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Response to Panorama Revelations

Campaign Against Arms Trade and The Corner House welcome the BBC Panorama documentary on the Al Yamamah arms deal between BAE Systems and Saudi Arabia. The documentary, Princes, Planes and Pay-offs, broadcast on 11th June 2007, makes new and extremely grave allegations about the deal.[1]

Its principal allegation is that BAE, with approval of the UK’s Ministry of Defence, made payments worth hundreds of millions of pounds over two decades to bank accounts under the personal control of Prince Bandar bin Sultan, the son of Prince Sultan bin Abdul Aziz who has been the Saudi Defence Minister since 1962. The Panorama documentary suggests that some of the payments were for the personal expenditure of Prince Bandar bin Sultan.

These allegations suggest that, since 1985, successive British governments under Prime Ministers Margaret Thatcher, John Major and Tony Blair have used Ministry of Defence bank accounts to facilitate corrupt payments to a foreign official. These allegations are more serious than the widely-reported ones of a £60 million slush fund run by BAE Systems for the personal benefit of Saudi royals, because they suggest the active involvement and complicity of the UK government.

In response to the BBC Panorama documentary, CAAT and The Corner House believe three key actions should be taken to repair the damage being done to trust in UK public life, both at home and abroad:

1. The Serious Fraud Office (SFO) investigation into the Al-Yamamah arms deal between BAE Systems and Saudi Arabia should be re-opened at once.[2] The investigation has become a litmus test of the UK’s willingness to tackle corruption. The Director of the Serious Fraud Office has repeatedly stated that reasons of evidence were not the basis for halting the inquiry; thus the investigation should be pursued to its conclusion if the UK’s commitment to combating corruption is to have any credibility. The appointment in June 2007 by BAE Systems of Lord Woolf to look into the company's current operations and ethical practices is no substitute for reopening an inquiry by a fully independent authority, the SFO, with an unlimited remit. Lord Woolf, a former Lord Chief Justice of England and Wales, will be considering current practice only and will not be investigating past allegations.
2. Members of Parliament should vote for the 1992 National Audit Office (NAO) report into the accounting arrangements surrounding Al Yamamah to be published.[3] No current MPs have been able to read the report as successive UK governments have refused to publish it on grounds of confidentiality. The allegations made in the Panorama programme are likely to be in the NAO report. If public money is being used to facilitate questionable payments to foreign officials, it is unacceptable for this report by the government agency charged with scrutinising public finances to be withheld from the public.
3. Parliament should commission the National Audit Office to write an updated report on the accounting arrangements surrounding the Al Yamamah deal that have been made since 1992. This report should be published in full and laid before Parliament for debate.

Notes

1. Princes, Planes and Pay-offs, BBC Panorama, broadcast on Monday 11th June 2007, 20:30 British Summer Time. See also reports in The Guardian newspaper.

2. In 2004, the Serious Fraud Office (SFO) initiated an investigation into alleged bribery and false accounting by BAE in relation to the Al Yamamah deals, including corruption offences since 2001, when bribery of foreign officials became a crime in the UK.

   On 14th December 2006, the SFO announced that it was ending its investigation into these bribery allegations. The reason given was that continuing the investigation might lead to Saudi Arabia withdrawing diplomatic cooperation with the UK on security and intelligence.

   On 19th April 2007, CAAT and The Corner House lodged the full grounds for their application for a judicial review of the decision to suspend the investigation.

3. The National Audit Office (NAO) scrutinises public spending on behalf of Parliament. It audits the accounts of all central government departments and agencies, and of a wide range of other public bodies. It reports to Parliament on the economy, efficiency and effectiveness with which these departments, agencies and bodies have used public money. It publishes around 60 reports each year on the findings of its value for money investigations.

   In 1999, persistent allegations of corruption over the Al Yamamah deal (and allegations related to a parallel but cancelled order for Tornado jets from Jordan) prompted the National Audit Office to begin an investigation into Ministry of Defence involvement in the deal. The investigation took three years and was presented to the House of Commons Public Account Committee in early 1992.

   The Chair of the Committee, Labour MP Robert Sheldon who is now in the upper House of Lords, refused to disclose the report to other Committee members, simply stating that there was "no evidence of fraud or corruption".

   Sheldon invited a Conservative Member of Parliament, Sir Michael Shaw (now also in the House of Lords), to read the report and to join him in interviewing the Permanent Secretary at the Ministry of Defence, and the head of the NAO.

   Even though the majority of the Public Accounts Committee had not seen the NAO report, the committee decided in March 1992 not to publish the NAO’s findings. Successive governments have also since refused to release the NAO report. A Freedom of Information request made by CAAT in 2006 reveals that this report is the only NAO report presented to Parliament that has never been published.

   More details available here.

[12 June 2007]