BAE Systems face SFO prosecution in bribery of ‘millions’
Oct 2 2009 by Graeme Brown, Birmingham Post
Defence giant BAE Systems is to face prosecution over bribery allegations following a long investigation.
The Serious Fraud Office (SFO) confirmed it is to pursue claims that the firm paid out millions of pounds to win contracts from a number of countries.
The company has denied the allegations, which follows an investigation into BAE contracts won from countries including Tanzania, Czech Republic, Romania and South Africa.
An SFO statement read: “The Serious Fraud Office has announced today that it intends to seek the Attorney General’s consent to prosecute BAE Systems for offences relating to overseas corruption and will prepare its papers to be submitted to the Attorney when the SFO considers it is ready.”
A separate case concerning a BAE deal with Saudi Arabia was dropped in 2007 on security grounds, following the intervention of then-prime minister Tony Blair.
Criminal charges would be brought under the 2001 Prevention of Corruption Act.
Despite the SFO’s decision to go ahead yesterday, the final decision on whether to proceed will be taken by Attorney General Baroness Scotland.
BAE is one of the UK’s largest manufacturers, making army kit and military hardware, with more than 100,000 employees worldwide.
Liberal Democrat frontbencher Norman Lamb said the situation was a “political scandal”, adding: “I’m pleased that the Serious Fraud Office is proposing to go to the Attorney General. It’s the right course of action and I would expect – provided the evidence is there, which I believe it is – the Attorney General to give approval to a prosecution taking place.”
Senior Lib Dem MP Sir Menzies Campbell said the potential implications were “serious, not just for BAE but for Britain’s defence capacity”.
“The company is the principal contractor in the programmes for the Eurofighter, the aircraft carriers and Joint Strike Fighter which is to go on them, and many other significant procurement projects,” he said. “These developments have a considerable impact on all of these projects.”
BAE said it had acted “responsibly” in its dealings with the SFO and said in statement: “The company notes the announcement by the UK’s Serious Fraud Office and continues to expend considerable effort seeking to resolve, at the earliest opportunity, the historical matters under investigation by the SFO.
“BAE Systems has at all times acted responsibly in its dealings with the SFO, taking into account the interests of its shareholders and employees and the legal advice it has received. If the director of the SFO obtains the consent that he seeks from the Attorney General and proceedings are commenced, the company will deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court.”
The SFO prosecution could prove potentially embarrassing for the Government as it would shed light on the world of arms dealing and reignite interest on the Saudi case.
Sir Menzies said the Government should not interfere in the prosecution. He said: “There should be no question of any repetition of the circumstances surrounding the allegations in relation to BAE and Saudi Arabia.”
Legal expert Christopher Grierson, a partner in bribery and corruption at Lovells LLP international law firm, said the decision to prosecute would send “shockwaves” across the corporate world, adding: “The sheer scale of the penalties being sought, believed to be £1 billion, is unprecedented in the UK.”
