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Mrs Thatcher, Corruption and the Arms Trade

John Simkin

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Last week the National Archives made a mistake by declassifying a document that revealed large-scale corruption under Margaret Thatcher. It was hastily withdrawn by officials who claimed the release had been “a mistake”. Luckily, a researcher, Nicholas Gilby, had already realised its significance and photocopied the document before it was withdrawn. Here is an extract from Saturday’s Guardian:


Sir Colin Chandler's telegram was sent from Riyadh, where he was arranging the sale of 72 Tornados and 30 Hawk warplanes on behalf of the British arms firm BAE. It revealed that their cost had been inflated by nearly a third in a deal with Saudi defence minister Prince Sultan.

Sultan, who is crown prince, "has a corrupt interest in all contracts", according to a dispatch from the then British ambassador Willie Morris published in a recent Commons committee report. An accompanying Ministry of Defence briefing paper prepared for the then prime minister Margaret Thatcher describes Prince Sultan as "not highly intelligent ... He has prejudices, is inflexible and imperious, and drives a hard bargain". The Al Yamamah deal, worth £43bn in total, has long been the subject of allegations of secret commissions to Lady Thatcher's son Mark, and to several members of the Saudi royal family. All those involved have always denied the allegations.

The telegram from Sir Colin, now the head of budget airline easyJet, was unearthed by Nicholas Gilby, an anti-arms trade campaigner. After the Guardian showed it to the Ministry of Defence, officials were dispatched to the archives in Kew, where they loaded the files into a van and returned them to Whitehall's vaults. Campaigners had already copied all the papers and are planning to publish them on the internet.

Britain's politically sensitive Al Yamamah programme is under investigation by the Serious Fraud Office, which is probing corruption allegations against BAE.

The MoD documents reveal that the price of each Tornado was inflated by 32%, from £16.3m to £21.5m. It is common in arms deals for the prices of weapons to be raised so that commissions can be skimmed off the top. The £600m involved is the same amount that it was alleged at the time in Arab publications was exacted in secret commissions paid to Saudi royals and their circle of intermediaries in London and Riyadh, as the price of the deal.

Those allegations were treated with such concern in Whitehall in 1985, documents reveal, that a copy of the Arab magazine in question was immediately sent in confidence by the Foreign Office to Mrs Thatcher's chief aide at No 10, Charles Powell, with advice that officials "should simply refuse all comment". Yesterday, 20 years on, the MoD at first sought to take the same line. It insisted the Chandler telegram must have been leaked and said "we never comment on leaks". In fact, a copy was released to the National Archives on May 8 by the Department of Trade and Industry.

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I've always found it interesting that the Thatcher government has had such an easy ride when it comes to investigations of corruption. I lived in Saudi Arabia at the time of the invasion of Kuwait, and it was remarkable how relatively silent Thatcher was about Saddam Hussein at the time, compared with how strident she was about other acts of aggression (such as the Soviet invasion of Afghanistan).

I remember quite well the contempt various British government officials had for the Observer journalist who was executed by Saddam Hussein (in 1989?). It made you wonder if there was some connection between Hussein's regime and Thatcher (arm sales were an obvious link).

When the solids hit the air-conditioning in 1990, it quickly became clear to Brits living in Saudi that they'd get little help from British officials. A friend of mine with joint British and New Zealand citizenship phoned the New Zealand embassy in Riyadh to enquire about evacuation plans, and asked if they were coordinating their efforts with the UK. The response was immediate: "No way!" This just about sums things up …

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