officials to secure contracts, but the firm maintains that it acted lawfully. The SFO said national security would have been undermined by the inquiry. The legal challenge had been made by Corner House and the Campaign Against Arms Trade (CAAT).

In handing down the decision on Thursday, one of the judges, Lord Justice Moses, told the High Court that the SFO and the government had given into "blatant threats" that Saudi co-operation in the fight against terror would end unless the probe into corruption was halted. He added that the SFO had failed to assure them that everything had been done to meet the rule of law. "No one, whether within this country or outside, is entitled to interfere with the course of our justice," he said. "It is the failure of government and the defendant to bear that essential principle in mind that justifies the intervention of this court."

CAAT had argued that the SFO's decision to drop the probe was illegal under the Organisation for Economic Co-operation and Development's (OECD's) Anti-Bribery Convention. "We are delighted," said CAAT's Symon Hill after the decision. "It has been clear from the start that the dropping of the investigation was about neither national security nor jobs. It was due to the influence of BAE and Saudi princes over the UK government."

Susan Hawley of Corner House said: "This is a great day for British justice. The judges have stood up for the right of independent prosecutors not to be subjected to political pressure."

Following the judgement, BAE said: "The case was between two campaign groups and the director of the SFO. It concerned the legality of a decision made by the director of the SFO. "BAE Systems played no part in that decision."

For its part, the Serious Fraud Office said it had no further comment, but was "carefully" considering the implications of the judgement. It could appeal to the House of Lords. Downing Street refused to comment.

The Conservatives said the High Court's ruling was "extremely troubling". A party spokesman said: "We were told, and Parliament was told, that national security was the reason for dropping this prosecution. The government has failed to persuade the court that this was the true reason. Gordon Brown must now decide whether to appeal - or, if not, to make a statement to Parliament on the matter."

Liberal Democrat leader Nick Clegg told BBC Two's Newsnight programme that national security had been used as a "magic wand" solution by Tony Blair and the government to absolve itself. He said: "I find that absolutely astonishing, that we should simply accept that due process should be suspended, that a fraud investigation into allegations of massive bribery and corruption should be suspended, because the Saudi individuals want their privacy protected." Mr Clegg said there was a "pressing need" for a full inquiry into the SFO's decision.

However, Conservative former foreign secretary Sir Malcolm Rifkind told the programme: "There have to be circumstances where the national security of this country becomes the priority for the government and which leads to a prosecution being suspended."

The SFO's inquiry was into the al-Yamamah deal with Saudi Arabia, which was first signed in 1985 but ran into the 1990s. Under the agreement, BAE sold Saudi Arabia Tornado and Hawk jets and other assorted weapons. The deal also included long-running maintenance and training contracts. In December 2006, the then Attorney General, Lord Goldsmith, announced that the SFO was suspending its inquiry.

Lord Goldsmith said its continuation would have caused "serious damage" to UK-Saudi relations and, in turn, threatened national security. Saudi Arabia is also reported to have threatened to cancel last year's deal to buy 72 Eurofighter Typhoon jets from BAE Systems. Worth an initial £4.4bn, contracts for maintenance and training are expected to take the final bill to £20bn. BAE argued that the SFO probe could "jeopardise" both this deal and "seriously affect" relations with the Saudi kingdom.

Details of the alleged bribes to Saudi officials were revealed in June of last year in an investigation by the BBC's Panorama programme. It said that up to £120m a year was sent by BAE Systems from the UK into two Saudi embassy accounts in Washington. Panorama established that these accounts were actually a conduit to Saudi Prince Bandar for his role in securing the al-Yamamah deal, something he has strongly denied.

The OECD said last month that it was launching its own investigation into the decision to drop the SFO inquiry.

Unsurprisingly, the Tories are all for helping Gordon Brown block further criminal investigation of BAE over accusations of corruption. From the Guardian:

Gordon Brown yesterday won Conservative backing for a move that would allow the government to block future criminal investigations such as the corruption case against the arms company BAE Systems. Despite scathing criticism in the high court on Thursday, the Tories have chosen to support Downing Street in facing down critics who are keen for the BAE investigation to be reopened.

Brown is said by Downing Street to have been totally behind Tony Blair in pressing Robert Wardle, the director of the Serious Fraud Office, to drop the investigation into secret payments by the arms company to Saudi Arabia. In Thursday's judgment, the high court rejected claims that the inquiry had had to be closed down for security reasons because "lives were at risk" if Britain no longer received intelligence on national security from Saudi Arabia.

Officially Downing Street said the initial response to the court judgment would be a matter for the Serious Fraud Office. But a No 10 spokesman said yesterday that it would still be a "hands-on" operation, implying that the prime minister might well block any move for a further investigation.

Such a decision would reignite criticism from some Labour backbenchers and the Liberal Democrats who have been keen for the full investigation. And it would fly in the face of the stinging rebuke from Lord Justice Moses, who with Lord Justice Sullivan attacked the government's interference as unlawful.

In their ruling, the judges said: "We fear for the reputation of the administration of justice if it can be perverted by a threat ... No one, whether within this country or outside, is entitled to interfere with the course of our justice. The rule of law is nothing if it fails to constrain overweening power."

Yesterday the shadow attorney general, Dominic Gieve, said: "We believe the existing system, by which the attorney is responsible for the public interest in deciding whether or not a prosecution should be discontinued because of national security issues, should continue. The attorney is accountable to parliament for her actions and her decision can be challenged in the courts if made unreasonably or capriciously."

This means he will be backing in principle the constitutional renewal bill which gives Lady Scotland, the attorney general, the right to block inquiries that threaten the national interest, thereby ensuring the government can get the measure through the Commons this year.

Any row between ministers and the Conservatives is likely to focus on whether the new provision is too inflexible. The Tories might force the government to amend this provision.

Nick Clegg, the Liberal Democrat leader, wrote to Brown yesterday challenging him to drop the new powers. "On taking office last year ... You recognised that the position of the attorney general had become so sullied by the BAE issue, questions over the legality of the Iraq war and the cash-for-honours inquiry, that it had to be reformed. Indeed, your Governance of Britain white paper pledged to 'renew the role of the attorney general to ensure that the office retains the public's confidence'. This sentiment is flatly contradicted by your recent proposals in the draft constitutional renewal bill. These proposals will give the attorney general effective carte blanche in future to block or quash any investigations or prosecutions under the pretext of 'national security'. Given that under these draft rules there would be no recourse to judicial review of such decisions, do you not see that this will be seen by the public as a step backward, not forward?"

Leona Helmsley once said paying taxes was for little people. In Britain, it appears justice is for little people. Money changes everything, and don't you forget it. The Guardian has an entire section on this story if you're further interested.