SFO raids four premises in BAE contracts probe
BAE Systems handed £280m criminal fines in UK and US
From the BBC:
't Bungling Baron Waste o' Space werr unavailable ferr comment, tha' knaws...
BAE Systems is to pay a fine of $400m (£250m) after pleading guilty to a charge of conspiring to make false statements to the US government.
The UK's largest defence group has also reached agreement with the UK Serious Fraud Office to plead guilty to breach of duty to keep accounting records.
That case is in relation to payments to a former marketing adviser in Tanzania.
In relation to the UK offence, it will pay a penalty of £30m, some of which will be a fine, some a charity payment.
The charity payment will go to Tanzania.
The last of the offences was committed in 2002. BAE has since reformed the way it conducts business.
However, BBC business editor Robert Peston said that pleading guilty to criminal charges in Britain and America was "a serious embarrassment to BAE".
Saudi deal
The US fine, agreed with the Department of Justice, relates to undertakings it gave to the US government in 2000 and 2002 in relation to the probity of the way it conducts business.
It is understood that the Department of Justice concluded that BAE breached these undertakings in relation to payments and support services provided to an unnamed Saudi official, as part of the £40bn al-Yamamah contract to supply military equipment to Saudi Arabia.
There was also an infringement of restrictions on the supply of sensitive US technology in deals to supply aircraft in Hungary and the Czech Republic.
Although the UK penalty is far less than Britain's Serious Fraud Office was seeking, it is thought to be a record for a criminal offence by a company in the UK.
The British charge stems from an £88m contract signed in 1999 to supply a radar system to Tanzania.
"Although the fines will be seen by some as damaging to one of the UK's most significant companies, BAE's directors are relieved at what they see as a final settlement of a controversy that has dogged the company for years," added our business editor.
BAE has been advised by its lawyers that the fines are fair.
The UK's largest defence group has also reached agreement with the UK Serious Fraud Office to plead guilty to breach of duty to keep accounting records.
That case is in relation to payments to a former marketing adviser in Tanzania.
In relation to the UK offence, it will pay a penalty of £30m, some of which will be a fine, some a charity payment.
The charity payment will go to Tanzania.
The last of the offences was committed in 2002. BAE has since reformed the way it conducts business.
However, BBC business editor Robert Peston said that pleading guilty to criminal charges in Britain and America was "a serious embarrassment to BAE".
Saudi deal
The US fine, agreed with the Department of Justice, relates to undertakings it gave to the US government in 2000 and 2002 in relation to the probity of the way it conducts business.
It is understood that the Department of Justice concluded that BAE breached these undertakings in relation to payments and support services provided to an unnamed Saudi official, as part of the £40bn al-Yamamah contract to supply military equipment to Saudi Arabia.
There was also an infringement of restrictions on the supply of sensitive US technology in deals to supply aircraft in Hungary and the Czech Republic.
Although the UK penalty is far less than Britain's Serious Fraud Office was seeking, it is thought to be a record for a criminal offence by a company in the UK.
The British charge stems from an £88m contract signed in 1999 to supply a radar system to Tanzania.
"Although the fines will be seen by some as damaging to one of the UK's most significant companies, BAE's directors are relieved at what they see as a final settlement of a controversy that has dogged the company for years," added our business editor.
BAE has been advised by its lawyers that the fines are fair.
Dimmer Switch, actually it was Wrathmonk who first broke the story.
Hopefully this will bring the whole unsavoury business to a conclusion and BWoS will now move on.
Hopefully this will bring the whole unsavoury business to a conclusion and BWoS will now move on.
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This is a great result for Bae... A fine of £280m is peanuts to a company of this size and thankfully the company has not been found guilty of anything....If it had then it would have meant the dole queue for a lot of British workers.
Below the Glidepath - not correcting
thankfully the company has not been found guilty of anything....If it had then it would have meant the dole queue for a lot of British workers.
So in summary, they bribed, they cheated (other bidders), they lied, they got caught out and they were fined $400 million dollars. Hardly my definition of not being found guilty, but I suppose it all depends on when your moral compass was last swung.
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While I would not condone the behaviour, how much of the fuss was raised by companies who got beaten to the deal? Are we sure there was no hint of sour grapes? Yes bribes/backhanders/sweeteners are part of the culture in some countries, if you want to work with them then you play the game.
Personally I'm glad that it may have reached a conclusion, I have too many friends who would suffer if BAE folded.
Ogre
Personally I'm glad that it may have reached a conclusion, I have too many friends who would suffer if BAE folded.
Ogre
How about looking into the "irregularities" on home soil. What about the multi-millions we pour into this company from our overstretched defence budget that prop up jobs and get 1*-4*s some senior jobs in the company (including some civil servants at DE&S)? When I think about the money we have paid this company "over and above" the market rate in order to save British jobs, only to see them make massive profits year on year - it is "criminal".
Here's a list of eqpt to show their pedigree:
Tornado F3 - delivered with a concrete nose and engines that surged.
Typhoon - overan about 7 years and delivered with interim capability and clearance - plus increased cost.
FRES - underachieving and overrunning.
Nimrod MRA4 - lost count how long it is overrunning (10yrs?) plus costs!
HERTi - tried making this work a couple of times now at significant cost to the taxpayer.
Mantis - Who knows! But I bet it will be more expensive compared to off the shelf solutions.
Well aren't they a pretty bunch of cost overuns, under achievement of original spec and late deliveries? The late deliveries and cost overuns are one of the main reasons we have seen our forces dwindle from 300,000 personnel in the early 90s to just 180,000 in recent years - our increasing equipment tariff is often quoted as the reason. So you've saved 30,000 jobs in Blackpool/Preston/Hull and lost 120,000 jobs in the Armed Forces - well done all involved!
Come on SFO and NAO get a wiggle on and get investigating! We need to get them to cut the cost of their equipment, get closer to delivery schedules and stop trying to please the share-holders and start looking after its customers!
Rant over
LJ
Here's a list of eqpt to show their pedigree:
Tornado F3 - delivered with a concrete nose and engines that surged.
Typhoon - overan about 7 years and delivered with interim capability and clearance - plus increased cost.
FRES - underachieving and overrunning.
Nimrod MRA4 - lost count how long it is overrunning (10yrs?) plus costs!
HERTi - tried making this work a couple of times now at significant cost to the taxpayer.
Mantis - Who knows! But I bet it will be more expensive compared to off the shelf solutions.
Well aren't they a pretty bunch of cost overuns, under achievement of original spec and late deliveries? The late deliveries and cost overuns are one of the main reasons we have seen our forces dwindle from 300,000 personnel in the early 90s to just 180,000 in recent years - our increasing equipment tariff is often quoted as the reason. So you've saved 30,000 jobs in Blackpool/Preston/Hull and lost 120,000 jobs in the Armed Forces - well done all involved!
Come on SFO and NAO get a wiggle on and get investigating! We need to get them to cut the cost of their equipment, get closer to delivery schedules and stop trying to please the share-holders and start looking after its customers!
Rant over
LJ
RD, I also wonder what they would find if they looked into aircraft sales to Israel and others over in the middle east as well from other suppliers.
LJ - just remember that most of the delays/overruns or whatever title you want to hang on them is not allways the fault of the prime contractor (I do believe that the F3 radar issue was caused by a company that was not a BAES one at the time). When the customer keeps moving the goalposts/adding additional capabilities that they did not want when the original design request was quoted for, especially when they keep doing this during the development/testing phase, how is anyone supposed to cope with that.
Added to that they then expect all the additional bells and whistles to still be added/tested within the original timescales and cost (they would still waffle and delay into service dates because they could never afford the equipment in the first place), it's also odd that other major companies who also have the same difficulties with their customers do not appear to come in for half the criticism that BAES does.
LJ - just remember that most of the delays/overruns or whatever title you want to hang on them is not allways the fault of the prime contractor (I do believe that the F3 radar issue was caused by a company that was not a BAES one at the time). When the customer keeps moving the goalposts/adding additional capabilities that they did not want when the original design request was quoted for, especially when they keep doing this during the development/testing phase, how is anyone supposed to cope with that.
Added to that they then expect all the additional bells and whistles to still be added/tested within the original timescales and cost (they would still waffle and delay into service dates because they could never afford the equipment in the first place), it's also odd that other major companies who also have the same difficulties with their customers do not appear to come in for half the criticism that BAES does.
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No...it was found guilty of LYING about the way it conducts business
So in summary, they bribed, they cheated (other bidders), they lied, they got caught out
Bae admitted to conspiring to make false payments. Thats not lying, its not bribery its conspiring to make false payments. A mere administration charge.
We really should be very thankful that this is now over and British people can rest assured that their jobs are safe.