Shuttered Washington Bank at Center of UK-Saudi Bribery Scandal

From the Guardian (UK) (ht lgf):

Last night, the Liberal Democrat leader, Menzies Campbell, demanded to know the role of the attorney general in concealing from the OECD the payments of more than £1bn from BAE to Prince Bandar as part of the al-Yamamah contract.

The money was paid from an account at the Bank of England into accounts in Washington controlled by Prince Bandar. Details of the transfers were discovered by the Serious Fraud Office during the marathon investigation into BAE.

However, the SFO inquiry was suddenly halted late last year. Al-Yamamah, Britain's biggest ever arms deal, which was signed in 1985, involves the sale of Tornado fighter jets and Hawk aircraft.

The Guardian has this week published accusations that £30m a quarter - for at least 10 years - was paid into accounts controlled by Prince Bandar at the Riggs bank in Washington. [NOTE: Riggs bank shut down after pleading guilty to money laundering charges in 2005.]

The attorney general yesterday categorically denied part of the Guardian story in the affair.

He said that he had not ordered British investigators to conceal the £1bn payments from the OECD.

The director of the SFO took responsibility for the decision to withhold information. In a statement, Robert Wardle said the decision was made by his own organisation "having regard to the need to protect national security".

The Guardian investigation has revealed that:

· The attorney general became aware of these payments because of the SFO inquiry into BAE corruption allegations.

· He recognised the vulnerability of the government to accusations of complicity over a long period in the secret payments.

· There is no dispute that, as reported by the Guardian, the fact of the payments was concealed from the OECD when it demanded explanations for the dropping of the SFO inquiry.

· UK government officials have been exposed as seeking to undermine the OECD process, and complaining that its Swiss chairman has been too outspoken.

· When, before publication, the Guardian originally asked the attorney general's office who was responsible for concealing the information from the OECD, the newspaper was told: "The information presented to the OECD bribery working group ... was prepared by AGO and SFO".

The AGO is the attorney general's office. Both departments report to Lord Goldsmith himself.

Last night, when Lord Goldsmith was asked if the concealment was done with his knowledge, he said he could not respond. His spokesman had previously said that full evidence had not been given to the OECD because of "national security" considerations. He also refused to discuss the allegations concerning the payments. "I am not going into the detail of any of the individual allegations," he said.

It also emerged yesterday that Des Browne, the defence secretary, held talks this week with the Saudi crown prince, Prince Sultan bin Abdul Aziz - the father of Prince Bandar - to try to secure a £20bn arms deal for BAE Systems.

Sir Menzies said the attorney general had more questions to answer.

"If it is true that information about payments made to Prince Bandar was not given to the OECD, then that is an allegation of the utmost seriousness. It would be unsupportable for Britain to sign up to an international agreement on bribery and then fail to honour its obligations when an investigation comes too close to home."