Evidence undermined denial that Saudi Arabia pays salaries for MoD’s project team
By Frederika Whitehead | 10 December 2012
Ministry of Defence officials are feeling the heat over corruption allegations surrounding a massive defence contract with Saudi Arabia.
The Serious Fraud Office may have launched a full criminal investigation, but much of that heat has so far been coming from Exaro.
When we uncovered how a British contractor transferred more than £14.5 million to two secretive companies registered in the Cayman Islands between 2007 and 2010, the Ministry of Defence (MoD) fell back to its Maginot line of “no comment”.
“The project operates at nil cost to MoD… The Saudi Arabian national guard covers Sangcom programme costs”
– Ministry of Defence spokeswoman
This was despite the fact that the contract to overhaul the communications systems of Saudi Arabia’s national guard (SANG) was a government-to-government deal overseen by the MoD.
And the MoD’s position was the same even when Exaro revealed that the ministry knew about the payments and warned that it was unlikely to approve future transfers.
Why, despite the MoD’s warning, did the payments continue for at least another 19 months? The MoD would not answer.
I discovered that six years ago Nicholas Gilby, then a researcher for Campaign Against Arms Trade, asked the MoD under the Freedom of Information Act (FOIA) about its Sangcom team, whether the ministry or Saudi Arabia paid for it, and what it cost.
The answer was intriguing: “Sangcom is made up of up to 16 personnel, 11 from the army and five civil servants. SANG pays full costs for Sangcom personnel, including accommodation and transport. Sangcom’s cost to the UK MoD is nil.”
We knew that the MoD’s Sangcom team had grown dramatically since then: the latest official figure is 49.
So, it seemed, the Saudi national guard paid the salaries of the MoD’s Sangcom team, together with other expenses. This was a remarkable break in our running investigation.
I decided to check with the MoD that I had understood the response correctly. There was room for ambiguity, Whitehall’s traditional comfort zone.
An MoD spokeswoman denied that Saudi Arabia paid the salaries for the MoD’s Sangcom team. She told me: “MoD personnel supporting the Sangcom programme are paid by the MoD and not the Saudi Arabian national guard.
“Under inter-governmental memoranda of understanding (MoUs), the Saudi Arabian national guard covers Sangcom programme costs, including accommodation and transport.”
My colleague, David Pallister, then turned up an exchange from a hearing at an information tribunal in 2008 over Gilby’s attempt to access documents relating to Saudi defence deals.
Stephen Pollard, deputy director of the Saudi Armed Forces Programme (MoDSAP), which is the MoD’s division that deals with other military sales to the kingdom, shed a different light on the issue.
He said: “The Saudi Arabian programme team, of which I am a member, is funded, in effect, from the management fee provided by the Saudi Arabian government, which is used, firstly, to reimburse the Ministry of Defence for our salaries and accommodation and so on, and secondly, is used to reimburse the Ministry of Defence for any other costs that it incurs in supporting the programme.”
My colleague then found parliamentary answers from 2004 and 2007 – given by two different defence ministers – that seemed to confirm that Saudi Arabia met the entire costs of MoDSAP. Why would Saudi Arabia pay for MoDSAP, but not Sangcom?
Pallister asked the MoD about the cost of the Sangcom personnel. He asked a different spokeswoman, and received a different answer: “The project operates at nil cost to MoD. Under inter-governmental memoranda of understanding (MoUs), the Saudi Arabian national guard covers Sangcom programme costs, including accommodation and transport.”
But which of the MoD’s two stories were true? Did the Saudis pay for the salaries or not?
It was a question that I had to ask twice.
Finally, the MoD’s first spokeswoman issued a “clarification”.
She said: “While the MoD continues to pay the salaries and costs for the MoD civilian and military personnel involved with Sangcom, these costs are recovered from the Saudi Arabian national guard under the MoU and hence the statement that the project operates at nil cost to MoD.”
How much is the annual salary bill? Submit a FOIA request, said the spokeswoman. We have done so, but our information is that it tops £2 million, with all costs for the MoD’s Sangcom team around £10 million.