MoD accused over role in Bandar's £1bn

Silence is golden around the Ministry of Defence and the Attorney Generals Office as both are refusing to comment on the recent allegations uncovered by the BBC's Panorama programme concerning payments allegedly made to Prince Bandar of Saudi Arabia totalling more that £1 billion paid as recompense for his aid in setting up the Al-Yamamah deal.

According to the BBC, MoD officials in Whitehall themselves processed quarterly "invoices" from the Saudi prince, who was seeking payment for "support services" for his role in the al-Yamamah arms deal.

The invoices were passed on to BAE executives, who would then wire the latest instalment of cash to accounts at Riggs bank in Washington. The transfers from an account held at the Bank of England went in batches of £30m a quarter for at least a decade.

The officials involved in handling any such payments are based at Deso, the MoD's arms sales unit. It is headed by Alan Garwood, a former BAE executive himself, and supervised by Paul Drayson, a businessman appointed by Tony Blair as arms sales minister.

BAE has already said it made the payments with the "express approval" of the MoD. The MoD arms sales department said last night that disclosing confidential information about the al-Yamamah contract, which was signed in the mid-1980s, would cause damage to national security. It also refused to say if payments to Prince Bandar were continuing today.

So both the MoD and the Attorney General are attempting to brass this one out by claiming that to answer questions would harm "national security".

Indeed, they intend to brass it out to the extent that they refuse to confirm or deny that such payments are ongoing, as even that might harm national security. Of course, what they are omitting, which Jack Straw recently alluded to, is that the threat to national security comes from the fact that the Saudis - the very people at the centre of the controversy - are threatening to withdraw all intelligence co-operation with the UK in the War on Terror if any investigation into this matter continues.

It is simply mind-boggling. The nation who had fifteen of it's citizens involved in the 9-11 attacks now threatens to stop intelligence in the War on Terror - which resulted from those same attacks - if anyone investigates whether or not Prince Bandar was involved in a £1 billion bribery scam.

And Lord Goldsmith has already stopped an investigation by the Serious Fraud Office for those very reasons, a decision which Tony Blair says has his full backing.

Vince Cable, the Liberal Democrats' deputy leader, said last night: "If the Ministry of Defence was actually directly involved in running the payment system, this is absolutely shocking and reveals the depths of the government's complicity in this scandal.

"We must know if BAE's payments to Prince Bandar are still going on today".

It really isn't asking an awful lot to enquire into whether or not these payments are still ongoing, although the reticence of the MoD to answer such a simple request surely means one has to suspect the worst.

Prince Bandar, whilst not denying that the money was paid, has claimed that the money went into accounts of the government of Saudia Arabia and not into his private accounts. The programme makers have argued that this is a false distinction.

In last night's Panorama programme, a Riggs bank investigator, David Caruso, was quoted. He said: "There wasn't a distinction between the accounts of the embassy or official government accounts as we would call them and the accounts of the Royal Family."

He said the money was apparently used for embassy operations and for the Prince's personal expenditure.

Of course it would be much easier to accept that Bandar was telling the truth were he not also threatening to suspend all joint intelligence operations between the UK and Saudi Arabia in the War on Terror unless all investigations into this matter are dropped.

A threat like that puts every citizen in the UK at greater risk from terrorist attacks, and it's hard to believe that Bandar would issue such a threat if he had nothing to hide.

Prince Bandar said in a statement yesterday that the allegations in the Guardian were "not only untrue but are grotesque in their absurdity".

In this statement, Prince Bandar gets things precisely backwards. It is grotesque to threaten to withdraw all intelligence co-operation with the UK if this matter is properly investigated, and it is an absurdity for him to attempt to cling to the moral high ground whilst doing so.

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Tags: Prince Bandar, Saudi Arabia, Blair, UK, Jack Straw, Al-Yamamah deal, Panorama, Guardian, Attorney General, Lord Goldsmith, bribery