WikiLeaks Reveals How the British Lied to OECD about BAE Bribery

A WikiLeaks cable dated March 5, 2007 has raised new interest in the BAE bribery scandal (AP, WSJ, Telegraph). While no one seems to have noted this, the cable shows that the British lied to their counterparts at the OECD about details of the bribery investigation into BAE.

As the Guardian (which led the reporting on this story) reported three years ago, the UK’s Serious Fraud Office started investigating evidence of an elaborate kickback system by which the Brits would give money to the Saudis for BAE contracts in 2004 (it turns out those kickbacks were allegedly used to fund covert operations). In 2006, Prince Bandar bin Sultan flew to London and threatened Tony Blair the Saudis would stop sharing information on terrorists if the SFO continued its investigation. As a result, in early 2007, the SFO stopped its investigation, citing public interest. The US settled its investigation of the same bribery scheme for $400 million last year.

The cable appears to be preparation for the March 2007 OECD meeting of the Working Group on Bribery; it serves as a review of what had happened in the previous, January 2007, meeting regarding the British decision to stop its investigation of the BAE bribery scheme. Much of the cable reviews the stance of each country regarding the UK decision, with France vocally complaining that the British decision violated the Convention on bribery’s prohibition on invoking relations with foreign countries as reason to spike a bribery investigation, and Australia fully supporting the UK decision. According to the cable, the American delegation was in between those two positions (they were basically arguing for putting off a conclusion about the appropriateness of the decision until the March meeting for which this cable served as preparation):

The U.S. delegation took note of the experience and professionalism of U.K. delegation members. The US del inquired into what appeared to be inconsistent accounts relating to differences in views of the SFO Director and Attorney General regarding the merits of the case, reports alleging British intelligence agencies had not joined the government’s assessment that the case raised national and international security interests, and whether the SFO could provide WGB members with assurances that BAE would not continue to make corrupt payments to senior Saudi officials.


The U.S. delegation commented that it was not appropriate at this juncture to conclude that Article 5 does not contemplate the proper invocation of national security interests.

Ultimately, the cable reveals, the group developed a consensus to revisit the issue in the March meeting after further review of the British investigation.

The cable is perhaps most interesting because it gives us a glimpse of what the British publicly told the international community about its investigation, the targets, and the reasons for dropping the investigation.

The SFO Deputy Director falsely portrayed the decision to end the investigation as voluntary

Most interestingly, the cable shows that SFO Deputy Director Helen Garlick portrayed SFO Director Robert Wardle’s decision to terminate the investigate as entirely voluntary.

Garlick started by underscoring the U.K. delegation’s willingness to answer as much as possible the questions of the WGB, bearing in mind pending litigation in the U.K. Garlick reported that SFO and MOD Police investigators had expended more than 2 million pounds sterling on the BAE investigations. She said on December 14, SFO Director Robert Wardle had decided to discontinue the joint SFO/MOD Police investigation based on his personal, independent judgment.

The French doubted this (I’m guessing they were suspicious partly because Wardle did not brief the group himself). Shortly after the January meeting, the Guardian reported that Wardle disagreed with Lord Goldsmith’s ultimate decision to spike the investigation and in 2008 Wardle testified that he strongly disagreed with the decision.

Wardle told the court in a witness statement: “The idea of discontinuing the investigation went against my every instinct as a prosecutor. I wanted to see where the evidence led.”

All of which suggests the French were right to doubt that Wardle made this decision himself.

The Brits may have kept Bandar bin Sultan’s role in the bribery scheme secret

In addition, tt appears that the Brits may have kept Bandar bin Sultan’s rule in the bribery scheme secret–though it may be, instead, that the cable didn’t record the details of the briefing pertaining to Bandar. The cable describes the Brits exhorting their partners to keep the contents of the briefing on the investigation classified.

U.K. delegation head Jo Kuenssberg said the U.K. recognized the level of interest of WGB members in the case and stressed the need to respect the confidentiality of the information contained in the U.K.’s briefing,

And then, among the details revealed in the investigation, the Brits described an “unnamed senior Saudi official” and “another very senior Saudi official” as recipients of some of the bribes in the scheme.

Third, payments made under the al-Yamamah contract to an unnamed senior Saudi official: Garlick advised that in October 2005, the SFO had demanded BAE produce documents including payments related to the al-Yamamah contract. The company made representations to the AG on public interest grounds (political and economic considerations) as to why the investigation should be halted. The AG undertook a Shawcross Exercise and sought representations from various British officials regarding the case. The SFO Director wanted to continue the investigation. On January 25, 2006, the AG agreed that there was no impediment to continuing the investigation. The SFO sought Swiss banking records regarding agents of BAE. The SFO found reasonable grounds that another very senior Saudi official was the recipient of BAE payments. The SFO was poised to travel to Switzerland in connection with its Mutual Legal Assistance (MLA) request when the decision to discontinue the investigation was made;

The cable explicitly named Turki Bin Nasir, then the head of Saudi Arabia’s Air Force and already by that point publicly tied to the bribery scheme. So these two must be others. I’m guessing that Bandar–whose receipt of $1 billion via the scheme would be broken by the Guardian in June 2007–is the “very senior Saudi official” mentioned, not least because his involvement seems to have been exposed at the Swiss bank account stage of the investigation. So the only question, then, is whether the Brits kept his name–as they did the “unnamed senior Saudi official”–secret from their counterparts at the OECD. It appears, however, they did.

In addition, the British review of the investigation far underplayed the amount involved here.

  1. emptywheel says:

    FWIW, one thing the Brits didn’t breathe a word about in this briefing, it seems, is British complicity in the bribes.

    In other words, in addition to protecting Bandar, they were also protecting Maggie Thatcher.

    • earlofhuntingdon says:

      It’s hard to imagine Bandy Bush not raising the issue with Shrub over a non-alcoholic beer.

  2. scribe says:

    No wonder (a) the Brits are closing the Serious Fraud Office and (b) Cheney just had a planeload of fresh, crisp hundreds ($9B worth) delivered to some guy named Ali in the middle of the desert at night in a sandstorm, and without a hand receipt. At least he was smart enough to know that cash is a hell of a lot harder to trace than bank deposits, even in Swiss banks.

    • earlofhuntingdon says:

      The avenue for the SFO’s closure is its merger into a parent organization; I suspect that’s as credible as the notion that Daimler-Chrysler was a merger of “equals”, not the outright acquisition observers knew it would be.

      Technically, the SFO is not a police organization, though its staff includes officers seconded from the Met and other forces. It reports to the Attorney General, which means the Cabinet, which means the PM.

      Curiously, given our earlier discussions about invidious Albion’s tax havens, its remit excludes the Channel Islands and the Isle of Man, two of the busiest. (Formally, those are “dependencies of the crown”, not independent territories or constituent parts of the UK. It’s an historical curiosity, convenient for royal and private millionaires alike.)

      The proposal, still in flux, is to merge it into a new National Crime Agency. Debate continues about whether it would have investigatory and prosecutorial powers. The wider goal has been to merge economic crime investigatory units into a single Economic Crime Unit. The FSA, which investigates the City, for example, succeeded in opting out. Bully for them.

      Given Cameron’s penchant for breaking all the eggs in the basket at one time – for draconian budget cuts (which target Labor more than Tory districts) and for wholesale privatization and non- or self-regulation – consolidating these financial crime agencies has less to do with cost and focus, than with keeping political tabs on which powerful entities are investigated and to what ends. Which is why it’s relevant here. Political control over investigating financial crimes (meaning their non-investigation) is not just the wet dream of Blair, Bush or Obama.

      • chetnolian says:

        Three points.

        The FSA hasn’t gone yet and is currently making biggish waves over its investigation of the Icelandic problems.

        Despite how odd it might seem to you, the position of the Channel Islands and the Isle of Man is that they are not legally parts of the United Kingdom nor ever have been. Don’t judge everything by a nice tidy US model (yes I do know what I’m saying). By the way that doesn’t mean I approve of their business or banking practices.

        Lastly and most to the point, what most people seem to ignore in the Saudi situation is that Al Yamamah is a British Government contract with BAE Systems as a subcontractor. Think FMS. So the investigation was going to net a whole bunch of people, not just Maggie, outside BAE who must have known what was happening. It was just like, oh let’s say following through properly on illegal surveillance of the populace. You wouldn’t give up on that just because politicians and public servants might be affected would you? And by the way hearing that the French were complaining does really make me laugh. Ask about the Saudi frigates.

  3. BoxTurtle says:

    We always knew that stuff like this went on all the time. So why do I feel so dirty after actually reading it in black and white?

    Boxturtle (*mutter*…torches…*mutter*…pitchforks…*mutter*)

  4. Gitcheegumee says:

    The BAE AL Yamamah issue has been of particular interest to me for a long while now…not so much for others,however.I have commented on this on numerous occasions,here.

    IIRC,and I don’t have any time for posting now, Barclay’s was the bank that figured most prominently in this.( Please correct me if I am in error.)Did Barclay’s receive any bailout money?)

    Yesterday, I posted an excerpt from Empire Burlesque that delineates the arms deals that are in the pipeline,especially the Saudi arms deal-with our Prez cheerleading the massive sale of weapons to the Saudis-including other ignoble regimes.

    Maybe I’ll post more later.

    Of Arms and the Man: War-Profiteers and Progressives Make Common …
    1 day ago

    With both progressives and war-profiteering plutocrats making common cause on his behalf, the re-election of Barack Obama looks more certain all the time.Empire Burlesque – 3 related articles

    Mar 12, 2011 … Of Arms and the Man: War-Profiteers and Progressives Make Common Cause … And the bulk of the Obama arms bazaar is going to one of the most ……/2101-arms-and-the-man-war-profiteering-bolsters- obamas-re-election.html – Cached

    • emptywheel says:

      ‘Tis indeed.

      In fact every time I write about him, I have to remind myself that Bandar Bush is not his legal name. Usually mess it up once or twice.

        • earlofhuntingdon says:

          In a lot of hot climate countries, truth is no defense to defamation. As Agatha Christie observed in One, Two Buckle My Shoe, the truth is often wicked.

        • fatster says:

          O/T and FYI.

          Senior judges keep 9th Circuit courthouses open
          As federal caseloads soar and judgeships go unfilled because of a recalcitrant Congress, some retired judges continue to handle cases. Many are in their 80s.


        • earlofhuntingdon says:

          An intentionally slow Barack Obama, too. He’s nominated far fewer judges than his predecessors at every point in his administration. He’s also refusing to nominate candidates for other Senate-approved positions. He must be afraid his sworn enemies in the GOP will think him rude for fulfilling his executive responsibilities.

  5. earlofhuntingdon says:

    Bmaz may have more. Given the judge’s earlier writings, I would say no. But that leaves one, possibly two, appeals.

    The trick will be whether, as Libby was facing, he has to go to jail pending the appeal. Given the likely short sentence 1-12 months, that would make any appeal moot unless it was handled on an expedited basis. The trick after that will be what position the DoJ takes regarding any appeal.

  6. Gitcheegumee says:

    BP boss set for top BAE job –

    BAE Systems has turned to oil giant BP to fill one of the most important jobs in the defence industry, it was reported.
    Dick Olver, who is deputy chief executive of BP, has been identified by BAE as its new chairman in succession to Sir Richard Evans, the Sunday Telegraph said.
    The appointment of a new chairman is expected by the company’s annual general meeting in May and would end a long-running and high profile search. BAE Systems declined to comment on the report.
    (Sir Richard has been a leading figure in the UK defence industry for more than a decade – serving as chief executive of British Aerospace from 1990 and as its chairman since May 1998.)

    Mr Olver joined BP in 1973, rising up the ranks to become chief executive of exploration and production in 1998. It is thought that the chartered engineer’s background in oil exploration fits in with BAE’s requirement for someone with an understanding of complex project management.The position is a significant one as BAE employs 90,000 people, holds orders worth £46 billion and plays a leading role in the defence of the UK

    Read more:–report.html#ixzz1GgI0Qp00

    BP-boss-set-BAE-job–report.htmlBP boss set for top BAE job – report | Mail 8, 2011 … BAE Systems has turned to oil giant BP to fill one of the most important jobs in the defence industry, it was reported.…/BP-boss-set-BAE-job–report.html

  7. Gitcheegumee says:

    From bnet,excerpt:

    And it recalls the lingering stench of very similar abuse fired at BAe from the wings of Congress several years ago over their ability to secure a lucrative contract with the Saudis to the deficit of the U.S.? Boeing and Lockheed. Blair and BAe were sharp enough then to put a positive spin to play down the media and painstakingly shut-down any suggestion of an investigation by the Serious Fraud Office.

    But the parallels between BAe and BP are noticeably close. Both are of significant strategic interest to the UK. Both are involved in inherently risky business. And both faced crises that were politically and economically sensitive. In fact, given that laissez-faire attitude of the US towards enviromentalism at large and the US dependence on arms sales (comprising nearly 40% of global arms sales) the stakes politically and economically may well have been larger in the BAe crisis. And since the 2006 scandal around BAe emerged, the operation has both pleaded guilty to counts of misconduct in the US and the UK, and agreed to compensation arrangements. Both without much of the publicity, public outrage and media frenzy fireballing around BP.

    Did BP CEO Spend Too Long Talking to Rocks? | BNETJun 21, 2010 … But the parallels between BAe and BP are noticeably close. Both are of significant strategic interest to the UK. ……/6936 – Cached

  8. Gitcheegumee says:

    Here is BAE’s statement,according to an article dated today:

    n a statement given to Corporate Counsel this morning, BAE said, “The terms of the global settlement reached a year ago between the company, the SFO and the DOJ and approved by the courts are an accurate record of the findings reached upon the conclusion of the investigations. No charges of bribery or corruption were made against the company. As regulators themselves have recognized, BAE Systems has in recent years systematically enhanced its compliance policies and processes.”

    After the SFO dropped its probe in 2006, the U.S. Department of Justice went forward with its own investigation under the Foreign Corrupt Practices Act. BAE has a U.S. subsidiary and part of the alleged bribe money was suspected of passing through a U.S. bank.

    But DOJ never charged BAE with bribery under the act. Instead it filed minor charges based on its failing to disclose information to the U.S. authorities, and failure to keep proper accounting records about payments it made to a former marketing adviser in Tanzania.

    The company pleaded guilty a year ago this month to “conspiring to commit offenses against the United States.” It agreed to pay fines totaling some $400 million in the U.S. and $50 million in Britain to settle the lingering allegations.

    Until now, other details of the allegations have been kept secret.

    Cable Leaked by WikiLeaks Shows Details of BAE Saudi Arms Deal
    23 hours ago

    And now a senior member of Parliament is demanding a new government inquiry into BAE’s $85 billion arms deal with Saudi Arabia several decades ago. …Corporate Counsel – 12 related articles