





Glympton, Oxfordshire. The 2,000 acre manor house and sporting estate purchased by Prince Bandar after he arranged the al-Yamamah arms deal. Photograph: INS News



Glympton looks at first sight like a typical English village.



But the entire Cotswolds hamlet and the surrounding 810-hectare (2,000-acre) sporting estate are owned by a rich Saudi.



Prince Bandar [biography] - son of Prince Sultan, the Saudi defence minister - bought Glympton on what are alleged to have been his winnings from Britain's biggest arms deal.



He constructed a complete replica English pub within the walls of his mansion, to entertain his friends.



Not to be outdone, his agent, a Syrian called Wafic Said [biography], built Tusmore Park, a grand stately home in the Palladian manner, nearby.



The British prime minister, Margaret Thatcher, negotiated with Bandar to clinch the so-called al-Yamamah deal [profile] for BAE [BAE's position] in 1985.



And the sums available were mind-boggling.



Over the past 20 years, the warplane programme has brought £43bn in revenue for BAE [profile].



The deal made the career of BAE executive Dick Evans [biography], who rose to chair the company on the strength of it.



Police later calculated that more than £6bn may have been distributed in corrupt commissions, via an array of agents and middlemen.Newly obtained documents and our own investigations have revealed details of where the money may have gone.



Millions went to Bandar, according to US sources. Up to $30m (£15m) at a time is alleged to have been paid into his dollar account at Riggs Bank [profile] in Washington.



More millions were paid by BAE into Wafic Said-linked accounts in Switzerland.



Bandar's father, Prince Sultan [biography], was described by a British ambassador as having "a corrupt interest in all contracts".



Legal sources say BAE disguised many of the payments by making them through an anonymous offshore company, Poseidon.



Large amounts were also alleged to have been transferred in this way to Mohammed Safadi [biography], a Lebanese politician.



He acted for Sultan's son-in-law, Prince Turki bin Nasser [biography], who controlled the Saudi air force.



At least £1bn is said to have gone down the Poseidon route. More payments were allegedly disguised in inflated bills to BAE from local subcontractors.



A relatively minor, although colourful, aspect of this torrent of cash was a £60m "slush fund" maintained by BAE to keep Prince Turki bin Nasser sweet on his visits to the west.



The arms firm provided him with extravagant holidays, fleets of classic cars, planeloads of shopping and blond girlfriends.



BAE claims these treats were "paid for under the contractual arrangements". But in fact bills went to the al-Yamamah contract at the MoD under the misleading phrase "support services" [document].



The cash for all these payoffs came, simply enough, from overcharging.



Accidentally released UK documents [article] reveal that the basic price of the planes was inflated by 32%, to allow for an initial £600m in commissions.



That was only the start. Many UK sub-contractors - for jet engines, weapons and electronics - have revealed that they too were required to pay commissions.[article]



Spare parts, maintenance, construction of local bases - every aspect of al-Yamamah is alleged to have involved corruption.



Former British defence secretary Ian Gilmour told Newsnight:



"If you are paying bribes to high-up people in the government, the fact that it's illegal in Saudi law doesn't mean much." Asked about allegations of royal corruption in 2001, Prince Bandar said:



"If you tell me that building this whole country ... out of $400bn, that we misused, or got, $50bn, I'll tell you, 'Yes. So what?'." "We did not invent corruption [...] This has happened since Adam and Eve. It's human nature." [transcript] But the British government still falls over itself to conceal Saudi behaviour [article]. Michael Heseltine, then defence secretary, was the first of a chorus, claiming:



"The government had no knowledge and no dealings involving commission arrangements." The documents reveal that, in fact, under the 1977 Cooper directive [document] still in force at the time, the UK government was heavily involved.



BAE was told by the MoD to sign a letter claiming the payments were "accepted by the Saudi authorities".



The commission amounts were then agreed by the head of DSO, Sir Colin Chandler [biography], and personally authorised by the MoD permanent secretary, Sir Clive Whitmore.



Just as it had done on previous deals, the MoD arranged BAE's resultant profit margins.



It also took a 2% management fee from the Saudis and set up an entire London office block [profile] of civil servants to run the government-to-government contract.



The cash for Bandar, described as for "marketing services", was allegedly drawn from Bank of England accounts containing Saudi Arabia's money, jointly controlled by DESO and BAE.



Within days of the deal being announced, an Arab-language magazine reached the desk of Thatcher's chief adviser, Charles Powell [biography].



In detail, it accused Bandar and others of taking huge commissions.



The Whitehall advice was not to attempt any denial: "We suggest MoD should simply refuse all comment." [document]



It might have been more stylish, perhaps, of the civil servants, and more in tune with the occasion, to recommend an old Arab proverb:



"The dogs bark, but the caravan moves on."



For in the end, it was to take more than 20 years for outsiders to crack these squalid secrets of al-Yamamah.



David Leigh and Rob Evans



Part 7: Britain blocks reform















