Calls to reopen BAE-Saudi inquiry


Opposition lawmakers and anti-arms campaigners stepped up calls on Friday for Britain’s anti-fraud agency to reopen a corruption inquiry into a lucrative arms deal between Saudi Arabia and BAE Systems PLC, after a court ruled that dropping the probe was illegal.

The High Court ruled Thursday that the Serious Fraud Office’s 2006 decision to halt the inquiry represented an “abject surrender” to pressure from a foreign government, but did not immediately order the investigation to be reopened.

The SFO has said it is considering “the way forward,” amid negotiations with the two anti-arms groups that sought and won the court decision.

If the two sides cannot agree on the next step, the High Court will hear further submissions from them - but not from the government, the Saudis or BAE - in about two weeks. It could at that point order the SFO to reopen the investigation. However, the agency can also seek to appeal the current judgment to the House of Lords, Britain’s highest court of appeal.

Nick Clegg, the leader of the opposition Liberal Democrats, said the investigation must be allowed to continue.

“The fraud office needs to now proceed with the original investigation which was suspended,” Clegg told the British Broadcasting Corp. “Second, I think we do want an independent inquiry into the way in which political pressure, inappropriately in my view, was brought to bear on the director of the Serious Fraud Office.”

SFO director Robert Wardle announced in July 2006 that the agency had decided to stop the investigation, but it was Prime Minister Tony Blair who publicly took responsibility for the decision later that year.

Blair claimed the investigation threatened national security because of the possibility it would provoke the Saudi government into stopping cooperation on combating terrorism. Blair said the investigation also threatened British jobs.

The SFO said national security would have been undermined by the inquiry and has denied coming under any political pressure to drop it.

However, Lord Justice Alan Moses and Justice Jeremy Sullivan, the High Court judges, said the SFO and the government had given into “blatant threats” that Saudi co-operation in the fight against terror would end unless the probe into corruption was halted.

The two anti-arms groups - the Campaign Against Arms Trade and Corner House - called on the government to give the SFO free rein.

Corner House spokeswoman Susan Hawley said that Prime Minister Gordon Brown needed to prove that Britain was serious about dealing with corruption.

“In effect, the government needs to back off, and it would be a scandal if they try to intervene again and get this stopped on national security grounds,” she said.

The agency was investigating allegations that BAE, a leading global defense and aerospace company, had a multimillion pound “slush fund” offering sweeteners to officials from Saudi Arabia in return for lucrative contracts.

The High Court judges said they based their judgment on claims by the Campaign Against Arms Trade and social justice group Corner House that a threat to drop a multibillion pound Typhoon Eurofighter contract was made directly by Saudi Prince Bandar bin Sultan, the former ambassador to the United States and now head of Saudi Arabia’s National Security Council, to Blair’s chief of staff, Jonathan Powell.

Corner House and Campaign Against Arms Trade lawyers said that Bandar then held talks with former French President Jacques Chirac about an alternative purchase of Rafale fighter aircraft to underscore his point.

Days after that meeting, Blair sent a letter to the attorney general, Peter Goldsmith, telling Goldsmith to stop the investigation, citing “a real and immediate risk of a collapse in UK/Saudi security, intelligence and diplomatic cooperation,” the letter said.

Shortly afterward, despite Goldsmith’s unease, according to documents tendered to the court, Wardle confirmed the investigation had been dropped. A 20 billion pound deal for 72 Typhoons was signed in September. (AP)