Saudi arms deal storm rumbles on

The Attorney General has denied claims that payments to a Saudi prince were concealed.

The claims in the Guardian allege that Lord Goldsmith concealed details of secret payments made by BAE Systems to a former Saudi ambassador from the Organisation for Economic Co-operation and Development (OECD)

In an interview with the BBC, Lord Goldsmith said that the claims were "absolutely untrue."

Both BAE and Saudi Prince Bandar bin Sultan, who is the son of the Saudi Defence Minister, deny any wrongdoing. The prince was responsible for negotiating an arms deal with Britain worth around £40 billion.

It emerged that the payments, amounting to hundreds of millions of pounds, to the prince were uncovered during an investigation by the Serious Fraud Office.

The details of the payments were known by the Ministry of Defence, but Lord Goldsmith declined to reveal details of the deal claiming that the matter was covered by confidentiality and would pose a "very serious risk to National Security."

In a statement Prince Bandar denied any irregularities in the payments: "The accounts at Riggs Bank were in the name of the Saudi Arabian Ministry of Defence and Aviation ('MODA'). Any payments into those accounts made by BAE were pursuant to the Al-Yamamah contracts and as such would not in any way have been 'secret' from the parties to those contracts.

"Whilst Prince Bandar was an authorised signatory on the accounts any monies paid out of those accounts were exclusively for purposes approved by MODA.

"In addition the accounts in question were audited on an annual basis by the Saudi Arabian Ministry of Finance on behalf of MODA.

"At no stage have MODA or the Saudi Arabian Ministry of Finance identified any irregularities in the conduct of the accounts whether in relation to monies coming into the accounts or monies going out of the accounts," the Prince said.

The Prime Minister said that the Serious Fraud Office had dropped the investigation.

However, it is understood that the legality of the payments would hinge on whether they continued after 2001 when bribes paid to foreign nationals was made an offence under UK law.


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