War Profits Trump the Rule of Law

by Chris Floyd t r u t h o u t | UK Correspondent

December 22, 2006

I. The Wings of the Dove

Slush funds, oil sheiks, prostitutes, Swiss banks,
kickbacks, blackmail, bagmen, arms deals, war plans,
climbdowns, big lies and Dick Cheney - it's a scandal
that has it all, corruption and cowardice at the
highest levels, a festering canker at the very heart of
world politics, where the War on Terror meets the
slaughter in Iraq. Yet chances are you've never heard
about it - even though it happened just a few days ago.
The fog of war profiteering, it seems, is just as thick
as the fog of war.

But here's how the deal went down. On December 14, the
UK attorney general, Lord Goldsmith (Pete Goldsmith as
was, before his longtime crony Tony Blair raised him to
the peerage), peremptorily shut down a two-year
investigation by the Serious Fraud Office (SFO) into a
massive corruption case involving Britain's biggest
military contractor and members of the Saudi royal
family. SFO bulldogs had just forced their way into the
holy of holies of the great global back room - Swiss
bank accounts - when Pete pulled the plug. Continuing
with the investigation, said His Lordship, "would not
be in the national interest."

It certainly wasn't in the interest of BAE Systems, the
British arms merchant that has become one of the top 10
US military firms as well, through its voracious
acquisitions during the profitable War on Terror -
including some juicy hook-ups with the Carlyle Group,
the former corporate crib of George H.W. Bush and
George W. Bush and still current home of the family
fixer, James Baker. BAE director Phillip Carroll is
also quite at home in the White House inner circle: a
former chairman of Shell Oil, he was tapped by George
II to be the first "Senior Adviser to the Iraqi
Ministry of Oil" in those heady "Mission Accomplished"
days of 2003. BAE has allegedly managed to "disappear"
approximately $2 billion in shavings from one of the
largest and longest-running arms deals in history - the
UK-Saudi warplane program known as "al-Yamanah" (Arabic
for "The Dove"). Al-Yamanah has been flying for 18
years now, with periodic augmentations, pumping almost
$80 billion into BAE's coffers, with negotiations for
$12 billion in additional planes now nearing
completion. SFO investigators had followed the missing
money from the deal into a network of Swiss bank
accounts and the usual Enronian web of offshore front

Nor was continuing the investigation in the interest of
the Saudi royals, whose princely principals in the arms
deal were embarrassed by allegations that a BAE-
administered slush fund had supplied the fiercely
ascetic fundamentalists with wine, women and song - not
to mention lush apartments, ritzy holidays, cold hard
cash, Jags, Ferraris and at least one gold-plated
Rolls-Royce, as The Times reported. One scam -
uncovered by the Guardian in a batch of accidentally
released government documents - involved inflating the
price of the warplanes by 32 percent. The rakeoff was
then presumably siphoned into BAE's secret accounts,
with some of it kicking back to the Saudi royals and
their retainers.

The Saudis were said to be incensed by the continuing
revelations spinning out of the investigation, which
had begun in 2004 after the Guardian first got wind of
the alleged slush fund. Last month, with talks on the
new $12 billion extension in the final stages, the
Saudis lowered the boom, threatening to ashcan al-
Yamanah and buy their warplanes from - gasp! - the
French instead. For a week or two, the Blair government
played chicken with the Saudis, hoping the threat was
just a hardball bluff for better terms (or maybe bigger

Then came a curious intervention. Last month, Dick
Cheney traveled to Riyadh for talks with Saudi King
Abdullah. There he beseeched the king to step in and
help pull America's fat out of the wildfire of Iraq by
using Saudi influence on Iraq's volatile Sunni
minority, the Scotland Sunday Herald reported. It's
also thought that Cheney asked the Saudis to stump up
more cash to replace some of the billions of dollars in
missing "reconstruction money" that White House cronies
and local operators have somehow "misplaced" into their
own pockets during the war.

It is widely believed in top UK political circles that
among the many considerations the Saudis asked for in
return for the possibility of helping out in Iraq was
the application of White House pressure on Tony Blair
to quash the BAE investigation. The king apparently put
this more in the form of a demand than a request:
senior sources in the Blair government told the
Observer that the Saudis threatened to stop sharing its
extensive intelligence on terrorism and kick all
British intelligence and military personnel out of the
kingdom if Blair didn't kill the probe.

But if Cheney and Abdullah did do a strongarm number on
Blair, they probably didn't have to break a sweat to
convince him. In this case, Blair no doubt could echo
the words of Macbeth when he saw the ghostly dagger
drawing him on to dirty deeds: "Thou marshall'st me the
way that I was going." For certainly, Blair had no
desire to see the fraud probe of BAE progress any
further. He has been one of the arms peddler's biggest
cheerleaders - and most assiduous shills - throughout
his long term in office. For example, in January 2002,
as India and Pakistan teetered on the edge of a nuclear
exchange over Kashmir, Blair made a lightning trip to
both countries to preach peace - and to hawk a $1.4
billion deal for BAE jet fighters with India. This
move, of course, only made the already outgunned
Pakistanis even more likely to use their nukes to stave
off any attack. It seems not even the greatest threat
of nuclear war that the world had ever seen was enough
to stop Blair from throwing gasoline on the fire in the
service of BAE's bottom line.

Yet although the Saudis certainly weren't pleased with
the investigation and wanted it to go away, as the SFO
moved forward it became increasingly clear that BAE
itself had more to fear from the probe than did the
gilded guardians of Mecca. In 2002, the UK adopted a
set of stringent anti-bribery laws that criminalized
the use of old-fashioned baksheesh to grease a deal
with foreign powers. As the Guardian reported, the SFO
were pursuing three key questions: Were members of the
Saudi royal family getting secret UK payoffs? Were the
financial transactions crimes under UK law? And had BAE
lied to government agencies in its claims to have
reformed its past practices and dispensed with the
"confidential Saudi agents" who served as bagmen for
the bribes?

They believed the answers were waiting in Berne,
Switzerland, in a box of files being kept for them by
the Swiss federal prosecutor's office, the Guardian
reported. This box "was the hottest potato of all. The
Swiss dossier contained print-outs of BAE's recent
offshore banking transactions with key Saudi middlemen.
The normally highly-secret bank records had recently
been secured by the authorities at the British
investigators' request."

But just before they were to fly down to claim the
Swiss bank trove, Goldsmith ordered the SFO to stop the
probe and turn over all their existing files for his
examination. After two days of poring through the
material (or perhaps not poring through it), Goldsmith
suddenly announced that, upon consultation with the
cabinet and the prime minister, he was quashing the
entire investigation in the name of "the UK's security
and foreign policy interests."

Legal experts told UK papers they could find no
precedent for such a move. Oddly enough, Her Majesty's
Attorney General - a certain Lord Goldsmith - had been
of a similar mind just 10 days before, when, in
response to a ferocious PR campaign against the SFO
probe launched by BAE's friends among the great and
good, he declared that he had "no intention of
interfering with the investigation," as the Guardian
reports. What a difference 10 days, Dick Cheney and
Saudi blackmail makes!

Not to mention Blair's desire to peddle even more BAE
weaponry on yet another "peace mission" - this time to
the Middle East, where he conducted a frantic and
utterly fruitless "whirlwind tour" in mid-month. But
before jetting off to seek ever-elusive "breakthroughs"
on Iraq and Israel-Palestine, Blair wanted the SFO
imbroglio wrapped up, so he could proffer BAE planes to
the United Arab Emirates without all that folderol
about bribes hanging over the company, the Times

In delivering his ruling on BAE, Goldsmith acted with
the same bold flip-floppery he had displayed in the
run-up to the invasion of Iraq. Then too, there was a
small gap of time in which a momentous reversal was
made, between his first, detailed private advice to
Blair that there were at least six different ways in
which the invasion could be considered a war crime and
his last-minute, hastily-sketched public declaration
that, by gum, he thought the war just might be legal
after all. Despite a few minor quibbles on various
tactics in the never-ending Terror War - Goldsmith has
on occasion voiced a few mild objections to the
American concentration camp on Guantanamo Bay - the
good Lord has proven himself a worthy counterpart to
his comrade across the sea, US Attorney General Alberto
Gonzales, in exalting the principles of political
expediency and war profiteering above the rule of law.

II. Tony in Wonderland

There is yet another parallel between the fraud probe
kibosh and the Iraq warmongering: the official reasons
given for the action have been constantly changing.
Indeed, in the days following Goldsmith's hugger-mugger
announcement - carefully timed to coincide with the
release of the final report on Princess Diana's death,
which the government knew would consume every ounce of
media oxygen that day - Blair and his high ministers of
state peddled a dizzying and often contradictory array
of justifications for stifling the investigation.

There was the initial "security and foreign policy
interests" offered by Goldsmith to Parliament and
initially echoed by Blair. The UK-Saudi relationship
"is vitally important for our country, in terms of
counterterrorism, in terms of the broader Middle East,
in terms of helping in respect of Israel-Palestine, and
that strategic interest comes first," Blair said after
the ruling, as AP reported.

However, that explanation didn't play very well, for it
seemed to confirm the reports that Britain had indeed
been blackmailed and bullied by Saudi Arabia into
dropping the probe. The underlying implications of
Blair's stance were riddled with glaring
contradictions: Saudi Arabia is our strong, trusted
friend and ally who, er, uh, has threatened to fan the
flames of regional conflict and expose us to a much
greater risk of terrorist attack if we don't disregard
our own laws.

Somehow, the sight of a British Prime Minister
declaring "if we don't do what they say, they'll hurt
us" did not convey the degree of wisdom and reassurance
the government sought to project about the decision. As
AP noted, some of those most upset by the ruling came
from Blair's own increasingly-fractious Labour Party -
which hit another new low in the polls this week,
dropping further behind the resurgent Tories. "We
appear to be giving businessmen carte blanche to do
business with Saudi Arabia, which may involve illegal
payments or illegal inducements," said Eric Illsley, a
Labour member of Parliament's Foreign Affairs Select
Committee. "We have been leaned on very heavily by the

And so this argument was largely supplanted by the
economic considerations that BAE's supporters had been
trumpeting in the press in the weeks before Goldsmith's
ruling. If the Saudis had slaughtered "The Dove" deal
because of the SFO probe, Britons were told, it would
have cost the nation 100,000 jobs. This figure, first
floated by BAE's media and parliamentary front men last
month, soon became the standard number touted by
government backers after the Goldsmith ruling. The fact
that it was flatly contradicted by a University of York
study which showed that a cancellation of the impending
al-Yamanah extension would have eliminated just 5,000
jobs cut no ice with the panicky spin doctors. (To be
sure, even the lesser job loss would have been a heavy
blow to the workers involved; but at that smaller
level, it was a blow that could have easily been
cushioned by government compensation and genuine
efforts at retraining or re-employment elsewhere: the
kind of action that Blair's government has often
promised yet seldom delivered to the many industries
that have gone belly-up - and overseas - during his

The new line also flatly contradicted Goldsmith's
original declaration to Parliament, in which he
insisted that economic considerations had "played no
part" in his decision. When the rank hypocrisy of this
was pointed out, Blair and Goldsmith both came up with
a new reason: the case wasn't strong enough to go
forward, there was not enough evidence of wrongdoing.
Aside from the fact that Goldsmith himself had
prevented the SFO from examining the most relevant
evidence in the entire case - BAE's own secret bank
records - this stance was, again, at odds with his
position just days earlier, when he'd declared he would
not intervene in the investigation. That declaration
had come after he had gone over the case and the
evidence for it in a meeting with SFO director Robert

SFO officials strongly disputed Blair and Goldsmith's
claim that the case was weak. And in any case, the
whole point of the probe was not to guarantee a
prosecution but to establish the truth. While the Blair
government's disinterest in establishing the truth as
opposed to pushing a political line is well-established
(see the Downing Street Memos), they are vitally
interested in information. So much so that they
apparently bugged the SFO offices during the probe, the
Independent reported. "I was told by detectives that
the probe was being bugged. They had reached this
conclusion because highly confidential information on
the inquiry had been reaching outside parties," a
senior figure involved in the investigation told the
paper. SFO investigators believe the probe was actually
quashed because the Blair spies had learned how very
substantial it was, not because the evidence was

In the end, after the "weak-case" justification turned
out to be a weak case itself, Blair and the gang
reverted back to a variation of the "security" line:
the noble struggle to free the peoples of the Middle
East from the clutches of armed Islamic extremism
superseded all other considerations. Despite the ever-
soaring rhetoric, however, Blair failed to make clear
exactly how providing $80 billion worth of advanced
arms to perhaps the most repressive Islamic extremist
state on earth can be said to advance the cause of
freedom and tolerance in the Middle East.

Lord knows - and lords know - that unseemly
accommodations sometimes have to be made in this world,
especially in geopolitics. A wink here, a little
baksheesh there between unsavoury characters are often
better than, say, launching a war of aggression and
murdering more than half a million innocent people to
achieve your political and commercial ends. But in the
BAE case, as in so much else in politics, it is the
hypocrisy that rankles most. Western governments
obviously believe they must give guns and bribes to
extremist tyrants in order to obtain the oil that keeps
their own nations in such disproportionate clover - but
they lack the guts to say so in plain language,
dressing up this ugly business with meaningless
trumpery about freedom, peace and security.

Are they trying to mask their own cynicism - or protect
the tender sensibilities of their electorates, who
might prefer sugared lies to acknowledgements of the
dirty deals that undergird their way of life?

Chris Floyd is an American journalist. His weekly
political column, "Global Eye," ran in the Moscow Times
from 1996 to 2006. His work has appeared in print and
online in venues all over the world, including The
Nation, Counterpunch, Columbia Journalism Review, the
Christian Science Monitor, Il Manifesto, the Bergen
Record and many others. His story on Pentagon plans to
foment terrorism won a Project Censored award in 2003.
He is the author of Empire Burlesque: High Crimes and
Low Comedy in the Bush Imperium, and is co-founder and
editor of the "Empire Burlesque" political blog.