Leading article: Running out of excuses

Most companies try to avoid the attentions of fraud investigators. Not BAE, though. The defence manufacturer is urging the Serious Fraud Office to revisit its probe into the £43bn al-Yamamah arms deal with Saudi Arabia, which was dropped 18 months ago in controversial circumstances.

BAE's chairman, Dick Olver, says he wants the SFO to seek senior legal advice on whether it could mount a successful prosecution against his company. This follows BAE's vow earlier this week to implement a set of recommendations made by the former Lord Chief Justice, Lord Woolf, on cleaning up the company's ethics.

So what explains this sudden scramble by BAE for the moral high ground? The truth is that this all has rather more to do with commerce than morality. Lord Woolf's report is little more than ethical window-dressing. It was commissioned last year to deflect a parallel US Department of Justice inquiry into the company's affairs.

And Mr Olver's invitation for the SFO to look again at its dealings is not as principled as it seems, either. He believes a review of the relevant files will show that an SFO prosecution would have little chance of success. Mr Olver seems to be taking heart from the recent verdict of Lord Justice Moses, ruling on the dropping of the initial investigation, who noted that the irregular payments involved in this deal might be seen as legitimate "commissions" rather than bribes.

These payments might or might not have been illegal, but they were almost certainly unethical. Saudi royals seem to have funnelled vast sums of Saudi public money from an official arms deal into their own pockets. Whether these payments were commissions or bribes, their existence is equally embarrassing for the Saudi regime. As for BAE and our government, getting to the bottom of this case will at least let us see what sort of business they are involved in on behalf of UK plc.

At the heart of the scandal of the SFO dropping the al-Yamamah investigation was not the question of whether a prosecution was viable or not, but the impression that our legal system had bowed to blackmail. The Saudi regime threatened to withdraw security co-operation with the UK if the probe went ahead. Instead of treating this threat from our supposed allies with the contempt it deserved, the Government capitulated and leant on the SFO to drop the case.

The High Court was quite right to rule last month that it was unlawful for the SFO to abandon the case on "national security" grounds. There is a compelling case for this probe to picked up again. Even the company in question now wants it to be revisited. There can be no more excuses. It is time some daylight was shone on this murky deal.