The BBC reports that Saudi Prince Bandar - known to Dubya as "Bandar Bush" - was the recipient of maybe $2 billion dollars in bribes payments from BAe, the UK's biggest arms manufacturer, under secret deals over more than a decade.
The Thatcher government agreed the kickbacks payments. Tony Blair and Lord Goldsmith halted a criminal probe in December 2006 for "national security".
The funds were paid to two Saudi embassy accounts with Riggs Bank (later busted for money laundering) used by Bandar for his own expenses and other mysterious purposes. Presumably embassy accounts were free of official scrutiny, money laundering reports and taxation.
Note that Charles Powell, private secretary to Thatcher, negotiated the secret deals. I wonder if Jonathan Powell, his brother who is chief of staff to Blair, might have helped cover them up.
Prince Bandar is now secretary-general of the Saudi National Security Council. He was ambassador to the United States from 1983 until 2005.
The payments to Bandar Bush were negotiated as part of a long term government-to-government contract for the supply of fighter jets from BAe to Saudi. Bandar was chief negotiator of the contracts. It's important to realise that it was the British government, under the direction of Margaret Thatcher, that agreed to the payments to Prince Bandar and others as the price of securing the survival of BAe. Thatcher's son Mark received a cut of the deals, and everyone involved seems to have prospered mightily.
One aspect that is confusing is that there may be some element of money laundering of off-the-books oil proceeds by the princes as part of the deal. I don't pretend to understand this, but it looks like off-the-book oil deals may have funded the payments streamed through BAe and back to the princes in a complex scam on the Saudi finance ministry or oil ministry.
Up to £120m a year was sent by BAE from the UK into two Saudi embassy accounts in Washington.
The BBC's Panorama programme has established that these accounts were actually a conduit to Prince Bandar for his role in the 1985 deal to sell more than 100 warplanes to Saudi Arabia.
The purpose of one of the accounts was to pay the expenses of the prince's private Airbus.
David Caruso, an investigator who worked for the American bank where the accounts were held, said Prince Bandar had been taking money for his own personal use out of accounts that seemed to belong to his government.
He said: "There wasn't a distinction between the accounts of the embassy, or official government accounts as we would call them, and the accounts of the royal family."
Mr Caruso said he understood this had been going on for "years and years".
Besides paying the expenses of his Airbus and other private requirements, the slush funds may well have been used to fund terrorism. It was discovered that Bandar's wife made several payments to two of the Saudi 9/11 hijackers who also coincidentally held accounts with Riggs Bank.
A Saudi named Omar al-Bayoumi housed and opened bank accounts for two of the 9/11 hijackers. About two weeks after the assistance began, al-Bayoumi's wife began receiving monthly payments totaling tens of thousands of dollars from Princess Haifa bint Faisal, the wife of Saudi ambassador and Bush confidant Prince Bandar bin Sultan, through a Riggs bank account.
Looks like Bandar's hand was deep in the Saudi public cookie jar. Should be interesting to see how this gets played in the US media given the very close links between Bandar and the Bushes.
Had Blair not already resigned, this scandal would have undermined him further. On the other hand, he's managed to wriggle out of accountability for much worse abuses of office. Lord Goldsmith will likely come under pressure, but as a Blair loyalist he was always likely to lose office in a Brown reshuffle later in the summer.
Timeline of the BAE bribery scandal.
Shares in BAE, the UK's biggest arms manufacturer, fell this morning on reports of the bribes. Although the investigation into Saudi bribes has been dropped, investigations into bribes involving Romania, South Africa, Tanzania, Chile, the Czech Republic and Qatar are ongoing.