Corruption is a Crime

BAE Systems yesterday formally announced the appointment of former Chief Justice Lord Woolf as chair of the company’s new inquiry into its business ethics - but the Al Yamamah deal won’t be part of his remit, according to today’s Independent.

Yesterday, Lord Woolf said he would not have wanted to take on a role at BAE that included “an inquest” into the Al Yamamah affair. But he insisted his appointment had not been made simply to head off criticism of the company’s dealings with Saudi Arabia.

Lord Woolf will be paid £6,000 a day by the company over the next six to nine months, which could net him up to half a million pounds.

Lord Goldsmith, the Attorney General, will be questioned about his role in the Al Yamamah/BAE affair by the House of Commons’ constitutional affairs committee, the Guardian reports.

The hearing is expected later this month while Tony Blair is still prime minister. The committee, chaired by the Lib Dem Alan Beith, will also question the head of the SFO, Robert Wardle. MPs decided to summon the two men at a private meeting in Westminster last week.

Splashed across the front page of yesterday’s Sunday Times was the news that BAE Systems forked out nearly a quarter of a million pounds for a luxury honeymoon for the daughter of Prince Bandar. Prince Bandar is the Saudi prince at the heart of allegations of backdoor payments from BAE in connection with the Al Yamamah arms deal.

The Sunday Times reports:

Peter Gardiner, managing director of the travel agency that organised the honeymoon, said: “BAE instructed me to give Bandar’s daughter and her husband the honeymoon of a lifetime at BAE’s expense. Who says that big business doesn’t have a heart?”

The disclosure is the first evidence that Bandar and his family may have benefited from secret payments made by BAE. The company and Bandar, who was Saudi Arabia’s ambassador to Washington at the time, have denied any impropriety.
[…]
The honeymoon for Bandar’s daughter, Princess Reema, was paid for through a £60m slush fund which the Serious Fraud Office (SFO) believes was set up by BAE to encourage Saudi royals to continue with a £43 billion arms contract to supply Hawk and Tornado jets.

There is lots more detail in the article.

Vince Cable, the Deputy Leader of the Liberal Democrats, has written an article for Comment Is Free calling for an inquiry into the Al Yamamah affair as a step towards cleaning up such international deals.

I still find it difficult to get my head round the idea that, until December, one agency of government (the Serious Fraud Office) was investigating what it believed could be crimes, leading to prosecutions, while another arm of government was cheerfully helping the suspected felons. Since there are six other bribery cases still being investigated by the SFO in relation to the BAE contracts with South Africa, Tanzania, the Czech Republic, Qatar, Chile and Romania, the obvious question is whether the government has been, or is, actively involved in facilitating payments there as well.
[…]
These issues are, on one level, legal and technical, but at another, moral and political. So far, the government has shown itself utterly impervious to political embarrassment. The prime minister happily signed up to a G8 communique condemning corruption, and British minsters and ambassadors go round the world lecturing (Africans, in particular) on the virtues of honest and transparent government procurement.

Read the full article here. Vince’s article from last week - “Today’s allegations about secret payments to a Saudi prince mean that the government must come clean about its role in the BAE arms deals” - is here.

The Liberal Democrats are calling for a fresh inquiry into the Al Yamamah arms deal, following allegations that £1 billion was secretly channelled to the former Saudi Ambassador to the US, Prince Bandar bin Sultan. Just yesterday, at Prime Minster’s Questions, Ming Campbell asked Tony Blair who was to blame for withholding information about these payments from the OECD’s investigation. The party has already called for an inquiry into ending of the Serious Fraud Office’s earlier investigation into the deal.

Her Majesty’s Official Opposition, on the other hand, have been strangely quiet on the issue, prompting a question posed on the Guardian’s Comment Is Free website: where are the Conservatives?

We’ve reported a number of BAE/Al Yamamah stories from the Guardian this week, and the paper presses on hard with its investigation today: “BAE faces criminal inquiry in US over £1bn payments” is the front page headline.

The US department of justice is preparing to open a corruption investigation into the arms company BAE, the Guardian has learned. It would cover the alleged £1bn arms deal payments to Prince Bandar of Saudi Arabia.

Washington sources familiar with the thinking of senior officials at the justice department said yesterday it was “99% certain” that a criminal inquiry would be opened under the Foreign Corrupt Practices Act (FCPA). Such an investigation would have potentially seismic consequences for BAE, which is trying to take over US arms companies and make the Pentagon its biggest customer.

The full story is here. You can find the Guardian’s detailed investigations pulled together in The BAE Files.

Tackled at Prime Minister’s Questions today about BAE/Al Yamamah, Tony Blair took responsiblity on behalf of his whole Government.

According to the Guardian:

After being asked at prime minister’s questions about the £43bn arms deal between BAE Systems and Saudi Arabia by the Liberal Democrat leader, Sir Menzies Campbell, Mr Blair said: “If you want to blame anyone for this, blame me. I am perfectly happy to take responsibility for it.”

Sir Menzies had asked which minister was responsible for withholding information from the world’s anti-corruption watchdog, the Organisation for Economic Cooperation and Development, about secret payments to Prince Bandar of Saudi Arabia.

We note that Tony Blair will be Prime Minister for just two more weeks.

Another day, another refusal by the Government to answer on Al Yamamah. From today’s Guardian:

Des Browne, the defence secretary, yesterday refused point-blank to say whether his department’s £1bn backdoor payments to Prince Bandar of Saudi Arabia for arms deals were still continuing. Visibly uneasy and irritated at a lunch with defence journalists, he claimed “national security” was the reason for his silence.

He also refused to say whether he or his predecessors were aware of the payments allegedly processed by MoD officials and wired to an American bank via the arms firm BAE as an integral part of Britain’s biggest arms deal. “I am not going to discuss the detail of these confidential contracts for the very reason it would generate the consequences we do not want to generate,” he said.

The newspaper also quotes the Liberal Democrat Leader Sir Menzies Campbell:

“We need a full investigation to determine whether the Ministry of Defence has been directly involved in processing payments to Prince Bandar. The department’s failure to clarify this issue is unacceptable. We need to know whether any payments took place after 2002 and whether they breached anti-corruption legislation. If it appears the law has been broken then it would be a matter for the police.”

The full story is on the Guardian’s website.

Last night’s Panorama on BBC One alleged that the Ministry of Defence “directly administered payments of more than £1bn to Prince Bandar of Saudi Arabia”, according to The Guardian.

According to the BBC, MoD officials in Whitehall themselves processed quarterly “invoices” from the Saudi prince, who was seeking payment for “support services” for his role in the al-Yamamah arms deal. The invoices were passed on to BAE executives, who would then wire the latest instalment of cash to accounts at Riggs bank in Washington.

The transfers from an account held at the Bank of England went in batches of £30m a quarter for at least a decade.
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Last night as Lib-Dem politicians renewed their questioning, Lord Goldsmith remained silent on whether he had advised that information about the Bandar payments be concealed from the OECD - the world’s anti-corruption organisation.

Read the full story here.

Following the reports in The Guardian about the Attorney General (Lord Goldsmith) and the failure to disclose secret payments to a Saudi prince to an OECD anti-corruption probe into the Al Yamamah arms deal, Liberal Democrat Ming Campbell has called on Lord Goldsmith to explain what has really happened:

If it is true that information about payments made to Prince Bandar was not given to the OECD, then that is an allegation of the utmost seriousness. It would be unsupportable for Britain to sign up to an international agreement on bribery and then fail to honour its obligations when an investigation comes too close to home.