The secret commissions paid to senior members of the Saudi Royal Family by the arms manufacturer BAE and their billion dollar fortunes hidden in offshore companies and Swiss bank accounts was overlooked in the recent corruption investigation in Saudi Arabia.

The arrest of numerous Saudi Princes and businessmen in Riyadh was heralded by analysts and diplomats as evidence of reform and modernisation in the House of Saud. But it was noticeable that senior Saudi Royals who were implicated in the notoriously corrupt Al Yamamah $40 billion arms deal with BAE were not targeted.

The bribes paid to Saudi Royals to sweeten the Al Yamamah contract for BAE were investigated by the UK Serious Fraud Office. But in 2007 when the SFO discovered evidence of secret payments to Swiss bank accounts belonging to Saudi Defence Ministers and middlemen, the Prime Minister Tony Blair closed down the criminal investigation and the files were sealed.

The most prominent Saudi Royal accused of corruption by the SFO was the late Prince Sultan bin Abdulaziz, the Defence Minister between 1961 and 2011 and also the Crown Prince. He was renowned for siphoning off funds from defence contracts. Diplomatic memos by former British Ambassadors to Saudi Arabia about Prince Sultan’s financial interest in arms deals have been discovered in the UK National Archives.

In 1971 the British Ambassador wrote: “Prince Sultan has of course a corrupt interest in all contracts”.  Another dispatch stated: “Sultan may very well have felt that the episode (a leak) would make it difficult for him to make his expected personal gains without embarrassment”.  And a third memo says: “There is no single 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”.

Prince Sultan made a fortune from the Al Yamamah arms deal in the mid-1980s which he personally negotiated and signed with Prime Minister Thatcher. As soon as he was paid his commission, the Saudi Defence Minister moved his wealth into London property. He bought two huge mansions next door to each other on The Boltons, the prestigious street in Kensington, via an offshore trust registered in Liechtenstein.  The value of both these houses today is £80 million.

Prince Sultan was also given the freehold to 2-8a Rutland Gate, Knightsbridge, in 2005 as a gift from Rafiq Hariri, the former prime minister of Lebanon. This house is worth at least £100 million and was owned jointly in the name of Yanuk Corporation NV and Yanuk Property Corporation NV, both incorporated in the Caribbean island of Curaçao.  But what is less well-known is that a director of Yanuk was Hussein Al-Mahktani who was also implicated the alleged billion-pound bribery scheme run by BAE Systems.  He is one of several Saudis who have been a custodian of Prince Sultan’s wealth, especially in France.

Like most members of the House of Saud, Prince Sultan’s wealth was managed by consultants and agents. The most well-known is the Syrian financier Wafic Said who was investigated by the SFO for his role in the Al Yamamah deal. He also invested in UK property. He lives in a vast house at Eaton Square, Belgravia, and acquired Tusmore Park, a 3,000-acre estate in rural Oxfordshire, through Panamanian company Tusmore Park Holdings SA.  In 2013 the freehold to 24 Queen Anne’s Gate, near Buckingham Palace – the office of the Said Foundation – was acquired for £3.8 million by Guernsey company Scotbury Ltd.

The role of Abdulmohsin Al Sheikh, a Saudi businessman, has also been overlooked in managing Prince Sultan’s wealth. Abdulmohsin became so rich that he acquired D’Arros, an island in the Seychelles, for $60 million through Chelonia Ltd, a Seychelles company. Chelonia itself is owned by a BVI company called Save Our Seas Ltd.
If the ambitious young Saudi Crown Prince wanted to investigate real corruption, then he could start with who benefitted from the over-priced Al Yamamah arms contract. But that may be too close to home as it would implicate members of his own family.

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