Corruption is a Crime

The Leader of the Liberal Democrats, Nick Clegg MP, has written to Prime Minister Gordon Brown urging him to re-open the the Serious Fraud Office’s investigation into the Al-Yamamah arms deal and demanding a full inquiry into how it came to be dropped.

This follows yesterday’s ruling by the High Court that the SFO acted unlawfully when it suspended - under direction from the Labour Government - its investigation into the deal between BAE and Saudi Arabia.

Nick Clegg also calls on the Prime Minister to update Parliament on the progress of other investigations into alleged corruption by British companies, and on UK Government cooperation with the US Justice Department’s investigation into alleged bribery by BAE.

Here’s the letter in full:
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The BBC is reporting that the High Court has ruled that the Serious Fraud Office “acted unlawfully” in shutting down its inquiry into the BAE/Al-Yamamah arms deal. The court has criticised the director of the SFO for “failing to resist threat from government”.

The judicial review case was brought by Campaigns Against Arms Trade who had said the decision to drop the inquiry was illegal under international anti-bribery agreements.

According to the BBC’s coverage, the Labour Government was concerned that the SFO’s investigation would jeopardise a deal to sell Typhoon fighters to Saudi Arabia - an economic consideration rather than the “national security” argument the Government and the SFO claimed.

We hope the SFO will now resume its investigation, and you can back our campaign for an inquiry to how the SFO came to drop its inquiry by signing the petition on the right-hand side of the page.

As today’s Observer reports:

The UK government will this week face an unprecedented investigation by the powerful Organisation for Economic Co-operation and Development (OECD) over its failures to comply with international anti-corruption and bribery protocols.

Over three days, starting on Tuesday, officials from the Foreign and Home Offices and the Ministry of Justice, together with the Attorney-General, senior Serious Fraud Office and police figures will be interrogated by French, Canadian and other OECD anti-corruption experts.

The agenda, seen by The Observer, will focus on why the UK government has failed to pass a modern anti-corruption law despite promising to do so for the past 10 years, and the reasons behind Britain’s failure to mount successful prosecutions in this area.

The scale of the investigation, which is divided into 114 sessions, reveals the depth of international concern at the inadequacy of the UK’s bribery and corruption laws and will embarrass Prime Minister Gordon Brown. Among witnesses will be senior business figures from BP and mining giant Anglo-American as well as MPs from all parties.

The OECD probe is known as a ‘Phase Two’ examination - a procedure that, so far, only three countries, Ireland, Luxembourg and Japan, have been subjected to. The investigation will also question the reasons behind the government’s decision to order the SFO to stop its investigation into the al-Yamamah arms deal between the Saudi government and BAE. That decision is now the subject of a judicial review.

The investigation will also seek to clarify the role of the Attorney-General in serious corruption cases - at a time when the draft Constitutional Renewal Bill is proposing to enshrine in law the right of the Attorney-General to stop bribery investigations on national security grounds if he receives a certificate from the relevant Secretary of State.

It is understood that the Paris-based OECD has come under pressure from UK officials to water down its probe, but the scale of the investigation appears to indicate that the OECD, which, as the leading grouping of advanced industrial nations, sets international benchmarks on corruption issues, has not caved in.

The Government was accused in court yesterday of having rolled over in the face of threats from Saudi Arabia over the investigations into bribery and corruption allegations involving BAE Systems and arms deals with Saudi Arabia.

The comments came during a court hearing into the axing of the investigations:

Lord Justice Moses said the court had seen nothing to suggest that the government had done “anything other than roll over” in December 2006.

An attempt could have been made, he said, to get the threat to withdraw co-operation with the UK, including over security issues, lifted.

Liberal Democrat MP Vince Cable said:

These comments are seriously damaging to the Government’s credibility in its handling of this scandal. The Liberal Democrats alleged at the time that the Government had capitulated in the face of threats from Saudi Arabia which may or may not have had any substance. Today we have confirmation that this is exactly what happened.

Tony Blair’s role in the blocking of a criminal investigation into the Al Yamamah arms deal should be investigated by an independent inquiry, says newly elected Liberal Democrat leader Nick Clegg.

In a sign that he will continue the tough line taken by previous Liberal Democrat leaders, Mr Clegg responded to the publication of a letter from then Prime Minister Tony Blair to the Attorney General saying its contents confirmed his “very worst fears”.

As the BBC reports:

The letter from Mr Blair to Lord Goldsmith dated 8 December 2006 was released to the High Court during a case brought by two pressure groups who are challenging the legality of the decision to end investigations into BAE Systems’ dealings with Saudi Arabia.

It refers to “critical difficulties” that might have affected the major contract for new Typhoon military aircraft.

There was uproar when the Serious Fraud Office inquiry into the Al Yamamah contract from the 1980s was dropped, but Mr Blair insisted the decision was taken on security grounds.

Mr Clegg called for an independent inquiry into Mr Blair’s role and insisted that a National Audit Office report on the deal, which has never been made public, should be released.

He said: “Tony Blair must urgently explain what he thought he was up to by invoking the Typhoon contract as a reason to stop the SFO investigation.

“As his own attorney general, Lord Goldsmith, made clear to him between December 2005 and December 2006, commercial relations are an improper basis under international law to suspend a legal investigation.

“Knowing this, why did Tony Blair persist in pursuing a legally improper line of argument which could amount to an attempt to pervert the course of justice?”

Whilst the UK Government decided to axe Britain’s investigation into corruption allegations arrising from the Al Yamamah arms deal with Saudi Arabia, the Swiss are cooperating with the US’s own investigation:

Swiss prosecutors have also agreed to hand over financial records linked to the Saudi Royal family, according to a report by the Guardian newspaper. A US source told the paper “The investigators are confident they can get what they need from Switzerland. That’s where all the BAE arrangements were made”.

Read more in Arabian Business.

From The Guardian:

US corruption investigators have gone behind the back of Downing Street to fly a British witness to Washington to testify about Saudi arms deals with the UK arms firm BAE Systems, the Guardian can disclose. In a hitherto secret move, Swiss federal prosecutors have also agreed to hand over to Washington financial records linked to the Saudi royal family.

The US is seeking - but has so far been refused - more than a million pages of documents seized from BAE, its bankers, Lloyds TSB, and the Ministry of Defence during an investigation by the Serious Fraud Office…

British ministers are refusing to grant a six-month-old official request from the US department of justice for mutual legal assistance, in defiance of the UK’s anti-bribery treaty obligations. This follows the suppression of Britain’s own Serious Fraud Office investigation, which was abandoned last year on the grounds that the inquiry might jeopardise national security.

The Government’s decision to drop the inquiry into corruption around the Al Yamamah arms deal is facing new scrutiny from the courts after campaigners won a request for a judicial review.

Corner House Research and Campaign Against the Arms Trade won their request for a judicial review after the judges ruled that “the challenge cries out for a hearing” and raises “matters of concern and public importance”.

Liberal Democrat leader Vince Cable comments:

“I am delighted that this is going to get a full hearing in the High Court.

“It is in the public interest to fully investigate the circumstances surrounding the dropping of this important investigation.

“It appears that the judiciary is more open than the British Government.”

Liberal Democrat MP John Pugh is demanding that a secret National Audit Office (NAO) report into the Al Yamamah arms deal is published.

His call follows revelations that Sir John Bourn, the NAO’s chief who resigned days ago, has received hospitality from BAE, the firm at the centre of bribery allegations over the Al Yamamah deal.

‘We will be looking to bring the deal back on to the agenda, as a result of Sir John Bourn’s departure and his conflict of interest issues,’ Liberal Democrat MP John Pugh said.

You can read more in Accountancy Age.

Vince Cable MP, the Acting Leader of the Liberal Democrats, is to boycott the state visit of King Abdullah of Saudi Arabia to the United Kingdom. According to the BBC:

Mr Cable says he will not attend any of the planned ceremonial events - as would be normal for the leader of one of the main opposition parties.

Mr Cable told the BBC’s Today programme that by any assessment of Saudi Arabia, “the human rights record is appalling”.

He also cited the regime’s arms deal with the British firm BAE and the row over alleged corruption surrounding it.

The International Herald Tribune quotes from Vince Cable’s letter to the Saudi ambassador:

“I have introduced three debates in Parliament this year expressing serious concerns over the al-Yamamah contract and the corruption allegedly involved. I have, in my arguments, also been very critical of members of the Saudi royal family and the Saudi record on human rights, including its maltreatment of British citizens,” the letter said.

“In my opinion, it is quite wrong for the British government to have proposed a state visit at this time. Therefore, it would, I believe, be inappropriate for me to participate in a ceremonial state visit against this background.”

Read more from:

• The Herald
• The Guardian
• ITN
• ePolitix.com