How Saudi slush kept UK aero biz afloat

Meanwhile, the UK government had got itself into another nightmare fighter-jet deal, mirroring the situation with the Tornado F3. The long-awaited Eurofighter is finally being delivered, and the UK is committed to buying no less than 232 of these colossally expensive machines. The RAF wants no more than 140.

Then the Saudis stepped in again, ordering 72 Eurofighters. It has been strongly hinted by BAE that the UK government might be able to resell some of its excess jets to fulfil this order, thus avoiding another embarrassing acquisition of eight-figure white elephants. And, of course, the £6bn of Saudi money might do the British balance of payments a bit of good (not all that much, though; UK exports for 2006 alone are estimated at £235bn. £6bn spread over years barely signifies).

Strangely enough, at this point the SFO investigation was binned. It was strongly hinted that this was at the behest of the Secret Intelligence Service (SIS, aka MI6), who were said to be heavily reliant on intel furnished by the Saudis.

It's true that's a large element of what the spooks do - act as a channel for under-the-counter info from other governments. It's also true that BAE has a close relationship with the secret service (exiled SIS officer Richard Tomlinson says the company has an in-house MI6 liaison who sees secret intel reports). Even so, it's said that SIS doesn't fancy taking the rap for another suspect government decision so soon after the dodgy dossier/Iraq WMD business.

It seems hugely more plausible that the SFO investigation was deep-sixed to protect the weapons deal du jour, just like the NAO report of 1992 - for all that everyone involved denies this.

The denials haven't convinced many. The OECD international watchdog, for instance, has rebuked Britain over the move and launched its own probe. The US has also expressed its displeasure, which might cause trouble for BAE's ongoing push to buy US weaponsmaker Armor.

Meanwhile, those relatively unbothered about possible corruption overseas but concerned about the defence of the UK have also criticised the Saudi Eurofighter buy. Some might say that selling rubbish such as the Tornado F3 to the Saudis for a lot of money is one thing; but selling them the Eurofighter is quite another. Reports thus far suggest that the Eurofighter, for all its horrifying expense and delays, is actually a fairly cutting-edge piece of kit. Furthermore, the export deal is to be "Saudi-ised," potentially meaning that the desert princes will actually gain access to the technology rather than merely the use of the hardware.

It's possible to suggest that it isn't actually in the interests of western democracy to release such tech out into the wider world. The Saudis probably can't use it, but they wouldn't have any real reason to keep it to themselves.

All of which brings us up to yesterday, with the Guardian revealing that Prince Bandar of the house al-Saud was paid more than £1bn over 10 years by BAE, which drew the cash from "a special Ministry of Defence account". The paper reported:

"According to legal sources familiar with the records, BAE Systems made cash transfers to Prince Bandar every three months for 10 years or more.

"The payments are alleged to have continued for at least 10 years and beyond 2002, when Britain outlawed corrupt payments to overseas officials.

"SFO investigators led by assistant director Helen Garlick first stumbled on the alleged payments, according to legal sources, when they unearthed highly classified documents at the MoD during their three-year investigation."

There isn't much doubt that the legal sources in question have had access to the SFO's now-closed files. When contacted by the Reg, an SFO spokesman said he couldn't comment on how the documents had reached the public domain.

"If I have a conversation with you, that's private to you and me," he said. "I wouldn't then give another journalist the details."