Fresh evidence that the Saudi royal family demanded secret commissions on arms sales emerged yesterday raising further questions about the propriety of Britain's dealings with the kingdom and the government's defence of them. Documents seen by the Commons export control committee reveal Whitehall's concern about Saudi demands that "appropriately discreet arrangements" should be made to secure defence contracts.One document states that the Saudi government "would certainly not officially approve the payment of fees although they undoubtedly expect appropriately discreet arrangements to be made".
Written by Lester Suffield, a former head of defence sales, it continues: "Statements to this effect are made by senior Saudis to visiting senior businessmen in somewhat elliptical language whenever a suitable opportunity occurs ..."
The documents, released at the National Archives, were obtained by the Commons committee as part of its inquiry into British arms sales - including allegations by the Guardian of corruption. They show that in 1976 Sir Frank Cooper, then top official at the Ministry of Defence, drew up a new directive covering the conduct of civil servants negotiating arms sales. "Public money is not to be used for illegal or improper purposes," it said. "What is 'illegal' or 'improper' will depend in the last resort on the law and practice of the country or countries concerned and it is for the foreign government to determine what are acceptable standards within its jurisdiction."
The documents show Cooper approved "agency fees" of about 15% on contracts for the Saudi air force and national guard.
The defence secretary, Des Browne, yesterday told the committee that the documents also suggested that officials were conscious about the use of public funds and the need to "restrain payments". Asked whether, since the 1970s, UK civil servants had been "aware of, connived at, and have facilitated defence exports to Saudi Arabia tainted with corruption", he reiterated the MoD's assertion that such claims were "totally unfounded".
A bribery investigation by the Serious Fraud Office into earlier dealings between Britain and Saudi Arabia was dropped in 2006 after Tony Blair and Lord Goldsmith, the then attorney general, said it would harm Britain's security interests. The SFO spent £2m and two years amassing documents that showed BAE, the UK's biggest arms company, had transferred £1bn to Washington bank accounts controlled by Prince Bandar of Saudi Arabia and large amounts to Swiss bank accounts linked to agents for Saudi royals.
The US justice department has launched an investigation into the allegations. The MoD told the Commons committee yesterday that a request for information by the US was "currently being considered by the Home Office in the normal way".