Document:Closing the Stable Door

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Disclaimer (#3)Document.png webpage  by Richard Donkin dated 2007-03-06
Subjects: Savoy Mafia, Al-Yamamah arms deal, Cash-for-honours
Source: Donkin Life (Link)

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Closing the Stable Door

There is something of the drip, drip, drip of the Watergate revelations about the cash-for-honours story in the UK. At least that’s what the press would like us to believe. It’s a power thing. There are few stories that journalists like more than those they believe have the potential to "bring down the government/prime minister/president/monarchy". Circle your favourite institution as applicable.

When I was engaged in this kind of digging at the FT in the late 1980s, part of our work was focused on Margaret Thatcher as British Prime Minister. While investigating the various export operations that later became lumped in to the catch-all "arms-to-Iraq affair", we were told about a circle of businessmen who met regularly at the Savoy Grill.

It is not a betrayal of confidences – he has written a book about it all – to say that our original source for this information was Gerald James, the former Chairman of Astra Holdings, a company that was well known among children as a fireworks manufacturer but which subsequently became a substantial exporter of explosive propellants. One of its customers was Gerald Bull, the Canadian ballistics expert who created a large gun – the Supergun – for Iraq.

Savoy Mafia

It was Bull’s dream to launch a projectile in to space from the barrel of a gun. It was Saddam Hussein's dream to have a nuclear arsenal and sufficient weaponry to create an Arab superpower. Bull wasn’t too choosy about his clients, a flaw in judgement that proved fatal when he was assassinated outside his flat in Brussels in 1990. Three years later, during a sabbatical, I began to write a thriller around these events but shelved it when I went back to the FT.

James would refer to the Savoy Grill group as the "Savoy Mafia". What most of its members had in common, he said, was a desire to make a lot of money exploiting export credit guarantees – a government-backed (that means taxpayer backed) system that underwrites export deals.

Members of this group, he said, were instrumental in finding work in the US for Mark Thatcher, the prime minister’s son who, so the allegation went, had enriched himself to the tune of several million pounds in commissions relating to BAE Systems' multi-billion pound Al Yamamah arms contracts with Saudi Arabia, the UK’s largest ever export deal.

Such stories were notoriously difficult to prove since, inevitably, the money trail would end at the brass-plate-coated offices of some Caribbean or Jersey-based lawyer representing the thousands of offshore entities used to protect the identity of their owners.

Sometimes someone in Parliament would get wind of such stories and launch an inquiry. It would be fascinating to know the outcome of the Public Accounts Committee investigation of Al-Yamamah. But the report, prepared in 1992, has never been published.

In the same way a two-year Serious Fraud Office investigation in to the Al-Yamamah deals was dropped recently after diplomatic representations were made to Robert Wardle the head of the SFO. Al-Yamamah is worth billions of pounds and supports thousands of jobs in the UK economy, but should justice be subordinated to national interest? The director general, Lord Goldsmith, said the decision had been made in the public interest not national interest. What's the difference?

This might seem like history but it should be remembered that Sir John Bourn, the Auditor General who last year suppressed renewed calls for publication of the Public Accounts Committee report, remains auditor general to this day at the age of 74. He was Deputy Under Secretary of State for Defence Procurement at the Ministry of Defence at the time of the original Al-Yamamah negotiations.

Now we have cash-for-honours. These stories always drag on so much that the protagonists are long gone from their seat of power before anyone or any accumulated evidence has succeeded in bringing them to account.

From today’s Guardian story it is looking as if the police think they may be on to a conspiracy to pervert the course of justice. Of course, every news organisation in the land would love to link any alleged conspiracy with Tony Blair, the prime minister and thus “bring him down.” But Mr Blair is going anyway. So the “bring down” movement will likely shift to Gordon Brown or whoever else succeeds Mr Blair.

The price of oil

I never imagined we would bring down Margaret Thatcher. It is silly to personalise a journalistic investigation in such a way. You should dig for evidence, not chase targets. Anyway her political colleagues did a far more clinical job than could be achieved by any journalist. But her legacy is intact, warts and all. As for Mark, the stupid son, well nothing he has done subsequently persuades me that he is anything but a thoroughly disagreeable human being. He has always denied the Al-Yamamah allegations. Well he's hardly going to say "It's a fair cop guv."

Of course it's all a dreadful scandal. Should our country be doing business with a despotic regime that maintains a police state and a judiciary that still believes that beheading women is a reasonable punishment for marital indiscretions? Would Al-Qada have flourished without such a regime?

So how would you feel about the consequences of a cancellation of the Al-Yamamah II contract - higher unemployment, fewer public services and an extra 50p a litre on your petrol? Not to mention meltdown in the Middle East. Oh, silly me, that's already happening.