The Prince and the Prime Minister

The British court ruling strongly criticized the actions of both Bandar and senior members of the British government, including former prime minister Tony Blair. The court said that if a person subject to British criminal law—which Bandar, as a foreign government official and diplomat, is not—had made the kind of threats to U.K. officials that the Saudi prince allegedly did, he would "risk being charged with an attempt to pervert the course of justice." In Britain "perverting the course of justice" is the equivalent of obstruction of justice in the United States.

In the ruling, British judges Sir Alan Moses and Sir Jeremy Sullivan said that Blair and his administration were wrong to pressure prosecutors at the government's Serious Fraud Office to shut down a long-running bribery investigation. Blair's government announced in December 2006 that it had ordered the investigation stopped on national security grounds, indicating that representatives of the Saudi government had threatened to cut off cooperation with U.K. authorities on antiterrorist operations if the corruption inquiry was not quashed. Justices Moses and Sullivan said that both Bandar's threats and the fact that Blair's government gave into them were an affront to the British judicial system and the rule of law. "No one, whether within this country or outside, is entitled to interfere with the course of our justice," the judges declared. But the judges did not directly order the British government, now headed by Blair's successor, Gordon Brown, to reopen its investigation of British Aerospace's dealings with Bandar and the Saudis—indicating instead that they expected to hear further arguments on the subject.

Brown is scheduled to pay a visit to the United States this week and will meet with President Bush as well as all three of the major candidates to succeed him. A U.K. government official said that there are no plans to discuss the British Aerospace investigation with U.S. officials.

A spokeswoman for the Home Office, the British government department responsible for internal security, confirmed Wednesday that the U.S. Justice Department had asked for help with its investigation. Some British commentators have suggested that the Home Office, at the direction of top British government ministers, is sitting on the Justice Department's request in an effort to kill or stall the American inquiry. The Home Office spokeswoman denied that her agency was in any way trying to hamper the U.S. investigation. Instead, she said the U.S. request for assistance was "receiving due consideration." A Justice Department spokesmen declined to comment. But a U.S. law enforcement official acknowledged that the U.S. probe of British Aerospace was still in progress.

The British Aerospace investigations in Europe and in the United States remain a major embarrassment for the Saudi government, and in particular for Prince Bandar. For many years he was a close confidant of American presidents, including both the current President Bush and his father. As NEWSWEEK reported last year, hundreds of pages of confidential U.S. bank records may help illuminate the allegations that British Aerospace funneled up to $2 billion in questionable payments to Bandar. The BBC and the Guardian newspaper reported last year that the company made "secret" payments to a Washington, D.C., bank account controlled by Bandar. The payments are alleged to be part of an $80 billion military aircraft deal between London and Riyadh.

The Riggs Bank records, obtained by NEWSWEEK, include a November 2003 "suspicious activity report" that the bank filed with the Treasury Department. It disclosed that over a four-month period $17.4 million had been disbursed from the Saudi defense account to a single individual in Saudi Arabia. When Riggs officials asked the Saudis who the person was and why he was receiving the funds, they were told the individual "coordinates home improvement/construction projects for Prince Bandar in Saudi Arabia," and the payments were for a "new Saudi palace," one document shows. In another instance Bandar wired $400,000 from a Riggs account to a luxury car dealer overseas.