Ten years after the allegations were first aired, Steve Shaw reports on corruption charges alleging misconduct in an arms deal between the UK and Saudi Arabia
The Background: the al-Yamamah Deal
After months of negotiations in the 1980s, which included the Saudis being personally lobbied by then-prime minister Margaret Thatcher, the UK secured the biggest arms deal in the country’s history.
Known as the al-Yamamah deal, the Saudis agreed to a multi-billion-pound order of Tornado and Hawk jets earning British defence giant BAE Systems at least £43 billion in revenue between 1985 and 2007.
It was a big success for the politicians and BAE but it was also, according to anti-arms trade campaigner Andrew Feinstein, “the most corrupt commercial transaction in commercial history”. Allegations of corruption spilled out soon after the deal was struck but it was a cache of documents leaked in the early 2000s that gave enough proof for Serious Fraud Office (SFO) to launch a major investigation.
The UK Government claims to have some of the most robust arms export controls in the world yet its arms sales to repressive regimes increased by £1 billion last year compared with 2018 – the equivalent of a 300% increase
The SFO soon uncovered details of how BAE used shell companies to bribe members of the Saudi royal family and others to the tune of £6 billion in order to secure the deal. It was alleged that even the prime minister’s son Mark Thatcher was paid £12 million as a bribe, along with Prince Bandar bin Sultan, son of the Saudi Crown Prince, who received more than £1 billion.
But in a startling act of state intervention, the SFO’s investigation was halted in its tracks in 2006 by Tony Blair’s Government over “national security” concerns. It was a move the High Court ruled as unlawful and Nick Clegg, former Liberal Democrat leader, said appeared “like it was done to protect BAE sales by appeasing the Saudi government”.
The Airbus Story
In the years since, the shadow of that investigation and the Government’s remarkable intervention has loomed over another investigation into a UK arms deal with Saudi Arabia, only this time it involved a subsidiary of Airbus.
Allegations began to unfold at the end of 2010 when whistle-blower Ian Foxley – a programme director for Airbus subsidiary GPT Special Project Management in Saudi Arabia – claimed to have uncovered unexplained payments to the Cayman Island bank accounts of Simec International and Duranton International.
The payments were processed by the UK’s Ministry of Defence (MOD) as GPT was working as the prime contractor for the UK Government to supply telecoms and electronic warfare equipment to the Saudi Arabian National Guard. Foxley believed they could be linked to bribes and fled Saudi Arabia to take his findings to senior compliance staff at Airbus and then to the MOD in January 2011.
As with the al-Yamamah deal, the case eventually landed on the desk of the Serious Fraud Office (SFO) resulting in a six years’ investigation into corruption that concluded in March 2018 when the SFO requested permission to prosecute. But then nothing.
The request sat with the UK’s Attorney General Geoffrey Cox for two years with little explanation, raising fears that history would repeat itself. In October last year, rights group Transparency International wrote to Cox urging him to act. The group warned that “any potential interference on national security grounds” would “irreparably damage not just the UK’s international reputation but also the global fight against corruption”.
Cox was eventually replaced in February by Suella Braverman and following further pressure from campaigners, Braverman gave the SFO the greenlight to move forward. On 30 July the charges were announced. They include the charge of corruption between January 2007 and December 2012 in relation to contracts for Saudi Arabia’s national guard against former GPT managing director, Jeffrey Cook, and John Mason, partial owner of two GPT subcontractors registered in the Cayman Islands.
Cook has also been charged with misconduct in public office between September 2004 and November 2008 when he was employed by the Ministry of Defence. Another man involved was Terence Dorothy, who has been charged with aiding and abetting that offence. GPT and the three men are due to appear at Westminster magistrates’ court in London on 14 September.
Corruption ‘Endemic’ in the Arms Trade
Duncan Hames, director of policy at Transparency International UK, said: “After more than two years of unexplained delays, it is most encouraging to see the Attorney General finally permit the Serious Fraud Office to pursue this case. These are serious allegations which involve corruption relating to a large defence contract. Failing to proceed with this would have given the impression that the UK Government condones this sort of practice.”
Andrew Smith of Campaign Against the Arms Trade also welcomed news of the prosecutions. He told Byline Times it is crucial “all allegations are full investigated and the people and companies are held accountable”.