Blair: No new BAE probe despite bribe claims

By Toby Helm
Telegraph
Jun. 08, 2007

Tony Blair has dismissed calls to reopen an investigation into a 1980s arms deal as new allegations surfaced that Ł1 billion in secret "sweetener" payments were made to a Saudi Prince.

According to the BBC and the Guardian newspaper, the money was allegedly sent by BAE systems - the UK’s biggest arms manufacturer - to Prince Bandar bin Sultan, the former Saudi ambassador to the US, over a period of at least a decade in the full knowledge of the Ministry of Defence.

It is claimed to have related to the Ł40 billion Al Yamamah contract with Saudi Arabia to supply Tornado and Hawk jets, as well as a major airbase construction programme.

The prince tonight issued a statement "categorically denying'' receiving any "improper secret commissions or back handers" over the arms deal.

A Serious Fraud Office investigation into allegations that the company had used "slush funds" to sweeten the deal was suddenly abandoned by Lord Goldsmith, the Attorney General, in December last year.

BAE strongly has always strongly denied the claims and Mr Blair said at the time that the investigation was being dropped for security reasons and to avoid creating ill-feeling with the Saudis that could threaten existing and future contracts - and therefore thousands of British jobs.

Asked today about the new claims of "sweeteners" at the G8 summit in Heiligendamm, north east Germany, Mr Blair made clear he regarded the matter as closed.

The Prime Minister said: "I’m not going to comment on the individual allegations and a lot of this relates to things that go back to the 1980s."

"This investigation, if it had gone ahead, would have involved the most serious allegations and investigation being made of the Saudi royal family and my job is to give advice as to whether that is a sensible thing in circumstances where I don’t believe the investigation would have led to anywhere except to the complete wreckage of a vital interest to our country."

The fight against terrorism would have been harmed and "we would have lost thousands, thousands of British jobs," Mr Blair added.

According to a BBC Panorama investigation, up to Ł120 million a year was secretly paid by BAE into two accounts in Washington for a period of more than 10 years.

The payments - made on a quarterly basis - are alleged to have been written into secret annexes of the Al Yamamah contract for the provision of "support services" and authorised by the MoD.

Investigations claim to have found that the accounts were a "conduit" to Prince Bandar, who used one of them to run his private jet which clocked up thousands of miles each year.

The SFO was said to have uncovered details of the payments at the time of its investigation but had not established whether they were illegal.

No one from the Saudi embassy in London was immediately available to comment on the claims.

An MoD spokesman said: "The MoD is unable to comment on these allegations 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."

However, Vince Cable, the Liberal Democrat Treasury spokesman, called for a reopening of the SFO investigation and said that if ministers in either the present or previous governments were involved there should be a "major parliamentary inquiry".