Goldsmith denies BAE cover-up

Last Modified: 08 Jun 2007
By: Cathy Newman

The attorney general, Lord Goldsmith, denies allegations that he covered up payments made by BAE Systems to a Saudi prince on the day the biggest submarine ever built for the Royal Navy was unveiled.

BAE Systems proudly unveiled its monster of the seas today - as big as nearly 1000 double decker buses.

But the mood of patriotic fervour that surrounded the royal launch was marred by allegations that the British government had concealed information about the company's payments of more than £1bn to a Saudi prince.

Lord Goldsmith today denied he'd ordered fraud officials to hide details of the payments from international investigators at the Organisation for Economic Co-operation and Development.

It's the deal Margaret Thatcher signed with the Saudi government in 1985 that has caused all the controversy.

The al Yamamah agreement to supply the Saudis with more than 100 Tornado and Hawk warplanes was originally agreed by Margaret Thatcher's Conservative government in 1985.

A previous report by the National Audit Office into allegations that huge bribes were paid to secure the deal was suppressed in 1992 amid claims that publication would damage relations with the Saudis.

The payments were allegedly received by Prince Bandar bin Sultan, the former Saudi ambassador to the United States, from BAE Systems for setting up the £40bn al Yamamah arms deal in the 1980s with the full knowledge of the Ministry of Defence

Today the director of the Serious Fraud Office backed up Lord Goldsmith's claim that he hadn't put pressure on British investigators.