<Bt-5z61>BAE paid $2b to Saudi prince in contract side deal says BBC
LONDON (Reuters) — BAE Systems denied any wrongdoing in response to media reports that it paid $1 billion ($2 billion) over a decade to a Saudi prince in connection with Britain's biggest-ever arms export contra
The reports said the payments were channelled through a US bank in Washington controlled by Bandar, a key figure in the Al Yamamah oil-for-arms deals between the UK and Saudi Arabia. The first of these deals was signed in 1985, and they generated billions of pounds a year in revenue for Britain.
"The Al Yamamah programme is a government-to-government agreement and all such payments made under those agreements were made with the express approval of both the Saudi and the UK governments," BAE Systems said in a statement.
The head of Prince Bandar's office in Riyadh declined to comment, saying the prince was out of the country.
"We are only in charge of the prince's private affairs. We are not involved in politics," Mohammed al-Rummah told Reuters.
Saudi government officials could not be reached for comment. In December last year Britain's Serious Fraud Office dropped an inquiry into the Saudi deal, for which BAE has been the prime contractor, providing Tornado fighter jets, Hawk trainer aircraft and other defence equipment along with support and maintenance services.
Prime Minister Tony Blair said at the time that pursuing the inquiry would have harmed national security and relations with Saudi Arabia, which he called crucial for counter-terrorism and Middle East peace.
The UK Ministry of Defence said in a statement yesterday: "The MoD is unable to comment on these allegations since to do so would involve disclosing confidential information about Al Yamamah and that would cause the damage that ending the investigation was designed to prevent."
BAE Systems said: "We deny all allegations of wrongdoing in relation to this important and strategic programme."
The company added that it would abide by confidentiality obligations imposed by the agreement.
"All the information regarding the Al Yamamah contract in our possession has been made available to the Serious Fraud Office over the last two and a half years and, after an exhaustive investigation, it was concluded, over and above the interests of national security, that there was and is no case to answer," BAE said.
The company said there was nothing in the latest media reports that changed that position.
Blair later on Thursday said: "This investigation, if it had gone ahead, would have involved the most serious allegations and investigation being made of the Saudi royal family and my job is to give advice as to whether that is a sensible thing in circumstances where I don't believe the investigation would have led to anywhere except to the complete wreckage of a vital strategic relationship to our country."
He told reporters at the G8 conference in Germany that the fight against terrorism would have been harmed and, "we would have lost thousands, thousands of British jobs".
