The British government approved up to £60 million ($74 million) in alleged bribes to Saudi Arabia as part of a huge arms deal over many decades and sought to conceal the payments through a controversial arrangement described as "deniable fiddle", a UK court was told yesterday. The "fiddle" involves paying bribes to Saudi officials using private contractors in order to secure major arms deal.
The case, which is being held at Southwark Crown Court, relates to a UK government arms deal to provide communications services to the Saudi Arabian National Guard. The services were delivered by a private contractor, British firm GPT, a now defunct unit of Airbus.
According to the Serious Fraud Office (SFO), which began an investigation into the payments, millions of dollars of alleged bribes were paid to Saudi royals to ensure that GPT received lucrative contracts from the Saudi military. GPT however claims that it was not aware that payments made by the company were intended as bribes to secure the deal.
Jeffrey Cook, former managing director of GPT, and John Mason, former financial officer at two of GPT's subcontractors, are accused of paying £9.7 million ($11.9 million) in bribes to Saudi officials between 2007 and 2012.
The arrangement of the payment structure allowing for the concealment of alleged bribery, however, is said to date back to the late 1970s. Described as a "fiddle", the arrangement enabled members of the Saudi royal family and the British government to "deny having any knowledge of [the payments] at all", the jury at the Crown Court were told.
Opening the defence on behalf of Cook, Ian Winter QC told the court that some of the payments were made to the then Prince Abdullah, who later became the Saudi monarch for a decade. King Abdullah died in 2015 and was succeeded by his younger brother King Salman Bin Abdulaziz Al Saud.
Winter also told the court that internal documents recorded that the British government and Abdullah organised "a deniable fiddle" to hide the payments. The British government had not "merely acquiesced or tolerated those payments" but "the Ministry of Defence actually required those payments to be made," said Winter.
According to Winter, members of the Saudi Arabian National Guard had made it "abundantly clear" in negotiations with senior UK government officials over the award of the contract that the payments were part of the deal. "It was therefore a contractual requirement that these payments be made in this way or the contract would go elsewhere to somebody who was prepared to [pay them]," Winter argued.
Describing the payment structure allowing both parties to conceal the bribe through a private contractor, Winter said that "both Prince Abdullah and the British government wanted a deniable fiddle that would enable the payments to be made, but which would permit them to deny their involvement through the use of a private contractor." In recent years, the role of private contractor had been performed by GPT.
Winter argued that his clients and the role of GPT was immaterial in the payment arrangement. He said that the MoD had set about working on creating a new system that did not involve GPT having to make the payments to senior Saudis. He alleged that the payments were moved through an offshore route by the MoD.
The SFO began its investigation into GPT in 2012 after complaints from whistleblowers. The case continues.