Minister unable to say if Britain will hand BAE evidence to US

Minister unable to say if Britain will hand BAE evidence to US


David Leigh
Tuesday July 17, 2007
The Guardian

Ministers admitted yesterday that the US department of justice has served a request on them to hand over evidence about BAE's alleged secret arms deal payments to Saudi officials.

But the government has refused to say whether it will cooperate, and gave no sign that it intends to take a fresh approach to the corruption allegations against Britain's biggest arms company.

Challenged by the Liberal Democrat deputy leader, Vince Cable, in a fresh debate called by the opposition party, the solicitor general, Vera Baird, said the home secretary, Jacqui Smith, would take the decision: "I cannot comment further."

Mr Cable said the US was "a close ally which has strict laws regarding corruption ... It is necessary the British government give an absolute commitment to maximum cooperation".

But the only offer made by Ms Baird to defuse the continuing BAE controversy was a suggestion that security-vetted MPs on the backbench intelligence and security committee could in future look at the intelligence information were a similar decision made to drop a sensitive investigation.

She said the role of the attorney general in such cases was under review, and promised that the Law Commission would "prioritise" a reform of Britain's corruption laws, with a consultation paper out this autumn.

Tony Blair, when he was prime minister, forced the Serious Fraud Office to halt the British investigation into allegations that £1bn was paid to Prince Bandar of Saudi Arabia, and another £1bn to Swiss bank accounts of intermediaries, to secure the al-Yamamah arms deal.

The al-Yamamah programme, which has provided BAE with £43bn in revenue, was launched by the Conservatives under Margaret Thatcher. Mr Cable read out detailed extracts from the Guardian's disclosures about the Bandar payments in the Commons yesterday, despite interruptions from both Labour and Tory backbenchers concerned over what one said were "tens of thousands of jobs".

Labour backbencher David Borrow, whose South Ribble constituency contains BAE workers from its Preston factory, claimed that comments he had made to his local newspaper had been wrongly interpreted in the Guardian.

The Guardian reported yesterday that Mr Borrow had lobbied the arms sales minister, Lord Drayson, over the US request last week, and had told his constituency paper that he expected the government would refuse to disclose information to the authorities in Washington.

It emerged during the debate that the cabinet secretary, Gus O'Donnell, had sent a letter last September calling for the SFO to drop its Saudi inquiry because it allegedly threatened the government's counter-terrorism strategy.

When that pressure failed, Tony Blair sent a letter several pages long, attaching a dossier from Sir Richard Mottram, Downing Street's intelligence coordinator, claiming the Saudis would threaten British lives by cutting intelligence links if corruption investigations were pursued.

Ms Baird disclosed that in his letter, the then prime minister said "he felt he would fail in his duty if he did not bring his views to the attention of the head of the SFO".