Al Yamamah: Another Government Capitulation To Big Business

I haven't written about the government's decision to drop a Serious Fraud Office (SFO) corruption investigation into a huge arms contract between BAE and Saudi Arabia yet because I've been too awe-struck for words. Of course, that the government is in bed with the military-industrial complex is no surprise, but to display such flagrant subservience to the arms industry so openly is truly staggering.

The situation can be summed up thus: in 1986, the British government secured a massive arms contract - the `Al Yamamah` deal - with the Saudi government, beating off fierce competition from France and the U.S. The deal, together with subsequent extensions, has been worth roughly £50 billion over twenty years for BAE Systems. It was described by the Financial Times as `the biggest [UK] sale ever of anything to anyone.' In September 2003, The Guardian alleged that BAE won the deal with the aid of a secret 'slush fund'. The SFO began investigating BAE for corruption and arrested two people in 2004. BAE denied any wrongdoing and said they "welcome[d]" the investigation to clear them of wrongdoing. However, in autumn 2005, BAE refused to comply with an SFO request for certain important documents detailing its secret offshore payments in the Middle East. In October 2005, an `understanding' was reached that BAE would supply Saudi Arabia with 72 Eurofighter Typhoon aircraft in a deal worth some £6 billion - the contract was signed in August 2006. In November 2006, The Daily Telegraphrevealed that the Saudis - reportedly "outraged" by the SFO investigation - had threatened to cancel the Eurofighter contract and take their business elsewhere unless the inquiry was halted within 10 days. Even worse, there were rumours that the `elsewhere' was France. Finally, after years of orchestrated PR-campaigns and relentless business lobbying, the Attorney General was persuaded to drop the case, citing Britain's `national security' interests.

Now, on the face of it, you'd have to say that this looks like a textbook case of government bending over themselves to please business. And you'd be right. It's also an example (as if we needed another one) of the flagrant contempt our government has for the rule of law.

The Attorney General, Lord Goldsmith, announced the surprise decision to drop the inquiry on December 14 before an almost empty House of Lords with the following statement:

"The Director of the Serious Fraud Office has decided to discontinue the investigation into the affairs of BAe Systems plc as far as they relate to the Al Yamamah defence contract. This decision has been taken following representations that have been made both to the Attorney General and the Director concerning the need to safeguard national and international security. It has been necessary to balance the need to maintain the rule of law against the wider public interest. No weight has been given to commercial interests or to the national economic interest".

Let's consider for a moment whether Lord Goldsmith's claim that `no weight has been given to commercial interests or to the national economic interest' is credible. Let's take a look at the nature of the (very vocal) opposition to the inquiry leading up to the decision to drop it.


  • On November 30 in the House of Commons, MP Michael Jack - whose constituency includes a large BAE factory - said,
    "As the leader of the house will know from aerospace workers in his constituency, that is now causing a great deal of concern, as it appears that the current inquiry is impacting on important negotiations".

    Jack Straw replied,
    "I applaud the way in which he [Michael Jack] has represented the interests of the British aerospace industry...I will pass his remarks to my right honourable and noble friend the attorney-general."
  • On December 2, The Timesreported that the Leader of the Commons Jack Straw will write a letter to Lord Goldsmith relaying concerns that the SFO inquiry is putting jobs at risk.
  • On December 3, local MPs prepared to lobby the government, demanding it halt the inquiry to save up to 50,000 jobs (a claim that is "pure fantasy" - the actual number of jobs that would be lost is closer to 5,000).
    MP Lindsay Hoyle said,
    "Quite a lot of MPs are saying that this is a major contract and that an incident like this puts thousands of jobs at risk. It could be a real problem for them."
  • The National Defence Industries Council - a business lobby group chaired by Rolls-Royce chief executive Sir John Rose (Rolls-Royce make the engines for the Eurofighter Typhoon) - pressed the government to halt the inquiry or risk 'seriously harming British industry'.

As you can see, the only factor being talked about in the run-up to the Attorney General's decision was the threat to the business interests of the UK coupled with the loss of jobs. No-one was talking about a threat to national security. The first time, as far as I can tell, that national security came into it was when the Attorney General announced the decision to shut down the inquiry. The problem for the government is that it is party to the Organisation for Economic Co-operation and Development (OECD) Anti-Bribery Convention - Article 5 of the Convention states,

`Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved.' [my emphasis]

Thus, the government had to come up with the novel excuse of `national security' to justify its perversion of justice. Incidentally, as Lord Thomas pointed out, even if we accept that the decision was not about economic interests but rather due to, in Lord Goldsmith's words, the 'serious damage to UK/Saudi security, intelligence and diplomatic co-operation' the continuation of the investigation would cause, this would still constitute a violation of Article 5 of the OECD Anti-Bribery Convention, which states that `the potential effect upon relations with another State' must not influence a bribery investigation.

Another argument used by the government to justify its abuse of power has been to declare that the investigation was going nowhere. In reality, this claim has been flatly contradicted by the head of the SFO, Robert Wardle, who felt that "further investigation was justified." He also agreed with Lord Goodhart's description of government capitulation to "blackmail" by Saudi Arabia.

Possibly the worst attempt to defend the decision to halt the inquiry came from the Saudi ambassador to the UK, Prince Mohammed Al Saud, who wrote a piece for The Daily Telegraphpraising the progressive reformation his country has undergone in the 20 years since the Al Yamamah deal was signed and the corruption allegedly took place. In reality, as Human Rights Watch documents, this reform is largely imaginary. Saudis still face political oppression, ordinary citizens face `daily harassment' from the `arbitrary power' wielded by police, women still face intense discrimination and the law does not protect religious freedom. The elections the ambassador boasts about were `inconsequential for local government, because the local councils are toothless' and completely excluded women from the process. In summary, `Saudi reforms have barely scratched the surface.' This raises the important point that, regardless of corruption, the UK should not be selling weapons to a dictatorship where, according to Amnesty International, `[f]logging remains a routine corporal punishment imposed by courts as a main or additional sentence for a wide range of offences, including in cases involving prisoners of conscience', `[w]omen are discriminated against in law and practice', `[p]eaceful critics of the state as well as suspected members of armed groups have been detained' and `[f]reedom of expression also continues to be curtailed'.

It is not surprising that our government has attempted to use the war on terror - and Saudi Arabia's cooperation with it - to justify flagrant violations of the law. It's hardlyunprecedented. Once we accept that the government's intervention was not motivated by `national security' but rather by economic interests (and since the government has declined to explain the nature of the `national security threat' Britain would face if the arms deal collapsed, we can dismiss it without further thought), all subsequent arguments are irrelevant. That only thing that matters is that the government decision to halt the inquiry was illegal. As Daniel Finkelstein writes (via),

`The purpose of the rule of law is to ensure that, in a vast range of different circumstances and over a long period of time, the interest of the public is served on average...The result of the Government balancing the rule of law and public interest in each individual case may be better in an individual case but is, without question, worse in the end.

The rule of law may not be superior in each individual case, but it is better for all cases when they are considered together. And it only works that way because it is applied to all cases considered together. The only way the rule of law can succeed is if it is applied blindly.

It is not therefore necessary to consider the rights and wrongs of the particular Saudi case in order to judge whether the decision was the correct one. The rule of law must prevail if we are not to live with the consequences of arbitrary justice.'

The government tried to bury its pathetic capitulation by announcing it on the same day as the Diana inquiry findings were released. We must not let them succeed. What is at stake is the fundamental character of our state - do we value democracy and the rule of law? Or are we ready to forget about them the minute they become inconvenient?

Cross-posted at The Heathlander

Tags: arms trade, BAe, bribery, corruption, Eurofighter Typhoon, foreign policy, human rights, international law, international relations, Saudi Arabia, tony blair, uk, war on terror (all tags)

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