Iraq's first independent media mogul has been running his empire with millions of pounds secretly provided by the Saudi regime, according to allegations made in the high court in London.
Based on documents lodged with the court, Saad Al-Bazzaz - dubbed the Rupert Murdoch of Iraq - was alleged to have received the money for the launch of his newspaper Azzaman, which is now the most widely read daily in Iraq. Mr Bazzaz also controls Iraq's first private satellite TV channel.
The papers emerged during a libel action in which Mr Bazzaz, a former exile in London, was accused of running a sophisticated covert propaganda operation funded by Saudi Arabian intelligence.
Mr Bazzaz's lawyers disputed the provenance of some of the documents.
In the high court yesterday his lawyers accepted that Azzaman had seriously libeled a wife of the emir of Qatar, Sheikha Mouza, in a number of untrue articles published in 2001. The paper and Mr Bazzaz agreed to pay £10,000 in damages and £500,000 in costs to her solicitors, Carter-Ruck.
In the week of the Iraqi elections, the settlement will have repercussions in the Arab world about the independence of the new Iraqi media. Azzaman has built up a reputation for authoritative reporting and robust comment.
Until he left Iraq in 1992 after disagreeing with Saddam Hussein's invasion of Kuwait, Mr Bazzaz headed up the regime's national news agency and the state TV and radio organizations. In the early 80s he was the head of the Iraq Cultural Center in London and after settling in the capital he became a British citizen. In 1997 he set up Azzaman and after the fall of Saddam the operation moved to Baghdad.
In public hearings and judgments in the high court last October, bank records were produced which showed transfers totaling£2.5m from Riyad Bank in Saudi Arabia to Azzaman's NatWest account in Ealing.
Other documents and letters, which Mr Bazzaz's lawyers say are of dubious provenance, suggest the money and political direction of the newspaper was covertly directed by senior officials in Saudi intelligence, which was then run by Prince Turki al-Faisal, the current ambassador in London.
Lawyers for Mr Bazzaz argued that Azzaman was raising issues of importance and it was not possible to check everything in an undemocratic and secretive country such as Qatar.
While accepting that the bank records were probably genuine, they said the question of who financed the paper and whether the Saudis had a covert hand in its journalism were "peripheral" matters and a "pure irrelevance." They denied Azzaman had conducted a sustained or sinister campaign against Qatar.
The judge, Mr Justice Eady, recognized that "running a propaganda campaign is, in general terms, perfectly lawful ... but it is a form of activity distinguishable in kind from independent and serious journalism". He said one of the documents, if proved true, would support the charge "that a propaganda campaign has been waged without regard to objective truth".
Prince Turki said in a statement through a solicitor's firm: "None of the Kingdom of Saudi Arabia, the Saudi intelligence or any of the Saudi officials you mention have or have had anything to do with the newspaper Azzaman."
Mr Bazzaz did not reply to emails sent to his personal and business addresses. His office in London did not answer calls.
© Guardian Newspapers Limited 2005