The Al Yamamah oil fund

Very interesting thread on Sic Semper Tyrannis about the US investigation into BAE:

the biggest aspect of the BAE/"Al Yamamah" story is
the offshore fund. To summarize: BAE delivered about $40 billion in
arms and services to Saudi Arabia. BAE padded the bills substantially,
up to nearly $80 billion. The pad was used, in part, to bribe Saudi
officials who helped swing the deal, including Bandar and Prince Turki
bin-Khaled, a top official of the Saudi Ministry of Defense. That part
is fully detailed in the Guardian and other British coverage of the BAE
scandal, going back three or four years. What is not covered in the
British press is the fact that Saudi Arabia paid for the arms with oil.
The oil was sold on the spot market, and this generated an estimated
(in current dollars) $160 billion in cash. I am told by former U.S.
Treasury Department officials that the funds generated from the oil
sales, after BAE got their cut, went into offshore bank accounts.

As Jamie notes at Blood and Treasure there's not a lot of evidence offered, but the allegation about the oil fund has come up before. In his book In the Public Interest, the former chairman of Astra, Gerald James, highlights a partially blacked out memo that was sent to Jeff Rooker MP, which suggested some of the funds found their way to the Conservative Party.







3 responses to “The Al Yamamah oil fund”

  1. David Habakkuk avatar
    David Habakkuk

    According to a story by Stephen Fidler in the FT last July, the account at the BOE into which the money from oil sales was paid was controlled by the Saudis — at least initially. Some or all of the payments out of it, he says, were routed through DESO at the MoD. So the relevant gap is between the amount paid in to this Saudi-controlled account, and the amount out to BAE.
    What his sources have been telling Harper — and these are CIA and Treasury people — is that this was a device devised, not simply to keep Saudi princes in the style to which they were accustomed, but to make possible the funding of covert operations. Initially, these would primarily have been the supply of arms to the muhajedin in Afghanistan. But if the gap is anything like as large as Harper suggests, a massive amount of money must have been available for such operations since the Afghan War ended.
    What makes his claims more plausible to me is that Fidler suggests that Al-Yamamah was ‘used, with the help of the British government, as a secret tool of Saudi foreign policy.’
    But Fidler’s story would seem to imply rather more than it clearly states. If in fact all of the payments out of the BOE account came through DESO — which Fidler suggests may have been the case — then it would follow that DESO was not simply an organisation for marketing weaponry, but also an organisation for funding covert operations.
    So one would then not have simply a secret Saudi foreign policy — but a secret Saudi/British foreign policy — and most likely, a secret Saudi/British/US foreign policy.
    It is worth noting the date: the letter from King Fahd stating his intent to buy 48 Tornados and 30 Hawk trainers was sent in August 1985, just as President Reagan was authorising the sale of arms to Iran. At this time, important figures in the Reagan Administration were fascinated by covert operations — and profoundly frustrated by constraints from Congress.
    What Harper is claiming — and clearly what senior Treasury and CIA people think — is that behind the corruption story is a much larger story about the subversion of constitutional government by enthusiasts for covert operations.
    Fidler’s story is at:
    I have covered aspects of this is in more detail in a long response to ‘Harper’ which Colonel Lang posted — unfortunately Typepad seems sometimes to take it into its head capriciously to eliminate paragraphing.

  2. ziz avatar

    Sic SEmper Tyrannis link does not work jusy consists of http//

  3. Tom Griffin avatar

    Thanks, I have fixed it now.

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