Interesting article:
Geopolitical Diary: A U.K.-Saudi Crisis?
Nov 20, 2006
According to the Sunday Times, a senior Saudi diplomat informed British Prime Minister Tony Blair in September that Saudi Arabia was prepared to suspend diplomatic relations with the United Kingdom and to stop sharing intelligence on al Qaeda unless a British investigation into corruption at British Aerospace Systems is halted. British officials are investigating a $113 million (60 mllion-pound) slush fund that BAE allegedly set up for some members of the Saudi royal family. The purpose of the fund was, according to reports, to ensure that the Saudis would continue to buy aircraft from BAE in what is the largest defense contract in the company's history.
It is not clear why the message to Blair, from September, was revealed now or whether it was the British or Saudi side that did the revealing. If we were to guess, we would guess that the revelation was made by the Saudis. This would increase the pressure being placed on the British, but it also sheds light on the investigation, which the Saudis clearly wanted to hide. Nevertheless, the fact is that someone leaked it to the Sunday Times and, so far, neither government has denied the story.
In some sense, the threat is symbolic. Suspending diplomatic relations has some implications, but not enormous ones. Suspending cooperation over al Qaeda is not insignificant -- but so long as the Saudis are working with the United States, Saud intelligence will continue to be passed on to the British. The substance of the threats, therefore, is not nearly as significant as the fact that the threats were made, and that they were made so publicly. This is a real crisis in U.K.-Saudi relations.
The real Saudi threat is that they will suspend the BAE deal, which is supposed to be valued at about 40 billion pounds (about $76 billion). If that were to happen, it would be a huge blow to BAE and to the British economy. BAE certainly needs this deal; it would be overstating it to say that Britain needs this deal, but not by much. If the Saudis canceled, it would cost thousands of jobs and force a restructuring of the British defense industries. It also would make some other country -- probably the United States -- very happy, when the project is transferred.
The issue is quite simple. BAE is accused of bribing members of the Saudi royal family with money and gifts to get the deal. The British government is now investigating these gifts, which would be illegal under British law. In so doing, they likely will name the Saudi officials and dignitaries who accepted the bribes. Apart from any legal implications, this will publicly embarrass those officials. The Saudi government does not want these names revealed: If there were bribes, they went (by definition) to powerful and significant individuals -- in short, to people in and close to the Saudi government. Therefore, the Saudis want the investigation stopped immediately and have taken the extraordinary step of threatening diplomatic, military and economic consequences ranging from symbolic to disastrous.
Welcome to the real world of multiculturalism. The Anglo-American view of law is that it overrides custom and requires government officials to act in a disinterested fashion. The Saudi view of law is that the formal law must co-exist with the customary form of government. In other words, the giving of gifts to powerful people when seeking their favor is customary, and the idea that a government official may not profit while serving his country -- while undoubtedly the Anglo-American view of law -- is simply not theirs. There is, throughout the world, a profound tension between a wide variety of cultural norms. What is bribery in London is simply good manners elsewhere.
In other words, if BAE is going to get a 40 billion-pound contract from the Saudis, the company is going to follow Saudi custom. Unfortunately, BAE is a British firm and, as such, it has to follow British law, which treats such behavior as a felony. Even if the Saudis are beyond that law, BAE isn't. Now, the British government did everything it could to help BAE win the contract, in hopes that its major defense contractor would prosper. However, the British government is now investigating the same company that it cheered on, knowing full well how business is done in Saudi Arabia.
While the British get twisted in deep ethical knots, the Saudis are going ballistic. They may not expect the world to understand how they do business, but they also do not expect senior members of the royal family to be dragged through the courts and the media. The Saudis have gone to this extreme to show how seriously they are taking the matter, and they may have no option but to do so. But it is not clear that the British government can block the investigation.
This probably doesn't have long-term geopolitical consequences, except for this: If the BAE contract is not continued, the only other country with the capacity to handle something of such magnitude will be the United States. The Saudis have been cautious about going too deep with the Americans since the crisis of 2002-2003. This affair could change that. It would seem to us that this mess might just draw the Americans closer to the Saudis.