[NYTr] FUK Arms/Saudi deal: Campaigners win judicial review of corruption case

[All the News That Doesn't Fit]

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The Independent - Nov 10, 2007
http://news.independent.co.uk/business/news/article3146477.ece

Campaigners win judicial review of BAE arms case

By David Prosser, Deputy Business Editor

Anti-arms campaigners have won a judicial review of last year's
decision by the Serious Fraud Office to end its investigations into the
defence company BAE's contracts with Saudi Arabia.

The judgment will be hugely embarrassing to the Government, which
opposed the review and has consistently backed the SFO's decision to
drop the case.

Yesterday two High Court judges granted an application from the Campaign
Against the Arms Trade and Corner House for the right to mount a full
challenge to the SFO, which in December last year dropped an inquiry
into allegations that BAE had made secret payments to Saudi officials
in order to secure a series of massive contracts.

Lord Justice Moses and Mr Justice Irwin said the case involved "matters
of concern and public importance", and that the challenge "cries out
for a hearing". The judges, who will now decide how to proceed with the
case, likely to be a two-day hearing in the new year, said they were
"surprised" the Government had opposed the campaign groups' application.

The SFO's decision last year prompted speculation that it had come under
pressure from the Government, as ministers became concerned about a
deterioration in relations with Saudi Arabia. The SFO's director, Robert
Wardle, insisted he alone had taken the decision to drop the probe,
begun in 2004, following advice that failing to do so might damage
national security. Mr Wardle said he would have preferred to continue
the investigation into BAE, which centred on the #50bn Al Yamamah arms
deal signed in 1986, and believed it was progressing. However, Lord
Goldsmith, then the Attorney General, said he thought there was little
chance of a successful prosecution.

In yesterday's hearing, lawyers for the campaign groups argued that the
SFO had failed to consider the threat to national security posed by
discontinuing the investigation, which, they said, could leave the UK
open to additional resentment from international foes. The groups also
argued that, in any case, the OECD's anti-bribery treaty, to which the
UK is a signatory, did not allow countries to suspend such
investigations for national security reasons.

A judicial review of the SFO's decision will consider the legality of
dropping the inquiry, rather than investigating the allegations against
BAE. Nevertheless, the hearing will embarrass ministers, who had hoped
to put the controversy behind them. It will also cause irritation at
BAE, which is facing a separate inquiry into Al Yamamah from US
regulators.

Symon Hill, a spokesman for the Campaign Against the Arms Trade, said:
"This is brilliant news for all those who have campaigned against the
influence that arms companies bring to bear on government."

A spokesman for BAE, which has always denied any wrongdoing, said
yesterday: "This is a matter for Corner House, the CAAT and the
Government  we were not a party to this case."

A spokesman for the SFO declined to comment.