Blair's banana republic 1; British rule of law 0

It's not often I find myself in complete agreement with The Guardian and the Liberal Democrats but I do today.  The Blair government's decision to stop the Serious Fraud Office's investigation into suspected Saudi/ BAe corruption is, as Oliver Kamm writes in today's Times, the lowest of many low points of this Blair government.  According to The Guardian the SFO were about to get hold of a Swiss dossier that contained print-outs of BAe's recent offshore banking transactions with key Saudi middlemen.  The Guardian continues:

"The SFO believed the banking files could unlock the answer to three questions: Were members of the Saudi royal family receiving secret British pay-offs? Were offences committed under UK law? And had BAE lied to the Department of Trade and Industry to get insurance cover when the company recently claimed it had cleaned up its act and got rid of its confidential Saudi agents?  But the events of the next 48 hours ensured that the SFO would not be allowed to collect those files. Instead came a sudden harsh lesson in the realities of power and politics in Blairite Britain."

Here are a few reasons why I object to Attorney General Lord Goldsmith's decision to halt the SFO investigation:

1. Tory Dominic Grieve said that “On the basis of the Attorney General’s comments about the highly speculative nature of the inquiry, and that any final prosecution was unlikely, the decision to discontinue the investigation in view of the potential damage to our national security was inevitable and the only sensible course of action."  I'm sceptical that Lord Goldsmith made his decision for entirely legal reasons.  The  Attorney General has 'form' in terms of giving legal advice and it is clear from all reports that the Foreign Secretary, Defence Secretary and Downing Street were all involved in the lobbying/ decision-making process.  The Prime Minister declared himself responsible for the decision.  This was clearly politicised.  The SFO should have been permitted to conclude its investigation without political interference.
2. Saudi Arabia recently warned that the Eurofighter contract with Britain was at risk if the SFO investigation went on.  The Saudis know that the British establishment is weak.  They prevented Death of a Princess from ever being rebroadcast and they have now appeared to succeed in blackmailing Britain over an SFO investigation.
3. The worst reason for surrendering to Saudi blackmail was that we needed support from the desert kingdom for the war on terror.  If we had continued with the SFO investigation there were warnings of no more intelligence sharing and, worse, Saudi support for Sunni fighters in Iraq.  What kind of signal does this send to every Muslim nation?  Threaten to join the wrong side in the war on terror and you'll get what you want.
4. If Saudi Arabia is an ally in the war on terror then God help us.  This is the nation that has funded the most militant expressions of Islamism all around the world.  The kingdom's human rights abuses include execution of homosexuals and zero tolerance of conversion from Sunni Islam.  No Jews of any nationality are permitted to enter Saudi Arabia.
5. There is terrible hypocrisy here.  It is a core of UK development policy that African and other developing nations must have zero tolerance of corruption but it now appears that the British state is willing to turn a blind eye to Saudi corruption.

If Labour comes out of this affair badly then so do the Tories.  Dominic Grieve's line is unbelievable.  MPs Gerald Howarth and Michael Jack - both with big BAe-related constituency jobs - lobbied to stop the investigation.  Edward Leigh defended the decision on Any Questions - joining Charles Moore and Peter Oborne in embracing the Government's 'realpolitik'.  Bernard Jenkin told the BBC that "The SFO should not be tempted to go on these fishing expeditions unless prosecutions are likely and these prosecutions are in the national interest."  Worst of all was Jonathan Aitken's suggestion that  even if the allegations against BAE were true, it was the correct decision to end the investigation in order to maintain good relations with Saudi Arabia.  I hope the human rights charity Christian Solidarity Worldwide is reconsidering having Mr Aitken as their president.

Final word must go to 'Russell' who made this brilliant comment on Danny Finkelstein's blog:

"The rule of law having been dismissed, and the public interest having been equated with the Government's interests (for which Blair takes "full reponsibility"), the Attorney General can now step in to halt the cash for honours enquiry. Not in the public interest, you see. While we're at it, why not arrest DC Yates for conduct prejudicial to national security?"

Related links: Saudi Arabia's funding of Islamism and Tories launch first human rights report

Comments

[Jon Gale]

For once Blair has done the right thing an protected the national interest. An investigation would have achieved nothing positive.

That the Tory party has recognised realpolitik instead of jumping on the LibDem/Guardian oh-so-righteous bandwagon gives me hope for the future.

[Annabel Herriott]

Yes, a bit of pragmatism and 50 thousand jobs saved, or the moral high ground, plus a long queue at he job centre. Are the Limp dums choosing the dole?

[Deborah]

Either we uphold the law or we don't. Which should it be? Who draws the line?

[Jack Stone]

I agree with Deborah totally.Politicans should stay out of the law and let due process take its course.
No one should be above the law and we should uphold the law regardless of the consequences.

[Editor]

That 50,000 jobs figure is hotly disputed Annabel and I do wonder if similar arguments of short-term economic self-interest were made when the west was arming Saddam?

[Sally Roberts]

Saudi Arabia may well be presenting itself as an "ally" to the West on the War on Terror but let us not forget that it is where Wahabism - the thread of Islam which has spawned so many extremists - originated!

[Richard]

I find myself tending towards realpolitik on this issue. It's a messy business but we don't live in a perfect world. We might as well call for MI5 and MI6 to be shut down on the basis that some of their activities might be a bit extralegal. The Sun editorial (yes, I did say that) sums it up nicely.

[Umbrella Man]

Is The Sun, Richard, the same newspaper owned by Murdoch... the same Murdoch who was willing to censor output in order to win business in China?

WHAT ARE WE DOING SELLING HI-TECH ARMS TO SAUDI ARABIA ANYWAY? Don't we learn the lessons of history? This nation which gave us 19 of the 21 9/11 hijackers will bite us back one day soon. It is only a matter of time.

[torylady]

Well done for highlighting this, Tim.
The whole thing is a disgrace.
I don't know how we can sit on our high horse condemning "Corruption in Africa" when we have such stinky business dealings under our own nose.

As usual the consequences of these actions will be felt by future generations of citizens and leaders. 50,000 jobs not "saved" but "created", not now, but in the future. Jobs which if they never come into being may never be missed. For crying out loud...

Saudi Arabia is not our ally.

[arthur]

Its good to know, that the activities of Jonathan Aitken and Mark Thatcher did not go to waste!

[David Sergeant]

In all this stuff about national interest I am wondering why the investigation started at all. As I undestand it the legislation under which the investigation took place was dated 2001. The original order took place years before that, so, any attempt at conviction would be retrospective - therefore surely a conviction would never have happened. But. The original order was done under the Conservatives; did someone tip off the SFO as a means of smearing the Conservatives? If you wonder if this is far fetched it seems the police are getting more political, I could go on, but, e.g. why were cases dropped against Davis, Prescott and Mandelson? It would be par for the course for NewLab to assume that the police and the law are only there for their convenience although I don't expect a Tory leader to say this because it would make waves - can't have that, where's the next sherry party.

I do hope as a result of this British companies keep their slush funds. We are no longer in a position to tell the world what to do. When in the world, do as the world does. Or starve.

[Chris Heathcote]

If this investigation really was a threat to national security why was it ever started in the first place? By letting it begin and go on for two years then blocking it just as it was finding something because the Saudis said so makes our whole country look shabby and crooked. When I think back to '97 I can scarcely believe what Tony Blair has become with this and the cash for honours scandal. I just really hope that in ten years time we are not saying the same about Cameron and co.

[ToMtom]

I am wondering why the investigation started at all.

You are not alone.

Siemens AG has a $400 million slush fund in CH and is currently being raided. it bribed Greek officials over the Olympics so there is hope for Tessa Jowell yet.

Most arms deals require slush. Surprised the ANC regime has not been investigated - so much slush down there in S Africa - and Pinochet...........slush makes the world go around.

[Editor]

"A $400m slush fund in CH"

CH?

I haven't seen any of it!

[HF]

What puzzles me is that I had understood that under our legal system only the AG can take the decision. So why is Blair going round saying that he took the decision? The AG can take advice but he surely would be wrong to be
taking orders from Blair on this?

[NigelC]

Which inconvenient law will NuLab ignore next? Slippery slope.

[malcolm]

A difficult one this. Two questions .1 Do we want a defence industry? Advantages jobs,foreign currency and the ability to equip our armed forces without relying on others. If we do and we believe they should compete on the international stage and export then it is criminally naive of any government to launch an investigation such as this one.How major defence contracts are won is not much of a secret as even Ming Campbell and his cronies should know.
Second question is do we alienate Saudi A rabia? If the Iraq war has taught us anything it should be apparent that our military power is inadequate for us to impose our will in the Middle East. We need friends there to maintain any influence but also to maintain our oil supplies. We have an enemy in Iran and we will sooner or later lose in Iraq,how many more enemies do we want?
Sadly I don't think Blair had any choice. It was crazy however that this investigation was allowed to get so far.

[Don Jameson]

Deeply disappointing to see the Party still supporting Saudi sleaze - have we learned NOTHING from the Aitkin years? Apparently not.

(Oh, and by the way, virtually no Saudi crude is ever refined in the UK.)

[TomTom]

"A $400m slush fund in CH"

CH?

I haven't seen any of it!

Posted by: Editor | December 16, 2006 at 18:20

Now ask why the BBC does not cover news from the largest economy in the EU

Siemens

Siemens 2

[TomTom]

Siemens 2

[ToMTom]

Deeply disappointing to see the Party still supporting Saudi sleaze - have we learned NOTHING from the Aitkin years?

Yes ! That Aitken was good as a link man to Saudi to sell Arms through Wafic Said.

That his father-in-law was a Serbian Arms-Dealer

That he should not have tried to sue The Guardian

That he is probably a much better man after his experiences than he was before

[michael mcgough]

When trading in Rome you have to do as the Romans do and talk the same language.However undesirable it is the only way you will do the business.At least all this 'dropsy' results in more BUMPER GDP producing business and jobs for the natives.The REAL world of international sales is too far removed from that of political workers for you to take the moral high ground.
Much more worrying is the fact that the endemic financial irregularities of the EU now extend to payments within the UK forcing the Treasury to enforce new audit procedures.I'm not worried about Saudi money going to Saudis but UK money going A.W.O.L..

[Jake]

Our party's position on this has depressed me deeply. The rule of law isn't just a nice idea, it is not too much to say it underpins our civilisation.

You cannot waive the criminal law just because somebody is willing to pay and it is sickening that normally sensible contributors here saying otherwise. Would we drop a murder investigation against a billionaire if he promised to make a substantial donation to Children In Need? To read some of you on here, you probably would.

I am also really surprised to read some of you treating corrunption as a normal part of business. Actually, I can tell you it isn't. Most deals are up front and made on legitimate commercial grounds. This undermines that - the message is that there are no rules when doing business in Britain and as such it undermines the work of legitimate businesses here.

I am seriously considering my position in the party after our abject, weasly performance on this.

[malcolm]

You're being extremely naive Jake. I'd be interested to see your evidence of the international arms deals that were made on 'legitamate commercial grounds'. My father worked for a big defence contractor and my mother worked in an embassy so I got to hear about several 'legitimate commercial deals!' Those were more than 20 years ago!
Perhaps you're as naive as Ming Campbell but I doubt it!

[geoff gilson]

The only surprise about Tony's halting of the SFO investigation into BAe bribes is that 'conservativehome' isn't asking if it might have had something to do with the possibility that New Labour were benefiting from BAe's largesse?

What do we all think Peter Mandelson was doing on those weekends he spent at Wafic Said's mansion in Surrey? Why, the same thing Jonathan Aitken was doing in 1993 at Mohammed al-Fayed's Ritz Hotel in Paris - carving up the arms bribes.

Since the SFO are no longer involved, and 'conservativehome' is apparently a little shy about asking the right questions at the moment (understandable Ashes fatigue...), the only way bloggers will be able to find out the real story about arms corruption in the UK is to examine the results of my own 18 year investigation - which began when a Category A D-Notice was slapped against the BBC's 'Newsnight' in 1989... www.lulu.com/content/384105

[Sam Tarran]

Truely shocking. At the same time, though, one wonders if this is just an example of realpolitik?

[Jake]

Malcolm, I actually have more experience in this area than you might think but we will just have to leave it at that.

[TomTom]

Editor

siemens 3

[Valedictoryan]

This government is very good at changing laws, so I look forward to it changing the one that said a bribe would be illegal.

My only objection to this whole thing is that we're attempting to sell arms to unsuitable governments. If this affair centred on Pot Noodles, I wouldn't give a monkey's if the Pot Noodle's king had bribed his way into the deal.

[sjm]

I recall this whole bribery thing coming up many years ago, when a business contact who worked for an world-wide company remarked that the UK would never do any more trade in Africa if they forbidden to add a 'bung' to every deal.

Whatever the rights and wrongs of doing business with the Saud family, this is yet another example of stupid politicians rushing through laws without thinking of the consequences.

[Tory Realist]

This is dirty business. But again, how will we benefit when we refuse to answer questions on the secret offshore companies pumping millions into party coffers or even name all of the people who funded our 2005 election campaign?

Combine that with Blair and Cameron colluding to fund themselves out of taxpayers money, we're not offering any alternative to take the pigs' snouts out of the trough, just trying to swap their pigs for our pigs

[EML]

It's very easy to be idealistic and throw our arms up in righteous indignation, but this sort of thing must go on all the time.

I only echo what other people have asked earlier; why was a formal investigation launched, and why did it have to be done in public?

[Thomas Wales]

I sincerely doubt that this is a modern phenomenon.

See my article here

[conan]

The key issue is jurisdiction. We wouldn't like it if the Saudi religious police began patrolling British streets and beating women who don't wear a veil, because the Saudis have no jurisdiction here. If there was a crime, the victim was the Saudi taxpayer, and the allegations of bribery are a matter for the Saudi police.

[The Laughing Cavalier]

Why arrest DC Yates when you can just as easily allow Lord Yates to retire early on a full pension? He could then take his his richly deserved place in the Upper Chamber funded by a handful of lucrative directorships and QUANGO appointments?

[tomtip]

IT'S A TOTAL DISGRACE! WE LECTURE THE WORLD ON HUMAN RIGHTS AND THE RULE OF LAW, THEN GO ON TO SUPPORT GUANTANOMO, RENDITION AND NOW BRIBERY BY ONE OF THE WORLD'S MOST CORRUPT AUTHORITARIAN REGIMES. AND TO TOP IT ALL OFF, CAMERON BACK ALL THIS 100%. WHAT A DISGRACE!!! MIGHT AS WELL STICK WITH NEW LABOUR - BETTER THE DEVIL YOU KNOW.

[Dontmakemelaugh]

CAMERON BACK ALL THIS 100%. WHAT A DISGRACE!!! MIGHT AS WELL STICK WITH NEW LABOUR - BETTER THE DEVIL YOU KNOW
tomtip | December 17, 2006 at 18:02

Something is badly amiss - I actually find myself in agreement with Cameron and Malcom.
All the holier than thou types probably believe (mistakenly) that they would not be affected by the curtailing of sales to Saudi and that the only suffers would be those mortgaged up to the hilt in the areas producing the military hardware. So, if you want to engage in business with certain countries then there is a surcharge to pay; if you do not want to pay it then don't get involved in the first place and try to avoid making enemies by crying foul.

And as for the West supplying arms to Saddam: if memory serves we had an arms embargo and so did the Americans. It depends how far you wish to go back. I believe that in about 1982 Carter did offer to supply Iran (not Saddam) with a a few aircraft (probably something to do with the release of hostages). I am sure that neither France nor Germany have ever supplied weapons or military hardware to Saddam or any other nasties.

Having thought about it again, I now believe that Blair was wrong to look after our national interests. We should have been looking after the interests of other nations like we usually do and put ours last. It must have been hard for Blair to break the habit of a lifetime. Blair was definately wrong; we should have given the contract to that nation of impeccable unwavering straight dealing - yes, we should have played our trump card against Saudi and insisted that only one country was fit for purpose - France.

[Serf]

Two Important points

1) The rule of law should be sacrosanct
2) Laws should not be passed if they will need to be over ruled.

This is the only possible end result of passing legislation that outlaws the paying of bribes in other countries. Our law, should simply be satisfied with making sure that corruption doesn't happen in the UK.

The defence business is notoriously corrupt, and this kind of thing was bound to happen. I have a friend, whose father was offered a briefcase full of cash in a deal similar to this. And he was only responsible for declaring bids to be technically acceptable or not.

[SimonNewman]

"WHAT ARE WE DOING SELLING HI-TECH ARMS TO SAUDI ARABIA ANYWAY?"

The whole thing is a joke. The arms we're selling the Saudis are no use to them, the purchase is simply a means for the Saudi government to exercise political leverage over our country. The money the Saudis pay for those fighter planes is just as much a form of bribery as whatever money BAE gave to individual Saudi officials. The Saudis buy our arms exports so we don't object as they fund the expansion of Islamism within our country, and the undermining of our democracy. They fund the same Islamist terrorists who seek to destroy us. They're doing the same in the USA and around the world.

The whole thing stinks.

[Michael McGowan]

I agree with Oliver Kamm on this one: not only does this decision give cynicism a bad name but it is also a stupid decision too. Not a surprise then to discover various Tory MPs lining up to support it.

[Geoff]

Serf makes two good points when he only needs to make one good point - "The rule of law should be sacrosanct"

Running an IT company a few years ago I was offered an (alleged) guaranteed £0.25M per year consultancy and development contract if I took their IT Director to the Hungarian Grand Prix.

I hate motor racing so I didn't. Obviously wasn't awarded the contract so I spent my spare time negotiating a contract with a with a telecoms provider worth three times as much.

Know what? They had a corporate yacht in Monaco and offered me a freebie to that GPrix for doing a good job. Life is so annoying.

[TomTom]

The whole thing is a joke. The arms we're selling the Saudis are no use to them, the purchase is simply a means for the Saudi government to exercise political leverage over our country.

Au contraire.

This order was originally placed for F-16s with the US but Congress refused to permit export of aircraft which would imperil Israel's superiority.

The British and French rushed in and Thatcher through Aitken and wafic Said got the contract in 1988 for British Aerospace. It just happens that Blair being a cretin allowed the SFO to root retrospectively through the 1990s archives in 2004 for matters which were not illegal at the time but were after 2001.

Supplying weapons keeps people loyal because they need the flight training, the engine servicing and the infrastructure. In essence it keeps airplanes in Saudi Arabia that British pilots could fly if need be

[SimonNewman]

TomTom:
"Supplying weapons keeps people loyal because they need the flight training, the engine servicing and the infrastructure. In essence it keeps airplanes in Saudi Arabia that British pilots could fly if need be"

The idea that the Saudi govt is loyal to *us*
(?!) seems utterly grotesque. The Saudis have a long-term strategy of bribing both the West (with arms deals, buying western University academic departments, and other sweeteners) and their own Islamists (with 'charity' that goes to spread Islamist expansion & often terror), in order to keep themselves secure in power.

Your other point is interesting, but to my knowledge in previous orders Saudi Arabia and the other gulf states rarely maintained many fighter planes in flight-capable condition, they just get left in the desert to rot.

Frankly, before 9/11 I'd probably have accepted the argument that this kind of deal, while corrupt, was on balance beneficial to Britain. I just can't accept that anymore. We should be isolating ourselves from these people, not begging them to buy our planes.

[SimonNewman]

TomTom:
"This order was originally placed for F-16s with the US but Congress refused to permit export of aircraft which would imperil Israel's superiority."

So the Saudis showed the USA what a good thing they were missing by buying our planes instead, thus getting Boeing et al to pressure the US Congress not to repeat the exercise. And if we got cold feet they'd 'punish' us by buying from the French, and if the French got cold feet it would be the Russians or somebody else, and so on. Frankly, until they stop undermining our countries we shouldn't be selling them anything.

BTW AIR, the F16 is a ground attack plane, the US air superiority fighter is the F15. So if they're buying air superiority fighters from us it's not even the same sort of plane!

[The jabberwock]

One aspect that seems to have escaped both sides of the argument is the sheer cost of developing a new aircraft, be it civil or military.

Is it possible that at the time the deal was struck the prospect of selling a significant number of aircraft to the Saudis may actually have made (and may make) the difference between the EADS and BAe Systems recouping the costs of developing the Eurofighter and making a huge loss? Would the latter have lead to the prospect of financial ruin for the companies involved and the end of our ability to produce state-of-the-art military aircraft?

Did those Civil Servants who drafted these laws not have the experience and sense to warn Ministers of the possible consequences of trying to make British law both applicable outside the UK and retrospective? Or did they warn against this, only for their advice to be ignored and/or over-ruled for political reasons, and if so, why?

That said, it is indeed a Black Day when the Chief Law Officer of what used to be Great Britain comes to the Dispatch Box in the House of Lords and states that the Law of the Land is to be set aside. I used to believe that this was a country that respected the rule of law, and that our laws applied irrespective of position: "Be ye never so high, the law is above you."
No longer: the Law of this Land, however incompetently or mendaciously framed, can now be set aside to assuage the outraged pride of the House of Saud. Is this today's equivalent of thirty pieces of silver?

I haven't felt so ashamed to be an Englishman for a very long time.

[SimonNewman]

Jabberwock:
"One aspect that seems to have escaped both sides of the argument is the sheer cost of developing a new aircraft, be it civil or military.
Is it possible that at the time the deal was struck the prospect of selling a significant number of aircraft to the Saudis may actually have made (and may make) the difference between the EADS and BAe Systems recouping the costs of developing the Eurofighter and making a huge loss?"

I'm sure this is entirely correct. Of course the Eurofighter project is a Cold War relic that to my knowledge has no conceivable military use for Britain in this day and age - we are not threatened by any power possessed of a significant air force. And the Eurofighter can't even be deployed from carriers! It's all about the money, and jobs, not defense. If we were serious about defense we'd be investing in such slow & unglamorous but useful planes as the A10 tankbuster, the US close air support plane that is probably the most useful vehicle on the modern asymmetric battlefield.

[niconoclast]

There is a lot of swallowing camels and straining at gnats here. We deal with corrupt countries every day. Africa kleptocacies. The EU a byword for corruption...

And we have it closer to home in the form of crippling taxation for business -defacto bribe system if ever there was one. Wake up and smell the hypocrisy guys.

[Tory Loyalist]

Don't we currently have a shadow cabinet member alleged to have "Arab arms dealing links"?

No names of course, but let's say he's known to be a "confirmed bachelor"

[Deputy Editor]

"The British and French rushed in and Thatcher through Aitken and wafic Said got the contract in 1988 for British Aerospace."

See this ToryDiary post for info about Wafic's financial interest in the Conservatives. It does shine some light on the Party's position on the issue!