This was forwarded to me from my friend Max Keiser, globetrotting reporter and host of Decline of the Dollar on the BBC.
This is a story that is largely ignored in the US regarding Saudi threats to the British government to halt inquiries into potentially corrupt Saudi arms dealing:
Saudi Arabia's rulers threatened to make it easier for terrorists to attack London unless corruption investigations into their arms deals were halted, according to court documents revealed yesterday.
Previously secret files describe how investigators were told they faced "another 7/7" and the loss of "British lives on British streets" if they pressed on with their inquiries and the Saudis carried out their threat to cut off intelligence.
Prince Bandar, the head of the Saudi national security council, and son of the crown prince, was alleged in court to be the man behind the threats to hold back information about suicide bombers and terrorists. He faces accusations that he himself took more than [radical]Ǭ£1bn in secret payments from the arms company BAE.
He was accused in yesterday's high court hearings of flying to London in December 2006 and uttering threats which made the prime minister, Tony Blair, force an end to the Serious Fraud Office investigation into bribery allegations involving Bandar and his family.
The threats halted the fraud inquiry, but triggered an international outcry, with allegations that Britain had broken international anti-bribery treaties.
Lord Justice Moses, hearing the civil case with Mr Justice Sullivan, said the government appeared to have "rolled over" after the threats. He said one possible view was that it was "just as if a gun had been held to the head" of the government.
Britain buckles before Saudi threats
By Philip Stephens, Financial Times, Dec 19, 2006
Consider the dry explanation of Britain's most senior law officer: "It has been necessary to balance the need to maintain the rule of law against the wider public interest." Now translate: "Faced with serious threats to the nation's security from the rulers of Saudi Arabia, I have decided to put aside the fundamental principles at the heart of our democratic system of government."
Little wonder that Lord Goldsmith, the attorney-general, sounded almost contrite when he called a halt to the long-running criminal investigation into whether a British defence company had bribed members of the Saudi royal family. Here was the guardian of the law in a mature western democracy publicly announcing that it had succumbed to blackmail by a foreign government.
Almost as surprising, though, as the decision itself has been the muted reaction. Business and trade unions have united in backing Lord Goldsmith's decision to drop the Serious Fraud Office's two-year investigation into allegations against BAE Systems, Britain's foremost defence company. The opposition Conservative party has been largely silent. Only the Liberal Democrats have protested at the subordination of the rule of law to Britain's relationship with the Saudi sheikhs.
The establishment consensus has been that the Saudi authorities would have scrapped a multi-billion pound contract to buy Typhoon fighter planes from BAE. Thousands, perhaps tens of thousands, of jobs would have been been at risk.
In Whitehall's corridors of power and in company boardrooms alike, suggestions that Lord Goldsmith should have let the law take its course are met with world-weary groans that arms deals in that part of the world are always dodgy: "It's the way of the world, old chap." If British companies had not paid "commissions" to Saudi princes, the business would have gone to the Americans or, worse, the French.
It should be stressed that BAE Systems has denied the allegation that it operated a [radical]Ǭ£60m slush fund in association with the 20-year-old Al Yamamah arms contract. Lord Goldsmith has voiced doubts as to whether the investigations would have led to successful prosecutions. Yet surely it was more than a coincidence that the attorney-general halted them soon after the SFO had gained access to a number of Saudi bank accounts in Switzerland.
Lord Goldsmith said that commercial considerations had not played any part in his decision. To have done otherwise would have been to admit a breach of the Organisation for Economic Co-operation and Development's anti-corruption code. Instead, Lord Goldsmith invoked the broader national interest. He had taken advice from the prime minister, the foreign and defence secretaries and the intelligence services and concluded that the investigation jeopardised Britain's national security.
Tony Blair, prime minister, offered elucidation. Britain's relationship with Saudi Arabia was "vitally important for our country in terms of counter terrorism, in terms of the broader Middle East, in terms of helping in respect of Israel/Palestine". Whitehall officials translate this as follows: such was the fury of the Saudi princes at the possibility of their bank accounts being investigated that their threats went well beyond the commercial.
As the Financial Times has reported, the Riyadh government said it would withdraw all co-operation on security, including intelligence-sharing on al-Qaeda, and would downgrade its embassy in London unless Mr Blair scrapped the inquiry. Since Saudi Arabia was the main source of finance and Islamist ideology for al-Qaeda, this was a threat taken seriously.
Yet subverting the rule of law was not the answer. Though this government often seems to think otherwise, the rule of law stands above any and all individual statutes as the foundation for freedom and democracy. It gives citizens a vital guarantee of equality before the law and serves as the bulwark against arbitrary power. It demands the rigorous separation of executive and judicial decision-making.
All this should be familiar to Mr Blair and Lord Goldsmith. Both, after all, are lawyers. A recent constitutional reform act sets out explicitly the government's duty to uphold the rule of law. Yet all it takes apparently is a threatening missive from Riyadh and such principles are cast aside.
Those impatient of principles should reflect on the supposed realpolitik of Lord Goldsmith's decision. Britain, it says, is now content to be reliant on a regime so determined to be spared any embarrassment that it would even withhold information on al-Qaeda terrorists. How comfortable can any state or government feel in such a relationship? Not at all.
Perhaps the Saudis were bluffing. Either way, this affair has opened eyes to the nature of the Riyadh regime.
For Britain, it is a grave strategic error, as well as a shameful retreat from the rule of law, to buckle before such threats. Mr Blair often says that principle and realism in foreign policy are two sides of the same coin. He is right. A pity then that he decided otherwise in this case.
