US defense contractor paid commissions to Saudi company that later allegedly served as bribery conduit | Saudi Arabia

One of the United States’ largest military contractors paid kickbacks to a Saudi company that later allegedly served as a bribery conduit for the kingdom’s royal family.

A document leaked during a criminal trial in the United Kingdom revealed that Harris Corporation, now L3Harris, paid commissions to the Saudi company for more than two decades for services in the kingdom.

The Saudi company that received the payments was run by the Fustoks, a Lebanese family that has had close ties to a branch of the Saudi royal clan for decades, according to court documents.

Members of the Fustok family and their company, Arab Builders for Telecommunications and Security Services (ABTSS), were accused by British anti-corruption prosecutors of handling or receiving bribes between 2008 and 2010 in connection with of a defense agreement.

The Serious Fraud Office (SFO), which investigates and prosecutes corruption cases in the UK, said the payments were made to ABTSS and another company “as an inducement or reward” for award of contracts by the Saudi National Guard. The main beneficiary of these payments, prosecutors say, was Prince Miteb bin Abdullah, a prominent Saudi royal who was once a pretender to the throne.

Prince Miteb bin Abdullah was once considered a contender for the Saudi throne. Photograph: Hassan Ammar/AFP/Getty Images

In 2017, Miteb was one of the most high-profile Saudis detained at Riyadh’s Ritz Carlton hotel during Crown Prince Mohammed bin Salman’s “anti-corruption” purge. He was later released after reportedly agreeing to a billion-dollar settlement, although it is unclear precisely what he was charged with. Some critics of the crown prince have suggested the purge was a crude way to eliminate his political rivals.

The documents emerged as part of a long-running British criminal prosecution against a British company, GPT Special Project Management, and two individuals. In 2021, GPT pleaded guilty to involvement in corrupt payments to Miteb through ABTSS and other intermediaries between 2008 and 2010. GPT paid fines of £30 million.

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Last Wednesday, both individuals were cleared by a jury of their role in the payments, including those made through ABTSS, after arguing they took place with the approval of the British and Saudi governments.

The documents disclosed in court provided details of the long-standing business agreement between ABTSS and Harris.

In January 2013, Saudi officials asked the British Ministry of Defense to sign a direct contract with Harris worth $93 million, according to court documents.

Details of the goods or services Harris would provide in exchange for the money were not disclosed to the court, but they were paid using Saudi funds held by the Ministry of Defense for expenses related to a defense agreement between the United Kingdom and Saudi Arabia, called Sangcom.

The Ritz Carlton in Riyadh, where Crown Prince Mohammed bin Salman detained Prince Miteb during an “anti-corruption” purge. Photograph: Giuseppe Cacace/AFP/Getty Images

Under Sangcom, Britain provided military communications technology and training to the National Guard. His commander at the time, and according to the documents, the source of the instruction for the signing of the contract with Harris, was Miteb.

Three months later, Gary Robson, the company’s Middle East commercial director, wrote to the Ministry of Defense informing it of a “commission which would be payable following the conclusion of the contract by Harris”.

“Harris has a long-standing agency agreement in place with ABTSS…for the representation of Harris within the Kingdom,” he wrote in a document provided to the court. Under the terms of the agreement, which he said had been in effect for 22 years, Harris paid a commission “on all Saudi National Guard business done by Harris within Saudi Arabia (the Kingdom of Saudi Arabia) “.

Robson said standard procedure was that a “contingency fee” on any contract with Miteb’s National Guard would be “required” by the ABTSS, deductible from Harris’ profits rather than included in the contract price. The commission paid by Harris to ABTSS on the $93 million contract would be $14 million.

Robson said Harris would receive a list of “significant value-added services” in return for the money, including “logistics, key liaison languages ​​and cultural advice and services”, “general management support” and “documentation and visa support”.

During the recent trial, defense attorneys said these descriptions of the payments between Harris and ABTSS were “strangely vague.” However, government lawyers observed that Harris provided the Department of Defense with compliance documents, including a 2013 due diligence review of ABTSS conducted by a law firm.

It is unclear whether Harris knew of a connection between ABTSS or the Fustoks and Miteb.

ABTSS is owned by Salah Fustok, described in court as Prince Miteb’s “business manager”. Neither ABTSS nor Fustok have been charged in connection with the SFO investigation. ABTSS did not respond to questions from the Guardian. Fustok declined to comment.

L3Harris declined to answer questions from the Guardian, including a request for clarification on whether it still had a relationship with ABTSS. A company spokesperson said: “L3Harris has a strong and long-established compliance program. We remain committed to the work we have carried out on behalf of the UK Ministry of Defense and the Government of Saudi Arabia.

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