by René Lavanchy
PRESSURE from arms giant BAE Systems and the Saudi government – including threats of “another 7/7” – led to the dropping of a corruption investigation into the company, the High Court heard last week.
Sir Robert Wardle, director of the Serious Fraud Office, told the court through a witness statement that “unless I stopped the investigation it was likely that UK national security would be seriously damaged and lives would be put at risk”.
And a personal minute from then Prime Minister Tony Blair – sent less than a week before the inquiry’s suspension – revealed how he pressurised the Attorney-General, Lord Goldsmith, to stop it because of “a real and immediate risk of a collapse in UK/Saudi security”.
The evidence emerged as judges considered the legality of the SFO’s decision in December 2006 to end an investigation into whether BAE Systems had paid over £1 billion in bribes to Prince Bandar of Saudi Arabia to secure a contract to sell Eurofighter Typhoon aircraft to his country.
During dramatic and sometimes humorous scenes at the High Court, Lord Justice Moses and Mr Justice Sullivan repeatedly questioned the Government’s case and accused the SFO director of being guilty of a “category error” in his assessment of the law.
Pressure groups Campaign Against Arms Trade and Corner House Research, who brought the case, have been campaigning for months on the grounds that the decision broke international law. But the documents released last week reveal for the first time that:
- In November 2005, over a year after the SFO inquiry began, BAE’s legal director wrote to the Attorney-General warning that it was “not in the public interest for the investigation to continue”. He did so on a “strictly private” basis and behind the back of the SFO;
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Matthew Cowie, the SFO’s case officer, wrote back noting tersely that BAE had not mentioned any such problem with the investigation in its year-long history. He also pointed out that the grounds BAE mentioned – financial loss and diplomatic damage – were specifically barred from
being taken into account by the OECD Anti-Bribery Convention, to which the UK and Saudi Arabia subscribes; - BAE nonetheless wrote back warning that the Saudis could impose “political and economic” sanctions on the British if they were obliged to surrender details of BAE’s payments to agents and consultants – which campaigners allege would have revealed payments made to Prince Bandar via a Swiss bank account;
- BAE’s legal director then told Sir Robert that the company had meanwhile “made representations” to the Ministry of Defence, and that they would contact the SFO. Sir Robert remained convinced that the investigation must continue.
- It was only after July 2006, when Prince Bandar met Mr Blair at Downing Street, reportedly threatening to terminate the Typhoon contract and cut off anti-terrorist intelligence, that Sir Robert began to consider “national security public interest factors” against the inquiry. He finally decided that “the public interest in pursuing the investigation was outweighed by the risk to people’s lives”.
As the hearing began, Lord Justice Moses noted that Sir Robert had talked of having to “balance the need to maintain the rule of law against the wider public interest.” He said it “shows a complete misunderstanding of the rule of law” to make that distinction.
Noting the strength of the threats the Government alleged, he added: “It’s just as if a gun had been held to the director’s head.”
Dinah Rose QC, for the campaigners, said: “No-one seems to have said to the Saudis, ‘We’ve signed up to those international resolutions so you need to consider your own position if you’re going to withdraw from those agreements’”.
Mr Moses, expressing surprise that there had been no negotiation with the Saudi government over the dispute, said: “We’ve seen nothing that suggests that anyone did anything other than just roll over.”
Ms Rose suggested the reason was the Typhoon contracts.
After BAE’s initial overtures had failed, the judge noted, “the next thing, there is a threat to national security”. Ms Rose said: “They start to think of a different way of putting it”. To widespread laughter – except from the Government’s legal team – the judge said: “That’s very unkind.”
Philip Sales QC, for the Government, said Sir Robert had only taken legitimate issues into account.
But commenting on a personal minute from Mr Blair, which warned of the damage to “Saudi confidence,” Mr Moses said: “I find it quite difficult to see how all of this isn’t squarely within Article 5 [of the OECD convention]”.
The judges said they would issue their judgement as soon as possible.
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