British prime minister Tony Blair has ordered an end to the Serious Fraud Office (SFO) investigation into alleged bribery of the Saudi royal family by UK defence contractor BAE Systems. Last month Saudi Arabia threatened to sever diplomatic relations with Britain if the probe was not stopped. Yesterday the SFO divulged that it had terminated its inquiry after government legal counsel advised that it could harm relations between the two countries.
The PM has confirmed that he pushed for an end to the investigation.
Tony Blair today admitted that he had urged the Attorney-General to drop a sleaze inquiry against the Saudi Government because a prosecution would have done "immense damage" to Britain.
The Prime Minister said that he took full responsibility for the decision to drop the Serious Fraud Office inquiry into bribery allegations involving arms manufacturer BAE Systems.
Speaking after a summit of EU leaders in Brussels, Mr Blair brushed aside suggestions that he had caved into pressure from the Saudi Arabian Government that would leave Britain vulnerable to "blackmail" from other regimes considered important to the country's security and employment interests.
Mr Blair maintains that he was motivated by a need to ensure continued Saudi co-operation in gathering anti-terrorist intelligence.
In its statement, the SFO said something very ominous.
The SFO refused to comment last night but issued a statement: “It has been necessary to balance the need to maintain the rule of law against the wider public interest.”
As Times of London Comment Editor Daniel Finkelstein points out, the suggestion that the rule of law must be balanced against the public interest is both dangerous and absurd. For the rule of law and the public interest are not competing ends; rather, they go together. If the rule of law is perverted or undermined, as is arguably the case here, then the public interest is ipso facto harmed.
Let us be clear. The British government has apparently determined that the economic interests of a large and important domestic corporation and its employees (not to mention the balance of trade and the government’s own budgetary position) are more important than investigating credible allegations that a British company paid millions of pounds in bribes to foreign officials. For good reason, opposition MPs are crying "Shame".
Norman Lamb, the Liberal Democrat MP who has followed the case closely, said: “If ever there was a final nail in the coffin of this government’s reputation this is it. . . . [T]his destroys Britain’s reputation for good governance.”
This is not over yet. It now transpires that Britain itself could face a corruption inquiry because its decision to halt the SFO probe potentially violates a 1999 international agreement.
The Organisation for Economic Co-operation and Development signalled that it would mount an investigation as a defiant Tony Blair took "full responsibility" for the decision.
. . .
Last night Professor Mark Pieth, the chairman of the OECD's working group on bribery, said that he was very concerned about the decision to halt the probe into an alleged BAE slush fund.
"We need to ask the UK some questions. But I have to say, comments by Lord Goldsmith have not helped allay my concerns," he said. Prof Pieth said he had been contacted by several members of the working group who had been alarmed at Britain's move.
. . .
Britain is a signatory to the 1999 OECD Anti-Bribery Convention, which stresses that investigations should not be "influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved."
Both the SFO and Mr Blair insist that economic considerations played no part in the decision. Nevertheless, BAE shares immediately jumped 6% on the news.
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