A major British criminal investigation into alleged corruption by the arms company BAE Systems and its executives was stopped in its tracks on Thursday when British Prime Minister Tony Blair claimed it would endanger Britain's security if the inquiry were allowed to continue.
The remarkable intervention was announced by the attorney general for England and Wales, Lord Goldsmith, who took the decision to end the UK's Serious Fraud Office (SFO) inquiry into alleged bribes paid by the company to Saudi officials, after consulting Cabinet colleagues.
In recent weeks, BAE and the Saudi embassy had frantically lobbied the British government for the long-running investigation to be discontinued, with the company insisting it was poised to lose another lucrative Saudi contract if it was allowed to go on. This came at a time when the SFO appeared to have made a significant breakthrough, with investigators on the brink of accessing key Swiss bank accounts.
However, Lord Goldsmith consulted the prime minister, Defense Secretary Des Browne, Foreign Secretary Margaret Beckett, and the intelligence services, and they decided that "the wider public interest" "outweighed the need to maintain the rule of law."
Blair said it would be bad for Britain's security if the SFO was allowed to go ahead, according to the statement made in the UK House of Lords by Lord Goldsmith. The statement did not elaborate on the nature of the threat.
BAE claimed that it was about to lose out on a third phase of the al-Yamamah deal, in which the Saudis would buy 72 Typhoon aircraft in a deal worth ?6 billion (US$11.8 billion). The Saudis had also hinted that they would do a deal with the French instead if the inquiry pushed ahead. A 10-day ultimatum was reportedly issued by the Saudis earlier this month.
A PR campaign saw MPs from all parties urging the dropping of the investigation, citing fears that jobs would be lost in their constituencies. But in its statements last night the government said commercial considerations had played no part in the decision.
The decision was condemned last night as naked political interference in a criminal case.
Norman Lamb, a senior figure in the UK Liberal Democrat party, said: "It is scandalous interference with a serious criminal investigation. If there is anything which would cause you to lose completely your trust in this government, this is it."
The SFO's director, Robert Wardle, issued a terse statement saying he had dropped the Saudi end of the investigation "following representations."
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