Department of Justice is right to investigate BAE Systems

The British government was mistaken if it thought last December’s shabby decision to drop its investigation into alleged corruption around the £43bn Al-Yamamah fighter export deal with Saudi Arabia would end the matter.

The US Department of Justice has decided to launch its own probe into whether BAE Systems, the British defence contractor that is also a large supplier to the Pentagon, has violated the Foreign Corrupt Practices Act. That decision shows the UK government’s arguments for suspending its investigation – that it would wreck a vital national security relationship with the Saudis and cost thousands of jobs – for what they are: specious realpolitik and economic excuses.

Al-Yamamah was never just an export order. First signed in 1985, after a vigorous competition against French Mirage jets, it served a multitude of purposes for both sides. It was a way for Saudi Arabia to spend some oil revenues in the west and for Margaret Thatcher, then British prime minister, to boast of jobs secured in Britain’s defence industry. It was an instrument of cold war security politics agreed by governments, not arms companies.

But there are allegations that Al-Yamamah slipped from a murky political deal into outright corruption. Earlier this month, for example, the BBC and the Guardian newspaper claimed to have uncovered proof that Prince Bandar bin Sultan, son of the Saudi defence minister and crown prince, benefited from hundreds of millions of pounds that BAE paid into a Washington bank. He denies the charges.

Allegations of bribery should be investigated; the law is the law. There are many in Saudi Arabia who want more transparency and the Saudis were never likely to cut off co-operation on national security matters. Britain might lose future arms sales if wrongdoing is exposed, but ignoring the law for the sake of economic expediency is an action of the mercenary and the cynical.

Those in the Saudi government who put pressure on Britain to abandon the probe have served their country poorly. They have turned a UK investigation into a US inquiry and thrust Al-Yamamah into the international spotlight.

The British government has been pusillanimous and the DoJ has exposed it. But there is a chance of redemption: the success and scope of the US inquiry will depend, in part, on how far Britain’s Foreign Office and Ministry of Defence co-operate. Gordon Brown, Britain’s new prime minister, should order that co-operation and let any repercussions fall where they may.