• Sweden edition
 
Sweden 'caved to banker' in Saudi arms deal
Former Defense Minister Tolgfors and Prime Minister Reinfeldt at the time of Tolgfors' resignation. Photo: Tomas Oneborg/TT

Sweden 'caved to banker' in Saudi arms deal

Published: 18 Aug 2014 17:12 GMT+02:00
Updated: 18 Aug 2014 17:12 GMT+02:00

The Swedish government's role in the arms factor was revealed in a media scandal in 2012, eventually prompting then-Defence Minister Sten Tolgfors to resign
 
"The Saudi Affair was a key reason that Tolgfors resigned," Ann-Marie Ekengren, professor of international politics at Gothenburg University, told The Local.
 
"This new information has stirred up an old discussion and brought new life into the issue. The question now is how many more heads may roll." 
 
The project, dubbed "Project Simoom", saw the Swedish Defence Research Agency (FOI, Totalförsvarets forskningsinstitut) allegedly creating a shell company called SSTI to handle dealings with Saudi Arabia in order to avoid any direct links between the FOI and the government, Sveriges Radio (SR) reported. 
 
A Swedish prosecutor began investigating the Saudi Affair in 2012, but dropped the case a few months later because the investigation showed "there was no reason to prosecute". 
 
SR has now revealed that classified documents prove that the Alliance government, which took office in 2006, broke off the deal with Saudi Arabia - but quickly repaired the burned bridges upon pressure from banker Marcus Wallenberg.
 

Banker and businessman Marcus Wallenberg. Photo: TT
 
Wallenberg, a prominent businessman on the board of directors for multiple Swedish companies including Ericsson, Electrolux, Saab, and AstraZeneca, wrote a letter to Sten Tolgfors and said that his "Saudi friends" in the business world were not happy, and that the decision to stop work on the factory "threatened important business interests". 
 
In particular, the government's decision threatened Saudi purchases of the Swedish airborne surveillance system Erieye - produced by Saab Electronic Defense Systems, formerly Ericsson Microwave Systems.
 
"My impression is that it is critical that this issue be solved quickly so that all parties are satisfied - otherwise there is unfortunately a risk that several other cooperation areas, not the least of which is Erieye, may fall into the danger zone", Wallenberg wrote in the classified letter to the defence minister.
 

A Saab 340AEW plane with an Ericsson Erieye radar system attached. Photo: Johan Nilsson/TT
 
The letter was published in full in a new book written by journalists Bo-Göran Bodin and Bo Öhman caleld "The Saudi Weapons" (Saudivapen).
 
After the letter was sent, the current Alliance government, led by Prime Minister Fredrik Reinfeldt, soon resumed the operation, and the prime minister re-approved the project at a government meeting in 2008.
 
State Secretary for Foreign Affairs Frank Belfrage, right-hand man of Foreign Minister Carl Bildt, was particularly involved, SR reported.
 
Bildt has only answered questions via Twitter, where he claimed he had never heard of any such letter and then reflected inquiries to the prior government.
 
Belfrage has referred questions to the Foreign Department in general, which has also kept quiet. The Prime Minister has also declined to comment.
 
"Everything I have to say about the Saudi Affair, I have already said to the Committee on the Constitution," Prime Minister Reinfeldt said on Monday
 
International politics professor Ekengren said silence may not be the most effective strategy.
 
"It may be a better strategy to face the storm," she told The Local. "But they're probably hoping the whole thing just blows over, like it did in 2012."
 
Ekengren said that the revelation of the classified letter had "interesting timing" considering general elections were less than one month away - but she doubted that the issue would develop into a game-changer.
 
The original "Saudi Affair" contract, which specified that Sweden would help build a weapons factory in Saudi Arabia in return for the Saudi purchase of Erieye, was drawn up by the Social Democratic-led government of Göran Persson in 2005 - meaning that the Social Democrat party may also have cobwebs to hide. 
 
"I don't think either party is eager to bring it up," Ekengren remarked.
 
"Just as in 2012, the Social Democrats are aware that this could fall back on them. So it may be an issue, but I don't think anyone is going to try to make it too much of an issue."
 
The Royal Family of Sweden has also been implicated in the drama. 
 
The project was in jeopardy in 2004, when Saudi interest in the Erieye radar system began to wane. A delegation - reportedly led by Crown Princess Victoria - was sent immediately to Saudi Arabia to secure business affairs. 
 

Crown Princess Victoria meeting a delegation from Saudi Arabia in 2008. Photo: Jessica Gow/TT
 
"Without Victoria the delegation would never have gained access to the country's highest political sphere," wrote Bodin and Öhman in their book. 
 
"Saudi Arabia is Sweden's largest trading partner in the Middle East, and Swedish exports to Saudi Arabia are worth nearly 6 billion kronor," Swedish diplomat Gunnar Lund, who accompanied Princess Victoria in the delegation, said in a statement shortly before the trip. "I see good possibilities for expanding our trade."
 
Certain parties, however, are not as engaged in the issue - and are not scared to bring it up. In light of the new information, Jonas Sjöstedt, leader of the anti-weapons Left Party, has demanded that Reinfeldt and Bildt come clean about what happened on their watch.
 
"This is a rotten affair from beginning to end," Sjöstedt told SR. "I think that both Carl Bildt and Fredrik Reinfeldt need to explain themselves."
 
Social Democrat leader Stefan Löfven, who also has a background in the weapons industry, has had few words for the press about the Saudi Affair. On Monday his comments were guarded.
 
"If this is true then it seems very peculiar," Löfven said. "We have made motions in parliament for many years to obstruct weapons exports to certain countries."
 
But while neither Löfven nor Reinfeldt may be eager to pick at the bones of the Saudi Affair, Ekengren said the battle was not over yet.
 
"It may not play a huge role in elections, but this discussion is just beginning."
 
Solveig Rundquist
Follow Solveig on Twitter.

For more stories about Sweden, join us on Facebook and Twitter

The Local/sr (news@thelocal.se)

Your comments about this article

Today's headlines
Swedish teenagers abused on Secret app
File photo: Fredrik Sandberg/Scanpix

Swedish teenagers abused on Secret app

Swedish police are struggling to know what to do with a new batch of criminal reports filed by teenagers upset about a controversial app that allows users to post comments and pictures anonymously. READ  

National
Swedish man beats bus in video challenge

Swedish man beats bus in video challenge

UPDATED: A Swedish runner who filmed himself beating his bus in Sundbyberg in north west Stockholm over the weekend is now planning to a similar challenge on the capital's Metro system. READ  

Regional
Rain causes power cuts across east Sweden
Strong winds are battering Stockholm and the east coast of Sweden. Photo: TT

Rain causes power cuts across east Sweden

Heavy rain and wind have left thousands without electricity in eastern Sweden, with ferries also disrupted by the storm. READ  

National
Sweden's benefit agency website down
Sweden's Social Insurance Agency is experiencing problems. Photo: TT

Sweden's benefit agency website down

Sweden's Social Insurance Agency website was out of action on Monday, as officials promised that the technical fault would not delay benefit payments. READ  

Elections 2014
Budget headache for new coalition partners
Social Democrat economic spokesperson Magdalena Andersson with Per Bo from the Green Party. Photo: TT

Budget headache for new coalition partners

UPDATED: The Social Democrats have been holding talks with the Green party to try and agree on a future coalition budget. But questions remain over how they will work together on issues including defence and nuclear power. READ  

National
US runaway banned from name change in Sweden
'Wanted' photograph of David Hemler used by US Air Force Office of Special Investigations. Hemler lives and works in Uppsala. Photo: Shutterstock

US runaway banned from name change in Sweden

A US airman who deserted from the military three decades ago and moved to Sweden has failed in his bid to get his old name back, because a Swedish court says he can’t prove his identity. READ  

My Swedish Career
Plucked out of Canada for love and guitars
Sharleen in action. Photo: Sebastian Bularca

Plucked out of Canada for love and guitars

For this week's My Swedish Career we meet a Canadian who came to Sweden for love and now works in Lidköping, custom-making guitars. READ  

Regional
Flood and high wind warning in east Sweden
Stockholm experienced heavy rain on Sunday. Photo: TT

Flood and high wind warning in east Sweden

After heavy rain broke off the September sunshine in eastern Sweden on Sunday, forecasters warn more bad weather is on the way. READ  

Tech
World car record on Malmö bridge

World car record on Malmö bridge

The longest electric car parade on a bridge between two countries was formed on the Öresund Bridge between Sweden and Denmark on Sunday, with environmental campaigners breaking several other world records in the process. READ  

National
Two hurt in Helsingborg ferry crash
The damaged ferry is being inspected on Monday. Photo: TT

Two hurt in Helsingborg ferry crash

UPDATED: A ferry crashed into a pier in the port of Helsingborg in southern Sweden on Sunday night, with two people taken to hospital following the collision. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Finest
Gallery
People-watching: September 20th
The 'black gold' of Sweden's west coast.
National
West Sweden prepares for the 2014 lobster premiere
Society
What's on in Sweden
Politics
How Sweden Democrats went mainstream
Politics
Scandinavia and Scotland: closer links?
Blog updates

22 September

Welcome National Geographic! (Stockholm in my American Heart) »

"What comes to mind when you think of the “The Arctic”? Crystal-encased cliffs jutting from the sea, baronial Polar bears scavenging over sheets of cracked ice or a lone explorer heading north into the night. The image my mind invokes is of three sparkling green lines splashed across the sky like graffiti— the Aurora Borealis— our..." READ »

 

19 September

Editor’s blog (The Local Sweden) »

"Happy Friday readers! It sure has been a exciting week in Sweden, where we’re set to get a new Prime Minister after Fredrik Reinfeldt stepped down following Sunday’s elections. The Local blogged live from the key political gatherings across Stockholm. Why not re-visit the action by taking a look at our photos, tweets, videos and analysis? Since the..." READ »

 
 
 
Gallery
Property of the week - Eskilstuna
Sponsored Article
How to start a business in Stockholm
Society
How I became a surf blogger when I moved to Sweden
Gallery
People-watching: September 13th
Society
Why is Stockholm's Södermalm so cool?
Gallery
People-watching: September 11th
Gallery
People-watching: September 13th
Politics
Five possible election outcomes
Politics
Sweden elections: How do they work?
Politics
Sweden elections: Who's who?
Gallery
Property of the week - Hornstull, Stockholm
Analysis
Five differences between the UK and Sweden
Welshman Jonny Luck is now a chef in Sweden
Society
How I opened my own restaurant in Sweden's Malmö
Sponsored Article
Stockholm tech fest: relive the magic
Gallery
People-watching September 8th
Photo: TT
Politics
Feminists fight for first seats
Politics
Immigration cut push from Sweden Democrats
Sheryl Sandberg says women have "low expectations"
Tech
Facebook exec talks women's limits in Swedish business
Politics
Left Party calls for justice and equality
Politics
Green Party wants 'better world' for kids
Sponsored Article
Introducing… Insurance in Stockholm
Sponsored Article
Graduates: Insure your income in Sweden with AEA
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

849
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN