/ 30 April 2007

UK tries to sabotage BAE bribes inquiry

The United Kingdom is covertly trying to oust the head of the world’s main anti-bribery watchdog to prevent criticism of ministers and Britain’s biggest arms company, BAE, The Guardian has learned.

The effort to remove Mark Pieth comes as his organisation has stepped up its investigation into the British government’s decision to kill off a major inquiry into allegations that BAE paid massive bribes to land Saudi arms deals.

The government halted the criminal investigation into the BAE Saudi allegations in December, citing the impact it could have on cooperation with Saudi Arabia in the war on terror. Related probes into allegations of BAE bribery in South Africa and the Czech Republic continue.

British diplomats are seeking to remove Professor Mark Pieth, a Swiss legal expert who chairs the anti- corruption watchdog of the Organisation for Economic Cooperation and Development (OECD), claiming that he is too outspoken.

At the OECD meeting in Paris in March, British officials tried to stop Pieth from addressing a press conference at which he announced his agency was to conduct a formal inquiry into the government’s decision to terminate the BAE investigation. They then privately briefed other diplomats involved with the OECD, saying he should be removed.

When that failed, the campaign against him continued unabated with further back-channel complaints.

But concern about the conduct of the British diplomats filtered back to Pieth, who confirmed this week that he was aware of the attempts to remove him. ”I am aware that the British ambassador was asking at the time for action to be taken against me,” he said.

Pieth refused to elaborate, but he is understood to be privately furious at the way he has been bad-mouthed.

A source at the OECD added: ”The UK’s representatives were sent to Paris to emasculate the [watchdog] and ensure they did not say anything publicly. They failed and were not pleased. They behaved in a manner that would not have been out of place in a boxing ring.”

In recent weeks, the UK has demanded that OECD officials should be prevented from making any future statements about the BAE case while the inquiry is ongoing. But the request has hit a brick wall. An OECD source said: ”The British do not have support from anyone else on this.” The director general of the OECD, Angel Gurria, also believes that the UK is encouraging a smear campaign against him.

Last Friday, he was accused in a British magazine of giving a job to his daughter, getting free football tickets and spending â,¬733 000 to refurbish his Paris flat in what was described as ”the poshest bit of the swanky 16th arrondissement”.

The article in The Economist quoted an unnamed north European ambassador expressing fears that ”the staid old body [OECD] … may drift into dangerous waters” under Gurria, the former finance minister of Mexico.

Following the allegations, Gurria issued a combative statement, saying he was under UK media attack by ”innuendo, gossip and partial truths”.

”It is no surprise that this attack occurs at this time,” he added.

Britain’s ambassador to the OECD, David Lyscom, admitted this week that he had talked off the record to The Economist but added: ”The UK had absolutely nothing to do with planting the story.” The UK partly controls OECD purse strings, and also has the power to veto Pieth’s reappointment, due next January.

Sensitivity over the OECD inquiry has become more acute since its 36-strong panel announced in March detailed plans to mount a fresh official inspection of Britain because of the manner in which the BAE inquiry had been halted.

It also rebuked the UK for failing to keep its promises to modernise its inadequate corruption laws, under which no one has yet been prosecuted.

The UK also faces a legal challenge in London. Two campaign groups, the anti-corruption group The Cornerhouse and the Campaign Against the Arms Trade, filed detailed pleadings last week alleging that Britain had broken the treaty banning corrupt payments by companies to foreign politicians and officials. — Â