High court to review halted BAE-Saudi investigation

Published in GuardianUnlimited on 9/11/07
http://www.guardian.co.uk/baefiles/story/0,,2208451,00.html?gusrc=rss&feed=11

Anti-corruption campaigners today won permission to bring a high court challenge over the decision to end investigations into alleged corruption by BAE Systems in arms deals with Saudi Arabia.

Lawyers for the Campaign Against Arms Trade (CAAT) and the Corner House argued that the UK government's decision to cut short an investigation by the Serious Fraud Office (SFO) was unlawful under the OECD's anti-bribery convention, which the UK signed in 1997.

Lord Justice Moses, sitting with Mr Justice Irwin, said "matters of concern and public importance" had been raised and the challenge "cries out for a hearing".

The £20bn-plus al-Yamamah contract with Saudi Arabia, which formed the focus of the legal challenge, was negotiated by the Thatcher government and involved the sale of Tornado jets made by BAE. Prince Bandar bin Sultan of Saudi Arabia allegedly received a secret £1bn payment to facilitate the 1985 contract.

The government has denied any breach of the convention and declared that it took the decision to terminate the investigation on the grounds of "national security".

Tony Blair, the prime minister at the time the inquiry was halted, said that continuing the investigation would have jeopardised Saudi cooperation on counter-terrorism.

The campaigners' lawyers argued that the SFO decision failed to take into account the national security implications of not proceeding with the investigation.

They said that the government's willingness to turn a blind eye to corruption within Saudi Arabia had the potential to encourage more international resentment towards the UK.

Notwithstanding those arguments, the campaigners contend that Article 5 of the OECD's anti-bribery convention precludes the UK from taking into account the potential effect of an investigation or prosecution on another state - even where there was concern over its impact on national security.

The CAAT spokesman Symon Hill told Guardian Unlimited today's decision was brilliant "for everyone who cares about justice in Britain".

"It's great news for everyone thinking that BAE and the government should not be above the law that the rest of us have to follow," he said.

In September, the two countries announced a £4.4bn deal for the sale of 72 Eurofighter Typhoon aircraft, also made by BAE, to the desert kingdom.

The same month, the UK government was accused of obstructing an American criminal investigation into the al-Yamamah contract by the US inquiry team.