BAE chiefs face renewed corruption inquiry
From The Sunday Times
December 9, 2007
BAE chiefs face renewed corruption inquiry
David Leppard
THE Serious Fraud Office (SFO) is to relaunch a criminal investigation of alleged corruption at Britain’s biggest arms company, BAE Systems.
Whitehall officials say dozens of senior BAE executives are to be interviewed in the next two months about alleged bribery involving more than £80m in secret commissions. The money is said to have been paid to middlemen involved in lucrative government arms contracts in South Africa, Tanzania, Romania and two other countries. The new SFO interviews come only a year after Tony Blair and Lord Goldsmith, then attorney-general, controversially halted a separate corruption probe into BAE’s arms dealings with Saudi Arabia.
The government stopped that inquiry after the Saudis threatened to end intelligence cooperation in the war on terror, provoking a wave of international criticism.
Among those to be interviewed under caution in the new investigation will be Sir Dick Evans, BAE’s former chairman, who is still a consultant with the company. Mike Turner, the outgoing chief executive, is also expected to face questions. Both men adamantly deny any knowledge of wrongdoing.
Senior BAE managers are to be asked about six separate defence deals where questions have been raised about commission payments to middlemen said to be working for the company. These include £75m alleged to have been paid in connection with a £1.6 billion deal to sell Saab Gripen fighter jets to South Africa, one of the country’s biggest arms deals. The Gripen is produced by the Swedish firm Saab, in which BAE has a 20% stake.
The SFO plans to ask BAE executives whether they had any knowledge of bribes paid by the middlemen to South African officials and ministers in order to win the contract.
The SFO is also examining a £116m contract for BAE to refurbish and upgrade two British frigates that had been sold to Romania in 2003.
There have been allegations that an unidentified Romanian politician received a £6m secret commission in connection with the deal. BAE executives can also expect questions about several other deals including: A planned £1 billion contract to sell Gripen jets to the Czech Republic in 2001. Published documents allege that secret arrangements had been set up to pay commissions through offshore companies to three agents with links to the Prague political establishment. The sale of a £28m radar system to the government of Tanzania in 2002. There are claims that the contract price was corruptly inflated and that commissions worth 30% of the total contract price were paid to Tanzanian agents. Contracts involving the sale of surplus frigates and other arms to Chile. It is alleged that secret commissions may have gone to General Augusto Pinochet, the former head of state accused of torturing opponents.
BAE has consistently denied allegations of corruption and insisted it complied fully with antibribery legislation. Earlier this year it appointed Lord Woolf, the former lord chief justice, to chair a panel to review its business ethics.
A spokesman said this weekend: “BAE Systems continues to cooperate fully with the SFO investigation. As this is an ongoing criminal investigation, it would be inappropriate for us to comment on the substance of it.”