Blair halts BAE-Saudi bribery probe

Stephen Beard Dec 15, 2006

KAI RYSSDAL: Over in the UK there’s a whiff of political favor for economic gain. British Prime Minister Tony Blair is defending his decision to scrap a major corruption investigation. Saudi Arabia had threatened to pull out of a multibillion-dollar defense contract if he didn’t. From London, Marketplace’S Stephen Beard has more.

STEPHEN BEARD: The Saudi government gave Tony Blair an ultimatum: call off an inquiry into a 20-year-old arms deal or risk losing a new multibillion-dollar defense contract. The inquiry was clearly ruffling feathers in Ryad. British investigators were examining claims that Britain’s biggest defense group, BAE, had bribed Saudi officials. Tony Blair called off the inquiry because he said he could have done massive damage to Britain’s national interests.

TONY BLAIR: Leave aside the effect on thousands of British jobs and billions of pounds for British industry, our relationship with Saudi Arabia is vitally important for our country.

But opposition politicians accused Blair of giving in to Saudi blackmail and encouraging British companies to pay bribes. Member of Parliament, Norman Lamb:

NORMAN LAMB: I’m absolutely outraged by this decision. I think it’s an incredibly depressing day for the cause of the rule of law. How on earth can you lecture other developing countries on the importance of the rule of law when we behave in this way ourselves?

BAE workers, however, celebrated after hearing the news and the company shares jumped by 7 percent on the stock exchange. In London, this is Stephen Beard for Marketplace.

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