Witness statement of Robert Wardle, Director of Serious Fraud Office

This witness statement from the Director of the Serious Fraud (SFO), Robert Wardle, was released at a Directions Hearing on 21 December 2007 in the High Court to prepare for a judicial review brought by The Corner House and Campaign Against Arms Trade (CAAT) against the UK Government's decision to cut short the SFO investigation into alleged corruption by BAE Systems in recent arms deals with Saudi Arabia.

The statement indicates that the Director repeatedly rejected requests to terminate the SFO investigation.

He insisted throughout the investigation that, on balance, "the public interest in investigating possible corruption by a major arms company" (para. 43) was best served by continuing the investigation.

Arguments that the investigation should be abandoned on security grounds were first put forward by the Cabinet Office (the government department supporting the Prime Minister) and the Ministry of Defence -- following representation by BAE Systems in November 2005 (paras 8-9).

BAE's assessment of "the risks to the national interest" included commercial risk, the position of Saudi Arabia in the Middle East, and the UK's counter terrorism strategy (para 8).

In December 2005, Wardle "considered . . . carefully" representations on security made by the Cabinet Office, which had the support of the Prime Minister, the Foreign Secretary and the Defence Secretary (paras 18-19).

However, he concluded that, although "the possibility that cooperation with the UK might be endangered" was, in his view, "the most powerful of the representations made on the public interest", he was nonetheless "not convinced that the danger referred to was imminent" (para 19).

In January 2006, Wardle told the Attorney-General that "the balance of the public interest was in favour of continuing the investigation" (para 20), and the Attorney-General "concluded that . . . the public interest required the investigation to continue" (para 21).

In September 2006 -- when the SFO was seeking Swiss bank account details about irregular payments to Saudi officials -- the Cabinet Office again raised the possibility that Saudi Arabia's cooperation with the UK on counter-terrorism would be prejudiced if the investigation continued -- but again the Serious Fraud Office and Attorney-General rejected the suggestion.

The decision made by the SFO Director on 14th December 2006 to drop the investigation appears to have been prompted by a 'personal minute' sent by then Prime Minister Tony Blair on 8th December 2006 to then Attorney General Lord Goldsmith (which superintends the SFO) and by meetings with the UK Ambassador to Saudi Arabia in November and December.

The government has not released any documents about the Ambassador's representations to Wardle, nor about the Saudi representations to the UK government.