28th May 2011

The UK Arms Trade Complex and Freedom of Information A case for an enhanced presumption of transparency in the case of corruption in arms deals Barnaby Pace 28th May 2011

Abstract The trade in arms is thought of by many states as a key factor in the maintenance of their national security. This is true in either selling arms abroad or procuring weapons and equipment for use by national forces. Sadly however, the arms trade is one of the most corrupt businesses on earth, accounting for forty percent of all corruption worldwide according to one estimate. The purpose of the arms trade is to create weapons with the power to kill and maim, and with this the consequences of corruption are especially destructive.

The prevalence and extreme danger of corruption in the arms trade justifies a greater level of transparency and accountability. However governments have long considered the arms trade to be essential to national security and too often regard anti-corruption efforts as a threat not only to their arms production capacity but also their security and international relations. This threat to international relations is itself premised on the perception of national security being dependent on military or intelligence co-operation with other countries founded, which in turn is founded on arms deals. Arms deals have become seen as a legitimate and unquestionable diplomatic tool whether the arms are sold corruptly or not.

This paper examines three disputed cases around the British governmental involvement in the sale of arms and associated services to the Kingdom of Saudi Arabia. The sale of arms to Saudi Arabia has long been associated with deep systemic corruption and the support of an oppressive dangerous regime. In all three cases campaigners against the arms trade and corruption attempted to reveal information potentially implicating the UK government in support for corruption in Saudi arms deals over the last 40 years. The results of these cases varied but arguments of national security deployed by the government allowed the case for an overriding public interest in transparency to be put forward. I argue that there is a compelling case for a principle of presumptive disclosure of information regarding corruption in the arms trade.

Barnaby Pace is an independent researcher on the arms trade, corruption and militarism.

1 28th May 2011

Suggested principle

The following categories of information are subject to presumptive disclosure:

(i) Information concerning constitutional or statutory violations and other abuses of power, including corruption, by public authorities or officials.

(ii) Concerning contracts (including for sale, purchase, procurement or service) relating to weapons, military equipment and material, as well as military transports (including ships, planes, vehicles) - (A) information on the use of, and payments to or from, any agents or other third parties involved in transactions with, or supported by, public authorities; (B) information on any commissions paid to public authorities, government officials, elected representatives, or their close relatives by any parties to such a contract; (C) information on the receipt of monies, shares or other benefits accruing directly or indirectly to any elected representative or government official from any party to such a contract.

“There was no reason for a commission payment to be concealed if it was entirely proper.”1

Legal advice sent to Government auditor Sir Douglas Henley in 1977. Marked Confidential. Not for Exchequer and Audit Department Eyes.

The arms trade is particularly susceptible to corruption. The size of the contracts involved, the relatively few officials involved in making a choice between competitors, and the secrecy justified by security concerns create the perfect conditions for corruption to thrive. The arms trade is thought to account for 40% of worldwide corruption. For an industry that accounts for around 0.5% of world commerce this is an extraordinary statistic2.

Though there is no official, widely-agreed definition of corruption, indeed most international agreements on corruption fail to define the term precisely. The respected NGO Transparency International does however give a rigorous definition that I have adopted, though with one caveat.

‘Corruption is operationally defined as the abuse of entrusted power for private gain. Transparency International further differentiates between ‘according to rule’ and ‘against the rule’ corruption. Facilitation payments, where a bribe is paid to receive preferential treatment for something the bribe receiver is required to do by law, constitute the former. The latter, on the other hand, is a bribe paid to obtain services the bribe receiver is prohibited from providing.’3

While an impressive definition, I would expand our understanding of corruption to include the act of corrupting, which could be defined as offering or giving any inducement that may or does in fact

1 Letter from A.D. Osborne, Treasury Solicitor, to John E. D. Street at the MoD, 21/2/1977, published on the Guardian, BAE Files, “BAE in Saudi Arabia”, http://image.guardian.co.uk/sys- files/Guardian/documents/2007/05/29/ch05doc05.pdf retrieved 16/2/2010 2 This figure was calculated by Joe Roeber in his work for Transparency International, Roeber appears later in this paper as a witness in the Gilby case. Roeber, J., 28/8/2005 “Hard-wired for corruption: the arms trade and corruption”, Prospect, no. 113 3 Transparency International: Frequently Asked Questions, www.transparency.org/news_room/faq/corruption_faq

2 28th May 2011 result in undue advantage. This highlights that successful conspiracies of corruption involve two or more willing participants and that all parties, be they purveyors or recipients of such inducements, should thus be considered corrupt.

The factors that contribute to the predisposition of the arms trade to corruption include: a) The secrecy and deference given to the issues of national security and commercial confidentiality. b) The intimacy of arms buyers, suppliers and their brokers. This relationship is also sustained due to the supply of spare parts and services that accompany so many arms deals for many years. c) The sophistication, fragmentation and in many cases opacity of global production, transportation and financial networks and instruments. Supply and smuggling networks are spread across the entire world and are often facilitated or ignored by states. d) The technical specificity of the product, so that only a very few experts are capable of making informed decisions on the purchase of arms. This factor is often exaggerated by the power ceded to a few officials at the top of a steep hierarchy who make the choices. e) Procurement pressures. Arms are often needed rapidly either during conflicts or in anticipation of conflict, this factor also adds to the perceived need for secrecy to provide an advantage of surprise against the enemy and lessens the time available for meaningful scrutiny to prevent corruption. f) The high financial rewards coupled with a lack of consequences for corrupt behaviour. Those who commit corruption are rarely caught due to their position of authority.4

When an arms deal is allowed to be corrupt there can be no certainty that the equipment bought was the best deal for the purchasing country, or that the equipment was even required in the first place. The price might be inflated, both to pad the pockets of the powerful and the profit margins of arms dealers. Indeed needs for arms may be imagined purely for the sake of personal enrichment for those who stand to gain through corruption. The equipment may not have won in open competition and the lives of armed forces may be endangered as they are left with sub-standard equipment.

The arms trade is especially deadly in the context of corruption; it is after all an industry in which items that are intended to kill, destroy and maim are sold for profit. The dangers come not only from the money which goes astray in corrupt deals but also from the possible consequences of tools of violence being acquired for reasons other than that of the public good. When national interests are confused by personal greed the consequences of corrupt deals are truly deadly. Arms races can be stimulated and corrupt regimes entrenched. In addition the money that might not have been spent otherwise on a corrupt deal could have been used elsewhere in healthcare, education or housing. Corruption hits the weakest hardest only to enrich the strongest.

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense.” Dwight D. Eisenhower, in a speech on April 16, 1953

If these weapons of war are then needlessly bought to fill the pockets of the powerful then this

4 These factors are further explored in the chapter “Corruption and the arms trade: Sins of commission” by Feinstein, Holden and Pace in SIPRI Yearbook 2011, Stockholm International Peace Research Institute, 2011

3 28th May 2011 statement applies doubly.

There are several ways of carrying out, and concealing corrupt practices used within the arms trade. The purpose of the recommended principle is that it ought to act as a catch-all so that if an honest person can see a connection to possible corruption in the case before them then the information ought to be disclosed for the sake of transparency. However the principle is also intended to address some of the most common methods more specifically.

There are several usual ways to corrupt: a) Bribery, a payment between the parties, the most easily understood mode of corruption. b) The failure to declare a conflict of interest. This can include everything from being directly on the pay roll of the corrupting party, to a relative or confidant holdings shares in an obscure firm benefiting from another activity of the corrupting party. c) The promise of post-employment, for the corrupted party or someone else, this can stretch the time span over many years and is commonly known as “the revolving door”. A promise might not even be made if other hints might suggest future employment, this can be a legal grey area but one that can certainly be used for corruption. d) The offer of preferential business access, this again can be very obscure with a separate agreement possibly elsewhere in a family tree of companies at another time.

The use of agents is the most common method of carrying out corruption discretely within the arms trade. An agent is also commonly referred to as a “fixer”. The purpose of the agent is to act as a representative of the corrupting party, working at arm's length to facilitate the business in hand. Agents or fixers are by no means inherently corrupt and in some parts of the world they are essential due to their local knowledge of the area or customs. However agents are often the most convenient way to pass inducements on to the corrupted party. This arms length arrangement commonly allows the corrupting party to deny all knowledge of the activities of the agent, instead claiming that their purpose, as far as they knew, was to only to offer advice or lobby. The agent may or may not be acknowledged to have a connection to the corrupting party and indeed the party may employ both overt and covert agents for legitimate and corrupt purposes.

Frequently the term commission appears in connection with corrupt payments. Commissions can be used to reward workers for their success rather than for merely carrying out their role normally. However, what is a frequent danger within the arms trade is that commissions are too large to merely act as a legitimate reward for success; instead a commission can act as an incentive for an agent to use corruption to buy success. The commission may be used to create inducements to corrupt. This fact is well known to corrupting parties and the term commission is often used as a euphemism for a bribe. Commissions too large to be justified in legitimate services can be a major clue to corruption in a deal.

Agents, like lobbyists are sometimes required to declare themselves or are banned in foreign countries and this leads to more devious methods being used. Commissions may be hidden, paid to covert agents, never publicly admitted to, or using complex and secretive methods such as through the off-shore banking system, paid through many intermediaries or misrepresented as legitimate services.

These common methods offer a hint of the potential complexity in uncovering corruption, it is therefore imperative that the most frequent methods are directly addressed with an enhanced state of transparency. Even in a corrupt deal any one of these pieces of information may not be enough to uncover the crime, therefore each needs to be disclosed to help investigators and the public see and

4 28th May 2011 build up the jigsaw of information needed to root out a corrupt deal.

The case for secrecy in the arms trade is often premised on the value of national security. The relationship between arms producers and dealers in the use of force by a state is evident enough. The state regards access to equipment and weapons to be a cog in the machine of national security.

In addition to supplying any national armed forces, the arms trade is seen by governments as a tool of international diplomacy. Using arms transfers for diplomacy is specifically intended not merely to generate financial ties but also security ties. Major arms deals are frequently built around military cooperation and the dependence on a regular flow of training, services and spare parts between nations is seen as way of tying the policies of states together. This military cooperation (often including intelligence and counter-terror cooperation) implied or overtly created around arms deals is intended to add value in national security terms to both the recipient state and the exporting state with the states furthering their alliance and interdependence. However the supply of arms, at home and abroad, while often being portrayed as a patriotic duty and being purely in this national security interest is generally carried out for profit.

The arms trade is largely operated on a for profit basis, many of the world's nationalised arms industries have been privatised and those that have not been are required to either cover their costs or generate a profit as well as provide weapons regarded as essential. In the modern world very few arms producers produce arms only for domestic sale, the majority of arms producers sell their wares abroad. Globalisation has also effected the production of arms and most products include parts made in many countries. These factors mean that arms producers largely do not exist purely in the national interest, their interest is, if they are a privatised company, to generate profits by any means within the law, regardless of national loyalties. Even in the case of nationalised production the need for international sales and commercial interests can also override the national interest. Further than this the export sales of arms producers are also perceived by many governments as useful for national security by helping to maintain their military industrial base and subsidising their own arms purchases by enabling economies of scale.

The dependence of states on arms producers is exasperated by the relatively small pool of producers to procure arms from. In states with developed nationalised industries (notably Russia and China) this means that those state or quasi-state organisations must receive special treatment as the thought of importing foreign armaments over a nationalised industry is often met with strong resistance5. This narrowing of the producing pool is not limited to countries with nationalised industries with formerly nationalised companies, companies with significant production in country or merely companies able to wrap themselves in the flag are able to draw special treatment.

Due to this state dependence, the commercial interests of arms producers are also often regarded as a national security interest themselves. For obvious reasons the locations of arms factories producing key goods for armed forces in a conflict are sometimes kept secret. However the protection of arms companies can sometimes raise serious moral hazards. For example the commercial interests in exporting arms are often supported by governments, however these same governments are expected to regulate arms exports, the two functions causing a significant and dangerous tension between respecting the ideals of disarmament and non-proliferation, human rights and sustainable development whilst supporting the sale of arms wherever possible. This

5 See for example the controversial proposed procurement of French built Mistral amphibious assault vessels by Russia; US Naval Institute, “Historic French-Russian Arms Deal Causes Alarm, Debate”, http://www.usni.org/news- and-features/historic-french-russian-arms-deal-causes-alarm-debate

5 28th May 2011 situation often leads to countries unwisely supporting the sale of arms to countries that ought not to have been allowed were arms export regulations properly enforced. As a seemingly logical extension to supporting the export sales of arms producers, the support or intentional ignorance of corruption follows.

The logic of unquestioning support for arms sales, despite the consequences of unrestrained proliferation and corruption clearly falls down. Supporting corrupt, repressive, undemocratic regimes not only damages a country’s moral standing and offends it’s public's ethics, but also too often threatens national security. Governments change and regimes fall and when they do those who armed or corrupted their previous rulers are often and rightly held to be in some part responsible. The issues raised in the cases detailed are around the national interest in government supported arms sales to Saudi Arabia, despite the use of those weapons for human rights abuses in conflicts and in repression of the population6 as well as supporting the notoriously corrupt rulers of the country. Transparency and accountability must be maintained in arms exports, especially in terms of corruption. Otherwise unrestrained arms exports and associated corruption will continue to cause destruction unchecked and political decisions will be made without reference to public opinion undermining the ideals of a democratic government.

Governmental involvement in arms deals can come from several angles. The most straightforward is in the procurement of arms. There is also almost always some governmental involvement in arms exports as a regulator. There may also be governmental involvement in a state or para-state arms producer and dealer transferring or selling arms abroad. This role is not unique to nationalised industries; some countries carry out government to government arms deals, often with a private company as a main contractor. But further than this and possibly most controversially governments may support private sector arms producers in exports abroad. This may be through political support with involvement by politicians, civil servants or embassy officials (military attaches normally) or the provision of subsidies or other financial supporting such as export credit guarantees.

The UK government is deeply involved in the promotion of the UK arms trade. The primary tool of this policy in recent years is UK Trade and Investment, Defence and Security Organisation (UKTI DSO), previously known as the Defence Export Services Organisation (DESO) and before that Defence Sales Organisation (DSO). The department, until recently based in the Ministry of Defence (MoD), has been always been directed by an arms company executive seconded into government but with their salary topped up by arms companies7 (this is with the exception of the most recent appointee, who previously worked for BP).

This organisation's dark and dirty history started in 1965 with the genesis of the Defence Sales Organisation, based on the output of a government report, the Stokes Report. The report described the need for the use of corruption from the start: “good commercial agents will be of the greatest value to the MoD’s own overseas sales staff; apart from providing an additional source of information, they are better placed than an official to dispense the less orthodox inducements.”8 The author of the report, Donald Stokes, often made his opinions on the frequency and necessity of bribery in the arms trade quite clear. He told the Ministry of Defence in an official meeting on the

6 Amnesty International has found that it is “extremely likely that the Saudi air force deployed UK-supplied Tornado fighter-bombers in the strikes" against Yemeni civilians in November 2009, possibly constituting war crimes. Amnesty International, 2010, “Yemen: Cracking under pressure”, http://www.amnesty.org.uk/uploads/documents/doc_20631.pdf 7 CAAT, January 2006, “Call the Shots DESO Campaign Briefing”, http://www.caat.org.uk/resources/publications/government/desobriefing0106.php 8 The National Archives: AVIA 65/1670 Stokes Report.

6 28th May 2011 report that “it was often necessary to offer bribes to make sales”9. Other statements by Stokes, the organisation's ideological godfather, truly revealed the contempt he had for restrictions on arms exports or corruption “the more often an arms sale is ruled out for reason of strategic export policy the more pointless it will become to employ valuable staff to sell arms”10. Stokes also observed, probably thinking of Apartheid South Africa or Franco's Spain that the UK was “excluded through political sensibilities from some of the most valuable defence markets of all”. Stokes made clear to Ministers at the time that “a great many arms sales were made not because anyone wanted the arms, but because of the commission involved en route”11. The attitude of the UK's arms promotion agency in its various incarnations does not seem to have changed much since. In 1977 the department's policy on bribery was formalised with the Cooper Directive which essentially dictated that bribery was to be ignored as long companies asserted that any payments were legitimate, however unbelievable such statements might be. Civil servants were specifically instructed to avoid “over-extensive inquiries”12. The directive was rewritten in 1994, but only to obfuscate governmental involvement, not to prevent bribery. In the updated directive officials would no longer visibly "authorise" commission payments or correspond about them. Instead, they were to merely "consider" and "advise”13. This of course has not stopped the organisation providing companies with lists of agents to use around the world, this policy is still in place today.

The ethics of the UK government have been tested in the supply of arms to the oppressive Saudi Arabian regime. The country is ruled by the Al Saud family and the UK has played a major role in equipping the military forces of the country since the 1960s. Arms deals to the Kingdom of Saudi Arabia are characterised by the inordinate size of the purchases and the massive systematised corruption of the government. The remarkable entrenchment of corrupt practices and appalling human rights abuses by the rulers of Saudi Arabia taint any arms deal to the Kingdom. The situation is unusual in the sheer scale of corruption but also the longevity of the kleptocratic rulers. The current leaders in the government, (the children and grandchildren of the nation's founder), hold a monopoly over power and many have been in position for decades. The National Guard, really Saudi Arabia's second army specifically tasked with protecting the Royal Family, has been commanded by King Abdullah since 195914 and Prince Sultan, now Crown Prince, has commanded the Ministry of Defence since 196215.

The relationship between the UK and Saudi Arabia has been largely founded on the supply of oil and arms deals. More recently military cooperation and intelligence have also been seen as highly important, especially in the context of terrorism.

One of the most significant points in UK – Saudi relations was the Al Yamamah arms deal. Al Yamamah translates as “The Dove”. Signed in 1986 by the head of DESO, Colin Chandler and Saudi Defence Minister Prince Sultan, the deal was negotiated by Margaret Thatcher and Saudi envoy (and son of Prince Sultan) Prince Bandar. It was originally for 132 aircraft including Tornado fighter aircraft, Hawk jets and training aircraft, along with the attendant maintenance and services

9 The National Archives:AVIA 65/1670 Minutes of Permanent Secretary’s meeting, 14th July 1965. 10 The National Archives:AVIA 65/1670 Minutes of Permanent Secretary’s meeting, 14th July 1965. 11 PRO: WO32/21301. Minute of meeting between Lord Shackleton and Sir Donald Stokes, 7 July 1965 12 Guardian, 8/6/2007 David Leigh and Rob Evans, BAE Files, “The culture of bribery that became government policy” http://www.guardian.co.uk/world/2007/jun/08/bae10 retrieved 16/2/2010; Cooper Directive published on the Guardian website, http://image.guardian.co.uk/sys-files/Guardian/documents/2007/06/01/ch08doc09.pdf 13 Guardian, 9/6/2007, David Leigh and Rob Evans, BAE Files, “BAE's secret money machine”, http://www.guardian.co.uk/world/2007/jun/09/bae retrieved. 1994 policy obtained from MOD by David Leigh in 2006, published at http://image.guardian.co.uk/sys-files/Guardian/documents/2007/05/29/ch08doc08.pdf 14 Robert Lacey, 2009, “Inside the Kingdom”, London: Hutchinson, p183 15 Patrick Tyler, 2009, “A World of Trouble: America in the Middle East”, London: Portobello Books, p313

7 28th May 2011 contracts. The deal was later expanded over time (most notably in 1988, a deal often referred to as Al Yamamah 2). The deal was strictly speaking between the UK and Saudi Governments but the prime contractor on the deal was British Aerospace (now BAE Systems). Over the years the deal has been worth at least £43 billion in sales to BAE Systems16, making it the largest ever UK arms deal. However what has characterised the deal has been the serious allegations of corruption on an epic scale. Police investigators calculated that over £6 billion may have been distributed as commissions by an array of shadowy agents and middlemen. Prince Bandar, the key negotiator on the deal from the Saudi side was found to have been paid over £1 billion by BAE Systems. More was funnelled through a network of hidden offshore bank accounts and the Swiss accounts of agents. More corrupt payments still was thought to have been hidden in inflated costs of subcontracts. Several contractors admitted to paying huge commissions on the deal17.

Important in uncovering corruption in the deal was the finding of key government documents, accidentally released in the National Archives. Nick Gilby, an intrepid researcher had been using his spare time to search through the reams of dusty files. He discovered the inclusion of substantial agency fees and commissions in UK – Saudi arms deals in 1967, 1973 and 1978 worth 5%, 13% and 15% of the total price respectively. These commissions and agency fees were of course in actual fact bribes. Gilby even stumbled across UK government documents showing the inflation of prices of Tornado aircraft in negotiations in order to accommodate £600 million in commissions, a rate of 32%18. The allegations of corruption in the deal had surfaced early and continued to build. From 1989 to 1992 the National Audit Office (NAO) in the UK investigated the arms deal and wrote a report on the Al Yamamah deal. The report was suppressed. No other NAO report before or since has ever been suppressed. The decision to do so was carried out by Bob Sheldon MP (Labour, now Baron Sheldon, Life Peer in House of Lords), then Chairman of the Public Accounts Committee. At the time he is quoted as saying that he “spent many hours worrying about this decision" but "There really are an enormous amount of jobs at stake”. Reasons given for not releasing the report later under the Freedom of Information Act (FOIA) include exemptions for international relations, parliamentary privilege and commercial interests. A MoD spokesperson said the report was not released to avoid breaking a confidentiality agreement with the Saudis.19

The Al Yamamah deal again came under intense scrutiny ten years later when the Serious Fraud Office (SFO) began investigating the deal and alleged bribes paid by BAE Systems. The Serious Fraud Office and Ministry of Defence Police even considered raiding the offices of the National Audit Office in order to obtain the report20. The investigation met significant official resistance all round and BAE Systems, along with the Saudi Government and elements of the UK government ran an increasingly vocal lobbying effort to shut down the investigation.

The perceived national security interest linked to arms deals with Saudi Arabia was most clearly demonstrated in the closure of Serious Fraud Office investigation into bribery by BAE Systems in the Al Yamamah arms deal. The investigation was closed on the grounds of “national and

16 Guardian, David Leigh and Rob Evans, “Secrets of Al Yamamah”, http://www.guardian.co.uk/BAefiles/page/0,,2095831,00.html. 17 Guardian, 7/72007, David Leigh and Rob Evans, “Sub-contractors corruption”, http://www.guardian.co.uk/world/2007/jun/07/bae16; For more details of corruption in the Al Yamamah deal see Feinstein, 2011 (forthcoming), “The Shadow World: Inside the Global Arms Trade”, Penguin Books 18 Guardian, 7/7/2007, David Leigh and Rob Evans, “Kew's Al Yamamah Files”, http://www.guardian.co.uk/world/2007/jun/07/bae.nationalarchives 19 Telegraph, 21/6/2006, Christopher Hope, “Twenty years of smokescreen over Saudi deal” , http://www.telegraph.co.uk/finance/2941537/Twenty-years-of-smokescreen-over-Saudi-deal.html 20 Telegraph, 10/4/2008, Christopher Hope & James Kirkup, “Extravagance uncovered during Saudi arms probe” http://www.telegraph.co.uk/news/uknews/1584599/Extravagance-uncovered-during-Saudi-arms-probe.html

8 28th May 2011 international security”21 after lobbying by the Saudi regime, BAE Systems, the Attorney General and finally Tony Blair himself. The various threats publicly made included the loss of a vastly exaggerated number of UK jobs along with the loss of future contracts for arms deals with Saudi Arabia but decisively threats on intelligence cooperation and UK national security were made forcefully. Saudi officials, backed up by officials in the UK government claimed that “British lives on British streets” were at risk from terror attacks if the investigation continued and Saudi Arabia withdrew intelligence cooperation22.

The investigation into the Saudi bribes was shut but following this there was a concerted effort by the group Campaign Against Arms Trade (CAAT) along with social justice campaigners Corner House to uncover details regarding the corrupt arms deals in question. The groups moved to challenge the shutting of the SFO investigation and continuing arms deals to Saudi Arabia. They did this most visibly with a judicial review challenging the closing of the SFO investigation. They won the review in the High Court as the judges gave a stinging judgement against the government for giving in to blackmail and threats without even considering alternatives to merely giving in. The case particularly rested on the OECD Bribery Convention to which Britain is a signatory. The OECD convention's fifth article states:

“Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved.”

This provision is vital in ensuring that high level corruption can be tackled, otherwise any person powerful enough to indulge in large scale corruption would also be immune from investigation as they could threaten international relations or economic interests. The inevitable friction from the revealing of high level corruption is an unpleasant but necessary fact in dealing with the scourge of corruption. This principle is clearly enforced in article five of the OECD convention by ruling out considerations of relations between states or the identity of person involved. The suggested principle should help bring this same idea to freedom of information law.

Whilst the High Court case was won by CAAT and the Corner House the government appealed the case to the Lord's, which proceeded to find in favour of the government. This was reasoned on the basis that ending a corruption investigation on the grounds of national security was not explicitly prohibited by the OECD bribery convention, a position disputed by the OECD. This ruling not take into account the damage to the rule of law or the long term consequences for national security should corruption in arms deals go unchecked.

Whilst the factors taken into account in the Al Yamamah SFO case are different to those applied in most freedom of information law the same principles about prioritising the rule of law, transparency and accountability over economic, commercial and short term national security considerations should still apply.

21 Case No: CO/1567/2007, The Queen on the Application of Corner House Research and Campaign Against Arms Trade and The Director of the Serious Fraud Office and BAE Systems PLC, Approved Judgment [sic], 10/4/2008 published at http://www.thecornerhouse.org.uk/pdf/document/JR-Judgment.pdf 22 Document 12 in High Court case between CAAT, Corner House and the Director of the SFO with BAE Systems PLC as an interested party. CO/1567/07, Exhibit RW4, Note, dated 14 December 2006, of meeting on 13 December 2006, attended by the Law Officers and the Director, and others , published at http://www.thecornerhouse.org.uk/pdf/document/RedactedDocs.pdf

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The UK government subsequently came in for severe criticism by the OECD group monitoring implementation of the Bribery Convention with regards to the handling of the Al Yamamah case. The group disagreed with the UK position on national security being a valid reason for ignoring corruption. The decision had in effect made it legal to cancel corruption investigations into any organisation capable of finding powerful friends to make threats to national security. In addition to the closing of the SFO investigation the UK's lack of thought given to anti-corruption measures in its support for the Al Yamamah deal through its export credit agency, ECGD, came in for particular censure. The UK's involvement in the Al Yamamah arms deal to Saudi Arabia and then its role in covering up the corruption destroyed what standing it had on corruption.

Whilst the corruption investigation by the SFO into Al Yamamah centred on bribes paid by BAE Systems (which was the main arms producer involved), the UK government was implicated in a range of roles. Most significantly the arms deal, like the majority of arms deals between the UK and Saudi Arabia since the 1970s, was a government to government deal with BAE Systems acting as the prime contractor. This meant that it was the British Government, (then under Margaret Thatcher), who negotiated the deal and signed it. The terms of the contract were set by the UK government and payments from the Saudis went through UK government bank accounts. The Al Yamamah deal, as well as its successor, the Al Salam deal have been managed by a department of the UK Ministry of Defence, staffed by British civil servants, called the Saudi British Defence Cooperation Programme (SBDCP), previously known as the Ministry of Defence Saudi Armed Forces Project (MODSAP) and previously part of DESO. In 2007- 2008 the Saudi Government paid £41.8 million for the 77 UK based civil servants, 43 UK based military personnel, 29 Saudi based civil servant and 61 Saudi based UK military personnel to run the arms deals23. The Al Yamamah arms deal was also underwritten by the UK taxpayer through the UK Export Credit Guarantee Department (ECGD) who provided £750m worth of coverage annually24, a very large chunk of the department's undertakings.

In addition to challenging the government’s decision to close the SFO Al Yamamah investigation CAAT, along with other researchers and campaigners, attempted to expose the conduct of the UK Government in supporting Al Yamamah and other Saudi arms deals. In order to find information about the UK's involvement in Saudi arms deals government archives, insider accounts and the UK's Freedom of Information Act were put to effective use. In the three cases detailed below Freedom of Information legislation was used to challenge governmental attempts to conceal suspected details of corruption in their involvement with the Al Yamamah arms deal. In these various cases, though the specific national security exemption in the act was rarely used, exemptions and arguments premised on the perceived national security interest were frequently put across to try to prevent the disclosure of documents.

Nick Gilby vs Information Commissioner (ICO) and Foreign and Commonwealth Office (FCO)25

23 CAAT, information from Freedom of Information request dated 15/7/09 quoted at http://www.caat.org.uk/campaigns/controlBAE/ 24 BBC Newsnight, 29/5/2009, “Suspicions over BAE termination of government contract”, http://news.bbc.co.uk/1/hi/programmes/newsnight/8073797.stm ; CAAT Freedom of Information request response, Control BAE web page, http://www.caat.org.uk/campaigns/controlBAE/ 25 All the open statements for the court relating to this case can be found at the CAAT website at http://www.caat.org.uk/infoTribunal/info-trib-SANG.php and the official transcripts for the three open days of the case can be found at http://www.caat.org.uk/infoTribunal/

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The Gilby case was heard together with the CAAT case in August 2008. Nick Gilby is a researcher and member of CAAT but pursued the case in his own right. He is one of the few true experts on the history of UK-Saudi Arabian arms deals and over many years he has uncovered remarkable documentation of corruption in Saudi arms deals. His work formed a significant part of the Guardian newspaper's exposé of BAE Systems corruption. Gilby is currently working on a book on the UK- Saudi arms trade.

In carrying out research on the Saudi-UK arms deals, Gilby came across a valuable store of historical documents in the UK National Archives (previously known as the Public Record Office). Among the documents he found extensive evidence of UK government knowledge and complicity in corruption. Gilby requested several closed FCO files relating to the supply of Saladin tanks for the Saudi National Guard, sale of other arms to Kingdom and air defence and military assistance given to the Saudi National Guard from 1st January 1968 to 31st December 1969. The information request was denied entirely, the National Archives telling Gilby that the exemption was under Section 27 of the Freedom of Information Act, which relates to international relations. The National Archives said that disclosing the information would harm bilateral relations with another country and damage British commercial interests in the region.

Section 27 of the FOIA, as mentioned above is a qualified exemption in that it has to be assessed with a public interest test. The section of the FOI act reads:

Section 27(1) provides that – “Information is exempt information if its disclosure under this Act would, or would be likely to, prejudice- (a) relations between the United Kingdom and any other State, (b) relations between the United Kingdom and any international organisation or international court, (c) the interests of the United Kingdom abroad, or (d) the promotion or protection by the United Kingdom of its interests abroad.”

Section 27(2) provides that – “Information is also exempt information if it is confidential information obtained from a State other than the United Kingdom or from an international organisation or international court.”

Gilby requested an internal review of the decision. After consultation with the Department for Constitutional Affairs (DCA) and FCO the National Archives decided that the exemption still applied and the public interest test, considering factors for and against disclosure led to them concluding that twenty four pages of material could be released but the remainder withheld.

Gilby then filed a complaint with the Information Commissioner; he disputed the outcome of the public interest test. He argued that the disclosure and declassification of the file was necessary to assess the current risk of arms contracts with Saudi Arabia being tainted by corruption. He also argued that the public had a right to expect public officials to act with the highest standards of integrity, including in its dealings with private companies and foreign countries. Also seeing that the files had been transferred from the FCO to the National Archives an extended closure period of forty years had been imposed, meaning that the documents in question might be released in three years in any case. It also became clear the FCO had been the body to apply the public interest test.

Both the governments of the United Kingdom and Saudi Arabia considered the information requested to be confidential and the Information Commissioner thought that bilateral relations

11 28th May 2011 between the two states would be prejudiced.

Therefore the Information Commissioner reconsidered the public interest test. Gilby put across five main arguments that in his view made the public in disclosure overwhelming. They read:

“14.1. disclosing the papers being withheld was unlikely to prejudice relations between the United Kingdom and Saudi Arabia any more than files from this period that were already in the public domain; 14.2. disclosure was likely to reveal prima facie evidence of bribery or attempted bribery by United Kingdom companies and/ or their agents in Saudi Arabia; 14.3. disclosure was likely to reveal evidence of gross misconduct by FCO and Ministry of Defence (MOD) officials in knowingly facilitating corrupt activities by United Kingdom companies and/ or their agents in Saudi Arabia; 14.4. disclosure would have a material bearing on a public assessment of the risk of current United Kingdom arms sales to Saudi Arabia being tainted by corruption because some of the key decision makers who were in post in 1970 were still in positions of power; 14.5. the file was under 40 year closure and those 40 years were almost up so what was the point in waiting out the full 40 year term? The file was likely to be as sensitive in 40 years as it would be after 37 years”

Gilby also made clear that in his opinion gross misconduct by officials would include the arranging of bribes, collecting intelligence to assist other in the payment of bribes and arranging for nationalised companies to pay bribes. He also made clear that the fact the information was forty years old should not make the case for revealing misconduct less important.

The FCO considered that the harm on UK relations with Saudi Arabia and trade interests outweighed the interest in transparency, in addition at the end of the forty year closure period the documents still may not be released and might be re-classified. The FCO represented that the Saudi Government felt strongly that disclosure of the information would constitute a serious breach of confidence. The Commissioner also noted the contestation of the national interest made in governmental statements regarding the closing of the SFO investigation.

The Commissioner ruled with the FCO and National Archives not to disclose the additional documents. Gilby once again disagreed with the side taken by the Information Commissioner and appealed the case to the Information Tribunal.

In the appeal the same main arguments were put forward once again, however in the Tribunal both sides were able to put forward significantly more supporting evidence. Gilby detailed some of the examples of his research which already showed corrupt behaviour in the arms deals, and brought forward two experts. One was Joe Roeber, a researcher and author who studied the arms trade and corruption for Transparency International and had himself investigated allegations of corruption in Saudi arms deals for a book which unfortunately could not be published due to legal concerns. Many of the allegations he made within his unpublished book, notably with regard to the Al Yamamah arms deal, were later proven correct when more evidence came to light confirming his view. Roeber detailed the international consensus on the dangers of corruption and the strong need in rooting it out. He was also able to explain the extent of corruption within the arms trade. Specifically citing UK government policy on corruption Roeber showed ministerial statements that indicated the strong public interest in transparency when tackling corruption, despite the likely friction caused by revealing corruption. The other expert Gilby brought forward was Carne Ross, a director and founder of Independent Diplomat, a non-profit organisation to provide a diplomatic

12 28th May 2011 service to those who need it most, as well a former British diplomat herself. Ross was able to give highly informed independent evidence analysing the likely diplomatic consequences of disclosing the information and both the positive and negative aspects of the UK's relationship with Saudi Arabia, including their national security based relationship. It suffices to say her view was that the relationship with Saudi Arabia also had strong negative aspects.

The FCO (the National Archives chose not to take part in the Information Tribunal appeal) brought forward the evidence of William Patey, the UK Ambassador to Saudi Arabia at the time. Patey argued that because members of the Royal Family such as Prince Sultan and King Abdullah still held the post they did at the time of the deals the interest in not disclosing the information was even stronger. Patey particularly argued that that the Saudi political culture was such that the Saudis would not understand the UK law around freedom of information and they would therefore hold the UK government responsible for a breach of confidence. Patey did put forward that the Kingdom of Saudi Arabia is a generally autocratic and secretive regime that would not understand the weight given to transparency, accountability and human rights in the UK. In open evidence he also made clear his strong opinion in favour of good relations with Saudi Arabia in the UK's foreign policy and national security. Patey did accept under questioning that there was already a significant amount of information detailing Saudi corruption in the public domain as detailed by Gilby, and there had not been any direct prejudice caused by the disclosure of that information. Patey, also explained that he would have objected to the release of any information implicating any serving members of the Saudi government.

The FCO also showed closed evidence that Gilby was not allowed to see or hear and a special advocate, with appropriate security clearance, who acted for Gilby and CAAT was allowed in the closed sessions. The court was therefore able to examine the documents in question and whilst their findings are of course secret, what became clear in open session was that at no time had the FCO denied that there were details of the alleged corruption in the documents requested, a very important point.

The Information Tribunal accepted that there would be some prejudice to the relationship between the UK and Saudi Arabia, given that disclosure of the documents would be seen as being an intentional breach of confidence as opposed to previous information accidentally disclosed or leaked. However when analysing the public interest the Tribunal found that where members of the Saudi Government were involved in employing agents or requiring the payment of commissions (contrary to a King's edict in 1968, though this law is largely ignored) the UK Government ought to insist on the the Saudis showing reciprocal respect for UK customs in transparency and accountability. The Tribunal ruled that “By acquiescing in their secretive and autocratic regime, he said, the UKG [UK Government] would in effect be encouraging and condoning those practices.” The Tribunal ruled that the public interest in “the possible involvement of UK officials directly or indirectly in the payment of commissions of agency fees in connection with arms sales, particularly following the King's edict dated 20th October 1968 making such payments unlawful in the KSA”.

The court ruled that the public interest in disclosure of the information to Gilby outweighed the case for secrecy in this important issue of corruption, historical and ongoing in an allied country and by UK officials.

CAAT vs ICO & FCO26

26 All the open statements for the court relating to this case can be found at the CAAT website at http://www.caat.org.uk/infoTribunal/info-trib-MoUs.php and the official transcripts for the three open days of the

13 28th May 2011

The CAAT case, as mentioned before was held at the same time, sharing evidence with the Gilby case detailed above. CAAT is a non-hierarchically organised, unincorporated campaigning organisation and was represented in court by its Parliamentary Co-ordinator Ann Feltham. The subjects of CAAT's freedom of information request were four Memoranda of Understanding (MoU) covering arms deals signed between the UK government and Saudi Arabia in 1973, 1985, 1986 and 1988. The latter three were all part of the Al Yamamah arms deal, the prime contractor on which was British Aerospace (later BAE Systems) and the first dealt with a British Aircraft Corporation contract (which later formed part of BAE Systems). These government to government contracts obviously place the UK authorities at the centre of any allegations of corruption in these deals.

The request was later reduced down to only apply for the 1986 and 1988 MoUs as the 1973 and 1985 MoUs were accidentally placed in the National Archives for public inspection and CAAT were able to obtain copies.

The Ministry of Defence, who held the documents requested contested the FOI request. They had refused the request on the grounds of exemption under section 27 (international relations) and section 43 (commercial interests) of the FOIA. The Saudi Arabian Government had been consulted on the request as the MoUs contained confidentiality clauses to the effect that mandated this consultation before the disclosure of any information relating to the documents. The MoD carrying out the necessary public interest tests on the two qualified exemptions. The MoD decided that due to the fact that ongoing relations with Saudi Arabia would be jeopardised the information should not be disclosed. The MoD did not originally list any benefits of disclosure.

CAAT asked for a review of the decision, particularly questioning the perceived economic benefits from arms deals with Saudi Arabia giving evidence of very large subsidies given to the arms industry. Perhaps unsurprisingly the MoD on review maintained its opinion against disclosure of the information. It did apologise for the lack of explanation on both sides of the public interest test. It also explained that it thought that while the opinions of third parties, namely the Saudi Government, were not decisive it was a legitimate factor to be considered.

CAAT sent a complaint regarding the decision to the Information Commissioner. The Commissioner ruled in favour of the MoD. Both sides reiterated their previous arguments, though the MoD made particularly strong representations about “the benefit from the British – Saudi defence cooperation programme in defence, counter-terrorism and related matters”. CAAT argued that the UK public could not have confidence in government regarding the contract after the widespread evidence of corruption in the deal. CAAT also again challenged the MoD to present any actual evidence of a public economic benefit from the arms deal, once subsidies were taken into account. CAAT also tried to make the argument that transparency would be in the public interest not only of the UK public, but also the Saudi Arabian public interest. CAAT also argued that releasing information about the arms deal would mean that economists and the public would be able to analyse the public benefit from the arms deals. CAAT was able to refer to a third party report from 2001 which concluded that a decrease in the number of jobs in military industry would lead to an overall increase in jobs in the UK, albeit at lower wages.

The Commissioner accepted the MoD evidence about the benefits from British – Saudi defence cooperation as well as the statements about the UK's national strategic interests. The Commissioner accepted Tony Blair and the Attorney General's statements justifying the closing of the SFO

case can be found at http://www.caat.org.uk/infoTribunal/

14 28th May 2011 investigations as extra supporting evidence for keeping the documents secret. The Information Commissioner, stated that he could not judge the contradictory evidence from CAAT and the MoD about the economic benefits of the Saudi arms deals, however did also declare that the potential consequences on UK employment only strengthened the public interest argument against disclosure. The Commissioner did not consider the section 43 commercial interest case, declaring that the section 27 exemption for international relations was sufficient.

The Information Commissioner’s decision was appealed to the Information Tribunal. The case, with shared evidence with the Gilby case, allowed CAAT to have the expert testimony of Gilby as well as others detailing the widespread allegations of corruption. In addition CAAT put forward evidence from Vince Cable, then the deputy leader of the Liberal Democrat political party and a trained government economist. Cable detailed many of the allegations of corruption against BAE Systems in the arms deal, arguably with government acquiescence. He spoke from a position of authority on the public interest in transparency alongside national security interests. Cable was also able to argue that the Saudi Government was blackmailing the UK into not fighting corruption by the threat of security ramifications and loss of jobs. CAAT brought forward evidence from Paul Ingram from the British American Security Information Council (BASIC), an expert on the economic impact of the arms trade on the UK economy. This allowed the group to show quantified evidence that the economic interests were being overstated by the government. Finally CAAT presented Nick Hildyard, Director of Corner House Research, a social justice NGO who was able to make extremely clear the strong public interest at combating corruption.

CAAT's argument that the MoUs were essential to investigate and stamp out corruption was founded on the reasoning that whilst the individual documents themselves might not make corruption obvious, the contracts were very important to build evidence necessary to identify corruption in any deal. CAAT also made clear that they saw a clear public interest in exposing corruption in an ongoing arms deal and with officials still in post in Saudi Arabia.

The MoD brought forward the same evidence that William Patey gave in the Gilby case. His evidence made clear his view of the dire consequences in both economic and security terms of offending the Saudi Royal Family. The MoD also presented evidence from Stephen Pollard, the Commercial Director and Deputy Director General of MoDSAP. Pollard brought out statistics approximating the number of jobs involved and reinforcing the Saudi Arabian attitude towards the need for absolute secrecy in matter of national security. Pollard also explained that MODSAP, as a result of the CAAT FOI request, had contacted Prince Sultan's most senior adviser to the request and ask for the official reaction of the Saudi Government. Unsurprisingly they responded that they expected confidentiality agreements to be respected and that no classified information, including the MoUs themselves be released to any third party. It is worth noting that Prince Sultan is strongly suspected of being a recipient of bribes in the Al Yamamah regime. The MoD also relied on the evidence of Katherine Elizabeth de Bourcier, Direction of Information (Exploitation) at the Ministry of Defence who told the court of the MoD process for dealing with the FOI requests.

The Tribunal decided that they could “not justify imposing on the KSA our particular customs and principles as to transparency or democratic accountability. It should be judged against what would have been reasonable for the KSA to have expected.” following up with observation of the secretive nature of Saudi society and the absolute monarchy in power there.

The Tribunal did however censure the MoD for the manner of their communication with the Saudi Government which the Tribunal considered was leading and encouraging a demand for secrecy. Instead the MoD should have made clear the nature of UK law and custom in Freedom of

15 28th May 2011

Information and represented that the preference ought to be in favour of disclosure.

The Tribunal chose to deny CAAT's application in this case, largely because they could not understand that the the MoUs requested were likely to be able to be connected with other information to make a conclusion on corruption to be reached. This they weighed against forceful representations from government representatives on the likely reaction from the autocratic, secretive Saudi regime. The Tribunal also placed great weight on the fact that the agreements had been agreed to be confidential as a whole and thus regarded as secret by the Saudi Arabian government.

This opinion sadly did not appreciate how complex corruption is in such cases. The judgement also did not place much emphasis on the ability for the public to scrutinise their governments conduct in the largest arms deal the UK has ever signed with a repressive, tyrannical and notoriously corrupt regime. This judgement and its fellows, along with the closure of the SFO investigation means that the UK public still cannot have trust in their government in their conduct in arms deals to Saudi Arabia.

ECGD vs CAAT & ICO27

The third case examined is another Campaign Against Arms Trade effort to investigate and expose the UK government's dubious involvement in Al Yamamah. The UK Government provides export credit guarantees for large export deals made by firms with some relation to the UK. Export credit guarantees insure firms against their customer not paying their bills. If the customer defaults on their payments, the taxpayer reimburses the firm for the lost business. The money paid out is then placed on the relevant country's national debt. The UK government body that fulfils this role is the Export Credit Guarantee Department (ECGD). The ECGD at the time of the request in 2005 was providing BAE Systems with £750m in cover per year. After this case and the demands of the OECD that the ECGD audit the BAE Systems deals the company cancelled all its cover with the ECGD28.

CAAT applied for a copy of the ECGD's Risk Committee's assessment of the Al Yamamah deal. This was in the form of a paper submitted to the committee and the relevant minutes of the committee. The paper is intended to inform the ECGD of the nature and likelihood of the various risks involved in the provision of support to BAE. Such risks would of course include the issue of corruption as well as the security of the Saudi Government and risks involved in arms deals to the country. It is worth noting at this point that as a government to government deal the Al Yamamah arms deal is exempt from the UK's arms export controls29 and therefore such an assessment has not necessarily been made in the context of arms export regulation. The ECGD claimed that both documents were exempt from disclosure citing multiple exemptions in the FOIA. The principle exemption was under 36(2)(b) of the FOIA, which limits disclosure that may prejudice the effective

27 The Judgement in this case is available at http://www.informationTribunal.gov.uk/DBFiles/Decision/i345/ECGD%20- %20Decision%20without%20signature%2021.10.09.pdf, additional documents can be provided by author. 28 Corner House Research and CAAT Press Release, 29 May 2009, “BAE terminates Government insurance for controversial Saudi arms deals”, http://www.thecornerhouse.org.uk/resource/bae-terminates-government-insurance- controversial-saudi-arms-deals 29 This exemption is examined in: Quadripartite Select Committee Joint Report on the Draft Export Control and Non- Proliferation Bill 2001 (01 May 2001) paragraph 53, http://www.parliament.the-stationery- office.co.uk/pa/cm200001/cmselect/cmdfence/445/44508.htm.

16 28th May 2011 conduct of public affairs, particularly the ability the work of ministers and their free and frank provision of advice and exchange of views.

Prejudice to effective conduct of public affairs. Section 36(1) provides that – “This section applies to- (a) information which is held by a government department or by the National Assembly for Wales and is not exempt information by virtue of section 35, and (b) information which is held by any other public authority. Section 36(2) provides that – “Information to which this section applies is exempt information if, in the reasonable opinion of a qualified person, disclosure of the information under this Act- (a) would, or would be likely to, prejudice- (i) the maintenance of the convention of the collective responsibility of Ministers of the Crown, or (ii) the work of the Executive Committee of the Northern Ireland Assembly, or (iii) the work of the executive committee of the National Assembly for Wales, (b) would, or would be likely to, inhibit- (i) the free and frank provision of advice, or (ii) the free and frank exchange of views for the purposes of deliberation, or (c) would otherwise prejudice, or would be likely otherwise to prejudice, the effective conduct of public affairs.

The ECGD also claimed that elements of the documents were exempt under section 41(1), information provided in confidence, section 42(1), information under the legal professional privilege, section 43, commercial interests, section 27, international relations and section 29, the economy.

The information was requested by CAAT on the 16th September 2005 and then after the initial request was rejected CAAT requested an internal review on the 30th January 2006, arguing that it seemed inconceivable that no part of the documents was able to be released. The ECGD acknowledged that its reasoning had not been fully explained but maintained that the exemptions applied were correct. CAAT then proceed to send a complaint about the case to the Information Commissioner on the 28th January 2006. CAAT argued that the approach taken to section 36, the prejudice of public affairs exemption was wrongly applied and the public interest test had been flawed. The Information Commissioner did not start investigating the case until the Spring of 2008 but the Information Commissioner did finally rule on the case in February 2009. The Commissioner decided that whilst the exemption under section 36 was engaged, the public interest test should have shown a public interest in disclosing the information. The Commissioner did however side with the ECGD on the exemptions relating to international relations and commercial confidentiality which applied to parts of the requested documents and in areas relating to those exemptions the public interest was not in favour of disclosure. The Commissioner decided that the economic exemption applied to a small amount of information though the public interest favoured disclosure in that case. The exemption under section 41, information provided in confidence, was not relevant in its use in this case according to the Commissioner. The Commissioner also did not accept the use of section 42, legal privilege, saying it was not relevant and, in any case, the information in question was exempted under section 43, commercial confidentiality. The Commissioner did therefore deem that the ECGD should have provided CAAT with all the information except the elements exempted by international relations and commercial confidentiality concerns.

In this case the ECGD appealed the case to the Information Tribunal in March 2009. The ECGD

17 28th May 2011 argued that the Information Commissioner had been wrong in ruling the public interest test in favour of disclosure when dealing with the section 36 exemption relating to the conduct of public affairs. The ECGD wished to conceal the entirety of the documents requested on the grounds that it would prevent public servants giving their honest advice and exchanging their views freely. Paul Radford, head of ECGD's Credit Risk Analysis Decision, told the Tribunal that the impact of disclosure would not be a “chilling effect” but a “freezing effect”, which he described as “catastrophic”. “He did not know how the ECGD would manage, how it would conduct its affairs, how it would function to demonstrate it was doing a proper job.” This view the ECGD supported by reference to the sensitivity of the Saudi Government when it came to observations on the country and the discussion of confidential information. The ECGD gave evidence in both open and closed sessions and therefore necessarily only the product of the open sessions and open part of the judgement in the case can be discussed here despite the fact that the closed evidence related closely to the assessment of the public interest test.

CAAT was again represented by Ann Feltham, the group's Parliamentary Co-ordinator. CAAT was forced to argue against the ECGD who claimed that the evidence of civil servants should be accepted almost without question. The Tribunal was persuaded not to tamely accept the evidence of civil servants. Feltham produced some of the extensive evidence to show corruption within the arms deal and therefore extremely high public interest in seeing the ECGD's assessment. The ECGD after all was staking very large sums of public money that the deal would carry on without issue. If the ECGD suspected corruption then the involvement of the UK government should be questioned, not only on moral grounds but also due to the risk involved in supporting a major corrupt arms deal in terms of financial losses, legal liability and the potential blowback in terms of national security policy.

The ECGD attempted to argue that all factors in the case should be considered in the public interest test, although it was only disputing the use of the section 36 exemption, conduct of public affairs. Therefore the ECGD had tried to argue the national security, international relations and commercial interest facets to the case to hide the entire document even though it was trying to use an exemption covering free discussion by public servants for the document as a whole. The Tribunal rejected this attempt, they ruled that only the factors relating to the ability of public servants to advice and discuss openly were engaged. The Tribunal also expressed surprise that if the ECGD regarded these arguments as important to the whole document they should have contested that the relevant exemptions should be applied to the entirety of the document.

The ECGD argued that there would be long term consequences of the release of the documents, saying it would set a disturbing precedent that all future information would be treated in this way and that there would be direct consequences of disclosure in this case. The long term consequences centred on this supposed “freezing effect” by which officials would be unwilling to offer their honest opinion for fear of it being scrutinised by the public later. This, the ECGD contended, would lead to civil servants not recording their thoughts or conversations accurately so that they could not be scrutinised or offend foreign rulers. The ECGD argued that had they known the paper would be disclosed they would have made it “more bland, less detailed and less specific”. They argued that whilst they would still provide advice with “integrity, honesty, objectivity and impartiality, provide advice based on evidence (as opposed to speculation) and accurately present opinions and facts, albeit not through the medium of Risk Committee papers.” The Tribunal ruled that these claims were “exaggerated” and by “taking the guts out of all the papers” civil servants would not be doing their duty. The Tribunal referring to the ECGD's chief economist and head of Credit Risk Analysis Division who had made these claims said “Along with his exaggerated claims and extravagant language, we also found Mr Radford's demeanour somewhat dismissive towards both the Tribunal

18 28th May 2011 and to the significance of the public interest balancing exercise.” This along with evidence from other staff at the ECGD who argued further that in sensitive and confidential issues essential details would be left out of reports to avoid their disclosure to the public, the ECGD's other witnesses also claimed that the disclosure of information would “result in more e-mail traffic and matters dealt with on a less formal, un-minuted basis with Risk Committees only being held once all the underlying decisions have been made. The Tribunal said “This approach suggests a misunderstanding of the application of the FOIA as the right it provides is the right of access to information held by public authorities.” of course emails would be accessible under the FOIA in any case.

The Tribunal neatly summarised up their view against the attempted use of spurious arguments for the use of the section 36 exemption in the case “In evidence, it appeared to us that the concerns raised as to the sensitivities of the disputed information and the reasons why it should not be disclosed were focussed on sensitivities surrounding the politically sensitive, that is relations with KSA, and the commercial, that is details relating to the Al Yamamah agreement, rather than any concern on the part of civil servants that their views or advice reflected in the disputed information might be open to wider scrutiny. Indeed, Mr Radford answered questions from one of the Panel to that effect; his concern was not that his views might be subject to public scrutiny but that the information contained in those views could cause harm if revealed.”

The Tribunal made clear that they saw no evidence or real likelihood of the freezing effect suggested by the ECGD should information be disclosed. The Tribunal argued that senior civil servants would still have "sufficient courage and independence" to give robust advice, even in the face of potential public scrutiny. Instead the Tribunal believed, importantly, that “such disclosure and scrutiny may enhance frankness and candour, thereby improving the quality and effectiveness of the decisions of ECGD.”

On the other hand the Tribunal accepted that “the decision of ECGD to enter into a business relationship with BAE that gave support to that decision is still part of the public debate. We consider that there is a strong public interest in UK arms deals abroad, both in the deal itself and in the process by which it is effected. The involvement of a government department, providing a service, and a possible commitment of public money, that enables a private company to pursue a contractual arrangement to provide military equipment and services to another country, regardless of its particular status, is clearly a matter of public concern.” The Tribunal judgement continued “That concern is compounded when the country involved is one with a public profile such as the KSA regime. We do not feel that we need to address each of the allegations raised by CAAT as to conflict, corruption and human rights abuses but would note that these allegations are not made by CAAT alone.” The fact that the ECGD was committing substantial public funds also was accepted as a factor in the deal “It therefore seems to us that the public has a clear and compelling interest in understanding, and assessing for itself, the process by which the level of risk assumed on its behalf was reached and the considerations that were taken into account.” The argument that increased transparency would also improve the quality of advice and decision, enabling the public to judge whether public authorities were acting appropriately was also given weight. The Tribunal said “It therefore is our conclusion that there is significant public interest when a government department underwrites an “arms deal” with public money, in understanding how that decision is made, in the process of how a public authority reaches decisions of importance, and in understanding how a public authority approaches a decision involving KSA, including in a situation where the Serious Fraud Office was conducting an investigation.”

The Tribunal ruled that the factors favouring disclosure were overwhelming with the arguments

19 28th May 2011 against, on the terms of the “freezing effect” of revealing civil servants' advice carried very little weight. The ECGD was ordered to disclose the disputed information.

The ECGD case shows the need for an overriding presumption. The case revolved not around the exemption of national security but internal discussions which the principles should acknowledge as open in any case, just as the Tribunal decided.

Conclusions

These cases illustrate the sometimes deep governmental involvement in arms deals, including highly corrupt deals. The arguments in the cases present nearly all revolved around issues of national security in offending the powerful men who had tried to get away with corruption and the perceived need to conceal such information that revealed corruption. This type of argument is the kind that only serves to perpetuate corruption amongst the powerful, where there is always some price in enforcing accountability. However the need for transparency and accountability is incredibly strong when such power is present. If transparency in enforced by a rule of presumptive disclosure on details that would show corruption then a great step will have been taken to end the state's role in corruption and security of both the nation and the human security of its citizens will improved. The very nature of an arms deal is dangerous in definition of providing the means of violence to an outside group or government, that process must be most carefully monitored to ensure that this dangerous power is not misused. In addition the unique vulnerability of the arms trade to corrupt practices necessitates an additional level of watchfulness and independent scrutiny over the conduct of the powerful.

The natural instinct of those in power is likely to be to keep any suggestion of corruption or incompetence secret unless forced otherwise. Dealing with corruption can be difficult and endanger international relations and even short term national security. But the short term difficulties are clearly overborne by the public interest, including security interests, in transparency, catching and prevent corruption and incompetence. This approach strengthens democratic institutions, does not protect corrupt regimes and due to the particular dangers of arms trade corruption helps prevent the enormous damage caused by this most dangerous crime.

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