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Blow for U.K. in BAE scandal

Hasan Suroor

Court allows case against decision to drop investigation

LONDON: In an embarrassing development for the British government, the High Court on Friday allowed two pressure groups to challenge its controversial decision to drop a criminal investigation into allegations that BAE Systems, Britain’s biggest arms supplier, paid millions of pounds in secret commissions to win a £43-billion defence contract with Saudi Arabia in 1985.

The court granted permission to the Campaign Against the Arms Trade and Corner House Research to seek a judicial review of the Government’s decision on grounds that the matter was of “public importance.” Judges said it “cries out for a hearing.”

The ruling gave a new twist to the long-running controversy sparked by the former Prime Minister, Tony Blair, when, last December, he intervened to stop an investigation by the Serious Fraud Office claiming that it would have a “devastating” effect on Britain’s relations with Saudi Arabia, a key ally in the “war” against terrorism.

“Damage to ties”

“I think that had we proceeded with this investigation, it would have significantly materially damaged our relationship with Saudi Arabia….It would have done damage to a major strategic partnership right at the moment when we need that strategic partnership, in terms of Iraq and other issues. And all of that leaves aside the issue of the fact that we would have lost thousands of UK jobs,” he said responding to criticism that he had acted under pressure from the Saudi government.

It was reported at the time that the Saudis had threatened to call off another multi-billion pound deal with BAE if the inquiry went ahead. Within months of the inquiry being dropped Saudi Arabia signed a deal with BAE to buy 72 Eurofighter Typhoon jets for about £4.4 billion.

At the heart of the controversy was the allegation that BAE paid up to £1 billion to Prince Bandar bin Sultan, a former Saudi Ambassador to America, for his role in negotiating the contract, known as the Yamamah deal signed by Prime Minister Margaret Thatcher. Prince Bandar has denied receiving any “improper” payments. BAE also says it was not involved in any wrong- doing.

The groups, which brought the challenge, argued that there was no justification for scrapping the investigation even if national security was at risk.

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