Calls to reopen Saudi arms probe

The Serious Fraud Office (SFO) has been urged to reopen its inquiry into a £43bn BAE arms deal with Saudi Arabia.

Liberal Democrat leader Nick Clegg said the investigation, which was suspended in 2006, must be allowed to continue.

The High Court ruled that the SFO acted unlawfully by dropping the corruption inquiry into the al-Yamamah deal. BAE maintains it acted lawfully.

In a statement the SFO said it was "carefully considering the implications of the judgement and the way forward".

BBC News political correspondent James Hardy said it remained possible that the High Court would tell the SFO to reactivate the inquiry.

'Blatant threats'

On Thursday judges said the decision to halt the inquiry represented an "abject surrender" to pressure from a foreign government.

Lord Justice Moses said that the SFO and the government had given into "blatant threats" that Saudi co-operation in the fight against terror would end unless the probe into corruption was halted.

AL-YAMAMAH TIMELINE

• 1985: Britain signs deal to sell 72 Tornados and Hawk jets to Saudis
• May 2004: Guardian reports MOD police are investigating £60m payments made during deal
• Nov 2004: BAE confirms it is being investigated by SFO, but denies wrongdoing
• 1 Dec 2006: French firm Dassault in talks to sell the Rafale, a rival to Eurofighter, to Saudi Arabia.
• 14 Dec 2006: MPs told SFO probe has been stopped
• 17 Jan 2007: OECD anti-bribery group has "serious concerns" about the decision
• June 2007: BAE says it is being investigated by US justice department
• April 2008: High Court rules the SFO acted unlawfully

Q&A: The al-Yamamah deal row

Analysis: Brown's arms probe dilemma

Mr Clegg has written to the prime minister, saying the inquiry should be re-opened and a "full inquiry" be carried out into how it came to be dropped in the first place.

He also says Gordon Brown has backtracked on plans to reform the role of the attorney general in the draft Constitutional Renewal Bill and urges a rethink.

And he asks the prime minister to update Parliament on the progress of other anti-corruption investigations involving Britain - including a separate US probe into BAE.

"How can Britain stand up to corruption and bribery abroad if we are not spotless at home?," he said.

The SFO said national security would have been undermined by the inquiry and SFO director Robert Wardle has said he took the decision to drop it independently and did not coming under any political pressure.

Former Foreign Office minister Dennis MacShane told BBC Radio 4's Today programme the ruling appeared to undermine Parliament.

He called for a debate on "whether the government of the day can take decisions in what it perceives to be the national interest".

The High Court case was brought by Corner House and the Campaign Against Arms Trade, who said the SFO decision was influenced by government concerns about trade and diplomatic ties with Saudi Arabia.

'Serious damage'

Susan Hawley, from The Corner House, said: "The government needs to back off and it would be a scandal if they try to intervene again and get this stopped on national security grounds."

The al-Yamamah deal with Saudi Arabia was first signed in 1985 but ran into the 1990s and involved BAE selling Tornado and Hawk jets, other weapons and long-running maintenance and training contracts.

BAE was accused of illegal payments to Saudi officials, but the defence company maintains it acted lawfully.

In December 2006, the then-Attorney General, Lord Goldsmith, announced that the SFO was suspending its inquiry into the deal, saying it would have caused "serious damage" to UK-Saudi relations and, in turn, threatened national security.

Saudi Arabia is also reported to have threatened to cancel last year's £20bn deal to buy 72 Eurofighter Typhoon jets from BAE Systems.

RELATED INTERNET LINKS
BAE Systems
Serious Fraud Office
Corner House
Campaign Against Arms Trade
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