Robert Baer: The Saudis do not give up their secrets, Mr Blair

The Government says national security would be threatened by further investigation into BAE arms deals. This is a red herring
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The Independent Online

One thing that reopening the Saudi-BAE corruption investigation will not do is put "lives at risk". During the past 50 years, Saudi Arabia has established an unblemished record of not talking to strangers about its internal affairs, including Saudi subjects who send money to al-Qa'ida. The Saudi view is that opening up its country to foreigners is akin to admitting incest to the family.

Even if Britain permanently closed down the Serious Fraud Office (SFO) investigation into BAE and every future investigation into alleged Saudi corruption, this would change nothing. Saudi Arabia is a closed country, and will remain one as long as the al-Saud rule it.

Tony Blair's arguments about "security" are a red herring. Let's look at the American experience. Although the United States is supposedly Saudi Arabia's closest ally, until this day Saudi Arabia has never provided the US with details on the militant Islamic group that took over the Mecca mosque in November 1979. It is too embarrassing for Saudi Arabia to admit it cannot account for its subjects.

Almost seven years after 11 September 2001, Saudi Arabia still has not provided a detailed explanation how 15 of its subjects ended up on the hijacked planes. The question remains: who inside Saudi Arabia recruited and vetted them? We're left with speculating that it was a network operating in Saudi Arabia's mosques, presumably led by a radical cleric who has never been named, let alone brought to justice.

Another mystery is the connection between Omar Bayoumi, a Saudi defence official in San Diego, and two of the 11 September hijackers. There has been no explanation from the US or from Saudi Arabia over what Bayoumi was doing in the US or why the Saudi ambassador's wife regularly sent him cheques. The ambassador at the time was Bandar bin Sultan, the man at the centre of the BAE corruption scandal.

Then there's Iraq. The US only found out about the hundreds of Saudi jihadists coming to fight on the side of the Sunnis when it stumbled across a documents cache near the Syrian border. Saudi Arabia pretended to be surprised that its subjects were making their way across the border into Iraq to fight what they call a Crusader occupation.

So why should we expect Saudi Arabia to be any more cooperative with Britain than it has been with the US if it stops the SFO's investigation into BAE payments to the Saudi royal family? Raising the spectre of another Tube bombing is a canard. Blair played the terrorism card knowing that the public has no way to challenge it. And the truth is too alarming to expose in public.

The Saudi ruling family sits on a volcano of corruption and mounting popular anger. Who knows whether Saudi Arabia is in a pre-revolutionary state: the country is a black hole. But Blair, like everyone else who follows Saudi Arabia, knows that if the SFO were allowed to pull hard on the BAE bribery string, it could reveal BAE to be complicit in one of the most eye-opening business arrangements in modern history. The last thing Blair wanted to do was remind the world, especially Saudi commoners, that the Saudi royal family is for sale.

Saudi Arabia's birth rate is one of the highest in the world. Real unemployment is well over 20 per cent. The windfall from $100-a-barrel oil is not creating jobs for Saudis, but rather going into property, gold-plated hotels and flying palaces. Riyadh property prices are higher than London or Paris. New jobs are being created, but they are going to Indians, Pakistanis and Somalis. The al-Saud princes seem to be reproducing faster than the average Saudi, and are more avaricious than ever. They are jealous of the first generation's easy wealth and want an equal piece of deals such as BAE's. Yes, on the face of it, the Saudi-BAE arms-for-oil deal was a profitable and common-sense barter arrangement. By 2005, BAE valued it at £43bn. And it could double in the next 20 years. The contract employs 5,000 people in Saudi Arabia and that many again in Britain. It is Britain's largest export deal. So far so good.

But what is lost in the fine print is that hidden deep in the BAE agreement, in the millions of invoices for Tornado and Hawk aircraft, spare parts, agent commissions and expense accounts, are vast sums in secret payments to the Saudi royal family. And this is not to mention the direct payments to Bandar, which were documented by the SFO.

But it's not just the BAE deal. Many other major aviation and telephone companies have invested in an economy that kicks back 10-20 per cent of any deal to the royal family and middlemen. There isn't a choice if you want to do business in the Kingdom. If the BAE deal is untangled and exposed, what is to stop the other European countries from following suit, investigating every other mega deal with Saudi Arabia? It wouldn't be long before the Saudi economy came crashing down. No doubt this is a distant, apocalyptic scenario, but this is exactly what Blair had no intention of testing.

Bandar claims that the BAE payments weren't a bribe. The money only passed through his accounts and went to various government projects. Whether he's telling the truth or not doesn't matter. The point is that Bandar does not know where the money ultimately ended up. Easy, shady money sloshes around Saudi Arabia with no accounting whatsoever. Could, for instance, BAE money have inadvertently gone through Bandar's accounts to the Saudi Ministry of Defence to Omar Bayoumi and then to the two hijackers in San Diego? There is absolutely no evidence the Saudi royal family or the Saudi government were involved in 11 September – I'm almost certain they weren't – but in a country that lives off bribery and Swiss bank accounts, in a country where there's no way to distinguish government from royal property, that suspicion will always be out there.

Blair may have found it expeditious to hide behind the veil of intelligence to conceal the truth that Saudi Arabia is a mess. But what if Talleyrand was right about foreseeing the inevitable and expediting its occurrence? Talleyrand could never have imagined our addiction to cheap oil, but you can count on his smiling knowingly from the grave. Putting off the Saudi accounting will ensure that one day we will have to face a revolution in that country which will make Ayatollah Khomeini's revolution in Iran look tame.

Robert Baer worked for the CIA in the Middle East for many years. He is the author of 'Sleeping With the Devil: How Washington Sold Our Soul for Saudi Crude'