The defence contractor could then have moved on, flourishing the ethical new leaf it turned over ostentatiously last year. Instead, the company chose to engage in what appears to be a game of brinkmanship with the Serious Fraud Office. By Wednesday night’s deadline, neither side had blinked. Yesterday the SFO announced it would seek permission from Attorney General Lady Scotland to pursue the case. It includes alleged bribes or secret payments on sales to Tanzania, Romania and South Africa, and a deal to lease warplanes to the Czech Republic.
Of course, this is not the first time the SFO has crossed swords with BAE. Three years ago the agency’s reputation was damaged when it appeared to capitulate to a demand from Tony Blair to call off a much bigger investigation into alleged bribery of Saudi Arabian officials by BAE Systems over the £1.6bn sale of fighter aircraft. The then Prime Minister claimed the probe threatened national security and British jobs. As the Saudis were threatening to switch a major order from BAE to a French company unless the SFO backed off, this looked like a government giving in to blackmail.
The whole affair made a mockery of the Labour government’s pretensions to an ethical foreign policy and suggested political interference with the course of justice.
This must not happen again. Lady Scotland, fresh from an uncomfortable week in the spotlight, is going to be under pressure, as Lord Goldsmith was in 2006. Lobbyists will argue that there is a grey area between
corruption and “facilitating a deal”. MPs, including Glasgow ones, with BAE jobs in their constituencies will argue that employment will be lost if BAE is made an example of. However, it is in the wider public interest that this investigation is allowed to run its course.
In this country, we live by the rule of law. How can Britain lecture other countries about “good governance” if corruption is tolerated here? Rich nations can best help eliminate corruption in poor ones by prosecuting companies that pay bribes.
A particularly unsavoury transaction was BAE’s sale of a $40m military radar system to Tanzania, a country with no air force. It is alleged that the deal was facilitated by a $12m payment to a Tanzanian middleman. Allocating the same sum to primary education would have provided classrooms and textbooks for every child in the country, two million of whom had never been to school. Yet these deals are done in our name, supported by government subsidies. BAE’s shareholders, including those who invest our pensions, profit from them.
Some will argue that BAE has cleaned up its business practices and the SFO should instead pursue former executives who were less than scrupulous but companies are legal entities and should be held accountable. In fact, anti-corruption legislation is needed to make this easier.
This is not about a choice between jobs and morals. Today BAE generates more than half of its sales in the US. It is the Pentagon’s fourth biggest contractor. Yet while the SFO was bullied by the British government into dropping its investigation into the Saudi contract, the US Justice Department continues to investigate allegations about illegal BAE payments to a Saudi prince. In Britain, too,
the message must go out that no-one is above the law.
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