Transparency Watch (TW): What triggered your investigations into BAE Systems?

David Leigh (DL): It goes back all the way to 2003 when we wrote a series in the Guardian based largely on research in the government’s archives on the relationship between the British Ministry of Defence and reported corruption in arms sales [Guardian]. This series encouraged some whistleblowers to start coming forward and then it was sort of one of those things where the end of a thread appears and you pull on the thread and it gradually gets bigger and bigger, till it becomes absolutely enormous. We first had somebody come forward who said that they had worked for a company connected with BAE in a minor capacity and they had been required to provide various treats - prostitutes and gold watches and things – for members of the Saudi air force when they came over here to train with BAE [BBC]. It turned out that there was some truth in the allegations, and as more and more people came forward it became apparent that the scale of the whole thing was much bigger than we had realised. We had discovered a whole modus operandi and it just got bigger and bigger like that.

TW: As someone who has spent years investigating the affair, what are your views on the House of Lords overturning the High Court’s decision that the Serious Fraud Office acted unlawfully when it halted its investigation into bribery allegations relating to the Al-Yamamah arms deal between Saudi Arabia and BAE Systems?

DL: The SFO [Serious Fraud Office] was not to blame for shutting down the investigation, which they began and persevered with after the Guardian took the evidence to them back in 2004. Tony Blair displayed a lack of principle in asking the director of the SFO to close down his inquiry just when it was getting somewhere. The original Moses/Sullivan April 2008 judgment in the High Court found British politicians culpable - the House of Lords stepped back and took a more narrowly conservative view. They said, in effect, that it was not for them to interfere. The Moses judgment recognised that the so-called threat to 'national security' was a pretext. The Lords decided to turn a blind eye.

TW: The Serious Fraud Office has asserted that their investigation into the Al Yamamah contract was discontinued for reasons of “protecting national security”. In your opinion, does this hold true?

DL: In my opinion, it’s not about national security at all. I believe it’s mainly about commercial interests because the Saudis threatened to cancel another big arms deal if this investigation was allowed to continue [Guardian]. Many of the stories about national security, cooperation on intelligence, threats to British lives and so on have always struck me as largely bogus.

TW: What impact do you think the British government’s response to this case will have on private sector corruption more widely, both within Britain and abroad?

DL: I think what it has done is give Britain the reputation of the dirty man of the West. There has been a pretty steady development in international pressure to cut down on bribery and countries like the United States, France and Germany have been making quite definite efforts to reduce corruption, not only in arms sales but also in other overseas contracts. The one signatory country to the OECD convention that stands out as having done absolutely nothing to enforce it is Britain, which has brought no prosecutions - its prosecution rate is zero [TI G8 Progress Report].

TW: What was the reaction to the reporting in Saudi Arabia?

DL: Their reaction has been to exert political pressure on the British government to have any further serious ruling in this inquiry stopped [Guardian]. The way it is presented by the British government is that the Saudi regime doesn’t like it because they like their privacy. Another way of looking at it is the Saudi regime doesn’t like it because further investigation may reveal that members of the royal family have received large pay offs from these contracts. Also, an investigation may reveal to the Saudi population in general and the world beyond them just how much these people may have profited from arms deals. The one guiding star of the Saudi regime’s behaviour in the last generation has been designed to preserve the regime’s power. They don’t like all this because they feel it threatens the stability of the regime, because people could be upset and hostile at what may have gone on [Independent]. So their reaction, I think, is in a way fairly complacent because the British government has dropped the whole thing. Unfortunately for them they haven’t succeeded in getting the Americans or the Swiss into dropping it, both of which are continuing their own investigations.

TW: As your investigations into BAE Systems progressed, what kinds of challenges have you encountered? How did you overcome them?

DL: We’re only journalists and there is a limit to what we can discover, for instance we can’t penetrate foreign banks. We took two decisions to try and get round the problems we faced. One was to cooperate with journalists in other countries, such as Sweden, Romania and Chile, where these things have gone on, and to share our information with them. The second was to go to the Serious Fraud Office and turn over our information to them, because they of course have powers that we don’t have. They have powers which they used to force BAE, by serving production orders on them, to hand over details of their agents. They also served production orders on the bank involved, Lloyds TSB, to turn over details of the banking transactions they’d carried out for BAE with these offshore payments. The SFO was then able to send letters of request all over the world to other countries, to Switzerland, to the Channel Isles, to South Africa for instance, and get them to go into local bank accounts and identify local agents. They could also talk to Inland Revenue and British embassies. So they could do all kinds of things that we couldn’t do; and all police activity, especially when it involved making inquiries abroad, pretty inevitably leaked quantities of information which we were then able to get hold of and publish. Gradually, bit by bit, the whole picture came into focus of who the agents were, where the payments had been made, how much the payments had been and what had gone on; and a pretty shocking picture it was too. That was how we tried to meet the challenges of trying to investigate a world wide very secret web.

TW: What cost is typically involved in conducting such an investigation?

DL: I have personally travelled all over on these corruption investigations since the British anti-corruption law criminalising overseas bribery came into effect in 2002. I have been to Romania, South Africa, Tanzania and Switzerland, and my colleagues have travelled all over as well. There are also Guardian correspondents all around the world. The investigations have taken up more than three years of mine and my partner Rob Evan’s time, more or less full-time. That’s two journalists’ salaries, plus all these plane tickets, so it is an expensive activity. But we haven’t had the resources to spend money on the scale the SFO or the US Department of Justice have, they have spent millions on this. It is a very expensive and excruciatingly slow business prising out the details of transactions in offshore tax havens, which are designed to be as secure and as secret as possible.

TW: Have you ever encountered any form of intimidation while working as an investigative journalist?

DL: I do quite a bit of teaching and lecturing throughout the world and students often ask me this. I feel rather ashamed really, because the short answer is no. Nobody has ever threatened me or people at the Guardian in that way. If you go out to other countries then yes, journalists do get threatened and hurt and sometimes killed. It’s not really like that here [UK]. The thing I fear the most is being sued, which is a good way of putting you out of action. BAE and the security department could employ people to follow us around and write dossiers about us, but it wouldn’t really matter.

TW: Have you ever experienced challenges to your work overseas and how do these compare to challenges in the UK?

DL: I went to Tanzania to try and investigate an arms deal there. It was a particularly scandalous one in fact, as BAE had paid a commission of more than 30 per cent to local agents to buy an unnecessary radar system [Guardian]. I’m there in a world I don’t understand, a completely different world culturally, socially and politically. You need to make connections with other people who can help you at quite high speed, because otherwise you’re blind in a foreign country. In a way it sort of mimics the actions of the arms companies, as they hire local agents who can arrange everything for them in a culture that they don’t understand. So if you’re a journalist and trying to do this you have to link up with local journalists or campaigners who can tell you what is happening and who is who. In Tanzania I was able to find out pretty quickly who the agent was getting all the money. It was like an open secret out there, although it was a mystery back here. But this is all excruciatingly difficult work to tell you the truth. I think it is difficult for journalists, but I can also see that it is very difficult for the police; the Serious Fraud Office has struggled and they have got much more power than we do.

Normally with this kind of thing the biggest challenge that you face is that you’re going to be sued. What is interesting with the BAE case, I think, is that they took the decision very early on that they were not going to litigate and they were going to say as little as possible about everything to give no oxygen to the story. I think they were very confident of their position because they have so much political support in this country. Obviously we were very careful of what we wrote and you develop some skills for doing this. We used the Reynolds defence [a ruling on the right to publish in the public interest] a lot, everything we wrote was with the Reynolds defence in mind, and it seemed to work. But I think if they would have come after us legally early on then our life would have been a lot more difficult. I think by the time it dawned on them that our investigation ought to be stopped it was getting to late to do it.

TW: Corruption stories can be quite technical and dry. Have you found editors to be generally supportive of investigative stories?

DL: Most of them can be excruciatingly boring. You have to be very careful of what you write and what you do write tends to be sort of dry and technical even before the lawyers have got at it. If you’re not careful you’ve got something that nobody is going to be one bit interested in. We’ve had that problem of reluctant news editors who obviously think that this is rather dull. It’s a battle you have to fight, a lot.

With the BAE files section on the Guardian’s website we were trying to do something new, something that could serve as a resource for other people and actually demonstrate how you can do this kind of thing online and use the possibilities of online - put up original documents and video and so on - to actually make some kind of package that people would find reasonably interesting and accessible.

TW: How do you ensure the accuracy of whistleblower information?

DL: You check a lot and there is no substitute for documents. You get whistleblowers and you ask: “have you got any documents?” Documents, documents and documents.

TW: How do you see the link between civil society and journalists? Do you think the levels of trustworthiness of NGOs vary?

DL: I find one of the most useful things is to try and link up with others across the world, including NGOs like Transparency International, and try and form a sort of counter network. What you are looking at here is something that is globalised, trans-national, and you really need to develop some kind of trans-national networks of your own in order to be able to try and come to grips with it.

Of course, just as the levels of trustworthiness with journalists vary, you find those that you trust and you work with them. You can’t trust everybody, you have to be able to establish who you can have relationships of trust with and similarly you have to be able to develop relationships of trust with the authorities in different countries.