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BAE deal probe suspension upheld

LONDON: The British government’s controversial decision to drop a criminal investigation into allegations that BAE Systems, Britain’s biggest arms supplier, paid millions in secret commissions to win a £43-billion defence contract with Saudi Arabia in 1985 has been upheld by the House of Lords, the country’s highest court of appeal.

In a significant victory for the government, the Law Lords ruled the Serious Fraud Office (SFO) was right to call off the investigation in the interest of national security.

They overturned a landmark High Court ruling, which criticised the SFO’s decision in December 2006, following the then Prime Minister, Tony Blair’s personal intervention.

The High Court had ruled the Serious Fraud Office appeared to have acted under pressure from Saudi Arabia’s government.

It described Riyadh’s reported threat to end cooperation on security issues and cancel further deals with BAE if the investigation went head as a “successful attempt by a foreign government to pervert the course of justice in the United Kingdom.”

Anti-corruption activists, represented by Corner House Research and the Campaign Against the Arms Trade, were given permission to seek a judicial review of the government’s decision on grounds that the matter was of “public importance.”

However, the Law Lords, in a unanimous verdict, rejected their appeal and agreed with the government’s claim that if the inquiry had gone ahead it would have affected Britain’s national security.

“The great British public may still believe it was the risk to British commercial interests which caused him [the then Serious Fraud Office chief Robert Wardle] to give way, but the evidence is quite clear that this was not so. He only gave way when he was convinced that the threat of withdrawal of Saudi Arabia’s security cooperation was real and that the consequences would be an equally real risk to ‘British lives in British streets’,” said Baroness Hale of Richmond, one of the Law Lords.

But critics attacked the ruling, saying it opened the door for the government to invoke national security whenever it wanted to stop a corruption investigation.

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