UPDATED:  FEB 24, 2008 

THE BLAIR LEGACY: NEW LABOUR STILL MIRED IN CORRUPTION. 

When New Labour came into office in 1997 Blair announced melodramatically that “a new dawn has broken.” This resonated with a sympathetic electorate because, in the last stages of their eighteen years in office, Tory politicians had become associated with sleaze and corruption. Labour’s landslide victory in the election of that year expressed a public mood of disgust with politicians who were considered to be motivated by personal greed, largely dishonest and venal. By contrast it was believed, a new Labour government would be incorruptible and committed to serving the public interest.  

This widespread view was not, I think, simply the expression of a desire for change. It is true that what had come to be called “Thatcherism” had polarised British politics in a way that had not been experienced in this country since the 1930s. Following her demise in 1990, the Tories, under her successor, John Major, embarked on an internecine, long drawn out “night of long knives” which left their leader a battered figure attempting to hold the ring against all comers.  Against this bankrupt band of exhausted free-market privateers, Blair’s government seemed to promise a new beginning. A Labour government, it was assumed, would be different because the Labour Party was very different from the Tories. It was a party of principle; a party that was above the sleaze and corruption of its predecessors because it was a social democratic party working for the common good whereas the Tories’ ideology of aggressive possessive individualism had produced the jungle morality of casino capitalism. 

It would have been difficult to believe ten or eleven years ago that almost all the worst features of fin de siecle Toryism would soon come to characterise New Labour.  Like the Tory politicians of the mid-nineties, their New Labour successors have been shameless in their attempts to cover up wrong-doing. They lie and dissemble as blatantly; they are as desperate in their attempts to withhold the truth, to deny access to potentially damaging evidence.  All these practices have been evident in the controversy over the Iraq war. But in other, less prominent cases ( too numerous to detail but notably involving illegal practices concerning the award of peerages in exchange for “loans” to the Labour Party’s election fund and illegal undeclared donations to candidates competing for the post of deputy leader) attempts to investigate have been met with a mixture of evasion, duplicity and denial.  A common refrain, when such acts of malfeasance have been exposed, is that in much of the rest of the world corruption in political life is much worse. As one commentator recently remarked “so much the worse for the rest of the world.” This threadbare defence of the indefensible reminds me of the argument frequently heard from representatives of governments perpetrating acts of oppression of one kind or another, that we would be better advised to reserve our criticism for other countries who are guilty of worse. 

This rather lengthy preamble leads me to my main point, which is to discuss a particularly egregious example of corruption in British politics. In an earlier column I referred briefly to one of Blair’s final acts before leaving office: his intervention to halt an investigation by the Serious Fraud Office into the activities of one of the world’s most powerful international companies – the armaments manufacturer BAE, which was accused of making illegal payments of billions of pounds in bribes to secure arms sales. Last year the fraud enquiry, which had reached an advanced stage, was abruptly stopped, supposedly in the interests of “national security”. This is what had happened. 

In 2004 the SFO began to investigate BAE arms deals concerning the sales of Tornado and Hawk jet fighters. They were interested in payments to middlemen and ordered the company to disclose information of such payments. BAE demanded that the investigation be closed down but the attorney general, Lord Goldsmith decided that it could continue. This is where things began to get very difficult for BAE, and, needless to say, considerable public interest was aroused. Thanks to the persistence of two diligent investigative journalists, David Leigh and Rob Evans, it was revealed that the company operated a multi-million pound slush fund. At the centre of the investigation was the Saudi Prince Bandar bin Sultan who received £1bn for brokering arms deals with BAE. As the investigation continued through 2006 the SFO came close to securing the release of Swiss Bank accounts linked to the Saudi royal family. On the basis of the facts now in the public domain it emerged that the Saudis, who together with BAE were the main suspects in this enquiry, moved to pervert the course of justice. They intervened to get the enquiry closed down.  They apparently threatened to sever diplomatic relations if this were not done. They also claimed that if the investigation continued, they would withhold from Britain intelligence information about terrorist threats, warning that this would lead to more suicide bombings on Britain’s streets. On December 1^st 2006 the Saudis issued an ultimatum demanding that the investigation be stopped within 14 days. On December 14^th the attorney general compelled the SFO to stop the investigation. The reason given? National interest.    

What had happened behind the scenes to account for this extraordinary outcome? The attorney general had been leaned on. The pressure came from BAE, the Saudis and Tony Blair. It is widely accepted that the Saudi threats to sever diplomatic relations and withhold intelligence were bluff as well as blackmail. What was really at stake here was BAE’s reputation and very lucrative arms deals. The British government is publicly committed against bribery and corruption in international trade and never ceases lecturing African governments on the need to clean up their acts in this respect.  The implications of the cover-up involved in this case are breathtaking. The closing of the investigation meant that a powerful multi-national corporation, which was on the point of exposure for engaging in illegal trading practices, had succeeded in perverting the course of justice – a criminal offence. The Saudis were also implicated as partners in crime. But, if anything, most guilty of all is the former Prime Minister, Tony Blair. 

At the moment a judicial review is in progress in London investigating the circumstances which led to the closing down of the SFO inquiry. Although it has no power to prosecute, its deliberations are very revealing. It has secured the release of documents hitherto secret. They reveal that on December the 8^th 2006, Blair wrote a lengthy letter to Lord Goldsmith which was marked SECRET. This was written shortly after a flying visit to London by Prince Bandar who visited the prime minister in Downing Street.  Blair wrote: “It is in my judgment very clear that the continuation of the SFO investigation into the al-Yamamah (arms deal) risks seriously damaging confidence in the UK as a partner…I am taking the exceptional step of writing to you myself.”  It is interesting to note that this was the second time that Blair was to bring pressure on the attorney general to “change his mind.” Immediately prior to the invasion of Iraq, Goldsmith was “persuaded” to reverse his earlier opinion that an invasion would be illegal without a second UN resolution. 

The judges presiding over this review are clearly in no mood to be fobbed off by appeals to “national security”. One of the judges, Lord Justice Moses, remarked with regard to both BAE and the Saudis, that in Britain, a suspect who made threats of the dire consequences likely to ensue if an investigation went ahead, would be guilty of a “criminal offence.” Exactly. The judge went on to ask the crown QC (representing the government) in what way the Saudi threat to “stop the investigation or else” differed from a villain trying to avoid a 25 year jail sentence. 

It is very gratifying that so much of this murky business is now being brought to light. But it is frustrating to think that it is unlikely to lead to any prosecutions. All the evidence suggests that BAE has been guilty of the most serious bribery and corruption, but in attempting to cover this up Blair stands just as guilty. The counsel for the pressure groups who are trying to overturn the decision to stop the SFO inquiry agreed with the judges that all this amounts to a perversion of the course of justice. This case has a transatlantic dimension. Since June 2007 BAE Systems has been under investigation by the US justice department regarding payments to Saudi middlemen for arms deals. We shall await the outcome of these investigations with interest. 

It would be encouraging if there were any evidence that Gordon Brown intended to make a clean break with his predecessor by supporting the judicial review and expressing himself in favour of overturning the decision to stop the SFO inquiry. Unfortunately there is no chance that he will do so. He subscribes to the same interpretation of Britain’s “national interest” as Blair’s: “What’s good for BAE Systems, is good for Britain.”