BAE scandal. "National security" or simply "commercial interests"?
May 18 2008 ~ Top BAE executives held in Texas
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FT "Mike Turner, the chief executive of BAE Systems, and Sir Nigel Rudd, a non-executive director, were detained last week by US authorities investigating bribery allegations.
The two, who are among the UK’s most senior businessmen, were issued with subpoenas by officials from the Department of Justice as they landed at Houston airport last Monday. They were kept for about half an hour and had their documents, as well as personal electronic equipment, examined....persistent allegations that bribery was involved in the contract, with stories of slush funds used to entertain Saudi officials and royalty. BAE has always denied any wrongdoing ....
BAE declined to comment on the details of the subpoenas but stressed that neither man was prevented from entering the US and that Mr Turner was now back in the UK..... The detention of the executives illustrates the gulf that exists between the two countries in their attitudes to pursuing white-collar crime. David Gourevitch, a US white-collar defence attorney, said British people were not necessarily used to executives being pursued and questioned aggressively. US prosecutors, on the other hand, were less likely to make a distinction between alleged white-collar criminals and “real” criminals in the tactics they employ, including aggressive questioning..."
May 8 2008 ~ "what explains this sudden scramble by BAE for the moral high ground?"
- Independent ".... The truth is that this all has rather more to do with commerce than morality. Lord Woolf's report is little more than ethical window-dressing. It was commissioned last year to deflect a parallel US Department of Justice inquiry into the company's affairs.
And Mr Olver's invitation for the SFO to look again at its dealings is not as principled as it seems, either. He believes a review of the relevant files will show that an SFO prosecution would have little chance of success. Mr Olver seems to be taking heart from the recent verdict of Lord Justice Moses, ruling on the dropping of the initial investigation, who noted that the irregular payments involved in this deal might be seen as legitimate "commissions" rather than bribes.
These payments might or might not have been illegal, but they were almost certainly unethical....
The High Court was quite right to rule last month that it was unlawful for the SFO to abandon the case on "national security" grounds. There is a compelling case for this probe to picked up again. Even the company in question now wants it to be revisited. There can be no more excuses. It is time some daylight was shone on this murky deal. "
May 7 ~ if a company is free of every taint, why does it require something called an "ethical audit"?
- Herald "Time and again, Mr Blair risked unpopularity by doing what he "knew to be right". One thing he knew without hesitation in December of 2006 was that the Serious Fraud Office (SFO) must not endanger Britain's security by looking too closely at allegations that the defence contractor BAe Systems plc bribed various Saudis massively.
The government's own documents, never mind Mr Blair's public comments, recall a meeting between the then prime minister and his "independent" attorney general, Lord Goldsmith. The former said to the latter that "higher considerations" were at stake while the SFO nosed around the alleged payment of £1 billion to the Saudi Prince Bandar and his family. A staunch Gulf ally was threatening to withdraw "intelligence co-operation" vital in the war against al-Qaeda unless the investigation was halted. Assorted issues. First, as a general rule, politicians have no right to interfere in a criminal case. Second, matchless Saudi intelligence did not prevent Saudis assaulting the Twin Towers. Third, the House of Saud, courted so eagerly by Thatcher, Major, Blair and Brown, is no-one's idea of democracy's bastion.
Finally, since BAE and Prince Bandar had both insisted on their absolute innocence of any wrong-doing, why would Mr Blair, or the Saudi government, be so concerned? Call me naive about the world of business, as many do, but if a company is free of every taint, why does it require something called an "ethical audit"? Such, along with 23 other recommendations, was nevertheless the conclusion offered yesterday by Lord Woolf, a former Lord Chief Justice invited by the company to run the moral committee rule over its corporate "culture"....."
Wednesday May 7 2008 ~ Yesterday's press conference in which Lord Woolf presented his report on BAE's "ethics" was an uncomfortable affair.
- Guardian "The 75-year-old former lord chief justice bridled when he was asked by the Economist about the £6,000 a day paid him by BAE to lead an inquiry on behalf of the arms company...."
July 16 2007 ~ "Britain's definition of national security might have to change under these circumstances."
- Guardian
The US justice department has sent its formal request for mutual legal assistance to the Home Office in London. This was confirmed by the SFO at the weekend. If ministers refuse to cooperate, they will face a fresh international crisis. The OECD, which polices international anti-bribery treaties, has already accused Britain of potentially breaching those treaties.
If British ministers defy the justice department, this could go on to endanger reciprocal cooperation and intelligence-sharing with the US. Britain depends far more heavily on Washington than it does on Saudi Arabia. One senior source close to the US department of justice told the Guardian: "Britain's definition of national security might have to change under these circumstances."
July 9 ~ Treasury plans to shut arms sales department
- The Guardian's
Rob Evans and David Leigh
reported
that the Treasury is planning to disband the government's controversial arms sales department. Former Treasury cabinet minister Stephen Timms launched proposals earlier this year to close down the secretive unit on the grounds that it subsidises profitable weapons giants such as BAE, Britain's biggest arms firm. According to Westminster sources, the Treasury's industrial productivity section argued that the taxpayer should not continue to subsidise an "anachronistic" department which had gained too much influence within Whitehall. "....Deso, set up in 1966 when the arms industry was largely state-owned and was mainly concerned with selling off surplus equipment, spends £15m a year directly on helping British arms firms to sell equipment abroad. It also lobbies within Whitehall for export licences for sales to sometimes controversial regimes. Opponents say no other British industry is supported by such a large government-funded machine and that Deso, which is always headed by an arms company executive, relentlessly promotes the industry's interests within the government. ..."
June 16 2007 ~ ".....Tony Blair's assertion this week that people should hold him personally and entirely to blame for the BAE affair at least had the allure of novelty.
- Marina Hyde in the Guardian
"Admittedly, even the prime minister lacks the brass neck to have quavered his standard "I only did what I thought was right" defence in these particular circumstances. Once a £75m Airbus has been custom-sprayed in the colours of the Dallas Cowboys and presented to a Saudi prince as a birthday gift, the decadence has attained such hilariously extravagant heights that to dress it up as part of an ethical crusade would tax a moral relativist of considerably higher calibre than our PM....
....perhaps you're charmed by the usual defence of realpolitik getting another run out, coupled with the offensively vague mention of "national security" as justification for anything one pleases. How well worn is that Blair schtick of deliberately confusing arguments in a manner that allows perfectly legitimate objections to his modus operandi to be dismisssed as naivety or hysteria. ...... Then of course there's the business of unelected officials making key decisions, or the total non-separation of powers as far as the attorney general's role is concerned..."
June 16 2007 ~ BAE Systems has announced the appointment, of a four-member independent committee of experts to evaluate the company's policies relating to ethics and business conduct.
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The committee will be chaired by Lord Woolf, the former Chief Justice of England and Wales.
In a statement, BAE said the committee would review the company's adherence to "applicable'' anti-corruption legislation and international treaty obligations.
"It will reach a judgement as to how the company's policies and procedures benchmark against industry standards, whether they are sufficiently robust to ensure compliance with its ethical business policies generally and in particular to detect and prevent violations of anti-corruption laws,'' it said.
Meanwhile, according to The Hindu "..... BAE claimed that all payments made in relation to the controversial Al-Yamamah deal were "lawful.'' The Guardian and the BBC disclosed last week that over a period of 10 years up to £1 billion were paid to Prince Bandar bin Sultan, a former Saudi Ambassador to America, for his role in negotiating the deal. Prince Bandar has denied receiving any "improper'' payments. The Guardian claimed that the BAE "gave'' Prince Bandar an Airbus as part of the deal."
( Marina Hyde in the Guardian comments: "Once a £75m Airbus has been custom-sprayed in the colours of the Dallas Cowboys and presented to a Saudi prince as a birthday gift, the decadence has attained such hilariously extravagant heights that to dress it up as part of an ethical crusade would tax a moral relativist of considerably higher calibre than our PM...")
June 13 2007 ~ Who exposed this colossal bribery? Why, the feral beast
- Simon Jenkins in the Guardian
says that in "any honest country the al-Yamamah participants would be in jail. Blair might ponder this when he next attacks the press ...I thought that little more could be squeezed from the Guardian's BAE/Saudi corruption story until the BBC's revelation on Monday that long-denied bribes had actually been countersigned by the Ministry of Defence. Those who jeer at the ethical standards of foreign governments should understand that these officials, were they in Washington, would now be in handcuffs...
The £43bn al-Yamamah deal was not so much about defence as laundering huge sums of surplus oil revenue into the pockets of the Saudi rich, distorting Britain's heavily subsidised defence industry into the bargain. The Saudis do not fight. They have no plausible army. Their purchases of overpriced ships and planes must be operated by mercenaries from Pakistan and elsewhere and sit rusting in docks and deserts. ....The threat to the present Riyadh regime is internal and is not to be met by Tornados and British destroyers. It is met with brutal repression, torture, sharia law and medieval treatment of women and foreigners. Yet this is a government that Britain's most sanctimonious of prime ministers calls a "good friend of ours". "...Whitehall has been complicit in a colossal, secret and illegal act of bribery to win a grossly inflated contract. That is why Goldsmith had to suppress the SFO inquiry and why BAE dare not let Lord Woolf near the stinking trough. And Blair has the gall to call the press cynical...."
June 12 2007 ~ BAE Lord Goldsmith remained silent on whether he had advised that information about the Bandar payments be concealed from the OECD - the world's anti-corruption organisation.
- Guardian
"....Robert Wardle, head of the SFO, says that he himself took the decision to withhold the facts from the OECD on the grounds of "national security". This followed meetings with Lord Goldsmith's staff and MOD officials. Lord Goldsmith insists that he did not personally give the order, but has not so far disassociated himself from it.
Lord Goldsmith is responsible for the SFO to parliament, and played a key role in the termination of the SFO's inquiry into allegations about the Saudi contract..." Goldsmith page. BAE page. Everything is connected with everything else...
June 11, 2007 ~ "BAE's bid to derail the inquiry was backed up by the prime minister himself, by John Reid, the defence secretary, and Jack Straw, the foreign secretary. It was an extraordinary piece of high-level bullying.
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At the SFO, Wardle pointed out that the OECD convention [profile] forbade commercial excuses for bribery. He hinted he might resign.
Goldsmith decided to back him. BAE then reluctantly began to disgorge boxes of files, and the contents soon led SFO investigators to set off for Santiago, Bucharest, Johannesburg, Prague and Dar es Salaam. The SFO's key discovery, however, was that as well as the £60m Saudi slush fund, £1bn may have gone into Swiss accounts linked, among others, to two intermediaries for the Saudi royals......Tony Blair called in Goldsmith and insisted that "national security" could be said to be at stake [document], rather than simply commercial interests. M16, however, refused to tell the OECD that they "agreed with [this] assessment"...." Guardian
June 11 2007 ~ "BAE Systems used a secret payments system to transfer more than£13m to a company linked to David Hart, the controversial former Conservative defence adviser, according to legal sources. He has acted as a lobbyist both for Britain's biggest arms company and also for the giant military manufacturer Boeing in the US. Mr Hart, an Old Etonian who lives in a Suffolk mansion, became notorious in the 1980s for helping the then prime minster Margaret Thatcher break the miners' strike...This is the latest allegation to emerge from corruption investigations into BAE, being conducted by prosecutors from three countries - Switzerland, Sweden, and the Serious Fraud Office in the UK...." Guardian
June 10 2007 ~ Foreign Office denies 'terror flights' cover up
Snowmail: "The Foreign Office and the Association of Chief Police Officers have today strongly defended any suggestion of a cover-up over the report into the CIA kidnap operation and flights passing through the UK. All this as we discover a CIA linked aircraft landed in Britain just last weekend.
The Foreign Office was quick to get onto us last night at the suggestion that the government might have interfered with police inquiries into whether the UK did or did not turn a blind eye to the US programme to kidnap and torture Al Qaeda suspects around the world.
Last night I put it to the Lib Dem's Vince Cable that, since the police didn't ask either the secret services or the airports about this, their inquiry was either useless or they'd been leant on by the government. He agreed, live on air.
Today both the police and Foreign Office have denied that there's been any improper pressure brought to bear. The police are now saying it wasn't an investigation - merely a 'review'.
So a police review is somehow better than a police investigation? Still no interviews from either the Association of Chief Police Officers or the government on this - behaviour that hardly instils confidence in their vehement denials."
Watch last night's report and interview with Vince Cable:
http://linkger.com/49a805
June 10 2007 ~ BAE Systems does not confirm it is recruiting independent ethics panel Forbes.com "...... The Sunday Times and other papers said BAE plans to recruit a panel to investigate its conduct of foreign arms sales in an attempt to draw a line under allegations of corruption in its dealings with Saudi Arabia. Senior defence industry sources said BAE had already begun talks with potential candidates to chair the investigation, The Sunday Times said. It is understood to be looking for a senior political or business figure with a legal background. It is not yet clear how many people BAE will recruit or what the inquiry's remit will be, it added. BAE and the UK government have been dogged by allegations of bribery stemming from the Al-Yamamah arms deal with Saudi Arabia. BAE issued a fresh rebuttal last week after the BBC and The Guardian newspaper alleged that payments totaling more than 1 bln stg were made to Saudi prince Bandar bin Sultan, the Gulf country's former ambassador to Washington, with the full knowledge of the Ministry of Defence as part of the deal...."
June 10 2007 ~Sir Menzies Campbell wants an inquiry into the allegations surrounding the Al-Yamamah deal. BBC
"He is particularly concerned about allegations that the attorney general concealed from investigators from the Organisation for Economic Cooperation and Development (OECD) that payments were being made over a decade to a Saudi Prince.
"What general advice does the SFO have from the attorney general?" he asked on the BBC's Sunday AM programme.
"Were there any conversations between anyone in the attorney general's office and the Serious Fraud Office and Number 10 about what was to be done in relation to the OECD?"
Lord Goldsmith has denied the allegations and BAE Systems has repeatedly denied any wrongdoing."
June 10 2007 ~The story of possible corruption between BAE and the Saudi government, and how the British government ignored it, is shocking. But we should not regard this episode as an aberration. Instead, it should force us to question the way foreign policy is thought about and practised in government today
Carne Ross Saturday June 9, 2007 The Guardian
"The story of possible corruption between BAE and the Saudi government, and how the British government ignored it, is shocking. But we should not regard this episode as an aberration. Instead, it should force us to question the way foreign policy is thought about and practised in government today.
For decades British policy towards Saudi Arabia has been dominated by al-Yamamah, the massive BAE deal to provide aircraft and supplies. When I worked on the Middle East at the Foreign Office in the mid-90s, it was widely assumed that, along with uninterrupted oil supplies, this was what Britain's Saudi policy was "about". Any other concern, whether of human rights or the export of radical Wahhabi Islam, was by and large secondary.
This assumption was never questioned by officials or ministers. It was just the way things were. To think otherwise, that British policy - "our" policy as we called it (though it was never democratically debated, of course) - should be about human rights or Saudi Arabia's contribution to global security, would have been dismissed as naive or fanciful. ...."
June 7 2007 ~ BAE paid Prince Bandar 1 billion Independent "British arms company BAE Systems secretly paid a Saudi prince more than £1bn over a period of more than 10 years, an investigation has revealed. ...The Serious Fraud Office discovered the payments during an investigation into the Al Yamamah deal which was halted last year after a review by the attorney general, Lord Goldsmith. He said it was in Britain's national interest to drop the investigation. Prince Bandar and the MoD declined to comment on the matter, and BAE said that the company acted lawfully at all times. "
May 22 2007 ~ BAE scandal Corruption investigation seems to indicate possible links between the cash for honours and the BAE scandals - both involving Jonathan Powell.
"Police investigating alleged corruption by Britain's biggest defence company sought access to Downing Street's computer system to trawl for e-mails sent by and to Jonathan Powell, Tony Blair's chief of staff.
They suspected that Lord Powell, his brother, an adviser to BAE Systems, the firm at the centre of the inquiry, was lobbying Downing Street aides to have the investigation stopped.
They approached officers investigating the cash for honours scandal, which had access to Downing Street e-mails, to see if they could trace e-mails between the Powell brothers.
They were looking for evidence that individuals might have tried to influence the outcome of the police investigation. " (Sunday) Times
April 27 2007 ~ BAE The Serious Fraud Office ended its investigation into a 1986 arms deal with Saudi Arabia in December 2006 saying it was"not in the public interest" to continue. The BBC reports that in January a US embassy official issued a verbal protest at the Foreign Office. The decision to end the SFO inquiry came weeks after reports that the Saudis were threatening to pull out of a deal to buy 72 Eurofighter jets from BAE.
November 27 2006 ~Shares of BAE, Europe's largest defence firm, fell 4.4 per cent today on reports it might lose a Eurofighter deal with Saudi Arabia if a fraud probe is extended to the Saudi royal family. See Ireland.com" "..... the Saudi government was set to tear up its Euro"ighter Typhoon agreement with Britain and give the jets contract to France if the Serious Fraud Office (SFO) opened Swiss bank accounts allegedly linked to members of the Saudi royal family as part of a long-running investigation.'
November 23 2006 ~ BAE Systems and Trident. Jack Straw says (See Guardian) 'This is about the defence of this country and its people and its future over many decades.
'Spea"ing to the parliamentary defence committee earlier this month, Mur"ay Easton, head of "he submarine division at BAE Systems, warned that a delay could have a 'catastrophic' impact on the industry.
(Some might feel that a 'catastrophic effect' on the arms industry might be preferable to the potential catastrophic effects caused by the weaponry from "hich its huge profits are derived.)
November 20 2006 ~ secret arms-deal commissions The Serious Fraud Office Guardian on secret arms-deal commissions:
- ".... The SFO has been inquiring for three years, in some secrecy, into allegations of systmatic corruption in international deals arranged by Britain's biggest arms company, BAE Systems.
.... BAE denies wrongdoing and says it is co-operating with the inquiry. .... Saudi officials are reported to have met Tony Blair's chief of staff, Jonathan Powell, to discuss the fate of "Al Yamamah 3", the latest multi-billion pound installment of BAE's warplane sales to the Saudis .... Mr Powell's brother, Charles - Lord Powell - has been on BAE's payroll as a consultant, and his son, Hugh, heads the Foreign Office's security policy department ......
In the past year, the SFO inquiry has dramatically expanded, identifying alleged BAE agents in Chile, Romania, the Czech Republic, South Africa, and, most recently, in Tanzania. "
November 20 2006 ~ BAE Systems makes a killing... It is the fourth largest arms company in the world. Each year it sells about £11 billion worth of arms around the globe. In 2005 BEA Systems ranked seventh in a list of companies supplying the Pentagon. See pdf link, at www.caat.org.uk (new window)
- ".. it is the fact that UK registered companies such as BEA Systems, Rolls Royce, Cobham and QinetiQ that really gives them access to the US market......Though they call themselves UK companies when trying to secure MoD contracts, in reality they ae international big businesses, eager to cash in on the US Administration's "war on terror"..."
November 19 2006 ~ Serious Fraud Office Tanzania deal investigation News in the Times and Reuters that the Serious Fraud Office and Ministry of Defence police are looking into allegations that BAE Systems paid backhanders to the Tanzanian Government in 2001 for a £28 million military air traffic control system has not been mentioned in the mainstream press since November 12 . It was a deal personally approved by Tony Blair who overruled Cabinet objections. There were objections too from the World Bank who said that Tanzania could, for a tenth of that price, have bought a civilian system, but our Prime Minister overruled the cabinet and forced it through the deal on behalf of BAE Systems, the UK defence contractor and partner to the Carlyle Group. Barclays Bank loaned Tanzania the money for the deal - a debt repaid from aid given to Tanzania by Britain to assist sustainable development, including primary education. The Times wrote:
- "...
The SFO is already investigating BAE Systems in connection with claims of a £60 million "slush fund" used by BAE to pay off Saudi Arabian dignitaries.
Investigators are understood to have obtained documents that suggest that there might have been criminal activity connected with the Tanzania deal. .... "
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"War-profiteering corporation in Washington DC headed by former president and CIA boss George Bush Sr, former Secretary of State and Treasury James Baker III, former Secretary of Defence and former Deputy Director of CIA Frank Carlucci and former British Prime Minister John Major - a certain Osama Bin Laden was earlier involved but seem to take less interest in the business these days in spite of making a career that benefits the company. The Carlyle Group has its tentacles in many businesses that benefit from USA' war on terror. George W. Bush Jr regularly makes decicions that put American taxpayers' contributions into the pockets of the Carlyle Group's CEOs."
www.skog.de/endictud.htm)
November 17 2006 ~ They're not laughing now The BBC quotes Alex Salmond, Leader of the SNP, about the speculation that Mr Blair is to be questioned "soon" after all.
- "I think everybody in this country who wants to see politics cleaned up, who wants to see a situation where people do not buy their way into the legislature will be extremely encouraged at the Metropolitan Police conducting such a thorough-going enquiry. Remember almost six months ago, when my young colleague Angus McNeil raised this matter, people were laughing - all the old lags at Westminster said 'oh no, the police'll never stand up to Downing Street'.
"Well, they're not laughing now."
November 17 2006 ~Blair overruled his own cabinet, and forced through a deal on behalf of BAE Systems, the UK defense contractor and Carlyle Group partner. Truthout.org has an article in which we read,
- "....yet another corruption investigation is now cranking up, the Times
reports, centering on Blair's personal intervention in the sale of a $50
million military air traffic control system to debt-wracked Tanzania - which
has a grand total of eight military airplanes. Despite objections from the
World Bank that Tanzania could have obtained a civilian system for a tenth of
that price, Blair overruled his own cabinet, which had also rejected the
deal, and forced it through on behalf of BAE Systems, the UK defense
contractor and Carlyle Group partner. Another beneficiary was one of the UK's
most powerful banks, Barclays, which loaned Tanzania the money for the deal.
The African nation repaid this debt with foreign aid money that Blair's
government had given it - ostensibly to support public education - while BAE
allegedly slipped big-time baksheesh to Tanzanian officials to clinch the
deal. In the end, Blair essentially served as a bagman for a bribe-greased
transfer of public money to Barclays and BAE".
OTHER WARMWELL ARCHIVES(opens in new window)