The Guardian, which cited "insider legal sources," said the British
Defence Ministry authorized BAE's payments to Bandar, the son of Saudi
Defense Minister Sultan Bin Abdul Aziz and who for more than 20 years was
Riyad's ambassador to the United States. The secret arms sales commissions,
reportedly paid to Bandar's account in Riggs Bank in Washington D.C., were
said to have violated both British and U.S. law.
"There must be a full parliamentary inquiry into whether the government
has deceived the public and undermined the anti-corruption legislation,
which itself passed through parliament," British parliamentarian Vince
Cable, the deputy leader of the Liberal Democrat Party, said. "It
increasingly looks as if the motives behind the decision to pull the SFO
inquiry were less to do with UK national interests but more to do with the
personal interests of one of two powerful Saudi ministers."
The payments to Bandar, who refused to respond to the Guardian, were
said to have stemmed from the Al Yamamah oil-for-arms project, which
supplied Saudi Arabia with about $86 billion worth of aircraft, ships,
weapons and training over the last 20 years. The Guardian said Britain's
Serious Fraud Office, during a two-year investigation, discovered the
payments by BAE, the prime contractor of Al Yamamah, to Bandar.
"The Al Yamamah program is a government-to-government agreement and all
such payments made under those agreements were made with the express
approval of both the Saudi and the UK governments," BAE said. "We deny all
allegations of wrongdoing in relation to this important and strategic
Bandar was said to have played a key role in Al Yamamah in 1985. The
sources said that in return, Bandar received cash transfers every quarter
for more than a decade for what was termed marketing fees.
The Guardian said BAE was provided access to a Bank of England account
that received up to 2 billion pounds [$4 billion] per year. The newspaper
said the Defence Ministry's Defence Export Services Organisation was also
allowed to withdraw funds from the secret account. The payments for Bandar
were said to have come from the same account.
"The MoD is unable to respond to the points made since to do so would
involve disclosing confidential information about Al Yamamah, and that would
cause the damage that ending the investigation was designed to prevent," the
British Defence Ministry said.