Post by Sapphire Capital on Jul 12, 2008 23:07:33 GMT 4
LONDON - July 7, 2008
A decision by Britain's anti-corruption agency to halt an inquiry into a lucrative arms deal between Saudi Arabia and BAE Systems PLC reached Britain's highest court Monday, as the House of Lords began considering whether the decision was lawful.
The Serious Fraud Office sought the appeal to the Law Lords after the High Court ruled in April that the agency's decision was unlawful following a legal challenge brought by anti-corruption groups.
The fraud office maintains that the agency's director made a legal and appropriate decision to stop the corruption inquiry in late 2006, after receiving threats from the Saudi Arabian government to withhold cooperation on critical issues of anti-terrorism.
"The SFO director was convinced that Saudi Arabia wasn't bluffing," SFO lawyer Jonathan Sumption told the five Law Lords hearing the two-day appeal at the Houses of Parliament.
However, lawyers for the Campaign Against Arms Trade and The Corner House, which sought a judicial review because of the public importance of the issues involved, said that the decision by the former director, Robert Wardle, "did not satisfy the strict necessity test."
"On his own evidence, there were alternative steps open to the United Kingdom which were not exhausted and the damage to the rule of law wasn't properly addressed," CAAT and Corner House lawyer David Pannick told the hearing.
In a strongly worded judgment, the High Court ruled in April that the Saudi threat was a "successful attempt by a foreign government to pervert the course of justice in the United Kingdom." Lord Justice Moses and Justice Sullivan added that the SFO and the government had made an "abject surrender" to "blatant threats."
However, Sumption told the Law Lords that the High Court had made several incorrect assumptions about the law and the agency's actions, noting that some of the key evidence had been "redacted," or heavily edited, for security and diplomatic reasons.
"They proceeded on limited information available to them," Sumption said.
He also criticized the High Court for highlighting the alleged direct involvement of Saudi Prince Bandar bin Sultan, the former ambassador to the United States and now head of Saudi Arabia's National Security Council, in making the threats to drop a multibillion-dollar Typhoon Eurofighter contract before the inquiry was halted. A $40 billion deal for 72 Typhoons was signed in September.
"The director has not given evidence one way or the other about the involvement of Prince Bandar in the utterance of these threats," he said, adding that the threat came from "several channels over a period of time."
Sumption said the inclusion of Bandar's alleged role was based on media reports and could be very damaging.
"At no stage has it ever been suggested that the Saudi Arabian government has been involved in any criminal conduct, nor has Prince Bandar or any other persons been a subject of an SFO investigation," he said.
Pannick said that CAAT and Corner House's case did not rely on the threats coming from one specific person.
He noted that his own legal team had not had access to the non-redacted documents and suggested that the Law Lords might seek access to the unedited papers.
The SFO was investigating allegations that BAE, one of the world's largest arms makers, ran a 60 million pound (126 million) "slush fund" offering sweeteners to officials from Saudi Arabia in return for lucrative contracts as part of the Al-Yamamah arms deal in the 1980s.
Al-Yamamah, meaning "the dove," was the name given to an agreement under which BAE supplied Tornado fighter jets and other military equipment to Saudi Arabia, which paid the British government with oil.
BAE, which has always said it acted lawfully, was in negotiations with Saudi Arabia about the successor to the Al-Yamamah agreement, a 10 billion pound ($19.6 billion) contract to buy Typhoon Eurofighter jets, when the SFO began its investigation.
The Saudi Arabian threats were made when the agency attempted to access Swiss bank accounts to see whether payments had been made to an agent or public official of the Middle Eastern country.
Wardle announced in July of that year that the agency was stopping its investigation. Former Prime Minister Tony Blair publicly took responsibility for the decision later that year, claiming that the investigation threatened national security and also threatened British jobs.
The Law Lords are expected to announce their judgment on the case in the autumn.
However, campaigners fear that the result could become moot after the government announced a bill in March that would in effect prevent judicial reviews like that of the BAE case. If that bill passes when it comes before Parliament later this year, the government could shut down the investigation on grounds of national security without giving a cause.
A decision by Britain's anti-corruption agency to halt an inquiry into a lucrative arms deal between Saudi Arabia and BAE Systems PLC reached Britain's highest court Monday, as the House of Lords began considering whether the decision was lawful.
The Serious Fraud Office sought the appeal to the Law Lords after the High Court ruled in April that the agency's decision was unlawful following a legal challenge brought by anti-corruption groups.
The fraud office maintains that the agency's director made a legal and appropriate decision to stop the corruption inquiry in late 2006, after receiving threats from the Saudi Arabian government to withhold cooperation on critical issues of anti-terrorism.
"The SFO director was convinced that Saudi Arabia wasn't bluffing," SFO lawyer Jonathan Sumption told the five Law Lords hearing the two-day appeal at the Houses of Parliament.
However, lawyers for the Campaign Against Arms Trade and The Corner House, which sought a judicial review because of the public importance of the issues involved, said that the decision by the former director, Robert Wardle, "did not satisfy the strict necessity test."
"On his own evidence, there were alternative steps open to the United Kingdom which were not exhausted and the damage to the rule of law wasn't properly addressed," CAAT and Corner House lawyer David Pannick told the hearing.
In a strongly worded judgment, the High Court ruled in April that the Saudi threat was a "successful attempt by a foreign government to pervert the course of justice in the United Kingdom." Lord Justice Moses and Justice Sullivan added that the SFO and the government had made an "abject surrender" to "blatant threats."
However, Sumption told the Law Lords that the High Court had made several incorrect assumptions about the law and the agency's actions, noting that some of the key evidence had been "redacted," or heavily edited, for security and diplomatic reasons.
"They proceeded on limited information available to them," Sumption said.
He also criticized the High Court for highlighting the alleged direct involvement of Saudi Prince Bandar bin Sultan, the former ambassador to the United States and now head of Saudi Arabia's National Security Council, in making the threats to drop a multibillion-dollar Typhoon Eurofighter contract before the inquiry was halted. A $40 billion deal for 72 Typhoons was signed in September.
"The director has not given evidence one way or the other about the involvement of Prince Bandar in the utterance of these threats," he said, adding that the threat came from "several channels over a period of time."
Sumption said the inclusion of Bandar's alleged role was based on media reports and could be very damaging.
"At no stage has it ever been suggested that the Saudi Arabian government has been involved in any criminal conduct, nor has Prince Bandar or any other persons been a subject of an SFO investigation," he said.
Pannick said that CAAT and Corner House's case did not rely on the threats coming from one specific person.
He noted that his own legal team had not had access to the non-redacted documents and suggested that the Law Lords might seek access to the unedited papers.
The SFO was investigating allegations that BAE, one of the world's largest arms makers, ran a 60 million pound (126 million) "slush fund" offering sweeteners to officials from Saudi Arabia in return for lucrative contracts as part of the Al-Yamamah arms deal in the 1980s.
Al-Yamamah, meaning "the dove," was the name given to an agreement under which BAE supplied Tornado fighter jets and other military equipment to Saudi Arabia, which paid the British government with oil.
BAE, which has always said it acted lawfully, was in negotiations with Saudi Arabia about the successor to the Al-Yamamah agreement, a 10 billion pound ($19.6 billion) contract to buy Typhoon Eurofighter jets, when the SFO began its investigation.
The Saudi Arabian threats were made when the agency attempted to access Swiss bank accounts to see whether payments had been made to an agent or public official of the Middle Eastern country.
Wardle announced in July of that year that the agency was stopping its investigation. Former Prime Minister Tony Blair publicly took responsibility for the decision later that year, claiming that the investigation threatened national security and also threatened British jobs.
The Law Lords are expected to announce their judgment on the case in the autumn.
However, campaigners fear that the result could become moot after the government announced a bill in March that would in effect prevent judicial reviews like that of the BAE case. If that bill passes when it comes before Parliament later this year, the government could shut down the investigation on grounds of national security without giving a cause.