Britain's biggest defence contractor, BAE Systems, allegedly paid millions of dollars into a slush fund for a leading member of Saudi Arabia's royal family with the knowledge of its chief operating officer, the BBC says in a television programme to be screened Tuesday.
BAE, formerly British Aerospace, laid on luxury hotels, chartered aircraft, limousines and exotic holidays for Prince Turki bin Nasser and his entourage, the broadcaster's Money Programme alleges, according to a press release.
The prince was responsible for running the Saudi side of Al Yamamah, the biggest arms sale in British history, worth billions of dollars in orders to BAE.
Peter Gardiner tells the programme how his small travel agency became a major conduit for money from BAE's alleged secret fund.
"Going back to 1989 it was 200,000 pounds or 300,000 pounds (a year). Then it moved to about a million pounds a year and quickly to two and three and by the time it was completed it was moving up towards seven million pounds a year," Gardiner said.
Overall, Gardiner reckons, the five-star hotels, flights, limousines and security the Turki family enjoyed that summer cost BAE around two million pounds (2.9 million euros, 3.6 million dollars).
"This is way beyond the life style of most film stars," Gardiner told the programme. "Film stars were quite often around at the large hotels that we were visiting, but they wouldn't be living in this level of affluence."
He said he was also required to provide money to the Saudi prince and his entourage. Sometimes as cash, sometimes as a bank transfer to pay off a credit card bill. The bank transfers, Gardiner recalls, averaged 100,000 dollars.
Another interviewee, Edward Cunningham, who was given the task of looking after the Saudis who mattered to BAE, says he settled gambling bills and arranged prostitutes for Saudis visiting London on Al Yamamah business.
The executive in charge of the Al Yamamah project at the time, Steve Mogford, authorised a series of slush fund invoices for payment with just three words: "OK to pay", according to the BBC.
Mogford, now BAE's chief operating officer, also halted an internal BAE investigation which might have revealed the true nature of the slush fund, the broadcaster said.
BAE denied the allegations, calling them "ill-informed and wrong".
It said in a statement: "The facts are that the Al Yamamah contract, which is the subject of these allegations, is a contract between the governments of the United Kingdom and the Kingdom of Saudi Arabia.
"BAE Systems can state categorically that there is not now and there has never been in existence what the media refers to as a 'slush fund'."