Tanzania: Britain to Launch Public Inquiry Into U.S.$40 Million Payment Mike Mande July 2011 Nairobi Britain is to begin a public inquiry into the $40 million BAE Systems compensation to Tanzania on July 19. The International Development Committee of the UK parliament will seek to establish why BAE Systems has for seven months now failed to provide the money to the Tanzania government. BAE, a defence contractor, brokered a deal with Britain's Serious Fraud Office (SFO) in February 2010 to pay a $40 million fine to settle a bribery investigation regarding the supply of Watchman radar systems to Tanzania. The inquiry will also seek to establish how BAE will ensure that its payment to Tanzania is used for development purposes and what advice the UK's Department for International Development (DfID) has given to BAE about how this money might be used. Executives from DfID, BAE Systems and SFO will appear before the team led by Secretary of State Andrew MitchellThe EastAfrican has learnt that Tanzania is poised to sue BAE Systems come September to compel it to release the $40 million as agreed earlier between the aerospace firm, the government and DfID. The development comes after Tanzanian MPs failed to persuade the British government to push BAE Systems to pay the money to the government. Deputy Speaker of the Tanzania parliament Job Ndugai, told The EastAfrican that the delegation has advised the government to seek legal action against BAE if it goes ahead to give the money to British charity organisations and local NGOs selected by the firm. According to Mr Ndugai, the government agreed with BAE Systems that the $40 million should be availed to Tanzania and managed by parliament for the provision of 200,000 desks for primary and secondary school students, 1,196 housing units for primary and secondary teachers in 132 councils, and 4.4 million books. "The government needs to start legal action against BAE as advised by the delegation starting September this year, as it is not up to BAE to determine how the money is spent and it should not backtrack on an agreement made with the SFO in December," said Mr Ndugai. In December, BAE was fined for concealing payments of $12.4 million to a marketing adviser in Tanzania in connection with the deal. BAE agreed with the Serious Fraud Office to make an ex-gratia payment of $40 million to Tanzania. DfID and the Tanzania were both involved in drawing up plans on how to spend the payment. Parliamentary Public Accounts Committee chairman John Cheyo, told The EastAfrican that the payment process should be conducted in co-ordination with the UK and Tanzanian authorities who should ensure that money moves into, and through, accounts in a transparent manner and that money is accounted for and independently audited at each stage of the process. Mr Cheyo said that BAE should ensure that it publicly discloses all payments made, including to whom they are made and which accounts they are made into. Parliamentary Public Corporations Committee chair Zitto Kabwe told The EastAfrican that the BAE payment cannot be considered a reparation but a refund, a decade later, of money paid for goods that were not fit for the purpose. Mr Kabwe said that the appropriate use of the money should be vested in parliament to promote transparency. BAE Systems last week formed an advisory board to guide the company on the best means of spending the money in accordance with company policies; British charity organisations will be the main beneficiaries of the funding. BAE Systems has already drawn up a list of what it called "like-minded British NGOs who, through their work, witness the devastating effects of corruption on developing countries every day" to receive the funding. British NGOs in the country include CAFOD, Christian Aid, Transparency International UK, Care International, Oxfam GB, Plan International-UK, Save the Children, Water Aid and World Vision.