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Behind the UK-Saudi Arms Deal

[Financial Times-UK] Stephen Fidler - Investigators from the U.S. Department of Justice examining BAE Systems' compliance with anti-corruption laws in its arms dealings with Saudi Arabia will find themselves scrutinizing a deal that was used, with the help of the British government, as a secret tool of Saudi foreign policy. The agreement, originally signed in 1985 to pay for the Saudi purchase of British Tornado jets, was employed to distribute Saudi oil revenues outside the country's official budget. "It was a way of Saudis paying money to Saudis," said one person involved in the deal. The mechanism was also used to buy arms from Egypt for the Mujahideen fighting Soviet forces in Afghanistan and paid for clandestine purchases of Russian arms to oust Libyan troops from Chad. Over nearly two decades, tens of billions of dollars were directed through it. A 2006 biography of Prince Bandar bin Sultan, the former Saudi ambassador to Washington and now national security adviser to King Abdullah, describes the arrangement as one that "circumvented the bureaucracy." This included the U.S. Congress, whose original objections to the proposed purchase of F-15 fighters led the Saudis to turn to the UK. British flexibility and discretion suited the Saudis after their difficulties with the U.S. Congress.
2007-06-03 01:00:00
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