A British witness has testified to US corruption investigators about alleged payments from BAE Systems to members of the Saudi royal family during the controversial Al Yamamah arms deals.
Swiss prosecutors have also agreed to hand over financial records linked to the Saudi Royal family, according to a report by the Guardian newspaper. A US source told the paper “The investigators are confident they can get what they need from Switzerland. That’s where all the BAE arrangements were made”.
According to the report, businessman Peter Gardiner was flown to Washington in August via Paris to avoid the attention of British ministers, who are refusing to grant a request from the US department of justice for mutual legal assistance. US sources said the British had protested the move, warning Gardiner his testimony was “contrary to international protocols”.
The UK’s Serious Fraud Office spent two years collecting evidence that BAE had transferred £1bn to US accounts held by Prince Bandar of Saudi Arabia, and a further $1bn to Swiss bank accounts linked to Saudi royals. It was forced to abandon its investigation on the grounds of national security.
Prince Bandar, the former Saudi ambassador to the US, has repeatedly denied any wrongdoing and hired a former FBI head and a retired British high court judge to defend his position.
The US department of justice formally demanded in July that Britain hand over all evidence of payments, but has so far been refused more than a million pages of documents seized by the SFO during its investigation.
Saudi Arabia and Britain sealed a $8.84 billion deal for 72 Eurofighter Typhoon jets in September. Sources said the pact would use cash from the Saudi defence budget, instead of oil shipments used in previous deals, which critics say make it easier to conceal secret payments.
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