Al Yamamah
Encyclopedia
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
to Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
, which have been paid for by the delivery of up to 600000 barrels (95,392.4 m³) of crude oil per day to the UK government. The prime contractor has been BAE Systems
BAE Systems
BAE Systems plc is a British multinational defence, security and aerospace company headquartered in London, United Kingdom, that has global interests, particularly in North America through its subsidiary BAE Systems Inc. BAE is among the world's largest military contractors; in 2009 it was the...
and its predecessor British Aerospace
British Aerospace
British Aerospace plc was a UK aircraft, munitions and defence-systems manufacturer. Its head office was in the Warwick House in the Farnborough Aerospace Centre in Farnborough, Hampshire...
. The first sales occurred in September 1985 and the most recent contract for 72 Eurofighter Typhoon
Eurofighter Typhoon
The Eurofighter Typhoon is a twin-engine, canard-delta wing, multirole combat aircraft, designed and built by a consortium of three companies: EADS, Alenia Aeronautica and BAE Systems; working through a holding company, Eurofighter GmbH, which was formed in 1986...
multirole fighters was signed in August 2006.
Mike Turner
Michael Turner (businessman)
Michael John Turner CBE is the former Chief Executive Officer of the aerospace and defence company BAE Systems.-Early life:He attended Didsbury Technical High School on School Lane in Didsbury...
, the CEO
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of BAE Systems, said in August 2005 that BAE and its predecessor had earned £43 billion in twenty years from the contracts and that it could earn £40 billion more. It is Britain's largest ever export agreement, and employs some 5,000 people in Saudi Arabia.
In 2010, BAE Systems pleaded guilty to a United States court, to charges of false accounting and making misleading statements in connection with the sales.
Background
The UK was already a major supplier of arms to Saudi Arabia prior to Al Yamamah. In 1964 The British Aircraft CorporationBritish Aircraft Corporation
The British Aircraft Corporation was a British aircraft manufacturer formed from the government-pressured merger of English Electric Aviation Ltd., Vickers-Armstrongs , the Bristol Aeroplane Company and Hunting Aircraft in 1960. Bristol, English Electric and Vickers became "parents" of BAC with...
conducted demonstration flights of their Lightning
English Electric Lightning
The English Electric Lightning is a supersonic jet fighter aircraft of the Cold War era, noted for its great speed and unpainted natural metal exterior finish. It is the only all-British Mach 2 fighter aircraft. The aircraft was renowned for its capabilities as an interceptor; Royal Air Force ...
in Riyadh
Riyadh
Riyadh is the capital and largest city of Saudi Arabia. It is also the capital of Riyadh Province, and belongs to the historical regions of Najd and Al-Yamama. It is situated in the center of the Arabian Peninsula on a large plateau, and is home to 5,254,560 people, and the urban center of a...
and in 1965 Saudi Arabia signed a letter of intent for the supply of Lightning and Strikemaster aircraft as well as Thunderbird
English Electric Thunderbird
The English Electric Thunderbird was a British surface to air missile produced for the British Army. The Thunderbird was primarily intended to attack higher altitude targets at ranges of up to thirty miles or so. AA guns were still used for lower altitude threats...
surface to air missiles. The main contract was signed in 1966 for 40 Lightnings and 25 Strikemasters (eventually raised to 40). In 1973 the Saudi government signed an agreement with the British government which specified BAC as the contractor for all parts of the defence system (AEI
Associated Electrical Industries
Associated Electrical Industries was a British holding company formed in 1928 through the merger of the British Thomson-Houston Company and Metropolitan-Vickers electrical engineering companies...
was previously contracted to supply the radar equipment and Airwork Services
Airwork Services
During the post-war period Airwork also further expanded its business into civil aviation. This expansion was financed by its wealthy shareholders, including Lord Cowdray, Whitehall Securities, the Blue Star shipping line, Furness Withy and Thomas Loel Evelyn Bulkeley Guinness.Airwork's other air...
provided servicing and training). Overall spending by the RSAF was over £1 billion GBP (SAR 57 Billion).
In the 1970s United States defence contractors won major contracts, including 114 Northrop F-5s. In 1981 the RSAF ordered 46 F-15Cs and 16 F-15Ds, followed in 1982 by the purchase of 5 E-3
E-3 Sentry
The Boeing E-3 Sentry is an airborne warning and control system developed by Boeing as the prime contractor. Derived from the Boeing 707, it provides all-weather surveillance, command, control and communications, and is used by the United States Air Force , NATO, Royal Air Force , French Air Force...
A AWACS aircraft. Following these deals and partly due to pro-Israeli sentiment in the U.S. Congress, which would have either blocked a deal or insisted on usage restrictions for exported aircraft, Saudi Arabia turned to the UK for further arms purchases.
Summary
The Financial TimesFinancial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
reported Saudi Arabian "interest" in the Panavia Tornado
Panavia Tornado
The Panavia Tornado is a family of twin-engine, variable-sweep wing combat aircraft, which was jointly developed and manufactured by the United Kingdom, West Germany and Italy...
in July 1984. Export had become a possibility after West Germany lifted its objections to exports outside of NATO. In September 1985 Saudi Arabia agreed "in principle" to a Tornado, Hawk
BAE Hawk
The BAE Systems Hawk is a British single-engine, advanced jet trainer aircraft. It first flew in 1974 as the Hawker Siddeley Hawk. The Hawk is used by the Royal Air Force, and other air forces, as either a trainer or a low-cost combat aircraft...
and missile deal. On 26 September 1985 the defence ministers of the UK and Saudi Arabia sign a Memorandum of Understanding in London for 48 Tornado IDSs, 24 Tornado ADVs, 30 Hawk training aircraft, 30 Pilatus PC-9
Pilatus PC-9
The Pilatus PC-9 is a single-engine, low-wing tandem-seat turboprop training aircraft manufactured by Pilatus Aircraft of Switzerland.-Design and development:...
trainers, a range of weapons, radar, spares and a pilot-training programme. The second stage (Al Yamamah II) was signed on 3 July 1988 in Bermuda
Bermuda
Bermuda is a British overseas territory in the North Atlantic Ocean. Located off the east coast of the United States, its nearest landmass is Cape Hatteras, North Carolina, about to the west-northwest. It is about south of Halifax, Nova Scotia, Canada, and northeast of Miami, Florida...
by the defence ministers of the UK and Saudi Arabia.
Although the full extent of the deal has never been fully clarified, it has been described as "the biggest [U.K.] sale ever of anything to anyone", "staggering both by its sheer size and complexity". At a minimum, it is believed to involve the supply and support of 96 Panavia Tornado
Panavia Tornado
The Panavia Tornado is a family of twin-engine, variable-sweep wing combat aircraft, which was jointly developed and manufactured by the United Kingdom, West Germany and Italy...
ground attack aircraft, 24 Air Defence Variants
Panavia Tornado ADV
The Panavia Tornado Air Defence Variant is a long-range, twin-engine interceptor version of the swing-wing Panavia Tornado. The aircraft's first flight was on 27 October 1979, and it entered service in 1986. It was retired on 22 March 2011 by the Royal Air Forceand is now only in service with the...
(ADVs), 50 BAE Hawk
BAE Hawk
The BAE Systems Hawk is a British single-engine, advanced jet trainer aircraft. It first flew in 1974 as the Hawker Siddeley Hawk. The Hawk is used by the Royal Air Force, and other air forces, as either a trainer or a low-cost combat aircraft...
and 50 Pilatus PC-9
Pilatus PC-9
The Pilatus PC-9 is a single-engine, low-wing tandem-seat turboprop training aircraft manufactured by Pilatus Aircraft of Switzerland.-Design and development:...
aircraft, specialised naval vessels, and various infrastructure works. The initial Memorandum of Understanding committed the UK to purchasing the obsolete Lightning and Strikemaster aircraft, along with associated equipment and spare parts.
The UK government’s prime contractor for the project is BAE Systems. BAE has approximately 4,000 employees working directly with the Royal Saudi Air Force
Royal Saudi Air Force
The Royal Saudi Air Force , is the aviation branch of the Saudi Arabian armed forces. The RSAF has developed from a largely defensive military force into one with an advanced offensive capability...
(also see Military of Saudi Arabia
Military of Saudi Arabia
Saudi Arabia's armed forces are mainly the responsibility of the Ministry of Defense and Aviation. The Ministry also has responsibility for the construction of civilian airports as well as military bases, and for Meteorology departments...
).
The success of the initial contract has been attributed to Prime Minister Margaret Thatcher
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
, who lobbied hard on behalf of British industry. A Ministry of Defence briefing paper for Thatcher detailed her involvement in the negotiations:
Since early 1984, intensive efforts have been made to sell Tornado and Hawk to the Saudis. When, in the Autumn of 1984, they seemed to be leaning towards French Mirage fighters, Mr HeseltineMichael HeseltineMichael Ray Dibdin Heseltine, Baron Heseltine, CH, PC is a British businessman, Conservative politician and patron of the Tory Reform Group. He was a Member of Parliament from 1966 to 2001 and was a prominent figure in the governments of Margaret Thatcher and John Major...
paid an urgent visit to Saudi Arabia, carrying a letter from the Prime Minister to King Fahd. In December 1984 the Prime Minister started a series of important negotiations by meeting Prince BandarBandar bin SultanBandar bin Sultan bin Abdul-Aziz Al Saud is a prince of the Saudi royal family and was Saudi Arabia's ambassador to the United States from 1983 to 2005. He was appointed Secretary-General of the National Security Council by King Abdullah on 16 October 2005...
, the son of Prince SultanSultan, Crown Prince of Saudi ArabiaPrince Sultan bin Abdul-Aziz Al Saud "Sultan Al-Khair" was the crown prince of Saudi Arabia at the time of his death. He served as the First Deputy Prime Minister and Minister of Defense and Aviation. He was one of the Sudairi Seven. Sultan was first in the Saudi line of succession.-Early life...
. The Prime Minister met the King in Riyahd in April this year and in August the King wrote to her stating his decision to buy 48 Tornado IDS and 30 Hawk.
Also, the role of Sir Dick Evans
Richard Evans (businessman)
Sir Richard Harry Evans, CBE, Hon FRAeS less formally known as Dick Evans, was formerly chairman of BAE Systems.In 2001 he became Chancellor of the University of Central Lancashire...
, the BAE Chairman at the time, in winning the Al-Yamamah arms deal should not be underestimated. It is believed by some that he managed to secure the deal by his ability to swallow sheep's eyeballs as though they were cocktail canapes at banquets, thus impressing his Middle East clients.
There were no conditions relating to security sector reform or human rights included in the contracts. Contracts between BAE Systems and the Saudi government have been underwritten by the Export Credits Guarantee Department
Export Credits Guarantee Department
The Export Credits Guarantee Department is the United Kingdom's Export Credit Agency . It reports through to the Secretary of State for Business, Innovation and Skills. ECGD derives its powers from the 1991 Export and Investment Guarantees Act and undertakes its activities in accordance with a...
, a tax-payer funded insurance system. Guarantees on a contract worth up to £2.7billion were signed by the Government on 1 September 2003. In December 2004, the Commons Trade Committee Chairman, Martin O'Neill, accused the Government of being foolish for concealing a £1billion guarantee they have given to BAE Systems.
Al Yamamah I
- 48 Panavia TornadoPanavia TornadoThe Panavia Tornado is a family of twin-engine, variable-sweep wing combat aircraft, which was jointly developed and manufactured by the United Kingdom, West Germany and Italy...
Interdictor Strike (IDS)- 28 GR1 Standard
- 6 GR1A Reconnaissance Standard
- 14 Dual Control Trainers
- 24 Panavia Tornado ADVPanavia Tornado ADVThe Panavia Tornado Air Defence Variant is a long-range, twin-engine interceptor version of the swing-wing Panavia Tornado. The aircraft's first flight was on 27 October 1979, and it entered service in 1986. It was retired on 22 March 2011 by the Royal Air Forceand is now only in service with the...
s, equivalent to RAF's Tornado F3 standard - JP233JP233Originally known as the LAAAS , the JP233 was a British submunition delivery system consisting of large dispenser pods carrying several hundred submunitions designed to attack runways.-Design and development:...
Runway Denial Munition - Sea EagleSea Eagle (missile)The BAe Sea Eagle is a medium weight sea-skimming anti-ship missile designed and built by BAe Dynamics . It is designed to sink or disable ships up to the size of aircraft carriers in the face of jamming and other countermeasures including decoys...
Anti Ship Missile - ALARMALARMALARM is a British anti-radiation missile designed primarily to destroy enemy radars for the purpose of Suppression of Enemy Air Defense...
Anti-Radar Missile - SkyflashSkyflashThe British Aerospace Skyflash was a medium-range semi-active radar homing air-to-air missile derived from the US AIM-7 Sparrow missile and carried by Royal Air Force F-4 Phantoms and Tornado F3s, Italian Aeronautica Militare and Royal Saudi Air Force Tornados and Swedish Flygvapnet Viggens...
air-to-air Missile
The first aircraft (two Hawks) were delivered on 11 August 1987 at BAe's
British Aerospace
British Aerospace plc was a UK aircraft, munitions and defence-systems manufacturer. Its head office was in the Warwick House in the Farnborough Aerospace Centre in Farnborough, Hampshire...
Dunsfold
Dunsfold
Dunsfold is a village in the Waverley district of the county of Surrey, England, 8.7 miles south of Guildford. The census area Chiddingfold and Dunsfold has a population of 3,812.-History:...
facility.
Eurofighter Typhoon (al-Salam)
In December 2005 the governments of the UK and Saudi Arabia signed an "Understanding Document" which involved the sale of Typhoon aircraft to replace RSAF Tornados and other aircraft. Although no details were released, reports suggested the deal involved the supply of 72 aircraft. On 18 August 2006 a contract was signed for 72 aircraft. The aircraft cost approximately £4.43 billion, and the full weapons system is expected to cost approximately £10 billion.Tornado upgrade
In February 2006 Air Forces MonthlyAir Forces Monthly
Air Forces Monthly is a military aviation magazine published by Key Publishing, based in Stamford, United Kingdom.Sister publications include Air International, Air Enthusiast, Airliner World, Airports International, FlyPast and Today's Pilot.-External links:*http://www.airforcesmonthly.co.uk/* via...
suggested that the eventual Eurofighter order may reach 100 and the deal could include the upgrade of the RSAF's Tornado IDS aircraft, likely similar to the RAF's Tornado GR4 standard. In an editorial the magazine also raises the prospect of a requirement for a new lead-in fighter trainer
Jet trainer
A Jet trainer is typically a turbofan or turbojet powered training aircraft, intended either for general aviation flying training or for more advanced jet aircraft. Jet trainers are typically divided into civilian and military, and custom designs versus versions of existing aircraft...
to replace the earlier generation of Hawk 65/65As and to provide adequate training for transition of pilots to the advanced Typhoon. BAE System's 2005 Interim Report noted that three RSAF Tornado IDS' arrived at their Warton
Warton Aerodrome
Warton Aerodrome is located near to Warton village on the Fylde in Lancashire, England. The aerodrome is west of Preston, Lancashire, UK.Today the airfield is a major assembly and testing facility of BAE Systems Military Air Solutions....
facility for design evaluation tests with the ultimate aim being "to improve serviceability, address obsolescence, and enhance and sustain the capability of the aircraft". On 10 September 2006 BAE won a £2.5bn (€3.7bn, $4.6bn) contract for the upgrade of 80 RSAF Tornado IDS'.
Corruption allegations
There have been numerous allegations that the Al Yamamah contracts were a result of bribesBribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...
("douceurs") to members of the Saudi royal family
House of Saud
The House of Saud , also called the Al Saud, is the ruling royal family of Saudi Arabia and one of the wealthiest and most powerful dynasties in the world. The family holds thousands of members...
and government officials.
Some allegations suggested that the former prime minister's son Mark Thatcher
Mark Thatcher
Sir Mark Thatcher, 2nd Baronet is the son of Sir Denis Thatcher and Baroness Thatcher, the former British Prime Minister, and twin brother of Carol Thatcher...
may have been involved, however he has strongly denied receiving payments or exploiting his mother's connections in his business dealings.
In February 2001, the solicitor of a former BAE Systems employee, Edward Cunningham, notified Serious Fraud Office
Serious Fraud Office (UK)
The Serious Fraud Office is an independent UK Government department that investigates and prosecutes serious or complex fraud and corruption...
of the evidence that his client was holding which related to an alleged "slush fund". The SFO wrote a letter to Kevin Tebbit
Kevin Tebbit
Sir Kevin Reginald Tebbit, KCB CMG ) is a former British civil servant.-Career:He was educated at the Cambridgeshire High School for Boys and St John's College, Cambridge. From January to July 1998, Tebbit was director of GCHQ...
at the MoD who notified the Chairman of BAE Systems but not the Secretary of Defence. No further action was taken until the letter was leaked to and reported on by The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
in September 2003.
In May 2004, Sir Richard Evans appeared before parliament’s defence select committee and said: "I can certainly assure you that we are not in the business of making payments to members of any government."
In October 2004, the BBC's Money Programme broadcast an in-depth story, including allegations in interviews with Edward Cunningham and another former insider, about the way BAE Systems alleged to have paid bribes to Prince Turki bin Nasser and ran a secret £60 million slush fund
Slush fund
A slush fund, colloquially, is an auxiliary monetary account or a reserve fund. However, in the context of corrupt dealings, such as those by governments or large corporations, a slush fund can have particular connotations of illegality, illegitimacy, or secrecy in regard to the use of this money...
in relation to the Al Yamamah deal. Most of the money was alleged to have been spent through a front company called Robert Lee International Limited.
In June 2007 the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
's investigative programme Panorama
Panorama (TV series)
Panorama is a BBC Television current affairs documentary programme, which was first broadcast in 1953, and is the longest-running public affairs television programme in the world. Panorama has been presented by many well known BBC presenters, including Richard Dimbleby, Robin Day, David Dimbleby...
alleged that BAE Systems "..paid hundreds of millions of pound
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
s to the ex-Saudi ambassador to the US, Prince Bandar bin Sultan."
1992 NAO report
The UK National Audit Office investigated the contracts and has so far not released its conclusions - the only NAO report ever to be withheld. Official statements about the contents of the report go no further than to state that the then chairman of the Public Accounts Committee, now Lord Sheldon, considered the report in private in February 1992, and said: "I did an investigation and I find no evidence that the MOD made improper payments. I have found no evidence of fraud or corruption. The deal... complied with Treasury approval and the rules of Government accounting."In July 2006, Sir John Bourn
John Bourn
Sir John Bourn, then an officer of the British House of Commons, was holder of the office of Comptroller and Auditor General and, as such, head of the National Audit Office. He took up his post in 1988 after a series of senior appointments in the Ministry of Defence and the Northern Ireland Office...
, the head of the NAO, refused to release a copy to the investigators of an unpublished report into the contract that had been drawn up in 1992.
The MP Harry Cohen
Harry Cohen
Harry Michael Cohen is a British Labour Party politician, who was the Member of Parliament for Leyton and Wanstead from 1983 to 2010.-Early life:...
said, "This does look like a serious conflict of interest. Sir John did a lot of work at the MoD on Al Yamamah and here we now have the NAO covering up this report." In early 2002 he had proposed an Early Day Motion noting "that there have been... allegations made of large commission payments made to individuals in Saudi Arabia as part of... Al Yamamah... [and] that Osama bin Laden and the Al-Qaeda network have received substantial funds from individuals in Saudi Arabia."
Serious Fraud Office investigation
The Serious Fraud Office was reported to be considering opening an investigation in to an alleged £20 million slush fund on 12 September 2003, the day after The Guardian had published its slush fund story. The SFO also investigated BAE's relationship with Travellers World Limited.In November 2004 the SFO made two arrests as part of the investigation. BAE Systems stated that they welcomed the investigation and "believe[d] that it would put these matters to rest once and for all."
In late 2005, BAE refused to comply with compulsory production notices for details of its secret offshore payments to the Middle East. The terms of the investigation was for a prosecution under Part 12 of the Anti-terrorism, Crime and Security Act 2001.
Threats by the Saudi government
At the end of November 2006, when the long-running investigation was threatening to go on for two more years, BAE Systems was negotiating a multi-billion pound sale of Eurofighter TyphoonEurofighter Typhoon
The Eurofighter Typhoon is a twin-engine, canard-delta wing, multirole combat aircraft, designed and built by a consortium of three companies: EADS, Alenia Aeronautica and BAE Systems; working through a holding company, Eurofighter GmbH, which was formed in 1986...
s to Saudi Arabia. According to the BBC the contract was worth £6billion with 5,000 people directly employed in the manufacture of the Eurofighter, while other reports put the value at £10billion with 50,000 jobs at stake.
On 1 December The Daily Telegraph ran a front page headline suggesting that Saudi Arabia had given the UK ten days to suspend the Serious Fraud Office investigation into BAE/Saudi Arabian transactions or they would take the deal to France, but this threat was played down in other quarters. A French official had said "the situation was complex and difficult... and there was no indication to suggest the Saudis planned to drop the Eurofighter." This analysis was confirmed by Andrew Brookes
Andrew Brookes
Andrew Brookes is an English aerospace analyst, author of aviation books and aviation journalist.He is a former Royal Air Force pilot, and flew 3,500 hours on strategic reconnaissance Victors and Canberras, and also the Vulcan bomber...
, an analyst at the International Institute for Strategic Studies
International Institute for Strategic Studies
The International Institute for Strategic Studies is a British research institute in the area of international affairs. It describes itself as "the world’s leading authority on political-military conflict"...
, who said "there could be an element here of trying to scare the SFO off. Will it mean they do not buy the Eurofighter? I doubt it."
There were reports of a systematic PR campaign operated by Tim Bell through newspaper scare stories, letters from business owners and MPs in whose constituencies the factories were located to get the case closed.
Robert Wardle, head of the SFO, also stated (in a later High Court challenge, see below) that he had received a direct threat of a cessation of counterterrorist cooperation from the Saudi Arabian ambassador to the UK, in the first of three meetings held to assess the seriousness of the threat: “as he put it to me, British lives on British streets were at risk”.
Article 5 of the OECD Convention on Combating Bribery prohibits the decision to drop investigations into corruption from being influenced by considerations of the national economic interest or the potential effect upon relations with another state. This does not however explicitly exclude grounds of national security.
This prompted the investigation team to consider striking an early guilty plea deal with BAE that would minimise the intrusiveness to Saudi Arabia and mitigate damage. The Attorney General signed off on the strategy, but briefed Prime Minister Blair, who in a reply dated 5 December 2006, urged that the case to be dropped. Despite affirming his government's commitment to bribery prosecution, he stressed the financial and counter-terrorism implications. That same day, Prince Bandar met with Foreign Office officials, after spending a week with Jacques Chirac to negotiate a French alternative to the BAE deal.
A week later, after consultation with the SFO, the Attorney General met with Blair to argue against dropping the case. It was Blair's opinion that "Any proposal that the investigation be resolved by parties pleading guilty to certain charges would be unlikely to reduce the offence caused to the Saudi Royal Family, even if the deal were accepted, and the process would still drag out for a considerable period".
On 13 December, the Director of the SFO wrote to the Attorney General to inform him that the SFO was dropping the investigation and would not be looking into the Swiss bank accounts, citing “real and imminent damage to the UK's national and international security and would endanger the lives of UK citizens and service personnel.”
Investigation discontinued
On 14 December 2006, the Attorney GeneralAttorney General
In most common law jurisdictions, the attorney general, or attorney-general, is the main legal advisor to the government, and in some jurisdictions he or she may also have executive responsibility for law enforcement or responsibility for public prosecutions.The term is used to refer to any person...
Lord Goldsmith announced that the investigation was being discontinued on grounds of the public interest. The 15-strong team had been ordered to turn in their files two days before. The statement in the House of Lords read:
The Director of the Serious Fraud Office has decided to discontinue the investigation into the affairs of BAE Systems plc as far as they relate to the Al Yamamah defence contract. This decision has been taken following representations that have been made both to the Attorney General and the Director concerning the need to safeguard national and international security. It has been necessary to balance the need to maintain the rule of law against the wider public interestPublic interestThe public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
. No weight has been given to commercial interests or to the national economic interest.
The Prime Minister justified the decision by saying "Our relationship with Saudi Arabia is vitally important for our country in terms of counter-terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel and Palestine. That strategic interest comes first."
Jonathan Aitken
Jonathan Aitken
Jonathan William Patrick Aitken is a former Conservative Member of Parliament in the United Kingdom, and British government minister. He was convicted of perjury in 1999 and received an 18-month prison sentence, of which he served seven months...
, a former Tory
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
government minister and convicted perjurer
Perjury
Perjury, also known as forswearing, is the willful act of swearing a false oath or affirmation to tell the truth, whether spoken or in writing, concerning matters material to a judicial proceeding. That is, the witness falsely promises to tell the truth about matters which affect the outcome of the...
, who was connected with the deals in the 1980s, said that even if the allegations against BAE were true, it was correct to end the investigation in order to maintain good relations with Saudi Arabia.
Mark Pieth, director of anti-fraud section at the OECD, on behalf of the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, Switzerland
Switzerland
Switzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
and Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
, addressed a formal complaint letter before Christmas 2006 to the Foreign Office, seeking explanation as to why the investigation had been discontinued. Transparency International
Transparency International
Transparency International is a non-governmental organization that monitors and publicizes corporate and political corruption in international development. It publishes an annual Corruption Perceptions Index, a comparative listing of corruption worldwide...
and Labour MP Roger Berry
Roger Berry
Dr Roger Leslie Berry is a British Labour Party politician, who was the Member of Parliament for Kingswood from 1992 to 2010.-Early life:...
, chairman of the Commons Quadripartite Committee, urged the government to reopen the corruption investigation.
In a newspaper interview, Robert Wardle, head of the Serious Fraud Office, acknowledged that the decision to terminate the investigation may have damaged "the reputation of the UK as a place which is determined to stamp out corruption".
Delivery of the first two Eurofighter Typhoon aircraft (of 72 purchased by the Saudi Air Force) took place in June 2009.
Judicial review
A judicial review of the decision by the SFO to drop the investigation was granted on 9 November 2007. On 10 April 2008 the High Court of JusticeHigh Court of Justice
The High Court of Justice is, together with the Court of Appeal and the Crown Court, one of the Senior Courts of England and Wales...
ruled that the SFO "acted unlawfully" by dropping its investigation. The Times described the ruling as "one of the most strongly worded judicial attacks on government action" which condemned how "ministers 'buckled' to 'blatant threats' that Saudi cooperation in the fight against terror would end unless the ...investigation was dropped."
On 24 April the SFO was granted leave to appeal to the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
against the ruling. There was a two-day hearing before the Lords on 7 and 8 July 2008. On 30 July the House of Lords unanimously overturned the High Court ruling, stating that the decision to discontinue the investigation was lawful.
U.S. Department of Justice investigation
On 26 June 2007 BAE announced that the United States Department of JusticeUnited States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
had launched its own investigation into Al Yamamah. It was looking into allegations that a U.S. bank had been used to funnel payments to Prince Bandar. On 19 May 2008 BAE confirmed that its CEO Mike Turner and non-executive director Nigel Rudd
Nigel Rudd
Sir Nigel Rudd is a Fellow of the Institute of Chartered Accountants. In 1982, he founded Williams Holdings, a company which went on to become one of the largest industrial holding companies in the United Kingdom until its demerger in November 2000, creating Chubb plc and Kidde plc...
had been detained "for about 20 minutes" at George Bush Intercontinental
George Bush Intercontinental Airport
George Bush Intercontinental Airport, is a Class B international airport in Houston, Texas, serving the Houston–Sugar Land–Baytown metropolitan area, the sixth-largest metropolitan area in the United States. Located north of Downtown Houston between Interstate 45 and U.S. Highway 59...
and Newark
Newark Liberty International Airport
Newark Liberty International Airport , first named Newark Metropolitan Airport and later Newark International Airport, is an international airport within the city limits of both Newark and Elizabeth, New Jersey, United States...
airports respectively the previous week and that the DOJ had issued "a number of additional subpoenas in the US to employees of BAE Systems plc and BAE Systems Inc as part of its ongoing investigation". The Times suggests that, according to Alexandra Wrage of Trace International, such "humiliating behaviour by the DOJ" is unusual toward a company that is co-operating fully.
Under a plea bargain with the US Department of Justice BAE was sentenced in March 2010 by U.S. District Court Judge John D. Bates to pay a $400 million fine, one of the largest fines in the history of the DOJ. U.S. District Judge John Bates said the company's conduct involved "deception, duplicity and knowing violations of law, I think it's fair to say, on an enormous scale". BAE was not convicted of bribery, and is thus not internationally blacklisted from future contracts.
External links
- http://www.guardian.co.uk/armstrade/story/0,,1975501,00.html - OECD to press Blair over BAE inquiry December 2006
- Al-Yamamah Scandal (Archived 2009-10-24)
- http://www.angloarabia.com/ - The Al-Yamamah Connection : bombs, bribery and BAE Systems.
- Corp Watch - BAE System's Dirty Dealings - November 2003
- Out of Arms Way - The GuardianThe GuardianThe Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
- August 2003 - Corruption is a Crime - Site by the Liberal DemocratsLiberal DemocratsThe Liberal Democrats are a social liberal political party in the United Kingdom which supports constitutional and electoral reform, progressive taxation, wealth taxation, human rights laws, cultural liberalism, banking reform and civil liberties .The party was formed in 1988 by a merger of the...
on Al Yamamah and other arms deals
Documentary Video
- Black Money - PBS Frontline documentary (watch online)