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A SECRET slush fund set up by BAE Systems, Britain’s biggest defence contractor, was used to pay tens of thousands of pounds to two British actresses while they befriended a senior Saudi prince and his entourage.
Confidential documents seen by The Sunday Times reveal that money from the £60m fund went on the mortgages and rent, credit card bills and council tax of Anouska Bolton-Lee and Karajan Mallinder. It even paid for language lessons.
BAE channelled the cash through a London travel company which financed “accommodation services and support” for Prince Turki bin Nasser and other Saudi figures responsible for the desert kingdom’s involvement in the £40 billion Al Yamamah arms deal.
The revelations are bound to reignite controversy over the deal, which sparked a bribery inquiry by the Serious Fraud Office (SFO). Documents giving details of the payments were handed to SFO staff.
The investigation was terminated in December when Lord Goldsmith, the attorney-general, told parliament that it was not in “the national interest”.
At the time of the payments Bolton-Lee, a former lingerie model-turned TV actress, and Mallinder regularly attended parties at the Carlton Tower hotel in London hosted by the prince who, as the then head of the Royal Saudi Air Force, was responsible for the purchase of 150 Hawk and Tornado jets from BAE.
A senior government official, speaking on condition of anonymity, said that the inquiry had been trying to establish why the women were paid through the BAE fund.
It is likely that both would have been interviewed later this year had the inquiry not been aborted.
Goldsmith’s move followed a series of threats made directly to Tony Blair by the Saudi government. The Saudis warned that they would halt all payments on the contract and cut diplomatic and intelligence ties with Britain unless the criminal investigation was stopped.
The SFO had been investigating claims that BAE had set up the fund to support the extravagant lifestyles of senior Saudi royals as a way of ensuring that what was Britain’s biggest arms deal survived.
The SFO established that BAE used Travellers World, a travel firm, to run the slush fund and channel payments to Turki and others.
The prince, who is married to a niece of King Abdullah, the Saudi ruler, was the key player in the deal because of his role within the military.
The documents relating to the actresses refer to Turki as PB – a code for “principal beneficiary” – BAE’s description of him.
They show that during 2001 and 2002 Travellers World paid the £13,000-a-year rent on Bolton-Lee’s flat in west London. One document reveals that she received “expenses” of £1,275 in cash. Bolton-Lee, 29, who has appeared as a hostess in the BBC’s The Generation Game, declined to comment.
The documents also show repeated payments made to Mallinder during 2001-2. In July 2001, a sum of £1,002.67 appears as being paid to “Associates-Mallinder”.
Other documents refer to payments for “Mallinder mortgage (£448)”; “Mallinder expenses (£1,000); and “Mallinder language course (£326).” Karajan Mallinder, who changed her name from Karen after a 1988 conviction for possessing cocaine, said she knew nothing about any slush fund companies but admitted that she was a close friend of Tony Winship, a BAE manager and former RAF wing-commander who was arrested in 2005 over allegations that he ran the fund.
She ended a telephone conversation with The Sunday Times abruptly when asked if she had met Turki and his party in the 18th-floor penthouse at the Knightsbridge hotel.
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Frankly, my dear, the girls deserved much higher pay. Love is not cheap.
Mozart, Poinciana, USA
Wow people in politics and the arms trade are dirty corrupt crooks. Tell us something we don't already know!
H, dartford, uk
Typifies the hypocrisy at the heart of Saudi Arabia and why that horible country has spawned Al Qaeda.
Nazih Musa, Baghdad,
Tanweerhussain, you are the only one that said muslim...not one other post has that word in it. Argh, it is so difficult t hese days to say anything without a muslim ranting on about discrimmination. Get a grip, it is a story of people-countries...if you want to bring race into it, then you, yourself, must be racist.
Maria, london,
Dont forget that this monarchy is supported by the West. What do you expect when these so-called "Royals" dance to the tune played by their masters ? Who made them King in the first place ? Saudi Arabia NEVER had a monarchy. It was a tribal society with a leader or Sheikh but never a king. This monarchy is a creation of the West and it gets away with murder because of its absolute power. The people of Saudi Arabia are rightly annoyed over this but have no political say. Small wonder that Al Qaeda can readily find willing recruits there.
BTW, as someone else rightly said, actress is euphemismfor these ladies. Well, I suppose it is ok, if your acting career is not taking you anywhere. Helps to pay the bills. When I first say the title of the report, I was curious to know which A-lister was involved. Alas, its not even a Z-lister.
J. Khan, London,
Well, when money and power talks,dosen't matter how powerful a country is,the laws and rules of that country dose not apply,only applies to weaker opponents.
Kumar, Greenford,
I really cant see the fuss about this. Simply put BAE used some money to get more money back. Has nobody ever been taken to lunch by a sales rep? And I dont believe 'actresses' is the right term for those girls... The only kind of acting they did was laying there pretending to enjoy themselves.
Jamie Brown, Maidstone, England
Nonsense. The muslim world has all th power to do something about it. The US did plenty about it. You just have to have some guts. GW was much more powerful when we rebelled. Go home, don't run away from your problems. You don't need a host country. Make yours a better place. It is all in your own hands. Stop playing the victim!
KMS, Santa Ana, CA, USA
Given the sums of money involved I would want a better class of totty to that pictured in the article.
BAE did what every other business does, how do you think "lap bars" etc survive?
Michael, London,
Far too much petty moral outrage going on here. What's wrong with a few actresses to smooth along a big deal? If I were the Saudis I wouldn't say "no".
The main issue - if true - is that the Blair government put a stop to the enquiry as a result of Saudi pressure. Not a big surprise. But entirely the wrong approach in a country that benefits economically from what are normally high standards of transparency.
Ray, Rome,
I am not surprised at the frankly rascist views expressed on comment page about muslims .
Its what we come to expect from the host nation which seeks to treat
the minorities as second class citizens.
regarding the saudi princes -most muslims know the current leaders in the muslim world are the worst they had in their history but they remain powerless to do anything about it.
tanweerhussain, liverpool,
News is news regardless of its consequences.
If you start censoring the media as a lot of people seem to be trying to do here then you might as well go and live in Russia, Saudi or for that matter Syria or Iran.
You will find there the news is always good news!!!
Either you have a free press or you don't you can not pick and choose, if you don't like the facts then you know what to do!!!
James, London, UK
Hypocracy exemplified! The back-handers and modest fees - for which, no doubt, they had to perform well - paid to the prostitutes are no worse than the excesses, self-indulgences and peccadillos practised by politicians at the top of the British manure heap. Let's first clean up British politics before getting too screwed up over what those devoutly religious Arabs practise behind closed doors. No-one has ever regarded the extended Saudi family as paragons of charity or/and virtue. Doing business with them will taint any organisation naively hoping that a Harvard business degree has any relevance.
Maxadolf, Epsom, UK
there's no free lunch.
loucapetown, cape town, south africa
guess what guys .. I m afraid to express my opinion :P
to [ Roy ] from riyadh BUSTED you Shamele$$
Ciao.
ops, Riyadh,
So BAE, the British government, or someone, paid some women to make a foreign businessman more amenable to signing a contract. So what? Happens every day.
Angus McFarlane, Bucharest, Romania
Jasper the toffee nosed twit from Chelmsford UK has not the education to separate the different aspects of Saudi life from the filthy prodigal sons of Saudi Royalty.
OK so we paid some £800milion for a useless tent called The Dome and he is saying there was no baksheesh in our society .
And that we have a compulsive liar for a P.M. in the Big Top position.
And a religion manufactured by Henry VIII.
F Cockburn, London, UK
This a way of life in the Middle East.
If you want the trade you have to give back handers, or it will go to those who do.
Britain has lost too many jobs and cannot afford to loose more. Most of the critics do not know about life outside their street
Mike, Paphos, Cyprus
There's no point in getting sniffy over this because that's the way this business is done say the pragmatists. They are right. The problem comes in drawing a line. The 'hostesses' are making a career decision and that is up to them. More worrying is that as a further concession to retain these arms contracts, the BAe merchants of death will pressurise government into permitting a super mosque in the UK funded by extremist wahabists where guest bigots will preach hatred of the West and we'll have more home-grown mass murderers in the making.
We seem willing to destroy our society's values for the sake of a few thousand jobs in Bristol.
The sooner the UK ends its dependence on oil the better. If that means building nuclear power stations, let's do it now. Let's also keep a nuclear deterrent and keep the world's crazies out of our country.
Ian, Bath,
Bribery, corruption, baksheesh, call it what you want, is part of the culture of these countries. Just as arranged marriage, treating women as chattels, denying women eduation, intolerance of other religions, denial of freedom of speech, sharia law and fatwa are also part of their culture.
It always puzzles me why PC wonks are so vociferous about matters fiscal but are unable condemn human rights abuses because might be construed as a criticism of multi-culturalism.
Naturally, it would be unfair of me to suggest that PC wonks can afford take the moral high ground when their jobs are not at risk if these contracts are lost.
jasper, Chelmsford, uk
This smacks of hypocracy and shows how naive the media assumes joe public is. It's common practice for all major industrial contracts with the Middle East or Asia to pay backhanders in one form or another.
Simply if you don't pay, you don't get the contract. For most top Industrial companies there is little difference between quality and it basically comes down to how much changes hands under the counter, or through an intermediary.
If action is taken against British Aerospace, then you can round up all the other leading European industrial companies who have won supposedly contracts in the last few years in the Middle East and Asia.
My advice everybody come clean or do nothing. The Saudi's are only angry, because they fear other contracts will surface.
John.gilmore, Chantilly, France
When you look around this big old world, how on earth can you kick up a fuss over this old baloney? "Hostesses"are frankly fine, sound cheap given the distasteful job in hand and, however tacky to poor old Middle England, we ended up selling vast amounts of crucial arnaments and guaranteed an enormous work load for this global arms player. We're taling areaslike Preston and Bristol here, scarcely lavish stuff. I feel it sanctimonious in the extreme reading these prissy comments. Had this deal gone the French way, what do think they'd have doled out to win favour? Anything frankly in order to beat the Brits...
Geordie Kidston, London, UK
Having read some of the other comments , I can only say yes I agree that morally it is dubious . But everyone should look at how the Empire was created , bribery and corruption was rife people left England relatively poor to return rather well off , do you all think they fair godmother provided the funds. Don't take a shot at the French, as to the payments to the two ladies if that is all they got it is not generous they should have been hired as consultants then the moral hypocrite would be able to sleep without tossing and turning . As to the Seattle letter writer look no further than Boeing , they do the same.
I think both ladies should have been paid far more . The whole thing reminds me of Monica Lewinsky , and now we find out that Gingrich was having an affairf himself.
l.wolff, Vancouver BC, Canada
Whatever happened to the tradition of honest business?
Regardless of whom is manufacturer is, such as BAE, or UTC, Boeing, etc. The concept of honest traditional business is to create a product/service that on it's own, the product or service provides what the consumer wants.
All the materialistic wealth on the planet cannot replace the loss of life of a failed product, a solid product or service should be what the consumer is after.
I can see if the Saudi's threw a party for BAE, there would be some reason for BAE to provide an equal party not more.
That's my two cents worth.
Anonymous, Jeffersonton, US/VA
"Actresses" ? My mother uses another word.
G Johnson, Camden, USA
Surely it should be up to the Saudi Government to prosecute or request prosecution rather than the SFO at the expense of the British taxpayer? At the end of the day it is the Saudi people who are paying the bill and who were let down by their officals not getting the very best price possible. The BAE officials got the Saudi contracts in spite of stiff competition from the US/France etc.
Kristi Prenn, monte carlo, monaco
There is a fine line between schmoozing a client and paying a bribe. It's not clear that this deal fell the wrong side of that line, but for as long as attempts to investigate are blocked it will remain controversial.
More pointedly (but sadly less thrillingly for the papers), this deal involves the transfer of significant jet fighter intellectual capital to Saudi Arabia. While Saudi is not hostile to British interests it is very possible that this will end up in the hands of countries that are.
£40Bn over 10 years is a tiny percentage of Britain's total exports. HMG should not be propping up any public company, especially not the defence industry which is horribly inefficient, and especially not BAe Systems which is in rude health and whose majority interests now lie outside the UK.
Al Yamamah stinks and we should drop it like a hot potato. If the French want to step in and apply a lower moral standard then that is their decision; Britain should know better.
Anthony Charlton, Swindon,
This is sleaze, on the part of the participants, and really, it is not unknown that the Saudis and many other Muslims try to play this game about their piety, but the fact is they get down and dirty all the time. It's a farce on the part of all parties, and the taxpayers get to foot the bill for this corniness. We're the chumps for putting up with this! Instead of yapping about what goes on, how about putting some beef behind the complaints?
Ann Rogers, Seattle, WA USA
Excellent article, just shows how a so called muslim royals act. the saudi people desrve to know what there rulers are getting upto. its all about keeping the elite in paradise while the poor pay the price no matter where you live in the world this rule exists. BAE and most corporation behave in this mannor. ask Thomas Jefferson he will tell you how it will eventually unfold.
lee, Cardiff, Wales
When H.M.the Queen entertains Royals from Saudi, or other Arab countries, accommodates them at Buckingham Palace, and the government of the day picks up the tab, is this considered corruption? Of course the ensuing trade agreements have nothing to do with this generous hospitality - or have they?
alan , Port St.Lucie, Florida,USA.
The Sunday Times gets more and more like the News of the World every day. This is highly irresponsible journalism. You are supposed to be better than this. It's time you found some serious and important news to report on.
Hrothgar, Schaumburg, IL, USA
Well done, The Times, my hat's off to you for daring to print this article regardless of all the opposition.
This is true journalism, tell it as it is and not like the British Government where everyone else is wrong and they can do no wrong.
WELL DONE.
Keep it up.
James, London, UK
Not much different to British MPs and their families, raking money out of the public purse and having holidays at the expense of media buddies etc. Visiting foreign countries on the pretext of learning something or cementing relationships.
David Madley, Alicante, Spain
Why do you print this stuff? The publication of this kind of information is deliberately antagonistic to the House of Saud. These people are our valued trading partners and of vast geo-political importance.
This irresponsible and pious sounding journalism will have a direct negative impact on the Middle Eastern peace process and on Britain's relationship with Saudi Arabia.
Irrespective of the truth of the matter this story belongs in the lowest grade of tabloid newspaper, not in a respected publication like the Times.
Poor show!
Crispin, London, UK
Wow! wait until the saudi muslim conservatives hear this music. Poor PB, he must be thinking, 'why did you get yourself involved with the Brits? Next time I gotta try the sexy American or French actresses'
I have two more things to say. Well done the times for exposing corruption no matter where it happens. This is also 'irresponsible journalism' as it threatens the wages of many British workers If the contract with BAE is ENDED
Qadar, London, England
*checks calendar*
Hmmm ...
Starling, Lancaster,
The British must do what the Americans the French and all other nations do to win contracts. If you continue this witch hunt you will cripple BAE and all the other businesses that depend on BAE. You will hand lucrative contracts to the Americans and the French, who do not apply hypocritical standards like the foolish British.
Roy, Riyadh, Saudi Arabia
Where is the problem? Do we sacrifice jobs and business for the UK and allow competitors to take all the benefits. Gifts and lavish life styles are the norm for many of those involved, no one has been harmed and the UK has benefited enormously. Its a harsh and hard world out there and we must remain competitive.
Tim, Tavistock, UK
At least there is one company that is prepared to live in the real world.
It is a pity that our politicians / so called elite of this country will not stand up for the British worker.
David Scott, Manchester, England
why all the fuss ?
entertainement comes in all kinds and is the uk to stand back while the other international competitors do the biz making available what is required for the signature.
less headlines and more reality please.
john haydon rowe, el ejido,
It is shocking to hear that Price Turki bin Nasser was involved in this scandal, he is a very religious person and I am sure he would never have given these call girls a second glance.
Perhaps it was the rest of the hangers on who made the most of them.
Charles, London, UK
Imagine that, hiring pretty women to entertain clients. Such a thing would never happen in the City...
Farrukh, Woking,
Is this newsworthy? Really? I take clients out for lunch and drinks etc because i know it reciprocates business relations. Why is hiring an 'actress' to pretend she's interested in a bloke such a crime. Isn't that why they're called actresses?
Poor girls, leave them alone and find some proper journalistic titbits for your table.
stu, london,
We all know what happened, how business is encouraged in the Middle East so why do you keep on trying to uncover another desparate situation. When the contract is cancelled who at the times is going to pay the wages of the british workers who lose their jobs as a result.
James Conran, Southampton,
"Actresses" get paid for acting. We know what these two are being paid for.
Gordon Robson, Ayr, Scotland
"Two British actresses"! Is that what we call them now?
james hazan, huddersfield, West yorkshire ,U.K
Having worked in the Middle East/Far East and numerous other areas on regular basis, it is no surprise that the buisnessmen of all companies and all countries do this, it is endemic when you are dealing with people outside the UK, Europe and the States.
Crooks, Barnsley,