The news that Saudi Prince Bandar bin Sultan was accused of accepting more than £1bn to seal Britain's £43bn Al-Yamamah arms deal with Saudi Arabia won't have surprised many Saudis, says Roula Khalaf in the FT. "In an absolute monarchy flush with petrodollars where the line between state and royal finances is blurred, arms deals are assumed to carry lucrative commissions." What's more, the former ambassador to America is seen at home as "a symbol of royal excess as well as submission to the US".
The outcome of the US corruption investigation is a long way off, says Khalaf, but Bandar is a "born survivor". Now 58, he is the illegitimate son of an African slave girl and Prince Sultan bin Abdul Aziz Al Saud. According to Bandar, he grew up as an only child in a mud hut', in spite of having 32 royal half brothers and sisters, and it was only when he was a teenager that his father, now Crown Prince, recognised him as his legitimate son. He soon learned he had to "compete for attention and respect", says David Ottoway in The Washington Post. At the age of 16, he chose the "most dangerous military career imaginable" fighter pilot and chief acrobatics artist in the Royal Saudi Air Force. His uncle, the late King Faisal, was so impressed that he married him to his youngest daughter, with whom he has eight children.
His diplomatic career was an accident. While on a fact-finding mission with the Saudi air force in California in 1978, he ran into the head of the Saudi intelligence service, Prince Turki, in his hotel. At the time, Turki was desperately looking for a Saudi who could persuade the Americans to sell them their fighter jets and the English-speaking Bandar fitted the bill. The 29-year-old found himself lobbying Congress and, in the face of formidable opposition, sealing the deal. The experience exhilarated him. Spotting his potential, his uncle, then-Crown Prince Fahd, made him his unofficial royal emissary' and Bandar began carrying covert messages between President Carter and his uncle. In 1983, Fahd appointed him ambassador to Washington and thereafter, until his resignation in 2005, Bandar managed the kingdom's most important strategic alliance.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Cocky but shrewd, Bandar acquired a reputation as a troubleshooter, assisted by close relationships with successive US presidents, particularly with George Bush Sr, who used to call him Bandar Bush'. He negotiated the end of the 1975-1991 Lebanese civil war, helped convince Libya to hand over the two suspects in the Lockerbie bombing, arranged the now-controversial arms deal with Margaret Thatcher in 1985, helped Chad to thwart an invasion by Libya and secured the Soviet withdrawal from Afghanistan in the late 1980s. He is even credited with "subtly choreographing the Persian Gulf War", says Ottoway. But Bandar's relationship with Clinton never took off, while his star was to wane further after September 11th, says Khalaf; not even Bandar could protect Saudi Arabia from America's wrath after the attacks. In 2005 he resigned and returned home to become National Security Chief. His diplomatic skills have faltered: this year, he encouraged the US to push for a Middle East peace summit only to find that his boss, King Abdullah, wasn't on board with the plan, said Newsweek. Yet he may still bounce back. "He's a man of great resilience and almost magical persuasive powers," says Chas Freeman, a former US ambassador to Riyadh. "It's always a mistake to count him out."
Latest Videos FromMoneyWeek
What happened in the Bandar arms deal?
In June this year, The Guardian placed Prince Bandar in the eye of the storm when it alleged that BAE Systems drip fed more than £1bn over a decade into an account controlled by Bandar in connection with the £43bn Al-Yamamah deal, Britain's biggest-ever defence contract. BAE has denied allegations that there was anything illegal in the payments, saying that it acted in accordance with relevant contracts.
Bandar also denies any wrongdoing and claims any money paid out of those accounts was "exclusively for purposes approved by the Ministry of Defence". These included an £8.6m refurbishment of one of his palaces (deemed an official residence') and the purchase and running costs of a "heavily used" £75m private jet.
The allegation that commissions were paid to the Saudis first surfaced in 1985, said The Guardian, but UK governments have successively denied the claims. A Serious Fraud Office (SFO) investigation was launched in 2004, but was stopped last December on the grounds that it presented a "real and serious threat to national security". The truth is that proceedings ground to a halt after the Saudis made it clear that they would cancel another lucrative arms contract and withdraw all cooperation on intelligence-gathering, says Con Coughlin in The Daily Telegraph. The decision by the US Justice Department to pick up where the SFO left off will no doubt spark a similar response from Riyadh, and the investigation is "arguably a bigger headache" for Bush than it is for the MoD or BAE, said Coughlin; Saudi Arabia is a vital US ally and Bandar is a personal friend of President Bush.
