Saudi prince 'received arms cash'

[Caiman]

All I can say is... wtf?

http://news.bbc.co.uk/1/hi/business/6728773.stm

A Saudi prince who negotiated a £40bn arms deal between Britain and Saudi Arabia received secret payments for over a decade, a BBC probe has found.

The UK's biggest arms dealer, BAE Systems, paid hundreds of millions of pounds to the ex-Saudi ambassador to the US, Prince Bandar bin Sultan.

The payments were made with the full knowledge of the Ministry of Defence.

Prince Bandar would not comment on the investigation and BAE Systems said it acted lawfully at all times.

The MoD said information about the Al Yamamah deal was confidential.

Private plane

The investigation found that up to £120m a year was sent by BAE Systems from the UK into two Saudi embassy accounts in Washington.

The BBC's Panorama programme has established that these accounts were actually a conduit to Prince Bandar for his role in the 1985 deal to sell more than 100 warplanes to Saudi Arabia.

The purpose of one of the accounts was to pay the expenses of the prince's private Airbus.

David Caruso, an investigator who worked for the American bank where the accounts were held, said Prince Bandar had been taking money for his own personal use out of accounts that seemed to belong to his government.

He said: "There wasn't a distinction between the accounts of the embassy, or official government accounts as we would call them, and the accounts of the royal family."

Mr Caruso said he understood this had been going on for "years and years".

"Hundreds of thousands and millions of dollars were involved," he added.

Investigation stopped

According to Panorama's sources, the payments were written into the arms deal contract in secret annexes, described as "support services".

They were authorised on a quarterly basis by the MoD.

Prince Bandar bin Sultan
Prince Bandar was Saudi ambassador to the US for 20 years

It remains unclear whether the payments were actually illegal - a point which depends in part on whether they continued after 2001, when the UK made bribery of foreign officials an offence.

The payments were discovered during a Serious Fraud Office (SFO) investigation.

The SFO inquiry into the Al Yamamah deal was stopped in December 2006 by attorney general Lord Goldsmith.

Prime Minister Tony Blair declined to comment on the Panorama allegations.

But he said that if the SFO investigation into BAE had not been dropped, it would have led to "the complete wreckage of a vital strategic relationship and the loss of thousands of British jobs".

Prince Bandar, who is the son of the Saudi defence minister, served for 20 years as US ambassador and is now head of the country's national security council.

Panorama reporter Jane Corbin explained that the payments were Saudi public money, channelled through BAE and the MoD, back to the Prince.

The SFO had been trying to establish whether they were illegal when the investigation was stopped, she added.

She believed the payments would thrust the issue back into the public domain and raise a number of questions.

'Bad for business'

Labour MP Roger Berry, head of the House of Commons committee which investigates strategic export controls, told the BBC that the allegations must be properly investigated.

If there was evidence of bribery or corruption in arms deals since 2001 - when the UK signed the OECD's Anti-Bribery Convention - then that would be a criminal offence, he said.

He added: "It's bad for British business, apart from anything else, if allegations of bribery popping around aren't investigated."

Liberal Democrat Treasury spokesman Vince Cable said that if ministers in either the present or previous governments were involved there should be a "major parliamentary inquiry".

"It seems to me very clear that this issue has got to be re-opened," Mr Cable told BBC Radio 4's The World Tonight.

"It is one thing for a company to have engaged in alleged corruption overseas. It is another thing if British government ministers have approved it."

[sjwmoore]

This seems to be how business is done in the Middle East, and therefore I dont find it surprising or "wrong"- its how they do things there.

[gothicform]

of course if no western company was willing to pay them bribes theyd be stuck with no money! im not surprised either. saudi arabia is only one of two countries in the world that doesnt have a parliament - the other is burma.
what is interesting though is the total scale of the bribes paid as compared to the size of the contract. it appears that the british are actually losing money on the sales to saudi arabia, but dont worry we're keeping people in work at the cost of £2 million per job!

[Zim Flyer]

I think the BBC is irresponsible in going after this story. There are thousands of people in the North West whose jobs depend on the relationship with the Saudi's.

It's not nice, it's not pretty, but that is life.

If the BBC wants to ask questions about awkward things, then they should start on the licene fee and those people that don't want to pay it but have no right to say no.

[gothicform]

but zim, think how many jobs could be provided in a different industry if they werent paying billions in bribes is £2 million per job over 20 years a good value for an employer - youre one, how much do you think you could employ people for?

[Zim Flyer]

Originally Posted by gothicform

but zim, think how many jobs could be provided in a different industry if they werent paying billions in bribes is £2 million per job over 20 years a good value for an employer - youre one, how much do you think you could employ people for?

I accept your point totally gothic, that as a business model it's awful. The defence industry though does employ alot of people in places like Chorley and Stockport and there are alot of support companies who benefit from it. I haven't recently but I have placed trainee engineers at the site in Chorley and what was Thomson Sonar in Stockport before Thales took over.

It's just such a big industry and it's good to see some manufacturing industry although I fully accept your point that as a business model it's terrible.

[gothicform]

good good in a world where the govt lets whole industries and companies go to the wall, the idea that they are subsidising jobs at british aerospace to the tune of 2 million quid each is obscene. there are much more worthy manufacturing businesses that BAe. the govt could have bought rover and rebuilt the entire thing from the ground up instead of paying bandar those bribes (and he's just one saudi royal alone). apparently the bribes so far have totalled between 10 and 15 billion to the saudis!
if people say theres no distinction between the saudi state and their royal family thats because their state IS the royal family. it is without a doubt the least democratic country in the world. even north korea has a parliament! saudi arabia is actually owned by the royal family there, they own all the land and there's no concept of freehold, its just a medieval feudalist country so backwards islamic fundamentalism iranian style would be a step forwards.

[Englishman]

Keeping a strong military manufacturing capability in the UK is strategically very important.

[gothicform]

we could spend the money on our own armed forces! imagine that.

[Caiman]

That must be why our next generation of aircraft carriers are being built in the UK. Oh.

[Irwell]

Originally Posted by gothicform

of course if no western company was willing to pay them bribes theyd be stuck with no money! im not surprised either. saudi arabia is only one of two countries in the world that doesnt have a parliament - the other is burma.
what is interesting though is the total scale of the bribes paid as compared to the size of the contract. it appears that the british are actually losing money on the sales to saudi arabia, but dont worry we're keeping people in work at the cost of £2 million per job!

The amount paid per job isn't really the relevant fact here though is it. Yes, those individuals each would only have been paid maybe a couple of hundred thousand each over that decade, but each of them would have easily produced goods worth over £2 million during that period. The payments were made to secure the deal, not to secure the jobs.

Whether or not the payments were appropriate is open to debate, but the cost per job isn't the issue.

[Jonesy55]

The slave trade was a major employer but that isn't any reason to encourage it imo especially when that involves breaking existing law. The fact is that the UK has signed up to international conventions banning foreign bribery and indeed it is enshrined in our own English law.

These bribes are actually putting the business interests of BAE systems in the USA in jeopardy which negates the jobs argument anyway as the US is BAE systems major market.

The Attorney-General is alleged to have ordered that these payments to the Saudi royal dictatorship were then hidden from international anti-corruption investigators which is even more shameful, how can we expect countries in Africa or Asia to listen to us when we say they should clean up their systems when we are clearly corrupt too


"Attorney-general knew of BAE and the £1bn. Then concealed it


Goldsmith hid secret money transfers from international anti-corruption organisation

David Leigh and Rob Evans
Friday June 8, 2007
The Guardian

British investigators were ordered by the attorney-general Lord Goldsmith to conceal from international anti-bribery watchdogs the existence of payments totalling more than £1bn to a Saudi prince, the Guardian can disclose.
The money was paid into bank accounts controlled by Prince Bandar for his role in setting up BAE Systems with Britain's biggest ever arms deal. Details of the transfers to accounts in the US were discovered by officers from the Serious Fraud Office during its long-running investigation into BAE. But its inquiry was halted suddenly last December.

The Guardian has established that the attorney-general warned colleagues last year that "government complicity" in the payment of the sums was in danger of being revealed if the SFO probe was allowed to continue.
The abandonment of the inquiry caused an outcry which provoked the world's anti-corruption watchdog, the OECD, to launch its own investigation into the circumstances behind the decision.

But when OECD representatives sought to learn more about the background to the move at private meetings in January and March they were not given full disclosure by British officials, according to sources.

One insider with knowledge of the discussions said :"When the British officials gave their briefing they gave some details of the allegations, but it now transpires, not all of them."

A source close to the OECD added: "We suspected that the British were holding some secret back."

Sources close to the US justice department, whose members help to police the international anti-corruption treaty to which Britain is a signatory, confirmed that UK officials had not disclosed to the group that huge payments had gone to the prince in connection with the al-Yamamah arms deal.

In those confidential briefings at the OECD headquarters in Paris earlier this year, the UK said "national security" reasons were behind the decision to halt the SFO investigation into the case.

They claimed the SFO probe focused largely on old allegations of a slush fund operated by the BAE to provide treats for junior Saudi officials. Last night, a spokesman for Lord Goldsmith said full evidence had not been given to international panel members of the OECD anti-bribery working party at their meetings in order to protect "national security". He said: "The risk of causing such damage to national security had a bearing on the information voluntarily provided to the OECD".

He added: "We have not revealed information which could itself jeopardise our national security. For these purposes the OECD was effectively a public forum, as is illustrated by the fact that you claim to know what [the government] told them."

The Guardian's disclosure of British government complicity in the alleged payment of £1bn to Prince Bandar caused international concern yesterday, with Tony Blair taking a bullish position when questioned at the G8.

Standing beside George Bush, a close family friend of former US ambassador Prince Bandar, Mr Blair said it would have "wrecked" the relationship with Saudi Arabia if he had allowed investigations to go on. "This investigation, if it had gone ahead, would have involved the most serious allegations and investigation being made of the Saudi royal family," he said.

"My job is to give advice as to whether that is a sensible thing in circumstances where I don't believe the investigation would have led to anywhere except to the complete wreckage of a vital interest to our country."

Neither Mr Blair nor the Ministry of Defence made any attempt to deny the allegations revealed by the Guardian.

Prince Bandar last night issued a statement through his lawyers categorically denying that payments made to Riggs Bank in Washington "represented improper secret commissions or 'backhanders'".

He said the payments were made to Saudi ministry of defence and aviation (MODA) accounts of which he was a signatory. "Any monies paid out of those accounts were exclusively for purposes approved by MODA."

He said the accounts were regularly audited by the Saudi ministry of finance and BAE payments were "pursuant to the al-Yamamah contracts". He added: "At no stage have MODA or the Saudi Arabian ministry of finance identified any irregularities in the conduct of the accounts."

BAE last night issued a statement claiming there was full government complicity in any payments it had made with regard to the al-Yamamah deal, which was signed in 1985. The company said transactions were made with the "express approval" of the British government.

"All such payments made under those agreements were made with the express approval of both the Saudi and UK governments".

The fallout from yesterday's allegations may affect BAE's planned expansion in the US.

According to a source in Washington, BAE's $4.1bn (£2bn) proposed takeover of a major US defence company could be in jeopardy because of the disclosures.

The source, assessing the damage yesterday, predicted it will also be harder for BAE to pursue other plans for moves into the US defence market.

BAE could come under scrutiny from a number of US investigatory bodies, including the treasury, the justice department and congressional committees."

[Jonesy55]

Why such a corrupt, undemocratic, repressive haven of terrorism and anti-western thinking like Saudi Arabia is considered an ally has always escaped me. Are we really that scared of losing access to oil reserves that we are happy to sell-out any principles that we claim to have in dealing with this country?

For all of the anti-Iranian rhetoric we hear, SA is far less democratic, just as repressive and is actually home to terrorists, sponsors and sympathisers who have attacked the west.

The Wahhabist ideology that has fuelled this repressive conservatism and hatred of western culture was promoted and spread around the Arabian peninsular by the House of Al-Saud itself.

[gothicform]

actually they didnt produce goods worth over 2 million each that period as the sum includes vast bribes its more like paying 2 million and getting 1 million back. the bandar bribes alone come to about 5% of the total contract value and that's just for one guy.

[sheilala]

Rumors are that as a part of the deal the king fahd had sex with lady diana and margaret thatcher can any once confirm this?

[Zim Flyer]

Originally Posted by Jonesy55

The slave trade was a major employer but that isn't any reason to encourage it imo especially when that involves breaking existing law.

The slave trade wasn't a major employer as the slaves didn't receive a wage and thus spend it on supporting industries.

So save your cheap and nasty comparisons, I'm talking about real jobs, real families in the North West of England.

[gothicform]

it was a major employer though. the ships had tens of thousands of sailors on them, the slave owners made vast profits which they spent on lavish houses and servants, their bankers made money too. many many people were employed in their country estates.

[Caiman]

Originally Posted by sheilala

Rumors are that as a part of the deal the king fahd had sex with lady diana and margaret thatcher can any once confirm this?

Yes, I filmed it, though unfortunately I lost the tapes.

So let me get this right, the general gist of this thread is... no one really wants to buy our stuff, so it's okay to bribe and line the pockets of a saudi prince so we can shift our stuff and keep people in work? Bollocks. Perhaps the government shouldn't be pissing money down the drain left right and centre elsewhere and spend some of it in this country instead of outsourcing all of our own needs to the lowest foreign bidder.

[sheilala]

Originally Posted by Jon Reid

Yes, I filmed it, though unfortunately I lost the taps.

So after all it is true that prince harry father is not the prince charles LOL

[sheilala]

Originally Posted by Zim Flyer

I think the BBC is irresponsible in going after this story. There are thousands of people in the North West whose jobs depend on the relationship with the Saudi's.

by the relationship with the saudi do you mean your mother and sisters sleeping with saudi princes?


Lovely how someone will defend a terrorist nation only because the saudi give a job to his sisters and mother.