World Tribune — U.S.-UK clash looms over huge jet fighter deal with Saudis

LONDON — Britain fears the United States could derail an estimated $10 billion aircraft deal with Saudi Arabia.

Industry sources said the United States was preparing to investigate BAE Systems, which won a project to supply 72 Eurofighters to the Royal Saudi Air Force. The sources said the Bush administration wants to determine whether BAE violated U.S. anti-corruption laws in establishing an alleged $100 million slush fund for Saudi princes responsible for military procurement.

"There are still concerns over various other investigations," British parliamentarian David Borrow said. "And that part of the reason for the U.S. wanting to carry out its own investigation is to put the Saudis off doing a deal with the UK."

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Borrow, a member of the House Defence Select Committee, said the administration wants to intimidate BAE, which seeks to expand its presence in the United States. Under U.S. law, a company that violated anti-corruption laws could be banned from government contracts, Middle East Newsline reported. BAE has been a leading partner in the U.S.-led Joint Strike Fighter project.

The sources said the administration has been pressing Saudi Arabia to purchase the F-15 and F-16 aircraft instead of the Eurofighter. They said U.S. pressure has delayed the signing of a Saudi contract with BAE.

"They hope they [Saudis] will buy U.S. jets instead of European," Borrow said.

In early 2007, the United States formally protested the termination of a British police inquiry into the alleged BAE slush fund. Several European Union states have also criticized the termination of the British investigation.

But another parliamentarian, Michael Jack, said the BAE contract would be signed soon with Saudi Arabia. Jack, who represents a district that includes BAE's production facility at Warton, acknowledged that Washington was trying to undermine the Eurofighter deal.

On June 4, British Defence Secretary Desmond Browne met Crown Prince Sultan Bin Abdul Aziz, also the kingdom's defense minister, and reviewed defense and military relations. Sultan was quoted as saying that Riyad sought increased defense cooperation with London.