CHAPTER 7

Big Deals and Dangerous Games

Despite the various promises to control the flow of arms to the Middle East made by President Bush, Prime Minister Major and other Western leaders during the crisis and subsequent Gulf War, one of the results of this war has been an acceleration in the already massive Saudi armaments programme. Superficially it looks as if Saudi Arabia is building a strong army to protect itself against future contingencies, but this is not the case and recent Saudi arms purchases are nothing more than an extension of an old policy which was exposed as ineffective when the country proved itself unable to face the Iraqi threat alone.

Even before August 1990 Saudi Arabia had more arms than its small armed forces could use, or master. This fact, known to both Saudi Arabia and its arms suppliers - America had a military training mission in the country - was disguised to fool the Saudi people and the country's neighbours and potential enemies. The House of Saud pretended it could use the arms to conceal its dependence on the West for protection. The Saudi people, particularly the strong Muslim fundamentalist movement, would have objected to too close a relationship with the infidel West and the Arabs and Muslims would have seen the dependence as neo-colonialism and would have tried to foment trouble regionally and within the country.

The country's Western protectors, particularly the Americans, shared the concern of the House of Saud over their people's as well as Arab and Muslim reaction to any disclosure of the truth. In addition the West had an interest in selling Saudi Arabia military hardware, even when it knew that arms purchases alone could not produce an effective military force. These two considerations made the West an implicit co-conspirator in the game of pretence. The maintenance of this pretence and its elevation to the status of a defence policy were aided by the existence of a powerful inter-mediary establishment, an influential group of princes and arms dealers who realized billions of dollars worth of commissions from the country's huge military procurement programme. For the most part the intermediaries were the very same Saudi decision-makers who formulated their country's phoney defence policy.

Now, with the Gulf War as background, the House of Saud uses all the original reasons for pretending to build a strong army and finds it easier to justify them. Instead of producing a more coherent defence policy, the increasing internal pressures on the Saudi Government to distance itself from the West have made the House of Saud perpetuate the pretence. Simultaneously, in the West, the reductions in defence budgets and their consequent effect on the defence industry have made the Saudi arms business more important than before; instead of stopping or reducing the flow of arms governments are openly trying to sell more. So Saudi Arabia is buying more arms than ever, and, in addition to the West's reneging on promises to control arms sales to Middle Eastern countries, the traditional constraints over selling the House of Saud ultra-modern equipment have all but disappeared. The game goes on despite what the Gulf War revealed and the bitter lesson of Iran, under the Shah ~he one country which diverted funds needed for development purposes to buy more arms than it needed.

Saudi Arabia has 4400 miles of exposed border and - except for a number of sheikhdoms and emirates with small populations and insignificant armies - no friendly neighbours. For different reasons, Iran, Iraq, the Yemen, Jordan and the Sudan are anti-Saudi and have a combined population of 100 million people and standing armies which number two million soldiers. Their quarrels with Saudi Arabia translate into a wish to change its governmental system, share in its oil wealth and cancel the political effects of its alliance with the West on the Middle East. This is not to forget Israel, which continues to overstate the Saudi military potential and resents Saudi Arabia's 'special relationship' with the West. (Various Israeli studies available to me, including some by the reputable Dyan Centre, depict Saudi Arabia as posing a serious military threat to Israel and argue in favour of exclusive Western reliance on Israeli military might to keep the Middle East under control.)

This is why, even after the disappearance of the communist threat, Saudi Arabia continues to feel vulnerable and insecure. And it is why the ostensible policy of Saudi Arabia calls for the building of a strong army, air force and navy and why it spends so much money on armaments. And, of course, it is this 'commitment' to building a strong army and equipping it with the most modern weapons which has made the country the world's biggest arms importer and has provided the background which produced most of the world's best known intermediaries cum arms dealers. The world knows more about these two subsidiary situations - Saudi Arabia's role as the top arms importer and the home of unprecedented intermediary activity - than it does about the more basic issue of the country's military capability. Happenings in these areas grab the headlines and overshadow their source, the ostensible wish of the Saudis to be able to defend themselves against the encroachment and pressure of their covetous and unfriendly neighbours. In fact, though some reporters were aware of Saudi shortcomings and wrote about them, until the Gulf War none of them knew how bad things were and most believed all or part of the game of pretence.

Forced by circumstances to deal with the basic issue of the military capability of the country, reporters are now happy to use the Gulf War, exclusively, to provide answers. But, as with reporting on so many Middle Eastern situations, the answers are superficial and unsatisfactory. First of all, Saudi Arabia was not invaded and there is a big question as to whether Saddam ever intended to invade it. (I am in possession of Iraqi documents which show that invading Saudi Arabia was the last thing on Saddam's mind and Pierre Salinger's masterful The Gulf War Documents and other reliable reports support this contention.) Ejecting or helping to eject an invading army from a neighbouring country is not the same as defending one's own, particularly when the neighbouring country is as unpopular with one's people as Kuwait is with the average Saudi, who, like the rest of the Arabs, has always seen the Kuwaitis as libertine, arrogant money-grabbers and troublemakers. Also, the reasons behind the Gulf War have never been as clear-cut to the typical Saudi as the Western press has made out. Many Saudis, particularly devout Muslims, had serious misgivings about joining forces with outsiders to fight fellow Arabs while others found it difficult to believe that the billions of dollars spent on defence had failed to produce an army capable of defending their country without considerable outside help. On the other hand, Saudi Arabia cried wolf or, prompted by high-level US officials, was told to do so. In either case and in a move which should have brought an end to the policy of pretence, it made an important admission that it could not cope with Iraq alone or even with Arab and Muslim help.

Another element calls into question the use of the Gulf War to provide a full answer. Militarily Iraq was Saudi Arabia's strongest neighbour, a country which had spent billions acquiring and mastering modern weapons including unconventional ones, and it had a standing army of a million battle-hardened soldiers who had acquitted themselves relatively well during the country's eight-year war with Iran, albeit with direct and covert Western help. Iraq was a special case.

Any sensible assessment of Saudi military competence must result from a thorough analysis of Saudi defence aims, the nature of the country's armaments programme and what the two have produced. Luckily there is enough information available to deliver judgement. But, before delving into the facts and figures which make this judgement possible, a cautionary note is in order. The Saudi armaments programme may or may not be the result of Saudi aims, though they are undoubtedly closely related. In other words, it may reflect considerations which are not contained in or at variance with the stated defence policy of the country.

The overt Saudi response to the dangers surrounding them consists of plans to arm the country and guard its wealth against greedy poachers. With Saudi Arabia and the House of Saud still one and the same, this has meant that the survival aims of the country as expressed by all its kings are tantamount to maintaining the House of Saud as the absolute rulers of a personal fiefdom. Disenfranchised as they are, the Saudi people have no quarrel with their neighbours and believe that a moderate amount of wealth-sharing is necessary. But, as we have seen, the Saudi Army and Air Force have not been reliable and their commitment to the House of Saud remains in doubt. So an interim question arises: in view of the fact that a strong army would be better positioned to topple the House of Saud, is Saudi Arabia really trying to build one to defend itself against its neighbours - and thus endanger itself? It is the answer to this question which drives experts such as the Royal United Services Institute's Rosie Hollis to state: 'What they do has little to do with a rational defence policy.' I take her condemnation to mean a simple no. Saudi Arabia is pretending it is building a strong army. The House of Saud wants to maintain itself but it does not want a strong army capable of overthrowing it.

That the Saudi Army has never been trusted is attested to by the presence of the National Guard and its growing importance. The Army, whose official if exaggerated numbers have fluctuated between 40,000 and 60,000, is made up of townsmen, with whom the tribal House of Saud has never been in sympathy. On the other hand, the National Guard, now 32,000 strong, is made up of Bedoums and Wahhabi co-religionists, a more dependable lot whose loyalty can be bought the way it was at the time of Ibn Saud. The Bedoums and Wahhabis are less susceptible to nationalistic ideas and outside ideology; in fact, their loyalty to the House of Saud is a personal and tribal one which excludes the idea of a country or the complex notion of a nation-state.

Further proof of the House of Saud's attitude towards the Army and the National Guard comes from their disposition within the country. The Army is stationed in camps far away from the cities, where it cannot attempt a coup d'etat by trying to control the centres of government, but the National Guard is based in the cities, including Riyadh, Jeddah and Dhahran, and is entrusted with protecting the royal family. The policy which calls for using the loyal National Guard as a foil to the suspect regular Arn~y is a consistent one and has involved increasing the former's numbers and upgrading its equipment to match new arms purchases by the latter. Now the National Guard has armoured personnel carriers and helicopters and is planning to buy heavy tanks. The numbers of the National Guard have increased from 22,000 in 1975 to their present size while the Army has not grown at all. So the National Guard is moving ahead quantitatively and qualitatively. (Several experts, including Rosie Hollis, support the contention of Saudi opposition groups that the size of the Army is overstated, but, unlike the opposition, they shy away from claiming that the real number is no more than 25,000 and admitting that the official figures are overstated.)

But perhaps it is the Air Force's lack of dependability which has spread the greatest fears among the members of the House of Saud. As mentioned before, repeated rebellions in the ranks have led to a decision to keep the Air Force's planes unarmed and now nearly 70 per cent of the pilots come from the House of Saud, relations and 'reliable families'. Beyond that, because of its history, the Air Force has been a special target for the security apparatus of the country: a high proportion of the non-royal recruits are security service spies. Amazingly, all this has not put an end to problems in this service, as witnessed by the (hushed-up) defection of six non-royal pilots during the Gulf War, four to Jordan and two to the Sudan.

But the solidest confirmation of the House of Saud's decision not to build up strong armed forces comes from the make-up of these forces. There is no conscription in Saudi Arabia and the so-called reserves are somewhat of a joke because Bedoum sheikhs are encouraged to declare some of their followers as reserves when they are never trained and some of them are too young, too old or non-existent. For example, the Sheikh of Wablah's tribe in Asir is supposed to control 4000 reservists, many of whom are long dead. During the critical years between 1975 and 1982, a period of turmoil and challenges such as the Iran-Iraq War and the Mecca Mosque rebellion, events which should have produced the oppo-site results, even the official figures showed a decline in the Army's numbers. More recently, soon after the Gulf War, family disputes over the size and nature of the armed forces developed when Prince General Khalid bin Sultan announced, without consulting King Fahd, that the Army's strength would be doubled and that it would be merged with the National Guard. Rumours persist that this is what led to Khalid's resignation/dismissal (the announcement was ambiguous). King Fahd stuck to family policy, which called for keeping the armed forces small, separate and weak, against the wishes of the war's best-known Arab commander, a military man who recognized that a country with a long, exposed border and many enemies needed a large, integrated army. (The official figures reveal that the armed forces of Saudi Arabia represent a mere 0.7 per cent of the population compared with S per cent in Iraq, 6.5 per cent in Syria and 7.5 per cent in Israel.)

So once again, and on a vital issue affecting the country's survival, there is a contradiction between the Saudis' claim that they are building a large, strong army and the facts of the situation. Yet in this case the pretence exceeds most others in its seriousness and cost, and the armaments procurement programme continues in full swing. In fact, it is this activity, the seemingly incessant buying of modern arms, which creates the illusion of a militarily strong Saudi Arabia and which deserves analysis.

On 18 May 1987 the Washington Star claimed that the Saudis could only operate one out of five of the AWACS planes they leased from the USA. The senators and congressmen who had heatedly debated this lease in Congress did not take this prospect into consideration as much as they should have. On 12 July 1988 the Financial Times stated that the Saudis lacked the personnel for the arms they were purchasing, but Saudi plans to purchase more arms went ahead unabated. Then, on 18 July 1988, the Economist reported that Saudi Arabia was incapable of manning the 1000 Osano tanks it intended to buy from Brazil. Almost simultaneously, David Wood of the International Herald Tribune compared the Saudi army to a gold watch which has faulty moving parts. In 1989 the prestigious Institute for International Strategic Studies provided a conclusive judgement: 'The Saudi Arab army is not growing in proportion with the hardware at its disposal.' But these reports have not altered the mistaken general perception of the situation created by a mostly pro-House of Saud Western press which ignores the obvious and continues to speak of 'the country's legitimate defence needs'.

Furthermore, in the wake of the Gulf War, the hardware being purchased for the Saudi armed forces will continue to outstrip their ability to use it. Saudi Arabia has embarked on an armaments shopping spree which includes contracts to buy American Patriot Missiles; F-lSs; laser bombs; a Hughes Aircraft aerial-defence sys-tem; Canadian Halifax frigates; French Helec torpedo boats and British aircraft; and helicopters and boats from British Aerospace, Westland Helicopters and Vospers Thorneycroft. In the first six months of 1992 alone, Saudi Arabia signed $17 billion worth of military hardware contracts. The $6 billion contract for 72 F-15s followed in August 1992, and this time conditions within the defence industry dictated approval; unlike in 1985, there was no congressional opposition and the deal went through virtually unopposed. This is not to speak of plans to build whole military cities, including a $12 billion, 600-square-kilometre development south of Riyadh, in the middle of the Empty Quarter.

This particular economic problem, the offspring of Saudi pre-tence, has been going on for a long time. Over the past 15 years Saudi Arabia's armaments procurement budget has averaged between $12 billion and $18 billion a year, and is growing. Meanwhile, even if assuming the Government is telling the truth, the number of people in the country's armed and paramilitary forces has remained at around 110,000 (50,000 in the Army, 32,000 in the National Guard, 15,000 in the Air Force, 4500 in the Navy and 6500 in the Frontier Guard). This means an annual published hardware expenditure of $1 13,000-150,000 per soldier, airman and seaman. However, these exorbitant figures are put into perspective by unpublished ones: the value of the oil Saudi Arabia uses to barter for arms. As shown by the AWACS, Lightning and British Aerospace Yamama 1 deals, massive amounts of oil were used in barter deals for this purpose and the price of this oil is not included in the published defence budget figures. This method of payment is a major part of the colossal Yamama 2 contract with the UK, which is discussed later. So while the figure for 1982 is unusually high, these 'normal' figures are still considerably above those of other countries and the Saudi defence budget is between the eighth and sixth highest in the world. Adding the hidden value of the oil which is used in payment produces a minimum of $1.5 million worth of hardware per member of the armed forces over the years 1982 to 1990. It is safely assumed that an air force is the most expensive branch of a country's armed forces and if we took the 543,000 personnel in the US Air Force and applied these figures to them we would get a hardware procurement budget of $65-86 billion. The real US Air Force figure fluctuates but it has always been less than half of that.

But the story is worse than what a simple financial analysis of arms purchases reveals. The number of armoured vehicles the Saudi Army has, excluding what is on order, is 2600 (consisting of French AMX, German Leopard, American M60 and M6OAI, British Scorpion and Brazilian Osano tanks and armoured personnel carriers from different countries). It also has 800 pieces of artillery, mortars and Howitzers.

This simply does not work. The Saudi armed forces do not have enough people for the equipment - nor indeed for the installations. In 1984 the Air Academy was built to accommodate 50,000 cadets, instructors and other staff and it has never had more than 6000 occupants; the Hafr Al Batin Army Base, built to house 14,000 people, has a mere 2000; the 15 airbases in Qutaif are so undermanned that one of them has a total of three people; and the $8-billion King Khalid Military City built to house 80,000 people and three armoured brigades is less than 20 per cent occupied. Between 1982 and 1985 the Korean construction companies Kean Nam Enterprises and Sam bo and contractors from other countries built more than 7000 National Guard villas and furnished them with everything, including VCRs, yet most of them are unoccupied.

To use a topical example, extrapolating the Saudi hardware figures and applying them to the pre-GuIf War Iraqi army would produce an Iraq which had 61,000 tanks and armoured vehicles and 16,000 pieces of artillery. And we thought Saddam's 3700 tanks were bad enough.

The story of the Royal Saudi Air Force is the same. It has 400 combat planes, 320 helicopters, 260 other aircraft and 15,000 people, certainly the highest aircraft-to-personnel ratio in the whole world. Of course, Saudi Arabia has already signed an agreement to buy an additional 72 American F-lSs and is negotiating to buy more British Tornados, even before those they already have on order have been delivered.

The situation of the Royal Saudi Navy is even more absurd. It has 190 naval vessels, including four frigates, four corvettes and nine Peterson patrol boats. This gives us 21.6 people per vessel:a truly incredible statistic regardless of the size of the vessels.

Sometimes the quantities of equipment bought by the Saudis are patently senseless. An example of this is the purchase of one million nuclear, biological and chemical (NBC) warfare suits. This is nearly ten suits per soldier, airman and seaman and the cost of a total NBC outfit, including boots and a helmet, is somewhere around $450, so $450 million was mostly wasted or pocketed or both.

In most of the preceding cases the analysis of the ratio of equip-ment to personnel neglects the type of equipment involved. But this does not matter, for the figures tell the same story regardless of whether the pieces of equipment involved are sophisticated or simple, big or small. In fact, when we assume that the inherent inefficiency of the Saudi armed forces results in a need for more people per item of equipment than the US, UK or Germany, then the figures become worse. Laments former US Ambassador to Saudi Arabia James Akins, 'They shouldn't get except what they can use - this is unacceptable.'

Indeed there were instances during the Gulf War which revealed how equipment is wasted. According to Robert Fisk of the Independent, a dump of hundreds of trucks which the Saudis had forgotten all about was discovered in the middle of nowhere. An Arab journalist with the BBC laughingly confirms: 'I have no doubt that they had more trucks than drivers - I saw it for myself', and a CBS reporter who also spoke anonymously, goes further: 'Judged by equipment they have an army; judged by men they don't.'

The shortage of defence personnel is compounded by the already mentioned efficiency factor. The Saudis suffer from a lack of training in the use of sophisticated weapons, something which the presence in the country of a US military mission since 1951 has failed to cure. The ability of members of a society which is only 55 per cent literate to handle long-range ground-to-ground missiles such as the 1200-mile Deng Fo (Eastern Wind) weapons bought from China is in doubt, as is their ability to learn how to handle the advanced electronic gear in F-IS fighter aircraft or the friend-foe identification radar system made by E-Systems of Texas. The latter weakness was exposed tragically when the Saudis shot down two friendly Bahraini planes during the Gulf War, because they could not tell them from unfriendly Soviet-built Iraqi planes. (The pilots, who were decorated, kept their medals. The mistake was discovered but hushed up.)

The problem goes further, however, than a native inabiliiy to handle sophisticated weapons, for the Saudis are completely unable to integrate the diverse equipment they have purchased from several countries. Among other difficulties, their complex mix of American, French and British armour creates an unmanageable and ineffective armoured corps. According to the American expert on Middle East armaments Anthony Cordesman, the Western powers have resigned themselves to the Saudis' inability to field an effective military force and follow their commercial interests without making any attempt at coordinating their sales to Saudi Arabia or between Saudi Arabia and its small Gulf allies. In fact, it is the impossibility of integrating all the equipment the Saudis possess which totally cancels the widely accepted theory that the equipment is there to be used by American forces in cases of emergency.

But there is another factor: the even more basic fact that the Saudis in the armed forces are people who cannot make it in civilian life even in an oil-rich country. They tend to be underachievers who are lured by the prospect of lavish villas, servants and free telephones. But even if they were willing and able, we have to consider what is done to their morale after they enlist. The simple fact that the officer class more and more consists of members of the royal family and their relations and friends cannot but call into question the esprit de corps of the armed forces. That the command structure is subordinated to nepotism is attested to dramatically by the fact that all the operations and intelligence directorates are always headed by a prince who bypasses his superiors by having a direct line to the Minister of Defence. In fact, the combination of lack of technical competence and nepotism is seen as being so damaging that it prompted a member of a Washington DC think-tank to tell me: 'It's all a game. They won't be up to any of their big neighbours for 50 years to come.

So, we have more hardware than people to use it and more housing than people to occupy it and the people available lack the competence to handle what they have. And on top of all this, there is nepotism. This results in a Saudi army even weaker than its small numbers suggest and totally incapable of defending its country against countries which can field huge, more professional armies - Iran and Iraq, for example. Yet the game continues and King Fahd speaks of 'building and strengthening the armed forces' while objecting to expanding their numbers and Minister of Defence Prince Sultan speaks of future wars requiring superior technology and supposes that transfer of technology involves the simple act of buying modern arms. He shows no signs of stopping the shopping spree, which is reported to include eight submarines. Says Rosie Hollis in words with which other experts agree: 'They always provide a rationale for what has been acquired or is about to be acquired.' As usual, members of the Saudi opposition in exile go further and one of them speaks of the King and his brother, Prince Sultan, in the following terms: 'rationalizing the mad expenditure of $100 billion worth of arms since the Gulf War ended'.

This bizarre situation conceals further deception. The reality of the situation is that Saudi Arabia cannot protect itself and must look to the outside for protection. Friendly Arab countries such as Syria and Egypt cannot provide the needed protection, because the quality of their armed forces is suspect and neither of them is ever friendly enough long enough. Saudi Arabia wasted no time in asking the suspect Syrian and Egyptian troops to leave its territory after the Gulf War. Muslim countries, despite Pakistan's previous dispatch of troops to protect the Saudi oilfields, are also unreliable. The rise of radical Islamic fundamentalism stands in the way of further dependence on them. In fact, it was fear of religious turmoil which prompted Saudi Arabia to ask Pakistan to recall the Shia soldiers among its Saudi-based army contingents and which led Pakistan to withdraw all of them. This is why Saudi Arabia must depend on the West, particularly the United States, and why, with the internal and external dangers facing the country on the increase, this dependence is likely to deepen.

But Saudi Arabia, though more capable of doing so than in the past, cannot openly admit this dependence without increasing the danger to itself from its own Muslim fundamentalists and its Arab and Muslim neighbours. But even if the internal and external objections and the danger they carry are overcome, the United States is unable to enter into an open military alliance with Saudi Arabia. Says former US National Security adviser Robert Komer: 'Part of the problem is that the Israeli lobby would never stand for a military pact between the two countries [the USA and Saudi Arabia]. This forces the Saudis into their present posture.'

It is easy to extend the above speculation and theorize about the existence of a conspiracy between the House of Saud and their defenders, the West. Both sides have a vested interest in disguising the dependence and in order to do that Saudi Arabia buys more and more arms to pretend it does not exist. Recently the increasing importance to the US economy of Saudi arms purchases has become another extremely important factor. Not only does the United States, and the rest of the West, pretend to be helping the Saudis defend themselves, but the high level of unemployment in the defence business in the US, UK, France and Brazil has made these countries seek hardware orders like never before. This reliance on Saudi purchases is so great that the French arms maker Metra developed the Shahine missile to meet Saudi Arabia's specific needs, Brazil signed a five-year joint manufacturing agreement with them and, according to Britain's Minister of State for Defence Jonathan Aitken, the United Kingdom is looking to them to fund the manufacture of the European Fighter Aircraft. This advanced fighter is supposed to meet European defence needs well into the next century.

The US is not far behind. In 1978 the sale of F-lSs to Saudi Arabia took a year and a half to complete. Now, not to be outdone, US defence contractors and senators and congressmen representing states where the former are located are rumoured to be petitioning the US Government to allow them to offer the Saudis their most modern wares. Because of the cost and sophistication of the equipment involved, a Saudi commitment to buy something more advanced than the McDonnell Douglas F-5 aircraft they already have means that huge sums of money will continue to be wasted and pocketed. And when, as we have seen, all this is taking place in a country where the policy-makers and the intermediaries are one and the same then what is happening suits their policies and their pockets.

The most mysterious aspect of this convergence of interest which produces a wasteful armaments procurement policy is the role of the intermediary. The image of the Arab 'fixer' popularized by the Western press is a vague and incomplete one of a blonde-chasing, casino-haunting, jet-setting international smoothie with endless supplies of money to support these activities. But despite assiduous reporting of this kind, the picture of the vital role of intermediaries in places like Saudi Arabia remains incomplete.

Fundamentally he - or on extremely rare occasions she - is someone who can help a foreign corporation obtain business in this oil-rich country. Even when the business is there and the existence of a conspiracy between the House of Saud and their defenders, the West. Both sides have a vested interest in disguising the dependence and in order to do that Saudi Arabia buys more and more arms to pretend it does not exist. Recently the increasing importance to the US economy of Saudi arms purchases has become another extremely important factor. Not only does the United States, and the rest of the West, pretend to be helping the Saudis defend themselves, but the high level of unemployment in the defence business in the US, UK, France and Brazil has made these countries seek hardware orders like never before. This reliance on Saudi purchases is so great that the French arms maker Metra developed the Shahine missile to meet Saudi Arabia's specific needs, Brazil signed a five-year joint manufacturing agreement with them and, according to Britain's Minister of State for Defence Jonathan Aitken, the United Kingdom is looking to them to fund the manufacture of the European Fighter Aircraft. This advanced fighter is supposed to meet European defence needs well into the next century.

The US is not far behind. In 1978 the sale of F-lSs to Saudi Arabia took a year and a half to complete. Now, not to be outdone, US defence contractors and senators and congressmen representing states where the former are located are rumoured to be petitioning the US Government to allow them to offer the Saudis their most modern wares. Because of the cost and sophistication of the equipment involved, a Saudi commitment to buy something more advanced than the McDonnell Douglas F-iS aircraft they already have means that huge sums of money will continue to be wasted and pocketed. And when, as we have seen, all this is taking place in a country where the policy-makers and the intermediaries are one and the same then what is happening suits their policies and their pockets.

The most mysterious aspect of this convergence of interest which produces a wasteful armaments procurement policy is the role of the intermediary. The image of the Arab 'fixer' popularized by the Western press is a vague and incomplete one of a blonde-chasing, casino-haunting, jet-setting international smoothie with endless supplies of money to support these activities. But despite assiduous reporting of this kind, the picture of the vital role of intermediaries in places like Saudi Arabia remains incomplete.

Fundamentally he - or on extremely rare occasions she - is someone who can help a foreign corporation obtain business in this oil-rich country. Even when the business is there and ½ the company is qualified to do it, a fixer is needed. To most Western corporations, a piece of business, in this case winning a contract, is an organized, legal transaction which is expected to yield benefits to those participating in it. In Saudi Arabia, it is not a business transaction but a deal, and it is a highly private affair which is often extra-legal. Therefore how much profit is realized and how, is subject more to personal whims and greed than to standard business practices. For example, even a recognized need, be it for medical equipment or army Jeeps, is not addressed until the mechanism is established to guarantee the intermediary his share. The fixer is the man who bridges this gap in perception by translating the ways of one side to the other side to effect a modus vivendi acceptable to both.

But what is a fixer? Above all, the confusion surrounding his function is compounded by the number of names used to describe him. I am talking about the terms 'intermediary', 'middleman', 'go-between', 'wheeler-dealer' and 'promoter'. In fact, 'deal organizer' or 'deal fixer' are closer to the truth than the rest, but they are cumbersome expressions and the commonly used 'intermediary' is the most appropriate substitute.

In addition to reconciling the business ways of East and West, the intermediary's job is to provide a company wishing to do business in Saudi Arabia with an advantage over its competitors and to turn this advantage into the largest profit possible. He does this through getting a prince of the House of Saud to favour the company's interests over those of others in return for a commission/bribe which is shared by the intermediary and his sponsor. Intermediaries have become identified with the arms trade because that is where commissions are larger. Saudi defence expenditure has exceeded 30 per cent of the country's total budget for years and individual defence contracts tend to be larger than others. At present there are 22 defence contracts of over $500 million each. Furthermore, the uniqueness of some defence products and consequent absence of competitive pressure allows the intermediary to charge a very high percentage. But again, this is only part of the background to Saudi arms purchases, though it is the aspect which has excited the world because it has produced commissions and scandals worth talking and writing about.

The way in which the intermediary performs his duties begins with his assumption of his role. To become an intermediary, a person must ally himself with a Saudi prince who knows where contracts are and who can influence their awarding. After he becomes an extension of the prince the intermediary goes Out to match companies with the business his mentor can 'deliver':the right company for the right contract, at the greatest possible benefit acceptable to the corporation for himself and his boss. While intermediaries mostly get competent defence contractors to supply hardware and provide services, they have been known to err against policy and get such services from the wrong country or choose contractors with less than the required competence. Construction companies with little experience in the field have been awarded contracts to build armaments depots (Fotenhauer Enterprises of Florida, for example) and Ford and Chevrolet trucks which cannot meet the brutal demands of the desert have been bought. (In other fields the wrong suppliers of laboratories to schools have been used and the Saudis have bought equipment using different measures than are standard in their country.)

This matching game reveals the intermediary's sophistication or lack of it, but the demands on his ability go further. First there is his ability to entice a corporation into cooperating with him, something which very often depends on his track record and the influence of his princely sponsor. For example, Adnan Khashoggi is a super-intermediarY because he is a close friend of King Fahd and Minister of Defence Prince Sultan. He is also a worldly man who is at ease using Western corporate language and his track record includes obtaining business for major Western corporations such as Lockheed, Rolls-Royce, Grueman and others. It is difficult to imagine someone with credentials to match his. (I have yet to discover any corporation which refuses to deal with him because of his flamboyant lifestyle, involvement in several scandals or the fact that he served a prison term. (See Servants of the Crown.)

Of course, with the great majority of the 7000 princes available to indulge in influence peddling, cases develop when the sponsor is not influential enough for the particular project under consid-eration. A prince in the Eastern region, a nephew of the King and a colonel in the Saudi Air Force, got his intermediary to engage a company capable of building a huge army munitions depot only to discover that a better-placed prince, a deputy minister and likewise a nephew of the King, was after the same project. Clearly, the colonel was in no position to 'deliver' the contract. Ostensibly two princes vying for the same contract creates competition, but influence peddling in the country is the exclusive domain of the royal family, an extension of absolute power, so the competition is strictly between big and small princes.

Beyond the intermediary, there is a little-known but much more important person involved in Saudi business deals. He is the intermedler, or 'skimmer'. The intermedler may be the intermediary's immediate boss or someone higher up. He is the powerful prince whose demands must be met, the prince who is in a position to decide who gets the deal, a royal member of the Cabinet, a province emir, the head of a branch of the armed forces or the head of a royal commission entrusted with overseeing a specific development scheme (the building of the oil-terminal cities of Jubeil and Yanbu was supervised by a royal commission). Some skimmers use their own intermediaries while others deal with other members of the family who use intermediaries. In the first case the commission is divided two ways and in the second the intermediary and his boss share their commission with the intermedler. Because the intermedler cannot lose, all the intermediaries and their bosses are in the business of keeping in with him.

Prince Sultan bin Abdel Aziz, Saudi Arabia's Minister of Defence and officially number two in line to the throne, is probably the world's leading example of an intermedler and is certainly one of the wealthiest men alive. Merging the functions of policy-maker and intermedler, he decides what the country needs, and has to be satisfied regardless of who wins a defence contract. Given the value of business transacted through his ministry, the rest follows as a matter of course, except in cases when what the contract yields is beneath his dignity. The competition between the USA and the UK to supply Saudi Arabia with F-i5s or Tornados - it was decided in favour of the USA - was under Sultan's control every step of the way. As will be explained below, this did not mean that the makers of these planes offered to make direct payments, and Sultan is able to realize his money in ways which satisfy the constraints placed on the company by the laws of its country. In big contracts like those for the supply of aircraft, because hundreds of millions of dollars of commission are involved, the skimmer realizes most of the money while the intermediary and his boss settle for a 'normal' share. (It is axiomatic that the intermediary on the British-made Tornado aircraft deal (known as Yamama 2) accepted a small percentage but the supplier of American-made uniforms received a much higher share.)

Royal skimming represents the House of Saud's share of all business done in Saudi Arabia. But to judge it simply as an abusive, corrupt act solely in terms of the amount of money it yields is to overlook the additional disastrous effect it has on the merchant class of the country. When the skimmer arrives late, when he belatedly decides a contract is big enough to deserve his attention, he can disrupt the whole process of awarding the contract. An example of this is the Swedish contractors who won a $900-million contract to build the harbour at Jeddah. The contractors' Saudi agent had accepted a 2 per cent commission and taken all the known influence peddlers into consideration. The prince-governor of the province heard about this after the fact and demanded a 3 per cent payment, or else. Because the company was unwilling to increase its payment, their Saudi agent had the choice of paying much of the required money out of his own pocket or incurring the prince's wrath. He paid. In the defence area, the contract to supply a million nuclear, biological and chemical warfare suits went ahead without a skimmer because the original request was for a mere 20,000. The skimmer appeared when the order was increased to a million. Because the product was unique and carried a high commission, the intermediary was able to cover the skimmer's commission and still make a lot of money.

But who the Saudi intermediaries and intermedlers are and what they do are not the only things which are elusive and misunderstood. The level of commission paid and how it is paid is another grey area. In fact, it is the level of commissions paid which reveals why policy-makers and intermedlers are one and the same.

While the budgets of Saudi Arabia have fluctuated widely to reflect the price of oil and how much of it the country has exported, it is safe to assume that at least 70 per cent of the business transacted in the country is subject to commissions (some put the figure at 90 per cent). So, in a year when the budget is $50 billion, the commissionable business amounts to $34 billion. Assuming a conservative level of commission of 10 per cent, the commissions paid would amount to $3.4 billion. But the waste of money, or the reduction of its real value through recycling, does not stop there. Instead it continues vertically, with commissions piled on top of each other at every step on the ladder.

To explain this, I will take two examples. The building of a palace for the King, a lavish $2 billion affair for which the Government pays, is subject to the commission system. The contractor agrees to pay a 15 per cent commission, or $300 million. But subcontractors handling work worth $1.2 billion pay the contractor a 15 per cent commission: $180 million. Before that, suppliers of equipment and material pay the subcontractors 15 per cent on $500 million, or $75 million. So, without compounding the figures, the total commission paid is $555 million, though in all likelihood even more, a rate of over 25 per cent. On another occasion the supplier of a electronic defence system was a British company which had an agent who had no sponsor in high places, but the product was unique and needed. In this case, the intermediary took over from the agent after covering him. The people who had to be satisfied were the agent, intermediary, intermediary's boss and skimmer. Naturally the uniqueness of the product sanctioned the necessary increase in commissions. Here, again, we may be talking about a commission of 25 per cent. If we assume this is applicable to the commissionable budget as a whole, then the total figure is about $9 billion a year, considerably more than the budgets of most developing countries, including the needy Arab ones of Jordan and the Yemen, and equal to the entire foreign-aid budget of the USA. This is why there are so many House of Saud billionaires.

But a straight commission payment, when it takes place, no longer represents all the money realized from contracts. Straight payments can be traced and result in scandals such as the one which involved Lockheed. The USA in particular has enacted anti-corruption laws against them. And, as evidenced by the amount of reporting surrounding the British Tornado and Ameri-can F-iS deals, the press in the West is certainly on the lookout for them. To circumvent anti-corruption laws and avoid scandals, more elaborate and elusive commission schemes which escape the eyes of trained accountants and government auditors have been developed. In fact, if both supplier and purchaser are interested in concealing payments, then they will find a legal way to do it.

Essentially four basic ways to realize commissions indirectly, in effect to hide them, are used regularly. The first is to provide the services of an intermediary under a different name. For example, in America most Saudi contracts with US corporations contain payments to 'consultants' and the consultancy fees, though regulated, can be substantial, and, on the surface, totally justified. Some companies claim their Saudi 'consultants' have offices in Saudi Arabia which employ dozens of people to assist them in their endeavours when no such entities exist except on paper. The intermedler, when needed, uses his influence with the Saudi Government to provide the 'paperwork'. Naturally this doubling or trebling of the real costs is done with the full knowledge of the contractor. Also there is room to use other local services which are not needed - for example, lawyers and translation agencies, remunerated at an exorbitant level.

Some of the favourite in-laws of King Fahd, the Ibrahims, used this method when they decided to assume the role of skimmers on an already existing deal with an American military-electronics firm. The Texas-based corporation had supplied Saudi Arabia with military radar for years and had transacted $50 million worth of skimmerless business annually through a Riyadh agent.

Fahd's in-laws approached the company and demanded that they be paid a commission on their on-going business. The company protested that it was already paying its agent the limit allowed by US laws, and that paying more would threaten its profitability. The skimmers were unimpressed, and in the words of a vice president of the company, who spoke on condition of remaining anonymous:

'It was like talking to the wall.'

Thinking of ways to get through to them, the company rightly claimed that it was one of two companies in the world who make the type of radar needed, something which is vital to the security of the country. The threat to Saudi defences implied by cancellation of the contract was met by an open threat to make the company's presence and the agent's life miserable. After lengthy 'negotiations', the company succumbed and appointed them on-the-ground consultants who charge millions of dollars for a fully staffed office which does not exist. Lamented my informant: 'There was nobody in Saudi Arabia or the United States to protect us; we were at the mercy of people who do not shy from threatening the security of their country and using crude methods.' Referring to the source of power of the Ibrahims would have been gratuitous.

A second way of realizing indirect commissions occurs when oil is used in a barter deal, as was the case with the purchase of the British-made Lightning aircraft in the 1960s, the Boeing 747s in the 1980s and the lease of the AWACS during the same decade.

Oil was used to pay for the aircraft, but in an indirect way and the companies involved are probably innocent, or at least they did not benefit. In these cases, realizing the commission was an internal accounting procedure. On the books in Saudi Arabia, the value of each aircraft was exaggerated - for example, instead of a plane being worth ten barrels of oil it was entered on Saudi books as being worth eleven. After that the oil was shipped to Rotterdam and sold on the open market, with the proceeds from ten barrels being paid to the company and those from the extra barrel to the intermediary group. The Lightning deal went through without difficulty, but, to his credit, Saudi Oil Minister Yamani, afraid of undermining OPEC's production and pricing policies, unsuccessfully tried to stop the Boeing 747 deal (see Servants of the Crown).

There is no way for the supplier country to control situations like these. Not only is it impossible to get the Saudi books and examine them without infringing on the sovereignty of the country, but the books open to inspection tell an innocent story backed by an official cover-up. The document used by Fahd's in-laws listed the names of 40 full-time employees and the Ibrahims and Fahd are quite capable of producing 40 phoney Saudis.

A third totally local and legal way of disguising commission pay-ments is through the awarding of subcontracts. The intermediary group locates a subcontractor to do the 30 per cent of the work of a project which, according to a Saudi policy developed by the decision-making head of this intermediary group, must go to local contractors. The policy-making intermediary group prevails on the company to pay the subcontractor inflated fees amounting to 40 per cent, including an extra 10 per cent to cover their commissions. All the main contractor has to do is to accept the price of the subcontractor and look the other way. This is why, compared with prices in the West, the costs of certain Saudi projects such as the building of army barracks and palaces make no sense. Certainly the huge sports cities built in Jeddah, Riyadh and Dhahran by Prince Faisal bin Fahd qualify as examples of this kind of exaggeration, most of them accommodating more people than ever attend sports events in Saudi Arabia, and so is the $3.4-billion Bechtel-built King Khalid International Airport in Riyadh. ('I can build five airports for the price of this one,' lamented an American contractor.) More recently, the costs of the catering contracts to feed US troops during the Gulf War differed dramatically. One figure was $133 per American soldier per day while another was $70 - both considerably higher than the $30 per day it cost to feed French soldiers.

A fourth, relatively new elaboration of the subcontracts are the offset deals, when the Saudi Government insists that a contractor place a proportion of the value of a contract with Saudi companies, ostensibly a move to encourage them to acquire new disciplines. In contracts with a high technical input which fall under the Ministry of Defence and which are covered by this policy, the intermediary group creates a new company to take care of this business because existing companies do not qualify.

The American sale to Saudi Arabia in 1986 of an air defence system produced an example of the use of this new policy to make money. A Saudi company, Al Salem, was created to handle the maintenance part of the contract, 35 per cent of $1.2 billion. Boeing, ITT and Westinghouse, the contractors, who refuse to comment on the deal, lived up to their part of the contract. They contributed $4.5 million towards the creation of Al Salem while the Saudi partners provided an equal amount and the Saudi Government, through the Saudi Industrial Development Fund, provided $21.5 million and commercial banks $10.75 million. In other words, the control of the company fell into the hands of the Saudi partners, who paid a mere $4.5 million of the required $43-million capitalization.

The select group which contributed the $4.5 million are close to the royal family and among them are four members of the royal household and the bin Laden contracting company, known in Saudi Arabia as 'the King's private contractors'. There was no competition for Al Salem because there were 110 local com-panies with the necessary competence and even the company's American acting president, Larry Warfield, admits that its level of profitability is not possible in the United States. Naturally the Gulf War increased the need for the company's maintenance services, and again the competitive environment which keeps a lid on the level of profitability in other countries did not exist. This particular contract was one of many awarded under the Desert Shield programme, a complex, and obviously unsuccessful, multi-billion-dollar plan to provide Saudi Arabia with the capability to defend itself against aerial attacks.

The use of these various ways to realize a commission should not be seen as mutually exclusive and very often a deal involves a number of them. A big deal may involve direct commission payments (from companies from countries which allow them), barter, subcontracts, offset deals, consultancy fees and subsidiary payments in the form of sending people's children to university and making charitable donations in their names.

What we have is a House of Saud which makes the procurement policies of the country and allows its members to execute them in a way which vitiates the effectiveness of the purchases by the commission percentage they realize. Members of the House of Saud award themselves the same contracts their policy creates because winning contracts involves wielding power and all power is in their hands, in all fields. Thus there is no check on the level of commissions, and companies and governments, even when they are loath to pay them, cannot avoid them. Says the vice president of the already mentioned Texas-based electronics defence contractor: 'I can see the whole thing as having nothing to do with us, after all it's their money - even when they increase the price by 100 per cent. They aren't cheating Uncle Sam, or our company - they're cheating their own treasury.' This is the glib amorality which now determines the attitude of Western companies and governments.

The announcement of a big arms deals with Saudi Arabia produces the same reaction: the press and public begin to speculate on who is getting how much and how. Sadly much more is written about the pay-offs, commissions or bribes than about what the deal contributes to Saudi defences - not to speak of the immorality of it all. The governments and contractors behind deals do not even concern themselves with the obvious; to them, an arms deal with Saudi Arabia is cash in the bank and greater employment.

This is particularly true of the Yamama 2 arms deal between Saudi Arabia and Britain. In this case the estimates of the size of the deal and the potential commissions have dwarfed all else and have generated considerable reporting and gossip. 'Anything new on Yamama 2?' and 'Is the money going to himself?' are oft-heard questions. But even the final size of the deal is unknown and newspapers have placed it at somewhere between $60 and 150 billion. So far $34~0 billion has been committed (the figures are not exact and the fluctations in the exchange rate and use of oil to barter affect them).

In reality, the confusion over the size of Yamama 2 is not difficult to understand. It is not an arms deal in the conventional sense, rather a whole armaments programme which calls for the UK to meet the needs of Saudi Arabia in the areas of creating a modern air force and building an aerial defence system. But how Saudi defence needs are assessed is not clear, and with the Saudis' inherent inability to use modern arms in mind it sounds more like a supplier selling a purchaser a Rolls-Royce when a Chevrolet would do nicely. Unlike the US, the UK has had no effective pro-Israeli lobby to stand in the way of concluding a deal involving the most advanced equipment, and UK laws governing the payment of commissions are comparatively lax. So the UK entered into a modular arms deal with Saudi Arabia, a situation which resembles a corporation providing the most modern state-of-the-art data-processing technology to someone who needs a home computer. Whether America's newly acquired permissive attitude will lead US defence contractors to try to redirect this deal remains to be seen.

The original Yamama deal was signed in September 1985 and included the purchase of 72 Tornado aircraft of various types, Hawk trainer jets, improvements in Saudi airbases and the supply of spare parts and provision of maintenance personnel. The total value of the deal was around $10 billion and there was an oil-for-arms aspect to it, in that some payments to lead contractor British Aerospace were to be made in oil or through the sale of oil allocated especially to pay for this purpose.

The huge Yamama 2, to author of The Arms Bazaar Anthony Sampson 'the arms deal of the century', did not go the UK's way without an Anglo~French fight. British Secretary of Defence Michael Heseltine and his successor George Younger and Air Field Marshal Sir Peter Huntington trekked to Saudi Arabia to plead their case with Saudi Minister of Defence Prince Sultan, who accepted an invitation to visit Britain. French Defence Minister Charles Hernu met King Fahd in the South of France to sing the praises of the French Mirage 200 aircraft. Influential arms dealers were invited to parties given by Prime Minister Thatcher and the French gave Akram Oje, an arms dealer friend of Prince Sultan, the Legion d'Honneur. The British and French press went as far as to hint at official pimping.

Yamama 2 made the first, $10-billion, Yamama resemble a sample order. It was concluded in July 1988 and the initial part of the deal involved 50 Tornado combat aircraft, 60 Hawk trainers, 50 Westland Black Hawk helicopters made under licence from the USA's United Technologies Corporation, four minesweepers and the building of at least one airbase. This order was part of a 20-year programme; what would follow depended on the updating of Saudi defence 'needs' and the availability of new hardware to meet them, something like the $50-million European Fighter Aircraft. Like the first Yamama, there were oil-for-arms provisions.

The ability of Saudi Arabia to absorb the hardware of either Yamama deal was never considered; to repeat, how what was and is being purchased was arrived at is vague, though in all likelihood it was by a committee representing the sellers and policy-makers/intermedlers. A few commentators and think-tank analysts wondered about the Saudis' problem of hardware indigestion, but their opinions made little if any impact. The British Government, from Margaret Thatcher down, described both agreements as a triumph for British industry and talked about the number of defence jobs dependent on them. Even the simple questions of what would happen to the old equipment rendered obsolete by these deals and identifying the potential enemy were neglected.

As it now stands, this extendable deal contains all the elements which facilitate the payment of commissions - if the programme fulfils its potential, perhaps the largest commission in history. Bri-tish Aerospace, the lead contractor and manager of the whole deal, has no problem using agents to pay commissions. As explained before, the barter of oil facilitates commission payments; and huge subcontracts will be awarded to Saudi companies adept at padding their costs and the Saudi Government has included a number of suspect offset deals.

That British Aerospace uses agents and pays commissions is a fact which the company has never denied. I am in possession of copies of contracts which confirm its willingness to pay huge com-missions in connection with the selling of Jaguar fighter-bomber aircraft and the building of airbases. In connection with Yamama 2, the Observer newspaper has alleged that the early stages of this programme have already produced $300 million worth of direct commissions. British Aerospace has neither denied nor confirmed this report. That aside, indirect commissions are likely to be larger.

Initially, Saudi Arabia allocated 400,000 barrels of oil a day to pay for part of this deal, but this figure was increased by 100,000 barrels a day two years ago. Depending on the price of oil this amounts to between $2.7 billion and $3.5 billion a year. The details of how the Saudis are disposing of this oil are not known. British Aerospace has a trading subsidiary which is capable of selling it or helping to sell it. British Aerospace refuses to comment on either possibility.

According to the terms of Yamama 2, the subcontracts to house and feed the British Aerospace personnel stationed in Saudi Arabia, somewhere between 3500 and 5000 engineers and technicians, who implement the on-the-ground segment of the programme, must go to Saudi companies. The value of these contracts is unknown but ranges between $175,000 and US$500,000 a day. The ability of the local Saudi contractor to manipulate these contracts is wide open and, as we have seen, there is no business reason for British Aerospace not to accept an inflated figure. This is another opportunity for commission realization.

A further indirect way of realizing commission is through the offset programmes. Yamama 2 has provisions calling for the placement of several maintenance and personnel contracts with Saudi companies. Among them is a joint venture for maintaining the air-to-air missile plant. This joint venture is funded by the Saudi Arab Offset Investment Committee headed by Prince Fahd bin Abdallah. If, as British Aerospace Chairman John Cahill states, the whole programme could reach $150 billion over 20 years, then conservative estimates place the value of subcontracts, offset deals and oil at between $55 billion and $75 billion. Though it is difficult to deal with the huge figures involved, we are talking about a commission of $12-20 billion dollars.

Not only is Yamama 2 of exceptional size, but it involves most of the UK's defence contractors: British Aerospace, Westland Helicopters, GEC, Vospers, Plessey, Rolls-Royce and many others. The deal continues against a background of growing awareness of Saudi inability to use the hardware they have already purchased and serious questions about the country's human rights record. Once again, the British press has raised new questions about the appropriateness of Yamama 2, but the British Government appears totally impervious to all criticism.

The investigations carried out by British newspapers have gone beyond judging the merits of the deal to address the size of commissions and who is involved. In particular, questions have been raised about British participation, namely whether Govern-ment officials have joined the intermediary group. The purpose of their involvement would be to guarantee the suppliers', the companies' and the Government's facilitation of the commission arrangements. (Belatedly the House of Commons has ordered an investigation to determine Mark Thatcher's involvement in Middle East business deals.) With some newspapers claiming that the rake-off amounts to 30 per cent of the value of the deal, potentially $45 billion, the press pressure on the British Government to come clean on the whole deal became so great that it led to an investigation by the National Audit Office. However, though the report compiled by this Government watchdog has never been published, the Government insists that it uncovered nothing illegal. In an amazing violation of procedure and a highly suspect move, the Government has also refused to submit copies of the supposedly innocent report to the Parliamentary Public Accounts Committee, the House of Commons overseer of these matters.

The argument between the press and the Government continues.

The press stubbornly argues in favour of the right of the public to know, while the Government persists in claiming that Yamama 2 is a government-to-government deal which precludes pay-offs. Statements by Secretaries of Defence Michael Heseltine and George Younger betray a haughty exasperation with a press which pursues moral issues at the expense of British jobs.

Suddenly, as often happens, an insider began to level serious accusations at the British Government and the supplier compa-nies. It came from an unexpected source. A legal case which began in the District Court of the District of Columbia in October 1991 has focused on the question of the commission payments of Yamama 2. The strange suit was brought by one Lieutenant Colonel Thomas Dooley (Rt) against United Tech-nologies Corporation. Dooley is demanding $130 million in compensation.

Dooley alleges wrongful dismissal, denial of opportunity, inva-sion of privacy, denial of the right to exercise stock options, defamation and suffering distress and loss of peace of mind. Put in more pertinent terms, Dooley alleges that United Technologies Corporation demoted him for blowing the whistle on a bribery scheme involving Westland Helicopters. Westland, which is 15 per cent owned by UTC, is licensed to manufacture and sell the Black Hawk helicopter and through Yamama 2 it had contracted to sell 78 of them to Saudi Arabia.

He claims that Westland, with the knowledge of UTC, agreed to create two Saudi companies to handle the maintenance and the personnel needed for this deal. The Saudi companies are jointly owned by the Sikorsky Aircraft Division of UTC and Saudis close to the royal family, 45 and 55 per cent respectively. According to Dooley, the Saudi companies, Thimar Aviation and Thimar Al J azzira Group, headed by one Ibrahim Al Namla, were 'handling' a contract, acting as a front while, in reality, others were doing the work. In other words, they are no more than shell companies who use the personnel of other companies and pocket the difference between the real cost and the inflated cost which they charge and which this scheme allows them.

Dooley maintains that it was his objection to this phoney scheme whose sole purpose was to overcharge for services provided by Sikorsky to the benefit of the royal family which landed him in trouble. It is supposed to have led to his demotion, punishment and the issuance of threats against him.

The Dooley v. UTC case gained importance and momentum after the plaintiff began filing his evidence. The Dooley papers filed with the Washington District Court allege the existence of Mafia-like international groups who manipulate the underground world of the arms trade. The group handling the non-US aspect of the deal are called the Global Enterprise Group while the ones dealing with the whole world including the USA are called the Enterprise Group. The groups include several members of the House of Saud, corporate officers in the USA and Britain and Government officials. Beyond the existence of these sinister groups, the Dooley papers allege the following:

· Westland knowingly agreed to and helped in the establishment of phoney Saudi companies without competence to handle the work assigned to them.

· Five members of the Saudi royal family, including Prince Bandar, the Saudi Ambassador to Washington and a close personal friend of former President Bush, and General Prince Khalid, his brother and the former commander of the Saudi Air Force and the Arab forces during the Gulf War, were involved in organizing the deal.

· It is alleged that the deal is in violation of US laws, including the Arms Export Control Act, which prohibits the payment of commissions on arms deals.

· The deal is also alleged to violate RICO, the Racketeering Influence Corruption Act.

· According to Dooley's allegations, even the equipping of the Black Hawk helicopters with missiles was subject to discussions which centred more on which suppliers were willing to pay the highest commissions than on the most suitable missile.

Broad as they are, Dooley's allegations leave two vital points unclear. Did UTC, a company which on a previous occasion sent 20,000 telegrams to lobby for passage of the AWACS lease deal to Saudi Arabia, acquire part of Westland and license it to make and sell the Black Hawk helicopter to circumvent US laws prohibiting the payments of bribes by US corporations? One of Dooley's documents (Trip Report Kingdom of Saudi Arabia 18-27 April 1989) filed with the court mentions 'M. Thatcher's son in connection with the deal, and though this a clear reference to Mark Thatcher, Dooley has refused to elaborate on what this means.

So far, the UTC response to this legal suit represents nothing more than an example of unimaginative corporate thinking. The corporation asked that the suit be dismissed because of 'act of state doctrine', claiming that the law which places limits on the ability of US law courts to deal with corporations under the jurisdiction of another state applied to Westland. It also asked that the case be transferred to Connecticut, the state where it is headquartered. Both motions were rejected and the case is pending.

Once again, Dooley alleges that there is a larger picture. His law suit has confirmed that UK companies stop at noth-ing to accommodate their Saudi clients. It strongly suggests that the whole of the Yamama 2 programme is being han-dled with that in mind. It implies that US corporations have found ways of circumventing their country's laws in order to pay bribes to members of the Saudi royal family and their appointees.

Above all, when set against the background of Mrs Thatcher inviting known arms dealers to 10 Downing Street and George Bush's close friendship with Prince Bandar, the Dooley allegation that both governments are party to the commission conspiracy comes as no surprise.* It is the attitude of the governments of the USA and Britain, as well as France and others in other cases, which amounts to a sordid conspiracy of silence to use Saudi Arabia to keep their defence industries going. It is another reason why the West's support for the House of Saud appears stronger than ever.

This symbiotic Saudi-Western relationship, which starts at the highest policy level of pretending to create a strong Saudi Arabia and descends to embracing payment of commission and keeping the West's defence industry busy, is gathering momentum. Now the realities of the defence industry in the West make the situation resemble what always existed in Saudi Arabia: the sellers and policy-makers are one and the same. There are other complications in all this. The Saudi purchase of 72 F-iS aircraft during the American presidential election was a hurried affair aimed at helping George Bush's election chances. Beyond involving a number of subsidiary offset deals which might lead to a congressional investigation to determine if commissions are going to be paid, the deal is a landmark attempt by the Saudis to influence US politics. The Saudis have found another use for pretending to need arms.

*Dooley won a substantial out-of-court settlement in 1994.