Campaigners challenge BAE corruption plea bargain

IssueMarch 2010
News by Kaye Stearman

On 5 February, a brief press release from the serious fraud office (SFO) announced that it had reached a settlement with BAE Systems, the UK’s largest arms company. Four months earlier, the SFO had made headlines announcing that it intended prosecute BAE for alleged bribery and corruption relating to arms deals in the Czech Republic, Romania, South Africa and Tanzania.

The settlement saw all charges dropped in regard to the first three countries, with BAE pleading guilty to minor “accounting irregularities” in its 1999 sale of a radar system to Tanzania, for which the SFO proposed it should pay a fine of £30 million.

On the same day, the US department of justice announced its own settlement with BAE. Here, BAE admitted making false statements in 2000-2002 in relation to BAE’s arms deals with Saudi Arabia and passing covert payments through the US in regard to its arms deals in central Europe. The fine was substantially larger than in the UK – $400 million (£256 million).

Just one week later, on 12 February, lawyers acting on behalf of Campaign Against Arms Trade (CAAT) and The Corner House issued a letter to the director of the SFO laying out their intention to request a judicial review of the BAE plea bargain. The basis for the legal challenge is that the SFO failed properly to apply prosecution guidance (including its own guidance).

In particular, we contend that the plea agreement fails to reflect the seriousness and extent of BAE’s alleged offending, which includes corruption and bribery.

Investigations into alleged corruption in three countries have simply been dropped, meaning that their citizens still do not know the truth about arms deals being done in their name and with their money, funds that could have been spent on urgently needed social development, health and education. The British public has also lost out.

The arms industry, including BAE, is heavily subsidised by taxpayers, to the tune of around £9,000 a year for each job.

A special government department, “UK Trade & Investment Defence & Security Organisation” (UKTI DSO), exists purely to supports arms exports.

Topics: Arms trade