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Monday, February 18, 2008       Free Headline Alerts

Top Saudi prince threatens UK: Corruption probe could end anti-terror cooperation

LONDON — Saudi Arabia's most internationally prominent prince threatened to end counter-insurgency cooperation with Britain unless it halted an investigation of BAE Systems, a leading supplier of the Arab kingdom.

The threats were said to have been issued by Saudi National Security Adviser Prince Bandar Bin Sultan. Sultan has been accused of taking $2 billion in fees from BAE as part of Al Yamamah, the program that brought $86 billion in British aircraft, ships and military services to Saudi Arabia since 1987, Middle East Newsline reported.

The bribery investigation has spread to Switzerland and the United States, which hold bank accounts linked to BAE's payments to Bandar and other Saudis. Bandar served as Saudi ambassador to Washington until 2005.

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Documents released in Britain's High Court on Feb. 15 disclosed Saudi threats against the government of then-Prime Minister Tony Blair in an effort to halt an investigation of an alleged BAE slush fund for Saudi princes responsible for weapons procurement. The documents warned that without Saudi cooperation, Al Qaida could succeed in a major strike similar to that of the bombings of London's mass transit system in 2005.

In the United States, Bandar has been prevented by a federal court from transferring proceeds of property sales. The temporary restraining order was part of a suit brought by BAE shareholders who argued that the $2 billion received by Bandar represented bribes.

"As far as we know, we have seen nothing that suggests that anybody [in the British government] did anything other than just roll over in the face of that [Saudi threats]," Moses, the British judge, said. "If that had happened in our jurisdiction, they would have been guilty of a criminal offense."

The heavily-censored court documents, presented in a two-day hearing, asserted that Bandar arrived in London in July 2006 determined to end the British police investigation of BAE. Soon after Bandar's threats, Blair forced the Serious Fraud Office investigation to end its two-year-old investigation, which focused on the prince and his family.

"We had been told that 'British lives on British streets' were at risk,'" Helen Garlick, assistant director of Britain's Serious Fraud Office, recalled in a note presented to the High Court. "If this caused another 7/7 [July 7, 2005 bombings] how could we say that our investigation, which at this stage might or might not result in a successful prosecution, was more important?"

In 2007, Riyad agreed to purchase 72 Eurofighter Typhoon jets from BAE in an $8.9 billion sale. Petitioners to the High Court linked the British decision to end the police investigation to the Saudi aircraft order.

"Although some companies have sought to excuse bribery on the basis that jobs would be lost if bribes were not paid, the flip side of the coin is the extent to which companies lose business either because they are unwilling to pay bribes or because they are out-bribed by competitors," Corner House director Nicholas Hildyard said in a statement to the court.

Campaign Against Arms Trade and Corner House, the petitioners, have called for the resumption of the police investigation into BAE. A member of the two-judge High Court panel that has been hearing the case said the Blair government never tried to persuade the Saudis to withdraw their threats.

"What really puzzles me is why weren't the Saudis told, 'Hang on, this is just an investigation, and there may not even be any evidence?'" Lord Justice Alan Moses asked.

Philip Sales, who represented the Serious Fraud Office, said Riyad threatened to end counter-insurgency cooperation with London unless the BAE investigation was halted. Sales said the Saudi threat came amid Al Qaida plots against Britain.

"We in the UK can't compel the Saudi Arabian government to adopt a different stance," Sales told the court. "There was no other viable choice available to the director other than to accept, with very great reluctance, that the investigation should be stopped."

BAE was said to have lobbied Attorney General Peter Goldsmith to end the police investigation. When the company failed, BAE recruited ministers and their Saudi associates to warn that national security could be harmed.


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