Friday, December 15, 2006

BAE inquiry is dropped - PM defends decision

The Al Yamamah deal hangs in the balance

The British Prime Minister has been fending off criticism from many fronts this week. Yesterday it emerged he had been questioned by police for nearly two hours in connection with the so called ‘cash for honours’ inquiry. The PM was not under caution during the interview and a solicitor was not present, but the very fact that he was questioned at all, will fuel further criticism of the leader [BBC]. The timing of the interview and the release to the press, has also been the subject of criticism. Some commentators have said the release of the story to the media, coinciding with the release of the Diana inquiry report, was an attempt to bury bad news. It is not the first time the current Labour government has been accused of manipulating or attempting to manipulate the news. In 2001, Jo Moore, the then special adviser to the Transport Secretary Stephen Byers, had put about a memo that read “It is now a very good day to get out anything we want to bury. Councillors' expenses?" This on the day of America’s worst terrorist attack, 9/11. She subsequently resigned following an outcry in the media. There exists only speculation surrounding the timing of yesterday’s news, and the Prime Minister’s spokesman has denied any plan to bury the event of Mr Blair’s interview. He emphasized that there was no deliberate plan to "bury bad news" by holding the interview on the same day Lord Stevens released his report into the death of Princess Diana. "Categorically there was no linkage to other events," he said. But it is understood Mr Blair chose the day of the interview.
Today the Prime Minister was under further scrutiny after pulling the plug on an investigation into a Saudi arms deal [BBC]. The inquiry was halted on the grounds of ‘national security’. Mr Blair said today that to pursue the inquiry would create ‘ill feeling’ between a key ally in the War on Terror. Details of the corruption in the £6 billion arms deal may never emerge, but it is one more murky chapter in 20 years of trading with the Saudi kingdom [BBC]. In the decade following 1986, the UK government has sold the Saudis more than £50 billion in Tornados and Hawks. During the first Gulf war Saudi jets flew alongside British Tornados on missions into Iraq, a sign of the special relationship between the two countries. But in 2004 the Guardian newspaper alleged that BAE Systems had won the deal with the aid of a secret slush fund. It claimed that Ministry of Defence police were investigating payments totalling £60m made during the course of the Al Yamamah deal by BAE Systems. By November of the same year BAE Systems confirmed it was being investigated by the Serious Fraud Office (SFO), but the company strenuously denied any wrongdoing. Within a year a provisional deal had been made to sell the Saudis 72 Eurofighter jets to the tune of £6 billion. But by December this year, talks between BAE and the Saudis were said to have ‘slowed down’ following a proposed deal from French aircraft manufacturer Dassault. In this deal Dassault had offered to sell Rafale jets, but the details of the deal are not yet clear [BBC], but it is believed up to 36 aircraft maybe involved. Following the decision to drop the inquiry into BAE a statement from the company said: "After over two years of what has been a thorough investigation by the SFO, we welcome the statement made yesterday by the attorney general in the House of Lords." It is not yet clear whether the Eurofighter deal is still on the table, but shares in the company rose 6% after the announcement to £4.20.25.

No comments: