BAE in arms deal corruption scandal

It has been alleged that the arms company BAE Systems has paid Prince Bandar of Saudi Arabia more than £1 billion, in connection to Britain’s biggest ever weapons contract, “Al-Yamamah”, worth £43bn.

It is claimed BAE Systems, a British company which the University of York holds shares in, has channeled funds through a US bank to the Saudi Prince who was ambassador for the country for 20 years.

Allegedly, £30 million has been paid to him every quarter for at least 10 years, endorsed by the Ministry of Defence. It has been through an inquiry made by the Serious Fraud Office (SFO) into the transactions behind the Al Yamamah (“the dove” in Arabic) arms deal, signed in 1985, that the organization exposed details of payments made to the Prince himself.

However, in December 2006 the investigation was halted as the government maintained it endangered Britain’s national interest. SFO director, Robert Wardle stated that the decision was made by his own organisation “to protect national security”, and Tony Blair asserted that he took “full responsibility” for the decision.

At the time, government sources had warned colleagues that British “government complicity” was at risk of being discovered unless the SFO’s corruption inquiries were brought to a halt. A protest by anti-corruption campaigners pushed the OECD (Organisation for Economic Development and Cooperation) to take over the inquiry and launch its own investigation.

The matter of the payments has been undeniably hidden from the OECD when demands were made with relation to the dropping of the SFO inquiry. Lord Goldsmith has publicly admitted that facts were witheld from the anti-corruption watchdog because of “national security” considerations, chiefly to avoid information leaks to foreign countries.
Prince Bandar is known to have been a key figure, along with Margaret Thatcher, in setting up Britain’s largest series of weapons deals.

In over 20 years Al-Yamamah has brought the sale of 120 Tornado and Hawk warplanes and other military equipment to Saudi Arabia. The deal has also included a £75m, four-engine Airbus-340, donated to the president on his birthday in 1998, with its expenses still paid by BAE.

BAE drew and deposited £2bn from private Bank of England accounts, permitting Saudi oil to be sold in return for shipments of Tornado aircraft and other armaments.
The Defence Export Organisation (Deso) maintain that regular payments were made by BAE and wired to Prince Bandar’s account at Riggs bank in Washington DC.

Prince Bandar has denied all claims concerning the payments, saying that payments “were pursuant to the Al-Yamamah contracts and as such would not in any way have been ‘secret'”

Liberal Democrat deputy leader, Vince Cable has called for an urgent inquiry into the matter to see “whether the government has deceived the public and undermined the anti-corruption legislation which it itself passed through parliament.”

Believing that claims of national security concerns are weak and that the Prince himself benefited from the arms deal, he added “It increasingly looks as if the motives behind the decision to pull the SFO inquiry were less to do with UK national interests but more to do with the personal interests of one or two powerful Saudi ministers.”

As the government continued to partially deny its involvement in the controversy, behind the scenes there were moves to try and secure a new BAE £20 billion arms deal with Saudi Arabia. Evidence shows that the defence secretary Des Browne met with the Saudi crown prince, Prince Sultan bin Abdul Aziz, the father of Prince Bandar, to secure the deal for BAE systems.

The anti-bribery panel of the OECD will meet on June 19 in Paris and then move to London to question ministers about their conduct throughout the affair. In light of growing pressure on ministers to disclose their role in Britain’s arms deal, the BBC has accused the government of having a more direct role with regards to the transfer of money. It has claimed that Whitehall produced “invoices” from the Saudi Prince wanting payment for his services in relation to the arms deal. This was then passed on to BAE executives, and an installment of cash was transferred to Bandar’s bank.

Britain is a signatory to the anti-corruption treaty and the Prime Minister has claimed that Britain is at the forefront of combating corruption, but ultimately it can be said that Blair has failed to toughen up bribery laws and critics say that this situation seems to be a deliberate attempt to conceal the facts.

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