BA(E)d Times

One of Britain’s largest manufacturers, BAE Systems, has been the centre of an investigation into corruption and bribery spanning 20 years. Illegal payments of millions were allegedly made and fines amounting to more than £280 million will have to be paid to both the Serious Fraud Office in the United Kingdom and the Department of Justice in Washington, reaching record corporate punishment fines.

Yet nobody has actually been held accountable for anything. The only prosecution into an individual has been dropped and a firm line has been drawn under the whole fiasco. BAE says it ‘regrets the lack of rigor in the past’, although I’m sure that there should be a few more things on that list. Either the head honchos have a regrettable lack of integrity, honesty and respect for international relations, or their regrettable naivety has led to regrettable oversights resulting in regrettable worldwide misconduct. It’s not really what we need from our leading defence and aerospace company, even if they are partly responsible for the magnificent Eurofighter Typhoon.

The admissions include false accounting and making misleading statements, an example including holding their hands up to having written an ‘untrue letter’ to the US authorities in 2000. Maybe I’m being unfair; after all there are always alternative explanations for things. There could, for example, be a band of executives at BAE who’ve forgotten the fundamentals of numeracy and literacy. In this case the company could do with investing some of its extra cash, usually reserved for encouraging arms deals with reluctant investors, in some adult education. Once they’ve remembered how to add up correctly they can go back to work. Unfortunately the alternative seems more likely, that if you’re in big business you can lie and cheat all you like, as long as you’ve got enough cash to pay your way out of it.
Corruption can’t have a place in international trade, whether it be trade in fighter jets, weapons systems or donuts. It simply undermines the relationships necessary for maintaining national and international security. Somehow though, the investigation into allegations concerning BAE has come to a close now that they’ve thrown some more money in the right direction.

There still remain concerns about the company’s dealings with the Czech Republic, Hungary, Romania and South Africa. In 2006, Tony Blair accepted responsibility for closing an enquiry into mysterious payments surrounding the sales of al-Yamamah fighter planes to Saudi Arabia after pressure from BAE Systems and from Saudi Arabian officials who, it’s reported, threatened to rethink security agreements with Britain. This didn’t do much good for the company’s reputation.

In 2001 cabinet minister Clare Short objected to BAE’s divisive sale of an extortionately priced radar system to Tanzania. She said it ‘stank of corruption’. The World Bank deemed the purchase to be overpriced. The Civil Aviation Authority felt it unnecessary. Cabinet ministers made attempts to stop the purchase but were overruled by the Prime Minister. The Serious Fraud Office then found that over £9 million were diverted into offshore bank accounts accessed by Tanzanian politicians and officials. None of this would stand alone as evidence for corruption, however you would have thought that anyone with a bit of knowledge about the country’s military situation would have had alarm bells ringing at a deafening pitch: Tanzania didn’t have a military air force. I’m not surprised then, that a poverty stricken country with no military aircraft, didn’t really want an expensive, out of date, military air traffic control unit when a run-of-the-mill civilian one would do for half of the price. I’m also not surprised that the politicians took, when offered, such large amounts of money to sweeten the deal.

The only admission made by BAE was a breach of the 1985 Companies Act, after the company failed to record payments made to a marketing advisor, although I fail to be convinced that this is their only wrong-doing in the fiasco. Whether BAE admit to corruption or not, the resignation of Tanzanian politician Andrew Chenge, after the discovery of £500,000 appearing in his Jersey bank account at the time of the deal, leaves me just a little sceptical of the company’s conduct. The Serious Fraud Office is convinced of matters going beyond the admission of failing to keep “reasonably accurate accounting records”. In fact, they are handing over a large portion of the UK fine as an ex gratia payment for investment in programmes to benefit the people of Tanzania. One can only hope it ends up where they say it will, but if the suppliers of our defence systems can’t be trusted and the Serious Fraud Office can’t be trusted, who can?