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Weapons Trade: Sleazy does it

SOLOMON HUGHES examines Britain’s longstanding use of ‘middlemen’ to win arms deals with Middle Eastern dictators

IN THE wake of the Fifa scandal David Cameron bravely stood up to the “cancer of corruption,” saying it should mean the end of the  “international taboo over pointing the finger” at corrupt firms and businesses.

Cameron forgot that he actually complained when BBC Panorama probed Fifa’s corruption in case it got in the way of British bids for the World Cup.

For more Cameron hypocrisy about corruption, see Tory attitudes to the arms trade.

If you want to understand the unbreakable link between the British arms industry and corruption, you should read Nicholas Gilby’s Deception in High Places, published last year.

Gilby dug through the official archives for evidence of British bribery and arms sales from the 1960s onwards. The book is very heavily based on official documents — including papers he had to fight for in court. It is original history based on meticulous use of the facts.

But I advise you flick through the book with a pencil before you read it, randomly underline parts and draw exclamation marks and “surprised faces” (like those :-O marks) in the margins.

Because Gilby is writing an accurate history, recording bad things done by powerful and litigious companies, he sticks very strictly to the facts, plainly presented. But to do proper justice to the story he so clearly tells, you need to add a few sound effects as well — a load of “Oh, my Gods!” and “Whaaat?s.” 

Gilby shows the basic outlines of arms sale corruption haven’t changed in 50 years. Britain sells weapons to dictatorships, especially in the Middle East. All these arms sales rely on bribing the corrupt ruling elites of those nations. The bribes are transmitted via “agents” — middlemen who pay bribes which are lightly disguised as “commission” or “marketing.”

Usefully, the documents from the 1960s are pretty open about how it works — and give a comic view of British hypocrisy, where officials talk sniffily about corruption while at the same time encouraging it. Diplomats describe the men who handle bribes as “buccaneers” but see themselves as “gentlemen.”Gilby digs up a particularly fine example of this kind of doublespeak when a British ambassador high-handedly says: “Some governments are prepared to get involved in shady dealings” but her majesty’s government “are not.”

They “cannot and must not tell the company who is to be bribed” — a firm stand, immediately undermined by his assertion “that, after all, is what a local agent is for in this part of the world.”

This very British ability to face both ways jumps out from documents. There is a top Foreign Office official saying: “I realise that getting big contracts in Saudi Arabia requires a judicious element of bribery.”  

Or Britain’s ambassador to Saudi Arabia writing a letter titled “The Fiddle Factor in Saudi Defence Contracts,” saying:  “We should avoid getting involved in the fiddling,” but at the same time the ambassador kept a file on “who pays whom in Saudi Arabia” to show how companies could get into corruption. 

Gilby manages to tear away some of the excuses for bribery. Officials usually blame the bribed, not the briber, claiming “baksheesh” is the norm in these parts of the world. But when Saudi King Faisal tried to ban bribes in 1967, the British government and arms firms did all they could to undermine him.

Gilby describes the foundation of the Defence Sales Organisation (DSO), the official government body that backs arms sales. The DSO still exists with a slightly different name. I think we can assume it still has the same attitude to corruption as it did in 1967, when the boss got angry about Civil Service squeamishness about bribery. “I am completely mystified by just what your problem is … people who deal with the arms trade, even if they are sitting in a government office, live day by day with this sort of activity, and equally day by day they carry out transactions knowing that at some point bribery is involved.

Obviously I and my colleagues in this office do not ourselves engage in it, but we believe that various people who are somewhere along the chain of transactions do. They do not tell us what they are doing and we do not enquire. We are interested in the end result.”

Labour was fully behind this arms sales corruption. Another did-he-really-say-that? moment comes when Labour minister in charge of arms sales John Stonehouse talks about the need to “pay out vast sums” in bribes. Stonehouse himself was a comically corrupt figure, who later tried to fake his own death by leaving his clothes on the beach to make it look like he committed suicide by swimming to his death in the sea. He was alive, but hiding from bad debts.

Gilby takes the story up into the present day, showing that the story doesn’t change. Arms firms sell weapons to dictators using “agents” to pay bribes. Politicians back them up, as when Tony Blair quashed an investigation into BAE bribes in Saudi Arabia in 2006. 

BAE had introduced some new wrinkles to the corruption game, setting up secret offshore firms to pay bribes and buying a travel agent which it could use to supply Middle Eastern sheikhs with luxury holidays and sexual partners.

This also takes us up to the time when Cameron could have taken a stand on corruption — when Blair’s Labour Party shamefully closed the investigation into BAE. 

The Tories kept quiet and looked at their toes. Then the US Department of Justice decided — just as in the Fifa case — that it would prosecute. Its move against corruption was instantly condemned by Cameron’s shadow ministers.

Shadow defence minister Gerald Howarth condemned the US move against BAE bribery, saying: “We are very concerned that the Department of Justice is trying to pry into a sovereign matter between the UK and the Kingdom of Saudi Arabia.

It’s none of their business.”  Howarth claimed he had backing from shadow defence secretary Liam Fox. He certainly faced no opposition from Cameron.

  • Nicholas Gilby’s Deception in High Places: A History of Bribery in Britain’s Arms Trade is published by Pluto and available from all good booksellers.

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