Reply #10: BAE System's Dirty Dealings

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by Sasha Lilley, Special to CorpWatch
November 11th, 2003

Rotten from the Beginning
While armaments transactions are known to be fraught with bribery, British journalist and arms trade opponent Gideon Burrows states that Al-Yamamah "may be the world's most corrupt deal". And while the scandal around allegations of the BAE slush fund are particularly lurid, accusations of corruption date back to the creation of Al-Yamamah I and II, as they've come to be known.

According to former CIA operative Robert Baer much of the money that BAE registered as earnings from Al-Yamamah was earmarked from its inception for kickbacks to members of the Saudi royal family and other intermediaries. " was a huge commission-generating machine. British Aerospace overcharged for its hardware and spare parts, with the difference going to commissions."

The Saudis are not the only ones who may have profited from Al-Yamamah kickbacks. In 1994 MP Tam Dalyell accused the son of then Prime Minister Margaret Thatcher of receiving a £12 million commission from the Al-Yamamah deal, but the government declined to investigate the charges against Mark Thatcher. Less fortunate was British Defense Procurement Minister Jonathan Aiken who played a key role in setting up Al-Yamamah II. He was imprisoned in 1993 for letting the Saudis pick up his tab at the Paris Ritz.

The British government and BAE have been criticized from the start by arms watchdog groups for selling weapons to a despotic, theocratic regime. Amnesty International characterizes Saudi Arabia, the world's top arms buyer, as a major violator of human rights: "Summary, unfair and secret trials are the norm in Saudi Arabia and torture is a common practice to extract confessions from suspects. Defendants facing capital charge are invariably convicted after trials which lack the most basic standards of fairness." A 1995 Channel 4 "Dispatches" documentary revealed that BAE tried to sell electric shock batons to Saudi Arabia two years earlier, which could be used for the torture of prisoners.

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http://www.corpwatch.org/article.php?id=9008