your connection to The Boston Globe

Saudi prince reportedly was paid $2b

Secret arms deal alleged in Britain

LONDON -- Prince Bandar bin Sultan, a member of Saudi Arabia's royal family and the kingdom's former ambassador to the United States, pocketed about $2 billion in secret payments as part of an $80 billion arms deal between Britain and Saudi Arabia first signed in 1985, British media reported yesterday.

The reports revived questions about the British government's decision in December to drop a fraud investigation into the deal, which has been plagued by allegations of bribes and secret slush funds for almost two decades.

In remarks yesterday, Prime Minister Tony Blair did not comment directly on the reports made on the BBC and in the Guardian newspaper. But he repeated his often-made defense of the decision to drop the investigation on national security grounds.

"This investigation, if it had it gone ahead, would have involved the most serious allegations in investigations being made into the Saudi royal family," Blair said at a meeting of the Group of Eight nations in Germany.

He added that, "My job is to give advice as to whether that is a sensible thing in circumstances where I don't believe the investigation incidentally would have led anywhere except to the complete wreckage of a vital strategic relationship for our country. . . . Quite apart from the fact that we would have lost thousands, thousands of British jobs."

Prince Bandar declined to comment, according to the news outlets.

A spokesman for BAE Systems, the arms manufacturer involved, denied any wrongdoing and told the Guardian that the company had "acted in accordance with the relevant contracts." BAE Systems is Europe's largest defense contractor, with annual sales of more than $22 billion, according to the company website.