BAE stands accused of covertly paying hundreds of millions of pounds to a Saudi prince who negotiated a £40 billion arms deal. According to revelations this week, the company made payments for at least a decade to Prince Bandar bin Sultan for his role in the al-Yamamah deal of 1985 to sell jets to Saudi Arabia. Allegedly the payments were integral to the contract, were laid out in secret annexes and were authorised by Ministry of Defence officials under this Government and its two predecessors.
If you regard the issue as one of alleged corruption on an immense scale, concerning a huge industrial order on which many British jobs depend, and involving an important relationship in a region crucial to national security, then think again. It’s far more important that that.
At issue is the way the payments were discovered, and what then happened to those inquiries. Reportedly they came to light in an inquiry conducted by the Serious Fraud Office into the arms deal. The SFO peremptorily abandoned its investigation last December after receiving warnings about national security. In an extraordinary justification, the SFO declared: “It has been necessary to balance the need to maintain the rule of law against the wider public interest.”
This rationalisation, and the Prime Minister’s vigorous defence of it, encapsulates the reasoning of the banana republic. There is a strictly pragmatic reason for insisting, as Theodore Roosevelt put it: “Obedience to the law is demanded as a right; not asked as a favour.” There is no agreed standard for judging the public interest apart from a system of rules, enshrined in statute and convention, that binds everyone – including government. A system of rules makes policy more predictable, and thereby more efficient. It also makes a freer society, as citizens can live without fear of arbitrary authority.
If substantiated, the allegations concerning Prince Bandar will demonstrate the point crudely. The public interest beyond upholding the rule of law is hard to pin down; but you would have to be very trusting indeed to equate it with the transfer of vast sums to the strictly private interests of a member of the Saudi Royal Family.
BAE complains that the media “assume [the company’s] guilt in complete ignorance of the facts”. But this is beside the point. More serious is if BAE acted strictly with the knowledge and authorisation of government. Ten years ago, when Robin Cook announced his “foreign policy with an ethical dimension”, he was at pains to emphasise that the new government would still “honour agreements entered into by our predecessors”. Al-Yamamah does not belong in the same sentence as honour; nor, apparently, did new Labour’s approach to arms deals and open government, at any time.