SHELL EARLEY CONNECTION WITH THE SAUDI ARABIA / AL YAMAMAH BAE ARMS SCANDAL
Witness Statement of Mr Gerald James 1 June 2007 (24 page pdf document, so please be patience, it will take a while to download)
Gerald James book: IN THE PUBLIC INTEREST
Comment in House of Commons by Vince Camble MP, former Chief Economist of Shell (Debate on the Al-Yamamah BAE Fraud/Corruption controversy and associated money laundering)
7 Feb 2007: Dr. Vincent Cable (Twickenham) (LD):
“Let me turn to the history of this issue. The al-Yamamah contract originated in the mid-1980s, and the context is often forgotten. It was not achieved primarily as a result of competition and British technological excellence; the context at that time was the very close relationship between Saudi Arabia and the United States, which both sides wished to perpetuate. However, the problem was that, as President Reagan provided Saudi Arabia with more and more sophisticated equipment, there were objections from Israel. Perfectly understandably, the Israelis were concerned about one of their potential adversaries acquiring sophisticated technology. The situation was not helped, of course, by the tirade of anti-Semitic abuse that often comes from the Saudi authorities. Israel protested, and friends of Israel in the United States Congress blocked the F-15 deal, which was in turn passed on to Britain and Mrs. Thatcher. The Reagan Administration were very anxious to bless this arrangement. They owed the Saudis various favours. They were supporting the Nicaraguan Contras and helping gallant freedom fighters in Afghanistan—such as Osama bin Laden. Reagan was perfectly happy to support this British arrangement, which proved to be one of the largest arms deals in history. It has been worth about £40 billion to date, and could be worth something of the same magnitude again in the future. It is not merely an arms deal, but one of extraordinary complexity that involves two major subsidiary features. One is an offset agreement, which, essentially, is a joint venture set of arrangements under which British companies put in capital and expertise, and their Saudi partners take their cut. There is also an oil element. There was an oil barter arrangement whereby oil was marketed, initially by Shell and BP, and the proceeds were routed through the MOD to BAE Systems.”
Al Yamamah 2 Offset Agreement THE AL YAMAMAH ECONOMIC OFFSET PROGRAMME
This Saudi British Bank document contains a reference to the original “Al Yamamah” agreement involving Saudi Arabia, BAE Systems, the UK Ministry of Defence (the MOD), with Shell and BP fulfilling what has been described as a money laundering role in the “oil-for-arms” deal:
“The Al Yamamah Project was initiated in September 1985. It involves the supply and support of Tornado, Hawk and PC-9 aircraft and specialised naval vessels to Saudi Arabia. The UK Government’s prime contractor for the project is BAE Systems pIc. The related Al Yamamah Economic Offset Programme was launched in 1989.”
The main parties are once again Saudi Arabia, BAE Systems and the MoD. The main “Key” address for “The British Offset Office” stated in the document is the Ministry of Defence in London. Shell is also involved, this time via a subsidiary:
“The foreign partner is Basell, who is the world’s largest PP manufacturer and is itself a 50/50 joint venture between Royal Dutch/Shell Group and BASF. Basell will hold 25% of the equity in the Saudi Arabian venture.”
House of Commons Select Committee on International Development: September 2000
21. The allegations continued. In December 1996, Sunday Business suggested that one of the reasons behind the Saudi company Aramco’s replacement of BP and Shell as oil exporters in Al Yamamah was an attempt by the Saudi government to save money on commission payments to the companies, which were estimated at $30 million/£18 million a year. (Sunday Business, 1.12.96)
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