A bombshell front-page story in tomorrow’s Sunday Times of London: Saudi Arabia has threatened to cut diplomatic relations with Britain over an investigation into an alleged slush fund a British company set up to finance profligate spending by the Saudi royal family.
A senior Saudi diplomat in London has delivered an ultimatum to Tony Blair that unless the inquiry into an allegedly corrupt defence deal is dropped, diplomatic links between Britain and Saudi Arabia will be severed, a defence source has disclosed.The Saudis, key allies in the Middle East, have also threatened to cut intelligence co-operation with Britain over Al-Qaeda.
They have repeated their threat that they will terminate payments on a defence contract that could be worth £40 billion and safeguard at least 10,000 British jobs.
The Saudis are furious about the criminal investigation by the Serious Fraud Office (SFO) into allegations that BAE Systems, Britain’s biggest defence company, set up the “slush fund” to support the extravagant lifestyle of members of the Saudi royal family.
The slush fund allegedly bankrolled such extravagances as grand holidays and luxury cars to bribe the Saudis to continue buying from BAE. Five current and former company officials have already been arrested.
The Saudis threatened to sever diplomatic relations in September after the SFO persuaded a Swiss judge to order banks to release information on some of their accounts. (Details have only now been leaked by "defence sources".)
The sources said the accounts relate to substantial payments between “third party” offshore companies that may have received large sums in previously undisclosed “commissions”. Fraud office sources say they are now trying to get more documents that will tell them who benefited from the accounts. The trail is said to lead to the Saudi capital Riyadh.
Threatening to cut off diplomatic relations and cancel lucrative business deals shows that the inquiry is getting much too close to home for the comfort of the Saudi government. The Saudis are hopping mad about this investigation and clearly afraid of what information may come to light about their nefarious dealings. What's hidden away in those Swiss bank account records?
Attorney-General Lord Goldsmith and a spokesperson for Prime Minister Tony Blair both said they had no comment. Let’s hope they don’t cave in to the intense diplomatic pressure.









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