Saudi sandstorm
It is challenging to write with certainty about almost anything to do with the vast Al Yamamah defence contract between Britain and Saudi Arabia
The reason is that the original Al Yamamah deal - signed by Margaret Thatcher as British Prime Minister in 1985 - was covered by a stringent confidentiality agreement.
Which means that when allegations of impropriety or funny business surface, as they do regularly, neither the MOD or BAE systems can confirm or deny them - without breaching the terms of the original agreement.
However, this is what I can say with some confidence.
I've been told over many years by those connected to the deal that all payments made under the contract were both written into the contact and known to both governments.
Or to put it another way, any payments made by BAE – to Prince Bandar or anyone else – were officially sanctioned in the contract and by the British Government.
So if, as Panorama and the Guardian allege, hundreds of millions of pounds were paid by BAE to Prince Bandar of Saudi Arabia in connection with these military sales, then both the British and Saudi government approved the payments.
Now it would be pretty embarrassing for the British Government to admit that. But to reiterate, even if it wanted to make a clean breast, it could not. It would be driving a coach and horses through the confidentiality clause of the Al Yamamah contract and the Saudis, with good reason, would probably feel they could never deal in confidence with the UK again.
Now this is where it all gets very murky.
To state the obvious, Panorama would not have alleged that substantial payments went to Prince Bandar if it didn’t have powerful evidence.
However a source close to Prince Bandar is denying that these payments were made in the manner specified by Panorama, that is to a branch of Riggs Bank in Washington.
That’s one denial. A second denial is that Prince Bandar was the beneficiary of any payments made.
So far, so confusing – which, of course, rather suits the British and Saudi Governments.
However, there is no on-the-record denial, as yet, and no denial that commission payments were made to senior Saudis by BAE.
In fact, BAE has consistently said to me that commission payments were made to Saudis in connection with this deal. All that BAE has ever rejected is any suggestion that the commission payments were illegal.
It is also important to be rigorous in recognising what it meant to pay commissions on the Al Yamamah deal: the Saudis paid billions of pounds to BAE for airplanes and military equipment and BAE then recycled hundreds of millions back to… the Saudis.
Friends of Saudi cannot see what could be wrong with that. Others believe that if such payments were made in such a secretive way, there must be something very fishy.
Finally let us not kid ourselves that there would be nothing at risk if the British Government were suddenly to disclose all the gripping detail of the Al Yamamah contract.
This deal has been worth more than £40bn to BAE and other defence companies - it's been a massive source of valuable British exports.
What's more, BAE was hoping to sign a new phase of this deal next week. That would be worth an estimated £20bn and would be for the sale of Typhoon jets.
The Saudis hate the idea that their washing - dirty or otherwise - is being hung out in public. So BAE is nervous that following the allegations made overnight about the original Al Yamamah deal, the Saudis may have second thoughts about the new deal.
So £20bn of new exports to Saudi could be jeopardised. If you are against the arms trade, you are not going to worry about that. But £20bn is proper money.
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Investigative journalism is one thing, have these people got any idea of how many UK jobs will be lost when the King of Saudi Arabia awards the new defence contracts to the Americans.
You need to live in KSA ( I did on Al Yamamah for 10 years) to understand how business is carried out there. You have to play by their rules....or not at all.
It's about time to start looking after our own industry instead of trying to do ourselves out of all this income
I do not see anything wrong with allowing certain officals to "wet their beaks". This contract involves alot of money and british employment. All I have to say to those MPs trying to gain some sort of advantage is " are you going to pay the mortgages of the workers who lose thier jobs?" nuff said.
Now you know part of what is breeding Muslim terrorism and why these terrorists are bombing Saudi and Anglo-American targets.
Makes You Laugh The French Are Probably Waiting In The Wings With Americans Ready To Pick Up Contracts.
They Probably Will Agree To "Bungs"
And Nothing Will Be Said,This Country Certainly Knows How To Stab Itself In The Back.
How interesting that this is becoming news rather than history. I was teaching in KAAUni Jeddah over the period of Yamama. My friends and I, Saudis and ex-pats had a merry time trying to guess how much and who. There was never any doubt about whether. It was common knowledge and common practise. What's all the fuss about? Ask any ex-pat that had anything to do with the kingdom during the 70's,80's and early 90's. It was a way of life. Oiling the wheels and knowing the right people - wasata - gets you everywhere over there and, clearly, over here.
Don't care! as long as we get the jobs then why bother, otherwise we'd lose out and the Americans or Russian would get the orders. Your lefty media outlets are so oblivious to the nature of the world. You want everything to be black and white with flowers and laughing babies. Not going to happen.
I am normally a great fan of Panorama, an advocate of the freedom of the press and against the arms trade. Unfortunately responsible reporters need to consider the realities of the case and the possible consequences of their stories.
Payments may not be palatable to many in the UK but they are a reality of doing business in Saudi.
We're not just talking about the possible loss of a single £20bn contract. We've also got to consider future contracts and a careless disregard for ordinary working people's jobs and futures.
The reporters involved should be stripped of every last penny and locked up for the rest of their miserable lives.
The ³ÉÈËÂÛ̳ and the Guardian et al should stop trying to make sensentionalist stories that damage the UK's reputation in the world and support UK plc for a change. Other countries have different ways of doing business and that does not make them wrong.
The reason the USA is so anti Al Yamamah is becasue they didnt win it! USA has notoriously double standards when it comes to discriminating for US companies against everyone else.
£40bn is a HUGE bonus for our economy and not easily replaced. Get Real ³ÉÈËÂÛ̳!
If indeed from the highly secrative nature of the deal, it is true that underhanded practice has taken place, then one can question the ethics and morality of the UK government. But one is ignoring the total reality at one's owns peril.
It is universally acknowledged that arms trade has always been and always will be a Delboy business, doviod of any ethic and morals. This is my first point. Saudi government will not import even polo mints or bananas with out some prince somewhere being paid in what ever way it is convenient to disguise. This is my second point.
If UK government were to have followed strictly the moral route, the same birbe money would have gone to the same princes under same confidientiality and disguised in the same way. Only the exporting company and its government will have a different name. This is my final point. So let us sum up the moral of the story and the mundane reality. In our modern democratic world, with freedom on the march spreading democratic values through barrel of a gun, everything is subservient to money and vested interest.
I'm not sure who is being injured by this deal. America is getting its underwear in a twist, probably because they didnt offer enough to get them to buy F15's, and France because of the Mirage. All Saudi's I have ever met have been doing very nicely thankyou so the population of Saudi Arabia isnt suffering either. To me all thats being achieved by Panorama and the Guardian is that the next phase of the contract is being put at risk losing us the opportunity to get some of the money we spent on oil back in the UK. I hope those 'socialy concious' individuals will go and explain the merits of their stand to the unemployed of BaE. I for one dont care who got what.
Dear Sir,
Although certainly not a conspiracy buff, I wonder why this has come out now, and even more interesting why the [once] very powerful prince Bandar good friend of the Bush family has now been named. Any suggestions?
Henry
The Saudis, and I mean the royal ones, are above the law in their kingdom. Luckily we living in democratic societies still hold our leadership accountable. It will be very important to see this case play out under legal and transparent terms.
I'm more and more convivced that favors and bribes are the norm in doing big business. Yet it is shoved down our throats that doing favors and giving bribes is terribly wrong. Life sure is confusing to a working man .
Privatize the ³ÉÈËÂÛ̳ and let them earn a living out there in the cold.
We would then see what lengths they would go to to secure business so all could eat.
Ask BAE employees what they think.
I do not expect that the terms of this contract are anything unusual, in terms of dealing with the Saudi government and the all powerful ruling family. There has long been a presumption about how business is conducted in the Middle East; and to this end, the dealings of this British company are probably no different to those of our industrial competitors.
It is not too difficult to assume how this form of practice can lead to dissatisfaction amongst the ordinary people of Saudi and lead to the foundation and growth of organisations such as al Qaeda. Although ceasing such dealings with the Saudi government will probably not change our relations with such dissident factions, as their idealogical aims are probably more widespread and fundamentally different to our own; this does not say we must not change tack.
The day we shed our dependence on Saudi and other Middle eastern oil sources, cannot come early enough. Why should we be party to a murky business world where we first spend petro dollars, reclaim some by means of selling lethal weapons for a non existent military threat, to apparently only allow some of this to be re-diverted into the pockets of the ruling elite in a foreign power?
If it wasn't for the oil, I suspect out trading relations with Saudi and other Middle Eastern nations would be no different than say many parts of Africa or South America. Dirty Fuel and Dirty Money.
This is ridiculous.It is called Saudi Arabia. The House of Saud owns it. It is up to the Saudis to see if anything illegal was done. Right now they do not see anything wrong with this deal.So why should the British worry about it? All what will happen is that the Saudis will stop buying British planes and go and buy the French. That means more job loss in UK.
£20bn is as you say proper money indeed but needs to be compared to the significant impact of declining North Sea oil and gas. Over the next five years or so the value of imports needed to replace indigenous production increase to a similar value - annually. The North Sea is the elephant in the drawing room when it comes to the national trade balance.
Whilst such deals sound as if they may have payments that would not usually be expected, it seems that this type of action is fairly common in large arms contracts. It would be therefore be very shortsited to criticise such action when similar terms would almost certainly have been agreed to by any other countries in a similar situation.
Regards
I'm afraid, I have no idea what the fuss is about this type of deal. We are dealing with weapons capable of killing many people, and in an arena where British companies are amongst the best in the world.
When you come to questioning the ethics around selling weapons to regimes such as the Saudi Royal Family, where oretty much the vast majority of the wealth being used to purchase said warplanes and ordnance is sourced from teh private individuals who run the country, what difference do these kick-backs make? Is it any different to the vast subsidies that the governments of Europe and the US give to their respective aerospace industries, through preferential loans in teh case of Airbus, or access to DARPA and the masses of research info gathered by NASA in teh case of Boeing?
If we can guarantee the jobs of tens of thousands of British workers, the "sonsultancy" fees seem a small price to pay, and were paid by a private company, not the British taxpayer...
One could argue that £20bn of "dirty money" is not "proper money". Perhaps BAE should look at selling its wares to "cleaner" countries who don't require such inducements to order aircraft.
It is well known that oil revenues of Mideast are being stolen by the corrupt regimes in power. They are being helped in the process by the British and USA, to keep the region poor and underdeveloped. They sell them outdated Arms , through which these dictators get their kick back. These arms are used to oppress the Arab population, and never used to fight the neonazizizoinst aggression. This is the sad story of the poor Arabs. They see their resources are being stolen, by corrupt ruleres ,while they live in poverty, and under oppression. There is a good book that explains all these facts called ,AN ECONOMIC HIT MAN. Unless the people of the Mideast rise up, and kick all these criminal corrupt regimes, they will remain poor,unemployed, and oppressed.
In the light of the multi trillion dollar law suit currently taking place against the Saudis by the families of some of the victims of the Sept 11th attacks, alleging that the Saudi Royal Family has directly financed terrorism by paying huge amounts of 'hush money' to Osama and his "folks". Does this not implicate Prince Bandar as a co-conspirator and consequently does this not also implicate our goverment as accessories to the biggest terrorist event of our generation.
Are we not, therefore, guilty of being part of Bushs' axis of evil.
Yaaaaaaaaaaaaawn. These sorts of payments/bribes are utterly normal and expected in that part of the world and elsewhere. And that puts companies and governments in difficult positions. If they take the high road, safe to assume jobs are going to be lost.
If you allude that this is proper money then please can you tell us what is not proper money?
On the one hand our government wants to promote freedom and democracy and with the other hand we do deals with countries like Saudi with awful human rights records.
So is proper money the one which carries the queens head, where it comes from is of no concern?
Having spent over two decades in the Kingdom of Saudi Arabia from the early 80's onwards and well acquainted with Al-Yamamah project since inception, it was in fact generally well known that British Government had 'bribed' Saudi officialdom - an unofficial figure of 5 billion sterling bandied about at the time. The book 'In the Public Interest' explains the entire episode in detail including Margaret Thatcher's involvement!
The consequences could well include BAe doing what they've been considering doing for a long time and that is upping sticks and moving to the USA.
What this really amounts to is a way of hiding the theft of hundreds of millions of pounds from the Saudi people. The extra cost of bribing officials will be factored into the overall contract, which is ultimately paid for by the Saudi public.
It's no different to any other dictatorship stealing from it's people, except it seems that this time the British government has approved it. If we let this go, how can we possibly condemn other dictators for stealing from their people?
I work on the al-yamamah contract. What we in the west call corruption, is called normal practice here in saudi.
There is no doubt in my mind that that the extra payments happened. Its up to the (UK) government to smooth things over now, and I expect that to happen.
This shows the sad filthy double standards the powerful Western countries hold on the rest of the world. And this Yamama deal vis-a-vis British corrpution is just the tip of the historical ice berg of ethical and moral wrongs committed by the West. We need to learn to clean up our own house before preaching to others, often by economic or military force, to act ethically.
All confidentiality agreements are not in line with good governance.
How can we expect African leaders to respect honesty and anti-corruption practices when Britain acts dishonestly?
Saudi wants weapons.
Let them buy it openly and honestly.
British defence systems, etc and the Saudis' own safety will not be compromised. This excuse is simply a smokescreen.
I find it sad that a British investigation wants to carry on regardless of the jobs, businesses and peoples lives it will destroy should it ultimatley lead to a canceled deal with the Saudis.
Whilst I understand the moral and ethical practises required today to make a stand against other regimes in world, this happened in the 80s/90's and therefore before the agreement of 2001, so what is the benefit of dragging this up now? That was how business was done in the defence arena around the world and still goes on today by those attending the G8. So stop whinning about what has happened yesterday and concentrate on ensuring it's done correctly today.
I supposes this is another 'In the public interest' story??
What makes Panorama think they have got the truth!
Because they've spoken to some people 'in the know'.
It is easy to say what they want to hear, and be 'economical' with the truth, without actually saying anything, politicians do it all the time.
Athe the end of the day Panorama will make the words fit what they require, or not use 'that bit'!
Surely that's what 'editing is all about!
Wait a sec. To all those saying it is ok for such bribes to take place. So if I bribe a police official not to issue a speeding fine because i was stopped speeding, is that ok ? This is not about money or jobs etc... its about principle and ethics. If its ok for 'kingdoms' to do it, then why isnt ok for the small man to do it ? Its the principle at heart here.. in a democratic society bribes, corruption and like, especially those that are endorsed by government, is wrong, period.
What I'd really like to know is why the SFO investigation was stopped. Lord Goldsmith says it was because of national security concerns, Tony Blair says it was to protect British jobs.
And anyway, is it OK to break the law just because it saves some jobs?
So these payments are perfectly justified because "they are a normal part of doing business in that part of the world"? Bribery is wrong from an ethical point of view and from an economic point of view. It is wrong economically because it is unfair competition - an allocation of contracts not on the basis of how good the contract is for the contractee (as a company or government) but on the basis of how much the individual themselves is enriched. This can lead to contracts that are simply poor value - or projects that are entirely unnecessary.
It is unethical because it seeks to override the rule of law - allowing breaches of safety regulations or environmental laws. Only when the building collapses or the factory burns down does the truth come out.
As Transparency International puts it, "[Bribery] is often responsible for the funnelling of scarce public resources to uneconomic high-profile projects, such as dams, power plants, pipelines and refineries, at the expense of less spectacular but more necessary infrastructure projects such as schools, hospitals and roads, or the supply of power and water to rural areas...Environmentally devastating projects are given preference in funding, because they are easy targets for siphoning off public money into private pockets."
Finally, what actually does Saudia Arabia need with all these arms? Have any of the weapons involved been used against the Saudi populace? (Amnesty claim that part of the deal involved electro-shock batons that were used in torture).
There are some realists commenting, and some pie-in-the-sky idealists.
It's done now. Get on with life.
£20bn IS proper money and it's not JUST the unemployed-to-be BAe workers and their families who will suffer if the idealists are hell bent on dragging this up. £20bn goes a long way and will affect the country as a whole, almost certainly affecting the idealists themselves on some level.
The Saudis are going to get their new aircraft either way - right now we have the choice of selling them ours, or we can mess it up by taking the moral high ground, creating lots of unemployment in the UK and letting the French or Americans sell them their aircraft instead.
Some people just fail to see the big picture...
JOBS IS WHAT UK PLC NEEDS. THIS IS CEARLY NOT OF ANY INTEREST TO THE ³ÉÈËÂÛ̳. ³ÉÈËÂÛ̳ ARE NOT DOING ANY OF US FAVOURS. THIS IS THE REAL WORLD AND HAPPENS DAILY WETHER SEEN OR UNSEEN
There is public interest in this story but it is in safeguarding jobs not looking at what happened 20 years ago. Chance of prosecutions in the UK or Saudi ? Nil. Chances of putting another nail in UK plc's coffin ? Immense.
The Germans have their own bribery scandal in the form of Siemens Senior Execs but you can be sure that it won't threaten jobs or exports.
In 20 years time Panorama can show another documentary with an out of touch journalist wandering round the remains of Filton or some other BAe plant. 'Twenty years ago Britain had a strong defence industry. Tonight we will be looking at excuses as to why it disappeared as an infill before some lousy reality makeover programme.'
What's the problem ? The saudi's want commissions so BAE added the commission amounts to the price of the planes and the Govt of Saudi Arabia paid the bill from their treasury bloated with petrodollars from oil revenues.
seems to me the saudi population are the ones getting screwed.
Yes this is the way deals are done, not just in Saudi but in most countries. The morality issue is somewhat confused by using the emotive word "bribe". In fact where the customer state is effectively family owned there is no bribe but a facilitating fee which has to be part of the contract so that both parties are confirming the acceptance of this requirement. It is not illegal because it is not a secret benefit for an agent or other undisclosed third party.
You need to recognise the sensitivities of other countries' governments and populations. Another example is the unacceptability of interest charging as a concept in Islam. Islamic banking charges no interest but the lender obtains a right to a share of future asset value or profit which curiously equates to the local nonexistent interest rate accrued over the loan period.
We should not allow politicians or journalists with limited awareness of foreign transactions to misinterpret contract terms through UK tinted lenses. This leads to less understanding and more suspicion of international trade on both sides.
As a man in the street these allegations of payments to individuals in Saudi Arabia has zero impact upon me, may I be so bold to say so what? What did the journalists hope to achieve by spilling the beans, the only people who are really interest is the Government, but they would have already been aware of the situation. Well done journalists, you may have ruined a significant £20 billion order from Saudi Arabia which would have made many new jobs.
Look, the point isn't that a bribe was paid but to what type of person it was paid and how the money is spent. The devil continues to be in the details, that's why it is important that journalists not be censored even if that could have an effect on exports. Perhaps it should be pointed out that a war is now fought in Iraq over what was originally described as a threat from weapons of mass destruction, weapons which were sold by Britain and the US.
So while reporting on a subject as controversial as bribes being paid to Saudi royals potentially could cost you a 20bn arms deal, not reporting on the story could cost lives in future wars or terror attacks. But this is just speculation, which is all we got unless there are journalists out there doing their job. Besides if the payments were in fact legal and it is common knowledge that these kinds of deals take place then no harm is done by talking about it.