Al-Yamamah: secret UK-Saudi arms deal

In 1985, the British and Saudi governments began negotiations on a series of unprecedented arms contract known as Al-Yamamah. The deal, which involved £6 billion of corrupt commissions, has been covered up by Britain for decades.

The Al-Yamamah arms deal involved massive orders for British Tornado fighter planes, helicopters, tanks and ammunitions, most of which were built and supplied by Britain’s BAE Systems and its predecessor British Aerospace.

In order to finance the deal, which was the largest arms deal in UK history, the Saudi’s agreed to supply 600,000 barrels (95,000 m3) of crude oil per day to the British government, and particularly to BP and Royal Dutch Shell oil companies.

The success of an initial contract, which in the end totaled more than £43 billion, has been attributed to Britain’s then Prime Minister Margaret Thatcher, who lobbied hard for the deal.

Prince Bandar, son of Prince Sultan, the Saudi Defence Minister also played a key role in negotiations for the deal. According to the reports, the deal brought more than $30 million (£15 million) to Bandar’s dollar account at Riggs Bank in Washington.

From the start, the Al-Yamamah contract was shrouded in secrecy and suspicions began to surface that contracts were a result of kickbacks and bribery to members of the Saudi royal family and government officials.

According to The Daily Telegraph , an audit of the Al-Yamamah account at the British Ministry of Defence (MoD), conducted by the UK government in 1992 was considered so secret that members of the House of Commons on the relevant oversight committee were not allowed to see it.

Police, however, later calculated that more than £6 billion may have been distributed in corrupt commissions, via an array of agents and middlemen.

There were also allegations that Mark Thatcher, son of Margaret Thatcher only pocketed an $18 million commission in relation to the controversial arms deal, exploiting his mother’s political influence and connections.

In February 2001, the solicitor of a former BAE Systems employee, Edward Cunningham, notified Serious Fraud Office (SFO) of an alleged £20 million “slush fund” around the Al-Yamamah arms deal. No further action, however, was taken until the letter was leaked to The Guardian in 2003.

The SFO was then reported to be considering an investigation which led to two arrests in November 2004.

At the end of November 2006, The Daily Telegraph revealed that Saudi Arabia had given Britain ten days to suspend the SFO investigation into the country’s transactions or they would take the deal to France.

Robert Wardle, head of the SFO, also said he had received a direct threat from the Saudi Arabian ambassador to London to terminate the investigations.

“As he put it to me, British lives on British streets were at risk”, Wardle said.

Former British Prime Minister Tony Blair’s intervention forced the inquiries to be stopped over concerns about a diplomatic row between the UK and the Saudi regime.

This comes as Saudi Arabia, which is accused of a brutal crackdown on peaceful anti-regime protests, is considered as Britain’s largest trading partner in the Middle East, with bilateral trade worth more than £15 billion every year.

The BAE Systems was finally sentenced to a $400 million fine under a plea bargain with the US Department of Justice in 2010.

The company’s conduct involved “deception, duplicity and knowing violations of law, I think it’s fair to say, on an enormous scale”, said the US District Court Judge John D. Bates.