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Lawyers 'helpless' to stop Saudi deal
Lawyers for a government anti-fraud agency argued on Friday nothing could be done to counter threats from the Saudi Arabia government to withdraw cooperation on critical security issues - threats that led the agency to drop a corruption inquiry into an arms deal between Saudi Arabia and BAE Systems PLC.
- AP
- Published: 00:32 February 16, 2008
London: Lawyers for a government anti-fraud agency argued on Friday nothing could be done to counter threats from the Saudi Arabia government to withdraw cooperation on critical security issues - threats that led the agency to drop a corruption inquiry into an arms deal between Saudi Arabia and BAE Systems PLC.
A High Court judge hearing a challenge from two lobby groups to the legality of the Serious Fraud Office (SFO) decision to stop the investigation in December 2006 has repeatedly questioned why it appeared no steps had been taken to mitigate the threat.
The Campaign Against Arms Trade and anti-corruption group Corner House argue the decision to halt the probe was illegal because it was based on tainted advice from then-Prime Minister Tony Blair and his government.
Disregarded
The activists also argue it contravened the Organisation for Economic Cooperation and Development's (OECD) anti-bribery convention, disregarded Saudi Arabia's obligations under international law and was against British law.
Blair took responsibility for the decision to halt the probe, saying the investigation threatened national security interests.
Philip Sales, a lawyer for the Serious Fraud Office, was frequently interrupted by Lord Justice Alan Moses as he detailed his office's defence against the challenge.
Moses repeatedly questioned the stance taken by the government and the fraud office that threats from Saudi Arabia to withdraw cooperation could not be mitigated or overcome.
"You're saying that nothing can be done, it's out of our control, it's a friendly powerful state and nothing can be done," Moses put to Sales.
Sales responded: "We in the UK can't compel the Saudi Arabian government to adopt a different stance. It may be a matter of regret that the UK doesn't have the power to ensure that other states, big or small or large don't do what we want them to do. The world doesn't work that way."
Justice Jeremy Sullivan, who is hearing the case with Moses, questioned why some of the evidence on what SFO Director Robert Wardle took into account when he made his decision - a key issue given consideration of some factors is banned under the OECD convention - appeared to be contradictory. Sales had told the court the decision was taken by the agency's director because there was a "serious and imminent threat to national security."
Sales said Saudi Arabia threatened to withdraw cooperation on issues crucial to British public safety, including those "in light of the terrorist threat." Sullivan said that Wardle's statement said he took into account only national security, not political considerations, but Sullivan noted the court had "500 documents that make it clear" that other issues were considered.
Fighter contract
However, the two pressure groups argue the government also put pressure on the fraud office to drop the investigation because BAE faced the loss of a lucrative jet fighter contract.
The activists' lawyer, Dinah Rose, said the government had not disputed allegations that Saudi Prince Bandar Bin Sultan, the former ambassador to the United States and now head of Saudi Arabia's National Security Council, told Blair during a meeting in July 2006 to stop the inquiry or BAE would lose a £10 billion (Dh72 billion) contract to buy Typhoon Eurofighter jets.
Rose said Blair then placed "irresistible pressure" on Wardle to stop the investigation.
Documents presented to the court also revealed that BAE sent a "strictly private and confidential" memo to Britain's attorney general, Peter Goldsmith, saying the inquiry should be called off because it jeopardised the new contract.
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