British Government discussions about involvement in corruption

The documents below are all sourced from The National Archives (TNA) in London.    They contain public sector information licensed under the Open Government Licence v2.0.


Jedda Telegram No.624 to Foreign and Commonwealth Office, 17 October 1968, FCO 8/1187, TNA.


Pass following urgently to Vickers Ltd.

For Moray Stephenson[1] from Fitzpatrick.  Subject visits to Saudi Arabia.

Had long discussion yesterday with General Makki Tounisi[2] concerning stage management of Sir Leslie Rowan’s[3] visit.  My conclusion is that if a firm understanding is reached with Tounisi before the visit takes place, that the amount of quote squeeze unquote available to him will be around three point five per cent of contract if one is signed, then he will fix military committee to approve Vickers tank.  There is also the political factor which is outside the military competence to influence.

2. After discussion with Ahmed Yusuf Zainal strongly recommend you if possible and failing that competent senior negotiator should fly out immediately to discuss this aspect of deal with Tunisi.

3. Also had discussion with French Panhard car project officer and others concerned in armoured build up.  French and Germans both active in trying to persuade Saudis to accept AMX and Leopard tanks, though quite how active at this moment in time is difficult to assess.

4. Saudi military opinion appears to be that although they do not really want or need tanks now, they are prepared to be quote persuaded unquote to the contrary.

5. You will appreciate that discussions on matters of payment is difficult and assessing reliability of information almost impossible.  I believe though that an immediate visit by the right man from Vickers would be invaluable.

6. Ahmed Yusuf is recommending to Ali Ali Reza, who is in London, that some exchange of courtesies should be arranged between Vickers and [CENSORED] who is now in London clinic, and whose goodwill will be important

7. Ahmed is also under the impression that Rowan’s visit will be followed immediately my presentation of detailed proposal.  This is not our understanding of this point should be cleared up with the Ali Rezas.

FO pass MOD Army.

Mr. Morris[4]


Letter D.J.McCarthy, FCO, to W.Morris, British Embassy Jedda, 18 October 1968, FCO 8/1187, TNA.





18 October, 1968

W.Morris, Esq., CMG,



I realise that getting big contracts in Saudi Arabia requires a judicious element of bribery.  But I was slightly shaken by the implications possibly to be drawn from the message from your Defence Attache to Vickers in Jedda telegram No. 624.

2. If the discussion of the bribe required went no further than the reference to Saudi military opinion being prepared to be “persuaded” I suppose it is all right.  If, as paragraph 1 of the telegram could suggest, the conversation went to the point of discussing the size of the bribe, I see certain dangers.  One can visualise circumstances in which, with the Panhard representative’s assistance, “Le Figaro” might find itself in a position to carry the headline “British Military Attache bribes Saudi General for tank deal”.

3. The Defence Attache is chartered to promote military sales and Col. Fitzpatrick[5] has been doing so very well.  It is obviously difficult to draw lines in these matters.  But I feel that if one gets into the area of bribery, that is really what the Saudi agent is for.  And, though I cannot speak for British firms, my impression is that most big British firms would prefer to know nothing about it and would expect the local agent to find the cut out of his percentage.  The Ali Rezas[6] may reasonably be supposed to know their way through this one.

4. I may be fussing, and I have not consulted the Sales Directorate in the MOD[7] or the Board of Trade.  But altogether I should prefer to see this sort of thing conveyed through channels other than the Foreign Office telegraphic system.

(D.J. McCarthy)[8]


Jedda Telegram No.636 to Foreign and Commonwealth Office, 28 October 1968, FCO 8/1187, TNA.


My Telno 633 of 24 October.  Vickers Tanks.

I saw both King Feisal and Emir Sultan[9] with Sir L. Rowan in Jedda on 27 October.

2. I told King Feisal that Sir L. Rowan was here at Emir Sultan’s invitation to try to interest the Saudi Government in the purchase of Vickers tanks.  The King was friendly, and wished Sir L. Rowan well.  He said that companies dealing with the Saudi Government should be able to meet their expenses and get reasonable profit, but he warned Sir Leslie against agents and middlemen trying to make illegitimate gains.  Sir Leslie Rowan said that Vickers would be happy to deal with the Saudi Government direct.  (Although Ali Rezas represent various Vickers commercial interests in Saudi Arabia, they have no overt connection with proposed tanks sales.)  King Feisal said he was not just thinking of commercial agents but of Government servants who claimed to be able to influence decisions.

3. Emir Sultan gave the Vickers party a warm welcome, saw their film, and said he wanted them to discuss their proposals with his staff officers in Riyadh on 29 October.  (Contrary to earlier reports that this would only be a flag showing exercise, Vickers handed Sultan detailed proposals.)

4. Stephenson of Vickers had said that he understood that I would be inviting Sultan to England on HMG’s behalf to see a demonstration of the Vickers tanks.  I said I had no such instruction, but I would explain to Sultan that if he accepted Sir L. Rowan’s invitation, the demonstration would have full blessing and co-operation of Ministry of Defence.  Sultan said he hoped to be able to go, and Vickers will follow up in due course.

5. Sir L. Rowan expressed complete satisfaction with the support that we had given /GP UNDEC/ demonstrated by accompanying him on these visits.  He also told me that Marcus Sieff had informed him in London last week that agreement would be concluded in the next few weeks for the supply of Chieftains to Israel, and enquired what effect this would have on Vickers, chances here.  I said I had no information about present status of Israeli interest in Chieftains, but that such an agreement, if known, could of course have very adverse effect on their chances.

FCO pass saving Washington.

Mr. Morris


Letter W.Morris, British Embassy Jedda, to D.J.McCarthy, FCO, 31 October 1968, FCO 8/1187, TNA.




31 October, 1968

D.J. McCarthy, Esq.,

Arabian Department,

Foreign & Commonwealth Office


Dear Mac,

The Fiddle Factor in Saudi Defence Contracts

I understand your concern about the contents of our telegram No.624 and hope I can do something to allay it.

2. The telegram was elliptical in that it suggested a much more direct and brutal approach than what in fact took place.  Fitzpatrick went to Riyadh to discuss arrangements for the Rowan visit.  A Palestinian interpreter[10] at the Ministry of Defence suggested a meeting with General Makki Tunisi, and Fitzpatrick’s inferences were drawn from the pretty clear hints contained in what the General and the interpreter separately said.  He could (and perhaps should?) have put his fingers in his ears, or even said he must report the matter to [CENSORED] in fact he allowed himself to listen, but entered into no discussion, showing that whatever it might have to do with Vickers, it had nothing to do with him.

3. We then had to decide what to do with our information: whether to bury it in the ground, pass it on to the agent, or pass it on to Vickers.  Thinking, like you, that this is primarily the business of a local agent, we consulted Ahmed Yussuf who recommended that we should pass it on to Vickers.  All in all, I think it was better that we should have done it through our channels than that he should have passed a message about an approach to our D.A.[11] over the telephone or telegraph.

4. In the event, Vickers reacted by saying that it was up to the Ali Rezas, who said that they were not willing to make any move at this time.   (We have of course made it clear to both that they must leave us completely out of this.)  In the meantime, the local press published an Al Hayat (Beirut) report on 23 October that the Government had issued a circular letter instructing consulting engineers and all suppliers of military equipment to refrain from paying any kind of commissions or remunerations to any agent or representative in Saudi Arabia.  Since then it has been announced that the Ministry of Finance has established a Central Purchasing Directorate whose duties will be to specify, tender and purchase – presumably the intention is that centralisation of the purchasing power will make corruption easier to control.  You will have seen that [CENSORED] spoke strongly on this theme when he received me with Sir Leslie Rowan on 27 October (our telegram No.636 of 28 October).

5. According to Ahmed Yussuf Ali Reza, [CENSORED] is angry about reports of commissions on the Panhard armoured car deal, said by some to amount to as much as 30% (which is hardly credible) of the contract price.  You will also have seen from our telegram that the Ali Rezas are not official Vickers agents for the proposed tank deal – or indeed for the hospital contract which Vickers have already signed, though they are the agents for a number of other aspects of Vickers business.  In spite of this and in spite of what [CENSORED] said, I firmly believe that they are in close touch with [CENSORED] over every move in the tank game.  They also seem to be taking advice from [CENSORED] Ghaith, about the timing of Vickers moves (see my letter 10/22 of 4 September).  But [CENSORED] is frequently mentioned as having been financially interested in the Panhard sale.  He was present at our meeting with [CENSORED] when the latter spoke so sternly about middle-men.  I did not notice any blushes; we were also preceded immediately in audience [CENSORED] by the French Ambassador.

6. If you find it difficult to pick your way through this, so do I.  It seems to confirm your general instinct that we should avoid getting involved in the fiddling; but if we are to give British firms the help they need, we cannot close our eyes and ears, even if we keep our mouths tight shut.  Fitzpatrick was not present at the meetings between Sir L. Rowan and Generals Mutlaq[12] and Tunisi in Riyadh; but they seem to have been successful, and there is an atmosphere of great goodwill towards Vickers at this level on the Saudi side.  I think it may have been just as well that we did alert them to the seamier side of defence contracting here [handwritten by D.J.McCarthy in the margin: “They were a bit shocked (not surprised) saying that this was for their agent!”]

7. I meant, by way of precaution, to suggest to Stephenson of Vickers when he was here that he destroy any written record of our message; but I failed to do so.  Perhaps you could arrange for this to be put to him?

Yours ever,

Willie M

(W. Morris)

[handwritten: A.J.D.S[13] Do you want me to contact Vickers re paragraph 7?   Spoken.  No.  Let this drop.  AS]


Letter W.Morris, British Embassy Jedda, to H.J.L.Suffield, Ministry of Defence, 11 February 1970, FCO 8/1498, TNA.





11 February, 1970,

H.J.L.Suffield[14], Esq.,

Head of Defence Sales,

Ministry of Defence,


London, S.W.1.

Dear Suffield,

Arms Sales to Saudi Arabia

When we met at Ray Brown[15]’s last September, it was I believe your first day in the Ministry of Defence; but I am sure that by the end of lunch you were already aware that selling arms to Saudi Arabia is not simple.  It is certainly not getting any simpler.

2. In a letter of 15 October to Hubert[16] I promised that we would try to take a general look at prospects.  We have since been corresponding with your department and the F.C.O[17]. about various possible purchases on which there has been activity stirring (notably tanks and the navy).  But we have now produced for you and the F.C.O. (and enclose with this letter) a comprehensive paper in which we have tried to set out and discuss all the main considerations concerning the sale of arms to Saudi Arabia.  Annexed to it are (A) a table setting out all the information we have been able to gather about present commitments and future plans for arms purchases; and (B) a note giving the factual background (insofar as we can get at the facts) to present troubles over sales to the National Guard, as an illustration of what can happen when there is inadequate consultation between your department and us.

3. The question of corruption is obviously crucial and I have therefore dealt with it frankly and at some length: for this reason, I hope the circulation of the paper will be restricted.  One possible course of action not mentioned in the paper is that we should go to King Feisal, tell him what is happening, and ask him to intervene.  We have considered this before and rejected it on the ground that we would be unlikely to succeed, and that in failing we would antagonise both him and his brothers.  The compromise (in all senses of the word) that we recommend is however very much a pis aller.  Commercially and politically the “system” is at best an infernal nuisance, and it is politically explosive – a time bomb under the regime I have called it elsewhere.  If there were a practicable way of extricating ourselves, we should take it.

4. Since I started this exercise (and started drafting this letter) I have heard that the Saudi Arabian Government has decided to hold a “defence review”, and invited the Americans to assist in it; and that the Americans hope to have a team coming out in about two months’ time.  At first sight, this looks like a nimble move by King Feisal to postpone a bit longer decisions on arms purchases.  It may of course, be to provide a sectoral plan for the Five Year Development Plan by which future capital expenditure is to be guided.  Either way, the defence review should in theory clear up much of the confusion set out in our memorandum; but I am very sceptical of the possibility that it will.  We shall keep F.C.O. and you informed as we hear more about this.

Yours sincerely,

Willie Morris

(W. Morris).

[handwritten: This is an admirably clear & comprehensive survey of the complications AAD[18].]



Memorandum by H.M. Ambassador, Jedda

Arms Sales to Saudi Arabia

The attached table sets out the information we have been able to gather about present commitments and ideas for the purchase of arms by the Saudi Arabian Government between now and June 1975 (the end of the Saudi budget year 1394-1395).  The totals for the period under the heads “actual”, “imminent/desirable”, “favoured” and “germinating” are respectively £199m., £37.9m., £159m., £108m.: a total of about £500m., £300m. of it uncommitted.  I start with the assumption that, “other things being equal”, we would like to see as much as possible of any new expenditure that materialises spent on British equipment.  But what are the “other things”, and how equal are they?   The relevant considerations seem to me to divide into (a) political; (b) financial; (c) the British reputation; (d) Saudi absorptive capacity; (e) local practice in the arms business.  I will comment on these separately:-


(a)    Political

2. It is in HMG[19]’s interests that the present régime in Saudi Arabia should last for the next few years; and this interest outweighs any likely profit from arms sales.  Since lavish expenditure on arms is likely to reduce the chances of survival, it is in our interest that the Saudis should restrain their expenditure on arms.  It is arguable (though less and less arguable as the Air Defence Scheme staggers along its disastrous way) that there is a marginal political advantage in the Saudis buying from us rather than others, but the weight of the argument for our selling is overwhelmingly commercial.  Thus (a) our political interest is against stimulating the appetite for arms; (b) our commercial interest lies in selling at a profit [“at a profit” is underlined by hand with the comment “This is an important point sometimes overlooked.  Sales for sales sake rather than for profits is pointless.  AAD”] anything the Saudis decide to buy.

3. I take it that although HMG are in favour of a total arms embargo on the supply of arms to (unspecified) countries in the Middle East, this general aspiration does not affect our general willingness to supply whatever the Saudis are prepared to buy from us: unlike, e.g. the U.S. Government who for reasons of internal and external politics actively discourage Saudi interest in arms purchases.

4. The disappearance of the “Chieftains for Israel” theme from the Arab press and radio has removed a potential block to all arms sales, and I do not think the recurrent publicity for Centurion sales to Israel has much effect here.  But there is no question that the pro-Arab bias of French Middle East policy gives the French a head start politically in competing for arms orders.  Although the only concrete result seen so far has been the sale of Panhard armoured cars, we should expect further French successes in some field.  The Saudis share the general Arab sense of obligation to the French for their policy and of the need to keep it the way it is.

5. The Saudi Ambassador in London harps on the theme that we ought to sell our arms here offering a political “quid pro quo”, i.e. by adopting policies in the Arabian Peninsula which appeal to King Feisal [handwritten “However impossible for us, they would also like evidence publicly of some pro arab sentiment by H.M.G. in the arab/Israel context.  Z.  Yes.  AAD”].  For reasons set out in para.3 (iii) of my letter number 10/22 of 2 December to McCarthy about Vickers tanks, this means very little.  Without a complete reversal of our policy of military disengagement, the disenchantment of King Feisal with HMG over Aden and the Persian Gulf will continue to set the tone; all we can expect to do is to mitigate it.

6. Another kind of political consideration is relevant.  In the light of events during the past twelve months, we believe that the odds against a successful military coup here have perceptibly shortened.  We still reckon that the régime is probably good for another five years; but there are risks which now appear to us greater than a year ago.  If there were a coup, then the quantities of arms already in service would make it difficult for the Saudis to shift their sources of supply suddenly or drastically: they are far more deeply committed than Libya.  But I am quite sure that a main subject of revolutionary interest and fervour would be past arms purchases and the corrupt dealings surrounding them.  The moral of this is that commitments are to be avoided if possible which are either extended in time for much beyond five years, or which during that time leave firms heavily out of pocket at any point.


(b)   Financial

7. Saudi defence expenditure has doubled in the past seven years.  But this expansion took place at a time when Saudi revenues were expanding at corresponding rate (oil revenues increased by 50% between 1964 and 1968).  For the first time since Feisal took over the current budget shows a deficit – of SR.412m – and according to confidential information from the Arabian American Oil Company (ARAMCO) the Saudi foreign exchange holdings have been declining sharply and are now down to SR. 2 billion (U.S.).  Meanwhile, oil revenues have levelled off.  ARAMCO are being pressed to do better: but so are the oil companies in Iran, Kuwait, Libya etc.  The market is limited, and there is no prospect of a return to the spectacular rate of increase of recent years.

8. Moreover, the Saudi Central Planning Organisation (or rather, their American consultants) are writing a five-year development plan which is supposed to be put into operation from September next year.  This will call for decisions on the division of the Saudi national cake between security and development.  It assumes a rate of growth of the economy which is probably over optimistic.  There is no doubt in our minds that a prudent monarch would choose development expenditure over security expenditure, for various reasons which I will not go into.  We think that he will probably do the opposite.  Nevertheless, there will be conflicting pressures; and these will be reflected in pressure for cuts in prices, and extended credit terms, for any arms purchased.  The Saudis will also no doubt try to conduct Dutch auctions among prospective suppliers.  With the Air Defence Scheme in mind, I hope that any of our firms which become involved will have anticipated this and stick to their bottom price.  The bottom price should also take full account of local operating conditions.  As said above, the justification of arms sales is almost wholly commercial; and a lost contract is therefore preferable to a losing contract.  I doubt if “loss leaders” here will lead to anything but fresh losses.  [handwritten comment relating to the last two sentences: “Yes”]

9. Of course, all the schemes listed are unlikely to come to fruition and any time-table here is merely a starting point for speculation on inevitable delays.  Even the sum of £300 million spread over 5-10 years is not all that outrageous in relation to Saudi resources.  But the Saudis have already accumulated a debt burden of £200m. for past purchases of arms; and the place of every scheme that aborts is likely to be taken by a new conception.


(c)    The British reputation

10. This means the Saudi Arabian Air Defence Scheme, and the objective fact to be faced about it is that at present our name stinks in the nostrils of Saudis who count for arms purchases.  Whether rightly or wrongly is another matter: the voluminous correspondence on the subject shows that the record is not all black, though far too much of it is.  If we could bring about a dramatic reversal of fortunes on the Air Defence Scheme, then it might help us to sell other arms, but at present I must write it down as the greatest single obstacle to further sales.


(d)   Absorptive Capacity

11. One of the reasons why [CENSORED] would cut down on arms expenditure is that the Saudis already have more equipment than they can handle; and further increases will not add significantly to their military capabilities.  But scheme is added upon scheme for buying more equipment, for the Navy, Army, Air Force, National Guard, Coastguard and Frontier Force, the electronic defence of oil installations et al.  The answer of the [CENSORED] to the argument that he cannot produce the educated manpower required to handle all this is that he will give his latest brain child priority.  In November the Navy was to have priority; last week it was Phantoms.  Everything, and therefore nothing, will have priority.  There is a dilemma for firms here, illustrated by the case of Vickers.  They have rightly presented (in any case it was what the Saudis wanted) proposals which cover base, maintenance and training facilities as well as the supply of hardware.  There is so far as I can see, little hope that the Saudis would be able to meet what is required of them under the programme, and every likelihood that the supplier will incur odium for this.  But, if we are to sell, I see no course but to face this prospect stoically, and to avoid language, on the part of the company or HMG, which can be interpreted as an open ended commitment to make the programme “succeed”.  Oddly enough, the Air Defence Scheme has achieved more than most objective observers probably expected.


(e)   Local business methods

12. By this I mean corrupt practices: the payment of bribes called “commissions” to secure contracts.  This is probably a more important factor than the politics of the seller’s Government or the quality of his equipment in deciding where contracts will go; it is certainly the most complicated and elusive factor in the whole business.

13. Though corruption is long established in Saudi Arabia, the pattern of large commissions on arms sales as major source of enrichment for [CENSORED] was probably set by the Air Defence Scheme: we believe that about £5m. was paid to Geoffrey Edwards by the British companies and $5m. to Adnan Khashoggi by Raytheon: these sums covering their own commissions and those of Saudis who allegedly had procured the contracts (though in fact the Saudi Government accepted a joint package recommended by the U.S. and U.K. Governments).

14. These sums are large, but the percentages are modest compared with those asked (and paid) later.  On the sale of Panhard armoured cars in early 1968 it is generally believed that Khashoggi took 27-30%.  We know that 20% was the “commission” on the Hovercraft sale last year.  The former deal attracted such notice that [CENSORED] intervened.  A decree was issued banning the use of agents for defence contracts (and invalidating the contracts of companies breaking this rule).  On [CENSORED] insistence, the £15m. gift of British arms to Jordan in 1968 was taken out of the hands of Khashoggi and his British agent, Marshall and the Crown Agents were brought in to perform the genuine agency services at proper rates.  [CENSORED] explicitly warned Sir Leslie Rowan of Vickers in October 1968 against middle-men looking for profits.  Whether through lack of will, or power, or interest, [CENSORED] has failed to make this policy stick.  [CENSORED] Adnan Khashoggi returned after a temporary absence, and even accompanied [CENSORED] on his official visit to the United States last year.

15. In the nature of things, one cannot describe with certainty the details of the system, but the general lines are pretty clear.  [CENSORED]  Though they can break, even these cannot make, important deals without getting [CENSORED] consent.  They do not (we believe) have direct dealings with firms for their personal gain: access to them and their favour of is either (a) through other [CENSORED], or (b) businessmen/middlemen e.g. Khashoggi or the Bugshans dealing with [CENSORED] directly or through (a).  On a lower plane [CENSORED] but having special access which they exploit are [CENSORED] in business on his own account, and [CENSORED] whose sons are in the agency business.  We assume that [CENSORED] take the lion’s share, but that the remainder is widely distributed [CENSORED]  One rational defence of the system is that [CENSORED] have no other source of the income required [CENSORED]  It might have been expected that the more straitened financial circumstances would have led to a scaling down of the size of commissions, but there is no sign of this happening.

16. Though we know some sales have been made (e.g. Vigilants to the National Guard, the gift of arms to Jordan) without commissions, it has to be accepted that the normal choice for firms is between accepting the system or abandoning the idea of selling.  We believe that in the course of considerable correspondence on this subject with the F.C.O. and M.O.D. during the past year, the following general guidance has been accepted on our attitude to the system:


(a)    Officials of HMG, here and elsewhere, should acquire as much information as they can about the system and make it available to firms; but

(b)   they should avoid getting themselves directly involved with this aspect of arms sales.

(c)    Firms should be encouraged to take local advisers both to inform them and to act for them on these matters, rather than rely on officials.

(d)   It must be made clear to firms that in this matter they are taking their own decisions, and the risks involved.

(e)   Departments of HMG could not knowingly pay bribes without Ministerial clearance and that clearance would not be forthcoming.  If commissions are to be paid on Government-to-Government sales (except for bona fide services) therefore the arrangements will have to be made by private firms manufacturing and supplying equipment.

(f)     There should be the fullest exchange of information between M.O.D. (Sales) and the Embassy; the extent to which firms will or should be expected to take officials into their confidence is more doubtful.


17. These rules are a matter of expediency, not ethics; the ethical course would be to advise firms to refuse regardless of consequences to compromise with the system, in any case to forbid officials to involve themselves.  The justification for the rules is that (a) HMG will be more vulnerable when (as we expect) these affairs become a matter of public scandal; (b) the system requires that firms work through agents (or “advisers”); in the main they are only too inclined to let officials do what they should do for themselves; (c) our present troubles over National Guard arms purchases demonstrate the harm that can be done if officials get too involved (See Annex B); (d) the whole maze is so complex, the underworld involved so untrustworthy, that no advice can be given with certainty.  (As against this we believe we have far more detailed knowledge of the maze than we did a year ago.)


The prospects for us

18. Director of Army (Sales) has lamented that we have had no successes.  In the army field this is true: but the Panhard purchase is the only considerable army deal there has been in the past two years and the only French success in spite of political and other pressures.  It might even have gone against them had Alvis used a Saudi and not a Lebanese middleman.  We sold £5m. worth of Hovercraft to the Coastguard last year.  In spite of Saudi discontent with the Air Defence Scheme, the RSAF need more BA167s and more Lightnings; and Laing Wimpey are almost certain to get £30m. of business under Phase B of the Air Defence Scheme.  This suggests that the [CENSORED] have not been too unsuccessful in stalling on major new arms purchases; and if our competitors have not been making sales, our overall interests are not harmed by our own failure to sell.

19. It would be useful if we could list Saudi priorities, and base our selling effort on it.  But in Saudi Arabia, government does not work that way: with both Coastguard and Frontier force and the National Guard, co-ordinated programmes of expansion have been or are being drawn up: in both cases purchases have been and are likely to be piecemeal and haphazard.  What then should the British sales effort concentrate on?


(A)   Aircraft?

Failing a complete collapse of the Air Defence Scheme, the sale of additional Lightnings and BAC167s should be assured [handwritten: “I somehow doubt this!”].  For the next generation, the atmosphere is at present impropitious and one should hope that nothing comes of current interest in Phantoms and Mirage IIIs.  At the present stage of development of the RSAF, talk of absorbing additional more sophisticated aircraft is on all rational grounds premature – though no doubt we must try to keep interest in the Harrier alive.


(B)   Army: tanks

See my letters numbers 10/22 of 2 and 23 December to McCarthy.  The keen interest the fixers have recently taken in Vickers lately suggests that Vickers stand reasonably well [handwritten: “especially Kashoggi”].


(C)   Navy

See my latter number 10/11 of 9 December to McCarthy and subsequent correspondence.  Emir Turki firmly rejected our overtures last month.  The French interest has been prominent in the past year and it is possible that the Saudis may turn to a co-operative French/Pakistani effort.  But their first choice is U.S. help; and the field may be more open when the U.S. reply on this has been given.  Meanwhile, any interested firms might be encouraged to fish for themselves – the Saudis will not close the door to them even if only to put the screw on others in the field.


(D)   National Guard

[CENSORED] seems firmly wedded to British arms.  In spite of the complications of [CENSORED] role, the main block seems to be [CENSORED] inability to get [CENSORED] support for any substantial part of his expansion programme.  [CENSORED] has explicitly declared his determination to thwart any attempt by Khashoggi, Adham or the Pharaons to poach on his territory; [CENSORED]


(E)    Oilfield security

In spite of EMI’s considerable expenditure, this project – now standing at £50 million – still seems to be high in the sky.


(F)    Miscellaneous defence expenditure in the South

Various schemes to meet the “Southern threat” seem to have first priority now.  The question is whether any will come to fruition before the mood changes.  We have been responding fairly quickly to enquiries, and there seems nothing more to be done.


Any special measures?

(i)                  Visits by Saudi Ministers

20. We have invited [CENSORED] to visit Britain as the guest of the Minister of Defence for Equipment in May.  I am doubtful if he will accept.


(ii)                Visit by Head of Defence Sales

21. If Mr. Suffield is making a tour which a visit to Saudi Arabia can be involved, I would welcome this.  It would provide an opportunity for showing our interest in all fields, and perhaps stimulate some Saudi response.  I am, however, doubtful about a special visit to Saudi Arabia.  It would arouse both expectations and suspicions that he was bringing some specific package.  In present circumstances, he would be likely to become bogged down in polemical discussion of the failures of the Air Defence Scheme.  Moreover, since “commissions” figure so prominently, realistic discussion at this level is not easy.  However, it would be useful for us to have a chance to go over the ground with him.


(iii)               A British Ministerial Visit

22. For similar reasons, I would not favour a sales mission to Saudi Arabia only by a British minister.


(iv)              Appointment of a Defence Sales Representative Middle East (Mr. Hubert’s suggestion)

23. Unless HMG were prepared to negotiate commissions on behalf of firms, his role could only be to collect information and offer advice.  Whatever our shortcomings as an Embassy in this field, I do not think a sales representative visiting from Beirut could add significantly to available information.


General conclusions and advice on operating methods

24. There is no single golden key (or golden fixer) to open the door to an orderly, if crooked, world of arms sales in Saudi Arabia.  It is a jungle inhabited by beasts of prey in which one must move with caution and uncertainty.  The magnates are (justifiably) suspicious of one another and their agents; alliances and rivalries amongst both are constantly shifting.  Our efforts, therefore, should be based on the general guidance outlined in paragraph 16 above.  Also: (a) firms should be encouraged to regard the Embassy as a confessional rather than a branch office.  The more they tell us, the more they are likely to learn.  The separate “fishing” approaches to several members of the Embassy and the “hold-my-hand all the way to X” requests should be discouraged.  Firms should make their calls on Saudi officials in their own right, establishing and maintaining contact which ensures freedom of access.  They should not simply wait for appointments to be made by the Embassy or others.  They will not get business by the six-monthly whistle-stop tour – especially in the major deals when competitors are prepared to put in a man for months just to acclimatise himself, let alone push through a deal.  By the end of that time he is more likely to be in a position to assess the local scene and personalities involved, and to have formulated the essentials for reaching agreement with local agents or “advisors”; (b) early consideration should be given to whether a deal should be government-to-government or firm-to-government.  In the former instance, this would reduce the risk of a firm getting too involved in local commitments before HMG entered the field.  In the latter, their approaches could (as in the case of Vickers) be re-affirmed with a government assurance of approval for the potential sale.


[Annex A omitted]


S E C R E T 

Annex B 

Note by H.M. Ambassador, Jedda 

The National Guard, [CENSORED] and M.O.D. (Sales)


In late 1968 [CENSORED] a Lebanese businessman [CENSORED] began a series of approaches to the D.A. in Beirut, saying that he was in a position to secure sales to the National Guard.  (He operates through a firm, [CENSORED] whose front man is a Chamounist politician, [CENSORED]  In about November, 1968, M.O.D. (Sales) informed us that they had heard from a source close to the Saudi Government that we were not pressing the Saladin sale hard enough.  In answer to an enquiry made by us via F.C.O. Mr. Ray Brown refused to reveal his source, but said he had had amazing information from this source in the past.  We guessed (for reasons I cannot remember) that this was also [CENSORED] but Brigadier Donaldson, the Head of the Military Mission to the National Guard, was later asked by Mr. Brown to tell me personally that his source was (indirectly) Kamal Adham, whose firm, Arcan, represents Racal in Saudi Arabia.  This is still an unsolved mystery since [CENSORED] has told us since then that [CENSORED] is opposed to the purchase of Saladins.  A possible explanation is that [CENSORED] the businessmen, are two-in-one.  The Riyadh manager of [CENSORED] Arcan handles the National Guard business and is known to have been pressing for the Alvis agency and has admitted seeking Mr. Brown’s support for this in 1968.

2. In January, 1969, we instructed Donaldson to put to [CENSORED] our dilemma: [CENSORED] had told Mr. Healey he wanted government-to-government sales, and had instructed Donaldson to do nothing on Saladin sales without instructions from [CENSORED] others claimed to be speaking differently on his behalf.  What were [CENSORED] wishes?  [CENSORED] reply was to introduce Donaldson to [CENSORED]

3. After consultation between the Embassy, F.C.O. and M.O.D. (Sales) it was agreed that [CENSORED] should be told to get in touch with Alvis, and that officials of H.M.G. should thereafter disengage from contact with [CENSORED]  This agreement was not observed by M.O.D. (Sales), as we subsequently discovered.  Although M.O.D. (Sales) have categorically disowned the activities of Tuffill, who contrary to agreed policy established and extended a direct relationship with [CENSORED] we still do not know the details of them.  Mr. Dodds of M.O.D. told me last August that he believed the purpose of these contacts was to obtain information necessary for drawing up proposals on the Saladin sale – with Donaldson and the D.A. supplying the military information as requested and Alvis ostensibly responsible for the “fiddle factor”, this was an unnecessary involvement.  We now know however that the contacts went beyond this and included persuasion of three companies interested in sales with the National Guard to work through M.O.D. and take on [CENSORED] as agent.  One, B.C.C., was successfully persuaded; the other two, B.A.C. (Missiles Division) and Crown Agents were not.  We have even been told in writing by the Executive Officer of the British Agricultural Exports Council that a Beirut company claiming to have “all the right contacts in Saudi Arabia had approached B.A.E.C. via recommendations from the Crown Agents and the Ministry of Defence personnel”.  “This company”, his letter said, “has produced results for the Ministry of Defence……”.

4. The B.C.C. venture has had most unfortunate results.  The Saladin had been recommended by the Mission on sound technical grounds.  Donaldson had on similar grounds recommended the purchase of Racal radio equipment.  The introduction to B.C.C. by M.O.D. (Sales) was evidently interpreted by [CENSORED] as a guarantee that B.C.C. radio equipment would be recommended instead of Racal by Donaldson to whom [CENSORED] wrote to tell him of a forthcoming visit by a B.C.C representative.  At our suggestion, B.C.C. (now merged with Racal) withdrew and did not put forward their equipment, which will not in any case be available in time to meet the requirement.  [CENSORED] is furious with M.O.D. (Sales) for having failed to deliver a B.C.C. sale; and typically he (and probably [CENSORED]) is suspicious that the reason is a desire to confer benefit on a hated rival, Kamal Adham, the agent for Racal.  The failure of Alvis to renew [CENSORED] agency feeds this suspicion.  Tuffill cannot be blamed for failing to understand these complications.  He is very much to be blamed for blundering into a field where he was not competent to operate and causing damage which we now have to try to repair.

5. That the direct involvement of officials with [CENSORED] is unnecessary is rather borne out by the Hadshaltic offer to the National Guard of an underground power station.  In this case [CENSORED] and a consortium of British firms have come together in a fashion perfectly normal in the Middle East.  This project seems to be prospering.

[1] A Manager with the British arms company Vickers.

[2] Director of Operations, Saudi Army.

[3] Chairman, Vickers.

[4] Willie Morris, British Ambassador to Saudi Arabia.

[5] Colonel Colin Fitzpatrick.

[6] The Ali Rezas were the agents for Vickers in Saudi Arabia.

[7] Ministry of Defence.

[8] Head of Arabian Department, Foreign and Commonwealth Office.

[9] Prince Sultan, Saudi Minister of Defence and Aviation.

[10] Hassan Gabr.

[11] Defence Attaché.

[12] General Abdullah Mutlaq, Commander-in-Chief, Saudi Armed Forces.

[13] Alec Stirling, Arabian Department, Foreign and Commonwealth Office.

[14] Lester Suffield, Head of Defence Sales, Ministry of Defence.

[15] Raymond Brown, former Head of Defence Sales, Ministry of Defence.

[16] Director of Army Sales, Defence Sales Organisation, Ministry of Defence.

[17] Foreign and Commonwealth Office.

[18] Antony Acland, Head of Arabian Department, Foreign and Commonwealth Office.

[19] Her Majesty’s Government.