Guess why this man is smiling: the Biggest Arms Deal Evah

BAE accused of secretly paying £1bn to Saudi prince

· Money for 'marketing services' on arms deal
· £30m payments a quarter
· Sanctioned by MoD

David Leigh and Rob Evans
Thursday June 7, 2007
The Guardian

The arms company BAE secretly paid Prince Bandar of Saudi Arabia more than £1bn in connection with Britain's biggest ever weapons contract, it is alleged today.

A series of payments from the British firm was allegedly channelled through a US bank in Washington to an account controlled by one of the most colourful members of the Saudi ruling clan, who spent 20 years as their ambassador in the US.

It is claimed that payments of £30m were paid to Prince Bandar every quarter for at least 10 years.

It is alleged by insider legal sources that the money was paid to Prince Bandar with the knowledge and authorisation of Ministry of Defence officials under the Blair government and its predecessors. For more than 20 years, ministers have claimed they knew nothing of secret commissions, which were outlawed by Britain in 2002.

An inquiry by the Serious Fraud Office (SFO) into the transactions behind the £43bn Al-Yamamah arms deal, which was signed in 1985, is understood to have uncovered details of the payments to Prince Bandar. But the investigation was halted last December by the SFO after a review by the attorney general, Lord Goldsmith. He said it was in Britain's national interest to halt the investigation, and that there was little prospect of achieving convictions. Tony Blair said he took "full responsibility" for the decision.

However, according to those familiar with the discussions at the time, Lord Goldsmith had warned colleagues that British "government complicity" was in danger of being revealed unless the SFO's corruption inquiries were stopped.

The abandonment of the investigation provoked an outcry from anti-corruption campaigners, and led to the world's official bribery watchdog, the OECD, launching its own investigation.

The fresh allegations may also cause BAE problems in America, where corrupt payments to foreign politicians have been outlawed since 1977.

The allegations of payments to Prince Bandar is bound to ignite fresh controversy over the original deal and the aborted SFO investigation.

The Saudi diplomat is known to have played a key role with Mrs Thatcher in setting up Britain's biggest ever series of weapons deals.

For more than 20 years Al-Yamamah, Arabic for "dove", has involved the sale of 120 Tornado aircraft, Hawk warplanes and other military equipment. According to legal sources familiar with the records, BAE Systems made cash transfers to Prince Bandar every three months for 10 years or more. BAE drew the money from a confidential account held at the Bank of England that had been set up to facilitate the Al-Yamamah deal. Up to £2bn a year was deposited in the accounts as part of a complex arrangement allowing Saudi oil to be sold in return for shipments of Tornado aircraft and other arms.

Both BAE and the government's arms sales department, the Defence Export Services Organisation (Deso), allegedly had drawing rights on the funds, which were held in a special Ministry of Defence account run by the government banker, the paymaster general.

Those close to Deso say regular payments were drawn down by BAE and despatched to Prince Bandar's account at Riggs bank in Washington DC...

Read it all, pilgrims.

Yes, you got it right, that's Jonathan Bu$h's Riggs Bank. Poppy's own Bubba. Gotta love that Bandar Bu$hie, keeping it all in the fambly. Just like BCCI and Al Qaeda's petty cash fund.