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Blair fends off row 'to press for Saudi deal'

London Telegraph | June 9, 2007
George Jones

Tony Blair wants to sign a new £20 billion arms deal with Saudi Arabia before he leaves office later this month despite the mounting row over allegations of secret payments to a Saudi prince, Government sources indicated yesterday.

Saudi Arabia had been on the brink of concluding the deal to supply Eurofighter Typhoon jets to Riyadh when fresh allegations emerged that BAE Systems had paid £1 billion in backhanders to Prince Bandar bin Sultan, former Saudi ambassador to the US.

The Prime Minister still hopes to clinch the deal before he leaves No 10 on June 27 - six months after the Serious Fraud Office was told to drop an investigation into the bribery allegations.

The deal had been in jeopardy because of Saudi anger at the probe - but was said to be back on track after the SFO inquiry was halted by the Government last December.

The imminence of a new deal is understood to have been behind Mr Blair's point-blank refusal to order a fresh inquiry. He claimed on Thursday that if the inquiry into BAE had not been dropped, it would have led to "the complete wreckage of a vital strategic relationship and the loss of thousands of British jobs".

The head of the SFO yesterday backed angry denials by Lord Goldsmith, the Attorney General, that he had ordered British investigators to conceal from an international watchdog the existence of the secret payments.

The Guardian claimed that when the Organisation for Economic Co-operation and Development tried to look into the deal earlier this year, the details were not disclosed by British officials.

Lord Goldsmith strongly denied that he had been responsible for ordering the information to be withheld.

"It is absolutely untrue that I ordered investigators to conceal payments from the OECD. This is what The Guardian alleged. It is categorically denied,'' he told the Today programme on BBC Radio 4. The SFO director, Robert Wardle, confirmed that Lord Goldsmith did not order information about the payments to be withheld from the OECD.

The SFO said: "The decision as to what information should be given to the OECD about the investigation was made by the SFO. The information provided by the SFO was as full as possible, having regard to the need to protect national security."

Mr Wardle insisted he had stopped the inquiry for national security reasons and was not pressed to do so by Lord Goldsmith - who refused to discuss the allegations, saying: "As the Ministry of Defence has made clear, and they are the responsible department, they regard the UK as bound by confidentiality provisions." It is unclear whether the alleged payments to the prince would have been illegal.

The BBC's Panorama programme, in a show to be broadcast on Monday, says BAE, the British arms manufacturer, paid hundreds of millions of pounds to the prince over a decade. It found that up to £120m a year was sent to two Saudi embassy accounts in Washington, which it claims to have established were a conduit to Prince Bandar.

The prince, who is head of the Saudi national security council, issued a statement denying that he had received any "kickbacks" or improper payments. He said that the payments had been properly made to the Saudi ministry of defence and aviation under the terms of the deal.

 

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