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Before that decision, Mr. Wardle consulted the Attorney-General, who received further views on the public interest in the form of a memorandum from the Prime Minister, which Mr. Wardle saw. Of course, I
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took no part in that decision, but I have now seen the memorandum from the former Prime Minister. It makes clear his view that developments in the SFO investigation could have given rise to a genuine and immediate risk of a collapse in UK-Saudi security, intelligence and diplomatic co-operation and that that was likely to have seriously negative consequences for the UK public interest in terms of national security and our highest foreign policy objectives in the middle east. The then Prime Minister was clear that the decision was a matter for the independent prosecuting authority, but felt that he would fail in his duty if he did not bring those issues to the Attorney-General’s attention.

The former Prime Minister set out the centrality of Saudi Arabia and co-operation with its authorities to our efforts to protect British lives, and the risk of such co-operation being withdrawn. The document is some pages long and it goes into specific detail, which makes it compelling. It also deals with defence and foreign policy issues and states that the Secretary of State for Defence confirms the defence issues, and that both he and the Foreign Secretary share the Prime Minister’s overall assessment of the damaging impact of the SFO investigation. That assessment is formed on the basis of advice from the Government’s most senior national security official advisers. The Prime Minister’s minute was accompanied by further assessments from very senior officials, including Sir Richard Mottram.

David Howarth rose—

The Solicitor-General: Wait for it.

David Howarth: Will the Solicitor-General give way?

The Solicitor-General: I will not.

Those are not documents that could weigh lightly. Mr. Wardle told the Constitutional Affairs Committee that he had two subsequent conversations with the ambassador. Let me turn to that issue, because it is a subject of some—forgive me for using the term—scurrilous criticism of Mr. Wardle. What he did was to see those documents. He subsequently had two conversations with the ambassador, on 8 and 12 December—he had already had one conversation about the issues. At those meetings, he was able to probe the issues as much as he wished. Mr. Wardle is a professional lawyer at the head of an investigation and prosecuting body. I would expect him to be able to probe expertly the ambassador’s position not only on the centrality of Saudi Arabia but on the likelihood of the breakdown of relations, which would offer danger to national security.

Mr. Wardle told the Constitutional Affairs Select Committee:

Asked by the hon. Member for Chichester (Mr. Tyrie), a Committee member, whether he thought everyone else would agree or whether others might not, Mr. Wardle said:

Mr. Wardle was asked about Saudi benefits from an exchange of intelligence—the very point in a thunderstorm of allegations from the Liberal Democrats that the hon.
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Member for Twickenham raised. Mr. Wardle said that the question “Were the Saudis bluffing?” was something that he went into in his conversations with the ambassador. From what he was told, they were not.

Mr. Wardle has been clear that the decision was his. While he properly consulted the Attorney-General in his statutory superintendence role, he has made it clear that he came under no improper pressure from the Attorney-General. Mr. Wardle has said, again to the Committee that the right hon. Member for Berwick-upon-Tweed (Mr. Beith) chairs, that he had “no problem with the way the government has handled this” and that the then Attorney-General had acted “absolutely professionally” and played “with a straight bat”.

Mr. Wardle of course knew the state of the investigation, the input of expertise, the time that the SFO had already devoted to it and the £1.3 million estimated cost. He certainly understands the public interest in prosecuting corruption, since that is what he spends most of his life doing. Many of his cases are overseas corruption investigations. He has, with Lord Goldsmith, recently obtained blockbuster funding from the Treasury to investigate oil-for-food corruption in connection with the Saddam regime in Iraq. Mr. Wardle accepted in evidence to CASC that the decision had damaged the SFO’s reputation for dealing with corruption. He will therefore have quite obviously taken that danger into account as well. There can be no doubt that he was in the best possible position to balance competing considerations and come to a conclusion as to where the public interest lay.

Lord Goldsmith saw the same documents, knew the investigation and obviously understood the purpose and need for corruption prosecutions for the greater good. He agreed with Robert Wardle’s decision to halt the investigation. Lord Goldsmith was concerned that any prosecution might not succeed. Mr. Wardle would have preferred to try for further evidence and said only that the outcome was uncertain, and so they differed on that. Mr. Wardle took the decision. The Attorney-General’s difference was on whether, since our law of corruption involves the need to show payment to an agent without the approval of the principal, the payments to senior officials in this case might have been made to, or with the knowledge or consent of, the relevant principals—a matter of evidence. In the event, this difference of view was not tested, because of Mr. Wardle’s decision to halt the investigation on national security grounds.

The process that I have described is exactly what our constitution requires to happen, and the decision is evidenced by all concerned to have been taken independently, on information from a variety of sources that led Mr. Wardle to conclude as he did. I have set this out extensively because there has been innuendo upon innuendo, yet when the facts are thus set out, the innuendo is shown to be without any foundation. I hope now that it will now stop.

Mr. Alan Beith (Berwick-upon-Tweed) (LD): The hon. and learned Lady has referred extensively to the Select Committee. She has somehow implied that for the Select Committee to ask Mr. Wardle, who was an excellent witness before the Committee, a whole series of questions about how the decision had been arrived
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at—very similar questions to those that my hon. Friend the Member for Twickenham (Dr. Cable) has asked today—involved some kind of innuendo. Surely asking questions is an entirely proper means, both in that process and in this debate, of establishing the facts of the matter.

The Solicitor-General: I have suggested absolutely no such thing. I have relied on the evidence. I am glad that the right hon. Gentleman agrees that Mr. Wardle was an excellent witness. I have spoken to him, and I would expect him to be an excellent witness and a wholly reliable figure. I see the right hon. Gentleman nodding. Can he not curb the excessive desire of those on his Front Bench to refer to what Mr. Wardle said as “implausible”, when his own view conflicts with that by finding him an impressive witness? In my view, the inquiry by the Constitutional Affairs Committee was penetrating and drew out essentially what I have just put forward—namely, that this decision was taken independently after a great deal of independent thought by the expert who was best placed to take the decision.

Mr. Evans: The Solicitor-General has just stated that she hopes the mud-slinging and constant returning to this issue will stop. Does she accept that if that does not happen, it will have a commercial impact on BAE Systems, its workers and its future orders? Carrying on in this manner is jeopardising thousands of jobs.

The Solicitor-General: The hon. Gentleman makes his own point.

David Howarth: There was one particular part of the story that did not come out in the evidence to the Constitutional Affairs Committee, but which did come out in the Government’s written case in the judicial review. This involved the separate exercise at the end of September 2006 in which the Attorney-General’s office received further representations from the Cabinet Secretary about the public interest and raised the possibility of Saudi Arabia’s co-operation on counter-terrorism being prejudiced. Nevertheless, at that stage the Attorney-General decided that the investigation should continue. That point did not come out in the evidence to the Select Committee. What precisely changed between 30 September and the separate exercise in December?

The Solicitor-General: I have told the House what forces prevailed when the decision was taken. Surely that is the important point. I have no doubt that issues were raised, re-raised and considered, but it is clear that at some point this came to a head and a decision had to be taken on whether we should jeopardise our national security.

The OECD has scrutinised the decision and the basis on which it was taken. The SFO and other UK authorities have co-operated fully with the OECD. Indeed, the OECD issued a press release expressing its appreciation of the openness with which we have given our explanations, although hon. Members would not suspect that for a minute, given what we have heard from the Liberal Democrats today. We are satisfied that
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the decision made by Mr. Wardle was compatible with the OECD anti-bribery convention. We do not believe that the convention was intended to stop national authorities acting to protect their national security.

Opposition Members referred earlier to a legal challenge. That legal challenge brought by the Corner House resulted in the view that we were entitled to act to protect our national security—that must be a commonplace to everyone but the Liberal Democrats—which was borne out by Mr. Justice Collins, who refused permission for judicial review. He said the challenge was “bound to fail” on the basis that

The claimants have now sought to renew their application for permission at an oral hearing, but the SFO will continue to resist the challenge. The head of the OECD Secretariat, Professor Michael Pieth, has himself apparently accepted that the OECD convention allows cases to be stopped on national security grounds, although he added the rider

I am not sure on what basis he chose to add that qualification, but it should not be thought, asserted or pretended that the OECD has reached any finding that the halting of the SFO investigation amounts to a breach of the convention. It has not. It is, in any event, not the job of the OECD to inquire into individual cases or to act as any sort of judicial body. The UK remains a strong supporter of the OECD convention, and the UK authorities are co-operating with the OECD’s review, which is about our anti-corruption laws in general.

Mention has been made of an investigation in the United States. The Home Office, as the central authority for these purposes, has received a request for mutual legal assistance from the United States. That request is receiving appropriate consideration in accordance with procedures and the relevant law. Any decision on that request will ultimately be a matter for the Home Secretary. Beyond that, I cannot comment at this stage.

I should like to speak about the future. I obviously accept that this case has been controversial—although not, I venture to suggest, as controversial as the Liberal Democrats would have us believe by stirring it up. I have tried to be as open as I possibly could be with the House today about the basis on which the director of the SFO took his decision. The same applies to the former Attorney-General and Solicitor-General, who went straight to Parliament when the decision was made, and they have been equally open in the numerous debates that have taken place in both Houses.

I think we need to consider, however, whether there are ways in which these issues can have brighter light thrown on them, perhaps at an earlier stage. As the House knows, the Prime Minister has committed the Government to a programme of constitutional reform, with the express intent of being as open and transparent as possible and of divesting the Government of powers that can be exercised by Parliament or with closer parliamentary supervision. It is well worth considering whether other ways can be found of informing Parliament
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about cases of this sort—in particular, those cases where decisions are taken on the basis of sensitive intelligence that cannot be made public.

I imagine that the Government would be in an altogether more comfortable position at large if we were able to say that, notwithstanding the total personal integrity and total constitutional propriety with which this advice was given, we had exposed material that underpinned it to a thoroughly security-checked group of Members of Parliament of all parties. That would have to be a group of people in whom obviously the public, but equally the security services and the prosecution authorities, had confidence.

I can say that the former Attorney-General himself provided information about such a case, in which a similar decision had been made—similar in the sense that it was a decision not to prosecute in the public interest. He recently gave to the Intelligence and Security Committee some background material that contextualised the decision and the legal reasoning behind it. It may be that more use could be made of such a mechanism or other options may be available.

The House will further know that, following the programme of constitutional reform set out in the Green Paper “The Governance of Britain”, we will shortly issue a consultation document on the role of the Attorney-General and the Solicitor-General: they have identical powers and responsibilities, save that on the current configuration they are accountable to different Houses. One aspect of that consultation will concern the Attorney-General’s responsibility for criminal prosecutions, and the Law Officers’ accountability to Parliament. As part of that consultation, the Attorney-General and I will be happy to consider any proposals on such topics.

I should remind the House of what strong action the Government are taking against corruption world-wide. First, we are committed to reform of our law. That is far from straightforward. A draft Bill was subjected to pre-legislative scrutiny by a Joint Committee of both Houses in 2003—I was on that Committee, and if there is to be blame for delay, I shall have to share some of it as a Back Bencher, as we did not support that form of the Bill. We thought that it could be improved, and we sent it back. The Government responded, but the issues are hugely difficult, and we have asked the Law Commission to research the issues and prepare a draft Bill. That will include consideration of the experience of other countries that have implemented international conventions in this area. We have asked the Law Commission to prioritise that, and have made additional resources available to expedite it. It aims to produce a consultation document this autumn, with a report and draft Bill in 2008.

Meanwhile, let me set out the SFO’s vigorous pursuit of international corruption. My hon. Friend the Minister for the Middle East will say more later about broader steps that we have taken and are taking. The SFO, however, is pursuing a large number of cases, including some relating to BAE Systems.

One such case concerns allegations of corruption in relation to a joint venture within the Czech Republic between BAE Systems and Saab to lease fighter planes to the Czech air force in 2002. The Swedes have started their own investigation, with the assistance of the SFO.
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On 10 May this year, the SFO called for a meeting at the headquarters of Eurojust at The Hague, with members of the Czech investigation team. The SFO tabled a proposal for a more co-ordinated approach to aid the investigation, which was agreed. Since then, there has been active co-operation, and meetings of the Czechs, Swedish prosecutors and the SFO took place last month in London.

The SFO is also investigating allegations of corruption, again in relation to BAE Systems, within the state of Romania. The case concerns a contract to sell refurbished frigates to the Romanian navy in 2002. Again, excellent support has been afforded by the Romanian authorities and a letter of request has resulted in a visit to Romania by SFO investigators, during which excellent co-operation was achieved.

An investigation is also taking place of a contract awarded by the Government of Tanzania in 1993 to upgrade its air traffic control systems. The contract was with Siemens Plessey, which was acquired by British Aerospace in 1998. The Prevention of Corruption Bureau of Tanzania has commenced its own investigation. The SFO has given considerable technical and legal support and advice to that body. SFO lawyers with junior counsel, an investigator and an experienced Ministry of Defence police officer visited Tanzania in May. Three members of the PCB are currently working on the investigation and are spending July at the office of the SFO, where they are receiving support and training.

Mr. Hendrick: Given that the Government and the SFO are pursuing all these additional investigations with regard to BAE Systems, does it not seem ridiculous that the Opposition should make such a big fuss over the al-Yamamah deal? As my hon. and learned Friend clearly outlines, the Government’s commitment is forthright.

The Solicitor-General: The Government’s anti-corruption commitment is well known everywhere except on the Liberal Democrat Front Bench.

Another investigation concerns corruption in South Africa relating to the sale in 1999 of Hawk and Gripen jets to the South African air force. In June, an SFO team visited Pretoria and held a series of meetings with the national police authority, getting strong support.

The SFO is currently investigating nine other overseas corruption cases, not including the oil-for-food investigation, for which special ring-fenced funding has been agreed. The SFO mutual legal assistance section is giving sustained support to investigations in a number of other jurisdictions, including Zambia and Kenya as well as to the judicial inquiry in Uganda investigating allegations of mismanagement surrounding the Global Fund to Fight Aids, Tuberculosis and Malaria.

The SFO is widely acknowledged as a lead player in international investigations and provides support and training to anti-fraud and anti-corruption bodies in less developed jurisdictions. It is entirely right that the BAE Systems decision is contextualised in that way.

Finally, Mr. Wardle and the former Attorney-General and Solicitor-General, in respectively taking and advising on, in good faith, a decision, which it was
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their duty to do, were bound to land in controversy, probably whichever way they decided. If there are ways in which, in particular, democratically elected representatives of other parties can be more fully informed on such occasions, it may prevent scandalmongering of the kind that we have seen today, and more broadly it will be in the public interest.

In the ways that I have proposed or in other ways, we are open to suggestion in the spirit of openness and transparency that underpins the Green Paper “The Governance of Britain”. Now that I—like my predecessors and those of my noble Friend the Attorney-General—have done my best to be as open and transparent as it is possible to be within the terms of the current constitutional arrangements, I hope we can look forward to fair input and constructive support in our quest—in this area of the law as well as others—for a sound constitution for the 21st century.

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