BRITISH Prime Minister John Major's Conservative government is
going into damage-control mode, trying to weather an embarassing
weapons kickback scandal, which could cost British armsmakers
future foreign sales.
At the heart of the so-called "sleaze" scandal are allegations
that Mark Thatcher, son of the former Conservative prime minister,
earned 12 million ($18.9 million) in commission fees by helping to
facilitate a 20 billion deal with Saudi Arabia when his mother,
Margaret Thatcher, held office.
The controversy is likely to have an adverse effect on the
government, which is trailing badly in opinion polls and is under
political attack from the Labour Party opposition. But Labour is
only part of the government's concern.
Future arms sales to the Gulf states and such countries as
India, Malaysia, and Indonesia could be jeopardized by claims that
negotiations often turn on dubious payments to deal-brokers and
local officials, a London defense industry source says.
Mark Thatcher is a millionare businessman now living in Texas.
He was named in the London Sunday Times on Oct. 9 as one of several
middlemen who together earned a 240 million commission for their
part in the sales of British-built Tornado fighter-bombers and Hawk
trainers to Saudi Arabia in the mid-1980s.
The newspaper said the main source of the allegation, which Lady
Thatcher and her son both deny, was Mohammed Khilewi, a former
Saudi diplomat who defected last May and was granted asylum in the
British officials and defense contractors are alarmed because
the 20 billion Al Yamamah (the Arabic term for dove) contract with
Saudi Arabia still has about three years years to run. So far,
Britain has received about 13 billion.
British Aerospace, one of the main contractors, is reportedly
worried that the Saudis could cancel the deal if bad publicity
surrounding it continues to mushroom.
Other arms sales in the Gulf and in South and Southeast Asia
could also be affected, a British Aerospace source said, "if the
idea became firmly entrenched that sleaze is commonly part of
The government has reason to worry that the publicity could sour
the Saudi contract and cost British jobs. Earlier this year,
Malaysia ordered a ban on all trade with Britain after the Sunday
Times alleged that high government officials in Kuala Lumpur had
demanded bribes in return for their support for a deal in which aid
funds for a large dam at Pergau and British-built aircraft for the
Malaysian air force were intertwined. …