Revelations in BAE Saudi Case Prompt Inquiry Call
THE DAILY TELEGRAPH: A senior MP has demanded a parliamentary inquiry into Britain’s £43 billion arms deal with Saudi Arabia after a leaked US diplomatic cable disclosed the full case against BAE Systems, the defence contractor.

The Serious Fraud Office dropped the investigation in December 2006, after intense diplomatic pressure from the Saudis. BAE was fined by US authorities last year after it admitted a relatively minor charge of making false statements. It faced no action in Britain over the Saudi allegations and until now the full details of the case have been kept secret.

However, a US cable given to the WikiLeaks website and obtained by The Daily Telegraph discloses the strength of the investigators’ case. Written four months after the collapse of the investigation, it shows the SFO had evidence that:

:: BAE paid £73 million to a Saudi prince who had “influence” over the Al-Yamamah defence contract and that there were “reasonable grounds” to believe another “very senior Saudi official” received payments;

:: The contractor was being covertly investigated by the SFO for carrying out a “potential fraud” against a government department;

:: BAE allegedly circumvented anti-bribery laws by making “substantial payments” to overseas agents employed by the Saudi government;

:: Sir Sherard Cowper-Coles, then British ambassador in Riyadh and now a BAE Systems’ director, “had a profound effect” on the decision by Robert Wardle, then SFO director, to end the investigation.

It also details outrage among Britain’s allies who questioned claims that the case was being dropped on grounds of “national security”.

Last night, Sir Menzies Campbell, the former leader of the Liberal Democrats, called for a Commons investigation.

“This leak tells us how strong a case was available,” he said. “If the information in this document had been before Parliament and the British public, there is no way that the Labour government could have influenced the termination of the investigation.

“The particular issue which will cause a great deal of annoyance is the fact there was prima facie evidence that a government department had been subjected to fraud. If prosecution is no longer possible, it is open to the Commons’ business innovation and skills committee to conduct a full investigation.” >>> Christopher Hope, and Steven Swinford | Saturday, March 12, 2011

Fraud Watchdog Poised to Decide on BAE Bribery Prosecution
THE GUARDIAN: Arms giant given deadline to plead guilty in deal / Company firmly denies all allegations of wrongdoing

The Serious Fraud Office is expected imminently to announce whether it will take the politically momentous decision to seek to prosecute BAE over bribery allegations. The UK arms giant failed tonight to meet a deadline to settle the case or face the courts.

Sources close to the SFO said that the agency would decide what to do tomorrow or Friday. After months of fruitless negotiation, BAE had been given a deadline by the SFO to plead guilty in a negotiated plea deal which would at last draw a line under a six-year investigation into the company's behaviour.

Both sides were refusing to reveal their hand tonight in what appears to be a high-stakes poker game between Britain's biggest arms firm and the agency entrusted with eradicating foreign bribery. >>> David Leigh and Rob Evans | Wednesday, September 30, 2009

Serious Fraud Office Seeks BAE Bribery Prosecution
TIMES ONLINE: The Serious Fraud Office (SFO) today announced it will seek permission to prosecute BAE, Britain's biggest defence contractor, over bribery charges.

In a brief statement, marking the culmination of an investigation lasting almost six years, the SFO said that it will seek consent from Baroness Scotland, the Attorney General, to prosecute BAE for "offences relating to overseas corruption".

It said that it would prepare its papers to be submitted to the Attorney when the agency “believes it is ready to proceed”.

It gave no further details on the timing of a prosecution, which has to be agreed by the Baroness. >>> Miles Costello | Thursday, October 01, 2009

Mandelson Calls for Rover Apology
BBC: Lord Mandelson has called for the businessmen who ran MG Rover prior to its 2005 collapse to apologise for taking so much money out of the firm.

The business secretary said the so-called Phoenix Four, who bought Rover for £10 in 2000, had "feathered their own nests" during their time in charge.

A report found the men pocketed an "unreasonable" £42m in pay and perks.

The Phoenix Four blame Labour for Rover's collapse but Lord Mandelson said ministers had been "faultless".

'No humility'

And he rejected criticism that ministers had not done enough to try and save the firm, whose collapse cost more than 6,000 jobs.

However, opposition parties criticised the government for allowing the group to take control of MG Rover in the first place.

Earlier this year, the Serious Fraud Office chose not to pursue a criminal investigation into Rover's collapse and the conduct of the Phoenix Four. >>> | Friday, September 11, 2009

Watch BBC video: Lord Mandelson: "We've not seen an ounce of humility from them" >>>

BAE Systems Executive 'Questioned over Alleged European Bribery'
THE TELEGRAPH: A senior BAE Systems executive has been arrested and questioned by the Serious Fraud Office over suspected bribery to win lucrative arms contracts, it has been reported.

Julian Scopes, the company's former head of government affairs, was interviewed by SFO officers at Guildford police station on Sunday, according to the Financial Times.

Alfons Mensdorff-Pouilly, a Viennese count who worked as a consultant for BAE, was arrested, questioned and bailed by investigators on the same day, having been intercepted en route from Vienna to his Scottish mansion. His lawyer told the FT he denies any wrongdoing.

Mr Scopes declined to comment, the FT reported, adding that the SFO said a 55-year-old man was arrested and interviewed on suspicion of corruption before being released on police bail to appear next year.

Mr Scopes, 55, who is also a former private secretary to the late defence minister Alan Clark, worked at the Ministry of Defence for more than 20 years before joining BAE Systems.

After taking up the role of head of government affairs, he was responsible for smoothing out dealings between the company and the MoD and other government bodies. He was made head of the company's Indian operation last month.

The interviews came as part of an international investigation into suspected bribes of high-level officials in countries including Austria and the Czech Republic. Officers raided a number of properties in Britain, Austria and Hungary last month. >>> By Jon Swaine | October 23, 2008

The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>

BAE Paid Too Little Heed to Ethics, Says Report
THE GUARDIAN: The arms company BAE failed to pay sufficient attention to ethical standards, laying itself open to accusations of misconduct that have tarnished its reputation, Lord Woolf said today in a report.

BAE, which successfully lobbied to end a Serious Fraud Office inquiry into its multi-billion pound deals with Saudi Arabia, appointed the former lord chief justice to lead an independent committee in a review of current policies and practices.

"Critically, both the chairman and chief executive, in discussions with us, acknowledged that the company did not in the past pay sufficient attention to ethical standards and avoid activities that had the potential to give rise to reputational damage," the report said.

"Combined with this was its acceptance of conditions which constrained its ability to explain the full circumstances of its activities.

"These contributed to the widely-held perceptions that it was involved in inappropriate behaviour. They recognise that, justly or otherwise, these perceptions have damaged the company's reputation." BAE Paid Too Little Heed to Ethics, Says Report >>> By Sadie Gray, David Leigh and Rob Evans | May 6, 2008

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

”Abject Surrender to a Blatant Threat” from Saudi Arabia
"This investigation was blocked supposedly to protect our security, but it looks increasingly like it was done to protect BAE sales by appeasing the Saudi government. - Mr Clegg
THE TELEGRAPH: A bribery investigation into the biggest arms contract in British history could be reopened after the High Court condemned the Government's "abject surrender" to pressure from Saudi Arabia in blocking the inquiry.

Gordon Brown must decide whether he will uphold the decision of his predecessor, Tony Blair, and block a Serious Fraud Office (SFO) inquiry into BAE's £43 billion contract to sell warplanes and weapons systems to the Saudis.

Under pressure from Mr Blair and Lord Goldsmith, his attorney general, the SFO decided in December 2006 to end its investigation into allegations that BAE illegally paid as much as £1 billion in kickbacks to a senior Saudi prince during the 1980s and 1990s as part of the al-Yamamah deal.

The Government intervened after the Saudi government threatened to stop sharing intelligence on Islamic terrorist groups.
Mr Blair said that would have put British national security at risk. The Saudis are also said to have threatened to cancel a contract to buy 72 Eurofighter jets from BAE, but Mr Blair has always denied basing his decision on commercial grounds.

Britain is a member of the Organisation for Economic Co-operation and Development, whose founding treaty forbids halting criminal investigations for commercial reasons.

Lord Justice Moses and Mr Justice Sullivan have ruled that the SFO was wrong to drop the inquiry.

They condemned the Government's "abject surrender" to a "blatant threat" from a foreign country and ruled that Robert Wardle, the SFO director, had failed to satisfy the court that "all that could reasonably be done had been done to resist the threat". Brown Under Pressure to Re-Open Saudi Arms Inquiry >>> By Christopher Hope and James Kirkup | April 11, 2008

THE TELEGRAPH:
Extravagance Uncovered During Saudi Arms Probe: The Saudi princes and princesses were treated to every extravagance available when they were flown to the Hawaiian paradise island of Oahu in 1998 to enjoy the run of one of the world’s best hotels. The hotel had its own dolphins in a private blue lagoon, spas and “beach butlers” to provide face sprays, cooling drinks and sunshades By Christopher Hope and James Kirkup | April 11, 2008

THE GUARDIAN:
Listen to Guardian Audio - 'Brown Needs to Get the Locks Changed at Number 10': Simon Hill from the Campaign Against the Arms Trade wants the SFO to resume its investigation | April 11, 2008

THE GUARDIAN:
Cash, Contracts and Crown Princes By David Leigh | April 11, 2008

The Dawning of a New Dark Age (Paperback - UK)
The Dawning of a New Dark Age (Hardback - UK)

Saudi Arabia, Al-Yamamah Contract and Corruption: The Serious Fraud Office Acted Unlawfully
The judges had harsh words for the attitude of the SFO and the Blair government in never even considering the option of telling the Saudis their threats would be ignored.

"No one suggested to those uttering the threat that it was futile, that the United Kingdom's system of democracy forbad pressure being exerted on an independent prosecutor whether by the domestic executive or by anyone else; no-one even hinted that the courts would strive to protect the rule of law and protect the independence of the prosecutor by striking down any decision he might be tempted to make in submission to the threat."

THE GUARDIAN: The Serious Fraud Office (SFO) acted unlawfully in dropping an investigation into alleged bribery in an arms deal between BAE Systems and Saudi Arabia, the high court ruled today.

In a stunning victory for the activist groups that launched the legal challenge, the two judges said Tony Blair's government and the SFO caved in too readily to threats by Saudi Arabia over intelligence sharing and trade.

Lord Justice Moses and Justice Sullivan, using some scathing language, rejected the SFO's argument that it was powerless to resist the Saudi threats.

"So bleak a picture of the impotence of the law invites at least dismay, if not outrage," they said.

"Had such a threat been made by one who was subject to the criminal law of this country, he would risk being charged with an attempt to pervert the course of justice."

To give in so easily, the judges said, "merely encourages those with power, in a position of strategic and political importance, to repeat such threats, in the knowledge that the courts will not interfere with the decision of a prosecutor to surrender".

Campaign Against Arms Trade (CAAT) and Corner House Research had sought a review of the decision by the SFO director, Robert Wardle, in December 2006 to drop the investigation into allegations of bribery and corruption over the £43bn Al-Yamamah arms deal, agreed by the Thatcher government in 1985.

"No one, whether in this country or outside, is entitled to interfere with the course of our justice," Moses and Sullivan ruled. SFO Wrong to Drop BAE Inquiry, Court Rules >>> By Peter Walker and agencies | April 10, 2008

THE GUARDIAN: The Complete High Court Judgement

Summary of High Court Judgement

Cartoon

FINANCIAL TIMES: UK ‘Unlawfully’ Scrapped BAE Probe: ”No-one, whether within this country or outside, is entitled to interfere with the course of our justice,” Lord Justice Moses told the court. “We intervene in fulfilment of our responsibility to protect the independence of the director and of our criminal justice system from threat.“ By Megan Murphy, Law Courts Correspondent | April 10, 2008

BBC: SFO Unlawful in Ending BAE Probe

Cross-posted at The Shrewd Economist

The Dawning of a New Dark Age (Paperback)
The Dawning of a New Dark Age (Hardback)

Secret Papers Reveal Threats from Prince Bandar If British Government Refused to Drop Inquiry into Corruption at BAE
Photo of Prince Bandar, head of Saudi Arabia’s national security, courtesy of The Guardian
THE GUARDIAN: Saudi Arabia's rulers threatened to make it easier for terrorists to attack London unless corruption investigations into their arms deals were halted, according to court documents revealed yesterday.

Previously secret files describe how investigators were told they faced "another 7/7" and the loss of "British lives on British streets" if they pressed on with their inquiries and the Saudis carried out their threat to cut off intelligence.

Prince Bandar, the head of the Saudi national security council, and son of the crown prince, was alleged in court to be the man behind the threats to hold back information about suicide bombers and terrorists. He faces accusations that he himself took more than £1bn in secret payments from the arms company BAE.

He was accused in yesterday's high court hearings of flying to London in December 2006 and uttering threats which made the prime minister, Tony Blair, force an end to the Serious Fraud Office investigation into bribery allegations involving Bandar and his family.

The threats halted the fraud inquiry, but triggered an international outcry, with allegations that Britain had broken international anti-bribery treaties.

Lord Justice Moses, hearing the civil case with Mr Justice Sullivan, said the government appeared to have "rolled over" after the threats. He said one possible view was that it was "just as if a gun had been held to the head" of the government.

The SFO investigation began in 2004, when Robert Wardle, its director, studied evidence unearthed by the Guardian. This revealed that massive secret payments were going from BAE to Saudi Arabian princes, to promote arms deals.

Yesterday, anti-corruption campaigners began a legal action to overturn the decision to halt the case. They want the original investigation restarted, arguing the government had caved into blackmail. BAE: secret papers reveal threats from Saudi prince - Spectre of 'another 7/7' led Tony Blair to block bribes inquiry, high court told >>> | David Leigh and Rob Evans

LISTEN TO GUARDIAN AUDIO: 'It was remarkable the way the government had just rolled over': Two pressure groups are appealing against the decision to drop an investigation into BAE's dealings with Saudi Arabia

THE GUARDIAN: A cover-up laid bare: court hears how SFO inquiry was halted: Papers show how arms giant tried to avoid revealing secrets; Saudi threats meant 'no other choice' but to stop investigation

THE GUARDIAN: Full Coverage: The BAE Files

DAILY MAIL: Blair accused of forcing BAE fraud probe to fold by applying 'irresistible pressure

THE INDEPENDENT: Blair used 'irresistible pressure' to halt investigation into BAE-Saudi arms deal | Robert Verkaik, Law Editor

Mark Alexander (Paperback)
Mark Alexander (Hardback)

Challenge to Serious Fraud Office’s Decision to Halt BAE Fraud Investigation
BBC: Two pressure groups have won a High Court challenge on the legality of the decision to end investigations into BAE Systems' dealings with Saudi Arabia.

Corner House Research and the Campaign Against Arms Trade (CAAT) had asked for permission to seek a judicial review.

They want to contest the Serious Fraud Office's decision last year to stop investigations into whether BAE gave money to Saudi officials in the 1980s.

BAE, the UK's largest defence group, has always said it acted lawfully.

Lord Justice Moses, sitting with Mr Justice Irwin, said "matters of concern and public importance" had been raised and the challenge "cries out for a hearing". Court to study BAE fraud decision (more)

Mark Alexander

BAE Controversy Has Damaged the Serious Fraud Office’s Reputation for Dealing with Corruption
THE GUARDIAN: The Serious Fraud Office's reputation for tackling corruption has been damaged by the BAE Systems arms deal controversy, its director admitted today.

Robert Wardle told MPs it was "very disappointing" to have to drop his investigation into claims that Britain's biggest arms manufacturer made improper payments to Saudi Arabian officials. Serious Fraud Office admits BAE controversy has been damaging (more) By James Sturcke and agencies

Mark Alexander