The Serious Fraud Office in London spent £2m and more than two years amassing documents which showed BAE had transferred £1bn to Washington accounts controlled by Prince Bandar of Saudi Arabia, and another £1bn to Swiss bank accounts linked to agents acting for Saudi royals. The records include highly classified Ministry of Defence files detailing the government's involvement in the al-Yamamah arms deal payments.
The Saudis and BAE say the payments were all above board. But Mr Blair said the Saudi royals privately made threats to cut off intelligence links unless the investigations were halted. He claimed this might increase the risk of British citizens being murdered in al-Qaida terrorist attacks "on British streets".
The US justice department has sent its formal request for mutual legal assistance to the Home Office in London. This was confirmed by the SFO at the weekend. If ministers refuse to cooperate, they will face a fresh international crisis. The OECD, which polices international anti-bribery treaties, has already accused Britain of potentially breaching those treaties.
http://www.guardian.co.uk/armstrade/story/0,,2127192,00.html