Corruption remains a cornerstone of UK-Saudi relations

Corruption remains a cornerstone of UK-Saudi relations
The Middle East deserves more honest answers. Illicit funds swashing through the region are promoting neither peace nor stability.
4 min read
23 Nov, 2014
The UK-Saudi relationship is 'a permanently corrupt relationship of immense proportions' (AFP)

Not many relationships thrive on dishonesty, but the British government still believes that corruption and concealment amount to a strong foundation for its dealings with the Kingdom of Saudi Arabia.

Following revelations a decade ago of corruption on a grand scale throughout BAE Systems’ al-Yamamah deal and the enactment of tough new anti-bribery laws in Britain in 2010, graft as a way of government business might have been thought a matter of historical interest only. An investigation by Private Eye magazine, however, has revealed that

     Sparing blushes in the short-term simply entrenches the problem in the long run.

corruption remains a cornerstone of UK-Saudi relations.

When a new £2bn ($3.2bn) phase of a deal for the UK’s Ministry of Defence to supply electronic warfare equipment to the Saudi Arabian National Guard was signed in 2010, it provided for the contractor on the deal - a UK subsidiary of the Airbus group named GPT Special Project Management Ltd - to make payments for “bought in services” to Cayman Islands companies amounting to 15 percent of the legitimate fees.

A few months later, a whistle-blowing programme director revealed that the companies concerned didn’t actually provide any services. Further investigation unmasked a network that had been funnelling the payments to senior Saudi officials for more than thirty years.

Until the whistleblower took the details to investigators at Britain’s Serious Fraud Office, the UK Ministry of Defence team in Riyadh continued to approve the illicit payments. Now, having been exposed, it has reverted to decades-old defences to prevent any examination of the corrupt relationship.

Corrosive secrecy

The Ministry of Defence claims that disclosure of details of its approval of payments and the terms of a new agreement reached with Saudi Arabia last year after the scandal blew would “significantly compromise international relations between the UK and the Kingdom of Saudi Arabia”. Diplomatic and commercial ties going back to 1932 would, it said, be terminally undermined.

Some tension might indeed result, but the fact that such corruption must therefore remain secret simply illustrates the corrosive nature of the “relations” being protected. The very same excuses were used to abandon the prosecution of BAE Systems back in 2006. Sparing blushes in the short-term simply entrenches the problem in the long run.

What remains is a permanently corrupt relationship of immense proportions: bribes worth 15 percent of a £2bn ($3.2bn) contract amount to £300m ($480m) – all ultimately charged to the Saudi public purse. And this is just from one deal, which forms just part of the £7bn ($11bn) in annual British exports to the Kingdom. The country’s oil reserves might be large but they are finite; one recent report predicted them to run out around 2030 - or in less than one generation from now. Systemic bribery thus constitutes a major plundering of the Saudi people’s wealth.

The financial cost to ordinary Saudis is just one of bribery’s toxic consequences. The vast personal wealth that the practice affords the Kingdom’s elite sustains an oppressive tribal government that brooks no dissent and suppresses its people’s human rights. And when those with power profit so personally from their position, the appetite among them for any reform is diminished to the point of non-existence.

Destabilising influence

The effects of corruption have long been felt far beyond the Kingdom’s borders, too. When companies such as BAE Systems and Airbus accept bribery in some of their major contracts with oil-rich Saudi Arabia, it isn’t long before the same methods are used in more impoverished countries, as the Tanzanian people discovered when corruption landed them with an air traffic control system for air traffic they didn’t have, courtesy of BAE.

Such corruption is notoriously hard to expose, and the authorities propose to make it even harder. A complaint against the MoD’s secrecy over the Saudi National Guard communications project has been rejected by Britain’s Information Commissioner on the grounds that the UK-Saudi relationship is paramount “at a time of heightened tensions in the Middle East region”.

But what lies behind these “heightened tensions”? Who is backing and funding the expensive operations of the Islamic State group and others like them? This remains a question with no clear answers - but one thing is for sure: illicit funds swashing through the region are promoting neither peace nor stability. Meaningful progress will come only with legitimate government, which means relatively honest governments.

Nobody seriously believes the lazy clichés about the necessity of corruption for doing business in the region any more. Even the Saudi government has from time to time enacted legislation against it - albeit legislation more honoured in the breach than the observance. After half a century of covering-up, perpetuating and entrenching the corruption, it is now time also to reject the British government’s self-serving claim that exposing bribery will irreparably harm relations with its diplomatic ally.

The Middle East deserves more honest answers.

Richard Brooks is an award-winning investigative journalist with Private Eye magazine. A former tax inspector, specialising in uncovering illicit practices in international and corporate taxation, he is the author of The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business (2013). Follow him on Twitter: @rbrooks45

Opinions expressed in this article remain those of the author and do not necessarily reflect the opinions of al-Araby al-Jadeed, its editorial board or staff.