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Judge: Saudi threats apparently 'rolled over' British government
Published: Friday February 15, 2008

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The British government appeared to have "rolled over" in response to pressure from Saudi Arabia to drop an investigation into alleged bribery in an arms deal with BAE Systems PLC, a High Court judge said Thursday.

Lord Justice Alan Moses made the comments while hearing a challenge brought by two lobby groups to the legality of a Serious Fraud Office decision to stop the investigation in December 2006.

"Saudi Arabia's rulers threatened to make it easier for terrorists to attack London unless corruption investigations into their arms deals were halted, according to court documents revealed yesterday," David Leigh and Rob Evans report for The Guardian. "Previously secret files describe how investigators were told they faced 'another 7/7' and the loss of 'British lives on British streets' if they pressed on with their inquiries and the Saudis carried out their threat to cut off intelligence."

The Campaign Against Arms Trade and anti-corruption group Corner House argue the decision to halt the probe was illegal because it was based on tainted advice from then-Prime Minister Tony Blair and his government. The activists also argue it contravened the Organization for Economic Cooperation and Development's anti-bribery convention, disregarded Saudi Arabia's obligations under international law and was against British law. Blair took responsibility for the decision to halt the probe, saying the investigation threatened national security interests.

That argument was reiterated on Thursday by the fraud office's lawyer, Philip Sales, who said the decision was taken by the agency's director because there was a serious and imminent threat to national security. Sales said Saudi Arabia threatened to withdraw cooperation on issues crucial to British public safety, including those Ğin light of the Islamist terrorist threat.

However, the two groups argue the government also put pressure on the fraud office to drop the investigation because BAE faced the loss of a lucrative jet fighter contract.

The activists' lawyer, Dinah Rose, said the government had not disputed allegations that Saudi Prince Bandar bin Sultan, the former ambassador to the United States and now head of Saudi Arabia's National Security Council, told Blair during a meeting in July 2006 to stop the inquiry or BAE would lose a 10 billion pound (US$19.6 billion) contract to buy Typhoon Eurofighter jets.

Rose said Blair then placed "irresistible pressure" on the fraud office's director, Robert Wardle, to stop the investigation. "We submit that the prime minister, with the greatest respect, crossed the line," she said.

Documents presented to the court also revealed that BAE sent a 'strictly private and confidential' memo to Britain's attorney general, Peter Goldsmith, saying the inquiry should be called off because it jeopardized the new contract. Goldsmith's office responded by saying it was not appropriate for him to read such a memo.

Lord Justice Alan Moses, one of two judges presiding over the judicial review, repeatedly questioned why no attempt was made to see if the threats could be mitigated, or to explain to those making the threats that the fraud office was independent from the government, before ending the inquiry.

"As far as we know, we have seen nothing that suggests that anybody did anything other than just roll over in the face of that," he said.

Rose said a greater threat was the perception that Britain would give in to a threat delivered at the right time, in the right manner.

"That could seriously implicate our national security," she said.

The fraud office was investigating allegations that BAE, one of the world's largest arms makers, ran a 60 million pound (US$126 million) slush fund offering sweeteners to officials from Saudi Arabia in return for lucrative contracts as part of the Al-Yamamah arms deal in the 1980s.

Al-Yamamah, meaning 'the dove,' was the name given to an agreement under which BAE supplied Tornado fighter jets and other military equipment to Saudi Arabia, which paid the British government with oil.

The contract to buy Typhoon Eurofighter jets superseded the Al-Yamamah agreement.

BAE, Britain's largest defense group, has always said it acted lawfully. Prince Bandar bin Sultan has also denied that he profited from the deal. The judicial review, which is expected to last two days, will consider only if the decision was legal, not if it was right or wrong.

If the court finds in favor of the activists, the fraud office can be ordered to reconsider its decision. It would be able to draw the same conclusion, providing all legal procedures were correctly followed. The British government sold its majority BAE stake in 1981 when BAE became a public limited company.

An investigation by the U.S. Justice Department is ongoing.

Further excerpts from Guardian article:


Prince Bandar, the head of the Saudi national security council, and son of the crown prince, was alleged in court to be the man behind the threats to hold back information about suicide bombers and terrorists. He faces accusations that he himself took more than £1bn in secret payments from the arms company BAE.

He was accused in yesterday's high court hearings of flying to London in December 2006 and uttering threats which made the prime minister, Tony Blair, force an end to the Serious Fraud Office investigation into bribery allegations involving Bandar and his family.

The threats halted the fraud inquiry, but triggered an international outcry, with allegations that Britain had broken international anti-bribery treaties.

Lord Justice Moses, hearing the civil case with Mr Justice Sullivan, said the government appeared to have "rolled over" after the threats. He said one possible view was that it was "just as if a gun had been held to the head" of the government.



(with wire reports)

This video is from Channel 4, broadcast February 14, 2008.