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26 June 2007

Prince Bandar & The Forty Thieves

Oh, dearie, dearie me. It doesn't look good, whichever way you tilt it. This BAE Systems/Prince Bandar/backhanders/Serious Fraud Office malarkey has now been exported to the Good Ol' US of A where the Department Of Justice wants a word.

Our own Government has already put the kibosh on the SFO's UK enquiry - citing national security grounds - into the alleged hundreds of millions that the Saudi prince - son of the Saudi defence minister and, at that time, serving in the family government as US ambassador, received as a deal-sweetener. He's now the top boy at the Saudi national security council. He denies the charges as vehemently as BAE.

First off: why is everyone so surprised? We are talking about weapons of war. Technologies - especially ones that you have no home-grown capability of designing, building, testing and implementing - are an expensive business, and when those technologies specifically deal with long-range defence capabilities, the bottom line just grows and grows.

Now, say you worked in a car showroom. Your basic pay is £12K per annum. On top of that, you get a small percentage of each deal that you make. Now, work hard each quarter, and you could find your commission exceeding your basic. That is called incentivising.

Sorry about teaching you and your gran to suck eggs. But why oh why would any right-thinking person think that the same did not apply - frankly - among any and all levels and domains of international business? Considering the size of the al-Yamamah deal - a very cool £43 billion - a couple of hundred million on top/incorporated/squeezed in is, sorry to say, quite a low percentage of the deal as a whole. It's a lot of money per se; but it's a tiny cut.

Secondly, America's action today will actually see them hoisted by their own petard. In a vainglorius bid to look like good guys, the Yanks' Department Of Justice has invoked the hilariously-named Foreign Corrupt Practices Act - which sounds to me more like a policy document than a safeguard - in order to investigate al-Yamamah, as some of these alleged funds went through Riggs Bank in Washington, D.C.

I'm wondering what the FCPA would turn up, regarding the US's own international scammery, were the power of this act turned upon its creators?

I'm actually on the side of the UK and Saudi Arabia, to be honest. The SFO has no business investigating arms deals made by the government, as I'm not sure even they have the capacity to comprehend what goes on between nations behind closed doors. Stick to money-laundering and drug-running, it's what you're best at. Low-scale, small-fry. Not intra-national governments.

To quote Sir Humphrey: "Ah, yes, 'open government'. The problem is quite simple: you can either be open...or you can have government."

Welcome to Prime Minister, Gordon.


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