Denial over who meets salaries for MoD’s Sangcom team was wrong, admits Whitehall
Britain’s Ministry of Defence has been forced to admit that officials working on a contract embroiled in bribery allegations are paid for by Saudi Arabia.
It comes after the ministry denied to Exaro in June that the Saudi government pays for the salaries of the 49-strong team of British military and civilian personnel.
Exaro understands that the salary bill runs into the millions of pounds.
The Sangcom team of the Ministry of Defence (MoD) supports a government-to-government deal to overhaul the Saudi national guard’s communications systems. The MoD denied that there was any “intention to mislead”.
Exaro revealed in May how GPT Special Project Management, the British company acting as the MoD’s prime contractor on the deal, transferred more than £14.5 million to two secretive companies registered in the Cayman Islands between 2007 and 2010.
A leaked e-mail shows that MoD officials knew about the payments, and warned that the ministry in London was unlikely to approve future transfers. Despite the warning, the payments continued for at least another 19 months.
When Exaro first asked the MoD to explain who paid the salaries for its Sangcom team, a spokeswoman denied that Saudi Arabia met the bill.
She said: “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.”
When Exaro later asked the MoD for a breakdown of the costs for its Sangcom team, a second spokeswoman replied: “The project operates at nil cost to MoD.”
Asked how the Sangcom team cost the MoD nothing if the ministry – as it previously claimed – was paying the salaries, a spokeswoman 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.”
The first spokeswoman, asked why she had given the initial false denial, admitted that her previous statement was “not clear”.
She said: “What is not clear in my original statement that was sent to you in June is that, under the terms of the MoU, the MoD’s costs are recovered from the Saudi Arabian national guard.
“So, the statement that I sent to you is correct in that the MoD does pay for MoD personnel supporting the programme, but what is not explained is that those costs are then recovered from the MoU.”
“I apologise that my statement did not make this point as clearly as perhaps it might have,” adding, “There was certainly no intention to mislead.”
Declassified documents dating back 36 years show that Simec International, the Cayman company that received all but £141,000 of the £14.5 million of mysterious transfers, was being lined up before the Sangcom deal was even agreed for what the MoD’s Defence Sales Organisation called “agency fees” of three per cent.
The latest 10-year phase of the Sangcom project started in 2010 and is reportedly worth £2 billion.
The number of personnel in the MoD’s Sangcom team has increased from 16 in 2006 to 49, according to ministry figures.
While one team member is based at an MoD facility in Corsham, Wiltshire, the remaining 48 work in Saudi Arabia. Most are based in a block dubbed the “MoD villa” inside a compound for the national guard’s signals school at Khashm al-Aan, a suburb of Riyadh, the Saudi capital.
As the SFO approaches a decision on whether to bring any charges over the Sangcom project, Exaro reveals how the MoD initially denied – and then, eventually, admitted – that the salaries of its large team of military and civilian personnel supporting the contract are met by Saudi Arabia.