BAE set to be charged

In a move that may have significant consequences for South Africa’s moribund arms deal investigation, the United Kingdom’s Serious Fraud Office (SFO) will seek to prosecute multinational defence company BAE Systems.

In a brief statement issued on Thursday, the SFO announced that it intended to seek the required consent of the UK attorney general ”to prosecute BAE Systems for offences relating to overseas corruption”.

It is not yet clear whether this includes the South African leg of the UK investigation. South Africa bought Hawk jet trainers and Gripen fighters worth about R30-billion from the BAE-Saab consortium in the controversial special defence procurement programme of the late 1990s.

The SFO said only that the intended prosecution ”follows the investigation carried out by the SFO into business activities of BAE Systems in Africa and Eastern Europe”. Reports have suggested that the SFO’s strongest cases related to allegations of corrupt payments, equivalent to millions of rand, made to secure contracts in Tanzania and the Czech Republic.

Significant progress was also made at the UK end of the South African deal, with the Mail & Guardian revealing in January 2007 that the SFO had evidence of so-called ”commission” payments in relation to the South African deal amounting to about R1-billion. Among the largest beneficiaries was Fana Hlongwane, former adviser to Joe Modise, the late defence minister.

The M&G’s information came from a June 2006 request by the SFO for legal assistance in following the money trail in South Africa to see if money had flowed on to politicians or officials.

However, SFO attempts to pursue the investigation locally have been characterised by bureaucratic stonewalling by the department of justice — despite the fact that the Scorpions considered the UK evidence strong enough to launch their own investigation and conduct raids on Hlongwane in November 2008.

The disbanding of the Scorpions has left the South African investigation without resources, but the SFO decision may increase pressure on the Hawks and the justice department to offer greater assistance and cooperation than has been the case up to now.

Indications are that SFO director Richard Alderman is angry about BAE’s perceived intransigence. Confidential negotiations to persuade the company to accept a plea bargain came to a head this week after BAE ignored a deadline of September 30 that Alderman had set for the company.

But the decision to prosecute is likely to be the subject of intense lobbying with UK attorney general Patricia Scotland, who must give her consent. Alderman’s predecessor, Robert Wardle, succumbed to crushing pressure in 2006 to end the Saudi leg of the SFO’s six-year investigation, with former prime minister Tony Blair citing the supposed imminent threat of losing Saudi cooperation in the war on terror if Wardle proceeded.

In its response BAE said: ”If the director of the SFO obtains the consent that he seeks from the attorney general and proceedings are commenced, the company will deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court.”

DA spokesman on defence David Maynier said the prosecution of BAE represented ”the last best hope for us to get to the bottom of what really happened during the arms deal”.

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Sam Sole Author
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Stefaans Brmmer
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