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UK FEARS U.S. DERAILING OF SAUDI DEAL

LONDON [MENL] -- Britain has been concerned that the United States could derail an estimated $10 billion aircraft deal with Saudi Arabia.

Industry sources said the United States was preparing to investigate BAE Systems, which won a project to supply 72 Eurofighters to the Royal Saudi Air Force. The sources said the Bush administration wants to determine whether BAE violated U.S. anti-corruption laws in establishing an alleged $100 million slush fund for Saudi princes responsible for military procurement.

"There are still concerns over various other investigations," British parliamentarian David Borrow said. "And that part of the reason for the U.S. wanting to carry out its own investigation is to put the Saudis off doing a deal with the UK."

Borrow, a member of the House Defence Select Committee, said the administration wants to intimidate BAE, which seeks to expand its presence in the United States. Under U.S. law, a company that violated anti-corruption laws could be banned from government contracts. BAE has been a leading partner in the U.S.-led Joint Strike Fighter project.

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