The outcome of a US criminal investigation into alleged bribery in a £43bn arms deal between Britain and Saudi Arabia was watered down following a secret lobbying campaign, according to a leaked document.

The confidential memo seen by the Guardian provides a rare insight into behind-the-scenes negotiations between an American law firm hired by a Saudi prince and the US Department of Justice (DoJ).

The discussions took place in the runup to the DoJ’s completion in 2010 of an investigation into the deal between Saudi Arabia and Britain’s biggest arms firm, BAE.

The Washington-based law firm boasted in the memo that it had wrung a string of concessions from investigators that led to the removal of potentially embarrassing details from an official document announcing their conclusions.



The memo sheds new light on one of the most contentious arms deals in history, and underlines the lengths taken to prevent disclosure of any material that might damage the west’s relationship with the Saudis.



That relationship comes under the spotlight again this week with the visit to Britain of Saudi Arabia’s de facto ruler, crown prince Mohammed bin Salman, who is due to meet Theresa May in Downing Street. In November he initiated what has been portrayed as a drive to recoup billions of dollars accrued through corruption.

At least one prince alleged to have accepted a bribe in the arms deal was among 30 senior Saudis held under house arrest at the Ritz-Carlton in Riyadh.

Britain and Saudi Arabia have long sought to keep secret details of the arms deal known as al-Yamamah, which involved planes and other military equipment.

The leaked memo shows how a member of the Saudi royal family, Prince Bandar bin Sultan, hired a lobbying firm run by a former head of the FBI, Louis Freeh. According to the memo, the prince was a “key target” of the DoJ investigation after the Guardian revealed he had allegedly received more than £1bn in secret payments from BAE.

The memo was written by the firm for the Saudi ambassador to the US in January 2010.

The firm claimed that its “relentless” work, including “dozens of meetings, calls etc with BAE lawyers and very senior US government officials”, had persuaded DoJ investigators to remove anything identifying Bandar from the official document announcing the conclusion of the investigation into the alleged bribery.

Any details of the allegedly corrupt payments to Bandar had also been deleted from the draft document, leading the firm, Freeh Sporkin & Sullivan (FSS), to claim that it had achieved the “remarkable result” of getting the prince “cleared” in the investigation.

The firm claimed in the memo that it had secured a series of victories from the investigators in what amounted to an “exoneration of the good names” of the prince and Saudi Arabia.

The firm hailed the settlement in the BAE case as “a huge sea change” and a reversal of the investigators’ original plan.

Asked about the contents of the memo, FSS said: “While it has been publicly reported that FSS represented HRH Prince Bandar in connection with the BAE matter, we take our responsibilities under the attorney client privilege most seriously and so cannot comment on our representation.

“Needless to say, HRH Prince Bandar was never alleged or charged by any governmental authority, including the US Department of Justice, with any violation of law, regulation or other proper standard of behaviour. Conversely, HRH Prince Bandar has been a dedicated, life-long public servant of the Kingdom of Saudi Arabia, and a great friend and ally of the United States.”

The firm said it disputed the accuracy of the Guardian’s account of the memo and cautioned “publication could create a cause for claims of defamation”. It did not respond when asked what specifically was inaccurate.

Allegations that BAE used illicit payments to land the al-Yamamah contract – Britain’s biggest-ever arms deal – surfaced soon after it was sealed in 1985.



In 2007 the DoJ initiated its own investigation after the Guardian revealed that BAE had been making regular payments to Bandar via the Riggs Bank in Washington DC.

Bandar, who was the Saudi ambassador to the US for more than 20 years, denied he had received improper payments from BAE. He said payments consisted of Saudi official funds and were used for purposes approved by the Saudi ministry of defence. He was not among those arrested and held at the Ritz-Carlton in the recent roundup.

Bandar hired Freeh, who had headed the FBI in Bill Clinton’s administration. With two former judges, he had set up the law firm Freeh, Sporkin & Sullivan after he left the FBI in 2001.

The memo recorded a “significant” meeting between BAE, Freeh and his colleague Eugene Sullivan in January 2010. The arms company had shared details of its confidential negotiations with the DoJ investigators weeks before the settlement was published.

Sullivan, the memo’s author, wrote that the investigators had been intending to identify Bandar “anonymously but unmistakably as the recipient of $2bn in ‘corrupt bribes’ from BAE”.



He added the settlement would no longer refer to the “corrupt payments” that had allegedly been funnelled to Bandar via the Riggs Bank.

“This is a huge ‘sea change’ and reversal of the DoJ’s intended plan, and the direct result of our hard and successful work on the behalf of [Prince Bandar] and the Kingdom of Saudi Arabia over the last four years. We respectfully suggest that no other lawyers in America could have gotten this result,” Sullivan wrote.

He said he and Freeh had had a “high impact” on the negotiations with the DoJ and the UK’s SFO over their years representing Bandar.

He wrote that in the initial stages of the DoJ’s investigation into the alleged payment of bribes by BAE in a number of countries, Bandar and the Saudis were “key targets” and would form a major part of any deal to settle the case.

He claimed his firm’s work had resulted in the DoJ agreeing there would only be a limited reference to the allegedly corrupt activities of the Saudis.

He added the settlement would not refer to bribery in the al-Yamamah deal, nor the deal itself – “a complete reversal with regard to the Kingdom of Saudi Arabia and 180 degrees from where the DoJ started”.

No Saudi would be named and instead there would only be a reference to a “Saudi official”. The firm claimed in the memo that anyone knowledgeable about the case would realise the “Saudi official” mentioned in the settlement should not be read as a reference to its client, Prince Bandar, but another Saudi prince.

“This nuance will undoubtedly be lost in the announcement (and the huge negative hype which the Guardian eg will give to the initial story),” the memo said.