[blackmailing is terror too; dm+] http://www.ft.com/cms/s/85eeec12-b167-11db-b901-0000779e2340,_i_rssPage=34c8a8a6-2f7b-11da-8b51-00000e2511c8.html
Saudi threat to scrap security ties shook No.10 By Christopher Adams, Michael Peel and Jimmy Burns Published: January 31 2007 22:34 | Last updated: January 31 2007 22:34 It must have been an eye-popping telegram. When Sir Sherard Cowper-Coles, the unflappable ambassador to Saudi Arabia, told his bosses in London that Riyadh was threatening to scrap all security ties, including intelligence-sharing on al-Qaeda, it appears he sent Downing Street into a tailspin. For much of the autumn, the Saudis and BAE Systems had been putting pressure on the government to stop a long-running Serious Fraud Office investigation into the al-Yamamah arms deal, Britain’s biggest export agreement, negotiated by Margaret Thatcher in the 1980s. The SFO had been looking into allegations that BAE ran a “slush fund” to bribe Saudi officials. It was about to gain access to secret Swiss bank accounts linked, it is believed, to members of the Saudi royal family. The Saudis have a record of diplomatic brinkmanship. But if Mr Blair were looking for an excuse to act and prevent the loss of a multibillion pound jet contract, the successor to al-Yamamah, to France, this was it. While anti-bribery rules meant the UK could not intervene for diplomatic or economic reasons, it could, Lord Goldsmith, the attorney-general believed, cite national security. If in doing so, however, the government thought it could restrict the scope for challenging its decision, the public fall-out has proved it wrong. Since the inquiry was dropped in December, Britain has been attacked on the international stage. Anti-bribery campaigners are launching a judicial review. The attorney-general has found himself at the centre of a political storm. Exasperated by his critics, Lord Goldsmith defended his intervention and denied pressuring the SFO. Nobody, he said, had disagreed that the Saudi threats were real. While there remain doubts that MI6, the Secret Intelligence Service, believed the Saudis were bound to carry out their threat, Lord Goldsmith said Sir John Scarlett, the head of MI6, shared Mr Blair’s concern over the “possible consequences” of the inquiry continuing and the risk to security. “It’s a bit uncomfortable to be in that position. But you have to deal with the reality of the situation,” he said of the decision. The attorney-general disclosed that Robert Wardle, SFO director, met Sir Sherard three times before deciding to drop the investigation because of national security and said the SFO came to its own judgment. He shed more light on a disagreement with Mr Wardle over his own view that a successful prosecution was unlikely. The main legal obstacle, he believed, was the difficulty of proving corruption. Prosecutors have to show a person receiving bribes – the “agent” – was acting without the approval of their boss – the “principal”. “How were the SFO going to deal with that in this case? Were they going to call someone from Saudi to say this wasn’t authorised? That’s an insuperable problem.” He said of the investigation: “The evidence being obtained was not answering the question. It was doing the opposite.” His critics question whether this would necessarily have fatally undermined the case. They ask why he has chosen to speak out now about a potential problem that had been lurking since the investigation started in 2004. Taken at face value, his comments hardly amount to an exoneration of the allegations against BAE, which has denied bribery. Lord Goldsmith admitted to concerns that any trial might collapse should there be disclosures of government complicity, such as those in the Matrix Churchill case. His explanation is unlikely to satisfy anti-corruption campaigners, who believe Britain has flouted anti-bribery commitments and is trying to justify a commercially and politically expedient decision. One thing looks certain: it was the imminent examination of Saudi financial dealings – scrutiny of the secretive network of companies, bank accounts and middlemen thought to be used by the royals – that had troubled Riyadh so much. It is just possible that, this time, the Saudis may have meant what they said. Additional reporting by Jimmy Burns Copyright The Financial Times Limited 2007 +++ -------------------------- Want to discuss this topic? Head on over to our discussion list, [EMAIL PROTECTED] -------------------------- Brooks Isoldi, editor [EMAIL PROTECTED] http://www.intellnet.org Post message: [email protected] Subscribe: [EMAIL PROTECTED] Unsubscribe: [EMAIL PROTECTED] *** FAIR USE NOTICE. 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