The United Kingdom Serious Fraud Office’s settlement with BAE Systems is a travesty of justice. It is a slap in the face for the people of the countries BAE has allegedly corrupted, the British taxpayer and the British justice system.
BAE has always believed itself to be above the law. Two weeks ago it proved again that it is. In October the Serious Fraud Office said it was going to seek the attorney general’s consent to press overseas corruption charges against BAE after negotiations with the firm broke down. The press reported that this was because the watchdog wanted BAE to pay between £200-million and £500-million, and plead guilty to corruption, but BAE was only willing to pay between £20-million and £30-million, and did not want to plead guilty.
As recently as last Friday morning, the Serious Fraud Office team was still taking formal witness statements in relation to a multibillion-pound deal in which BAE sold jets to South Africa which its air force didn’t want and which are hardly used. More than £100-million in bribes was allegedly paid to agents, senior politicians, officials and political parties. The Serious Fraud Office felt it had a strong case.
Then, out of the blue, the watchdog allowed BAE to plead guilty to a minor accounting offence in relation to Tanzania, and settled for £30-million. It dropped its charges against individuals. There was no mention of why the watchdog dropped charges relating to the Czech Republic, Hungary, Romania and South Africa.
At the same time the United States department of justice announced it was fining BAE $400-million for withholding information about the payment of commissions (aka bribes) in relation to arms contracts. Although the overall headline figures look good — almost £300-million — most of that will go to US (not UK) taxpayers.
The prosecution of BAE for bribery in Africa and eastern Europe was a key test of the UK’s ability to restore its credibility after the dropped investigation into corruption allegations relating to the al-Yamamah arms deal. It has failed.
There is nothing wrong with the watchdog reaching a plea bargain with BAE. It is the terms that are wrong. The lack of an admission of guilt means no details or evidence will emerge about the payments BAE allegedly made in Tanzania, South Africa, the Czech Republic, Hungary and Romania. The people of those countries deserve to know how much they were ripped off by BAE and which officials were being paid off.
At the time of the deal, Tanzania was the world’s third-poorest country, but it was persuaded by the UK government and BAE to buy a multimillion-pound radar system it didn’t need. The almost six million South Africans with HIV/Aids were told their government couldn’t afford the antiretroviral medication they needed to stay alive, yet it could spend billions on unnecessary weapons.
The UK attorney general has clear guidelines on plea bargaining. The plea should reflect the seriousness and extent of the offence. The prosecutor shouldn’t make a second approach unless there is a material change in circumstances. The victims of the offence should be consulted on whether a plea should be accepted. Most of these seem to have been ignored by the watchdog.
The decision not to prosecute the company is cowardice, but the decision not to prosecute any individuals is an affront to the justice system. In what other sphere of criminal wrongdoing would suspects against whom there was good evidence be let off scot-free?
And despite claiming to have turned over a new ethical leaf, BAE continues to use Richard Evans — its former chairman who oversaw the years of alleged corruption — as an adviser on dealings with Saudi Arabia. Richard Alderman, the Serious Fraud Office director brought in after the al-Yamamah debacle, staked his credibility on concluding the BAE case successfully. This settlement shames us all. —