PCCB waiting in the wings
THE Prevention and Combating of Corruption Bureau (PCCB) has said it is awaiting official communication from Britain on yesterdays decision to file corruption charges against arms manufacturer company BAE Systems in the dubious 28 million pounds sterling (58bn/-) radar sale deal with Tanzania.
Britains Serious Fraud Office (SFO) announced yesterday that it will now seek consent from British Attorney General Patricia Scotland to go ahead and prosecute BAE Systems for offences relating to overseas corruption.
British investigators said they will prepare papers to be submitted to the UK attorney general once the SFO considers it ready to proceed.
Contacted for comment in Dar es Salaam, PCCB Director General Edward Hoseah said the PCCB is now bracing for formal notification from the SFO in order to determine the way forward in the Bureaus own investigation of the radar scandal.
I have not received any information from the SFO. I am waiting to hear from them, Hoseah told THISDAY, declining to comment further for the time being.
PCCB and SFO investigators are understood to have been working virtually in unison on the radar deal probe, sharing information on various key issues.
The PCCB has previously said it is very close to wrapping the probe from the Tanzanian angle.
Serious allegations of corruption and big-time bribery have for quite some time now been swirling around the 2002 transaction in which BAE Systems sold the said military radar equipment for air traffic control to the third phase government of ex-president Benjamin Mkapa.
The equipment was branded a waste of money by the World Bank, amongst others.
The SFO investigation has reportedly focused on whether the Tanzanian government was overcharged in the deal, and whether alleged commissions of around 30 per cent may have been paid into a Swiss bank to smoothen the deal.
Some $12m (approx. 15bn/-) in illegal kickbacks paid to the middleman involved, one Shailesh Vithlani, are believed to have been used to bribe senior Tanzanian government officials to approve the deal.
The SFO has already identified at least four prominent Tanzanian personalities believed to have been involved in the deal. They include Vithlani, now in hiding in Europe with an international arrest warrant hanging over his head; his former business partner Tanil Somaiya, former attorney general Andrew Chenge, and ex-Bank of Tanzania (BoT) governor Dr Idris Rashidi.
Reacting to the latest developments in London, the deputy leader of the official opposition in the National Assembly, Dr Wilbrod Slaa, called on PCCB to waste no more time in indicting high-profile suspects already linked to the radar corruption scandal.
"It would be a major embarrassment for the PCCB people if, after so much time and resources used so far, their long-running investigation of this case does not bear any dividends," Slaa told THISDAY in an interview yesterday.
In the wake of a recent public statement by President Jakaya Kikwete that 'two or three' major corruption cases are on the threshold of prosecution, various well-placed government officials have come out into the open to state that indictments in the radar case are now imminent.
Earlier this year, the PCCB unsuccessfully sought consent from the Director of Public Prosecutions (DPP), Eliezer Feleshi to file criminal charges against suspects in the same case.
It is understood that the Bureau is now expected to submit a fresh application to the DPPs office soon for prosecutions to formally begin in the radar case.
Officials say PCCB has asked for mutual legal assistance from the SFO to gain access to important information and documents on foreign aspects of the radar deal in order to build a watertight case for prosecution.
Reports from London say the SFO is also gearing to prosecute BAE Systems for alleged corruption and bribery behind a warplanes lease deal with the Czech Republic, the sale of two frigates to Romania, and a weapons deal with South Africa.
According to yesterdays SFO statement: The SFO intends to seek the (British) attorney generals consent to prosecute BAE Systems for offences relating to overseas corruption, and will prepare its papers to be submitted to the AG when the SFO considers it is ready to proceed. This follows investigation carried out by the SFO into business activities of BAE Systems in Africa and eastern Europe.
The decision is seen as a make-or-break move for the agency, which has spent the last six years - under two different directors - trying to resolve allegations against one of the worlds most powerful arms supplying companies.
The SFO must gain the formal consent of the UKs attorney general to press charges.
But the SFOs statement that, in effect, it is not yet ready to make a formal submission to the AG, leaves the door open for BAE Systems to return to the negotiating table.
In its own statement, BAE insisted it had "at all times acted responsibly in its dealings with the SFO, taking into account the interests of its shareholders and employees and the legal advice it has received.
The company notes the announcement by the UKs Serious Fraud Office (SFO) and continues to expend considerable effort seeking to resolve, at the earliest opportunity, the historical matters under investigation by the SFO," the statement said.
It said if a prosecution is launched, the company will deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court.
BAE was the biggest faller on the London Stock Market yesterday morning, down nearly five per cent.
This is the first time BAE as a company has directly faced the prospect of prosecution. In 2006, the SFO was forced to drop investigations into BAEs biggest arms deals in Saudi Arabia. Tony Blair, the then British prime minister, effectively granted immunity to the Saudi ruling family.
Negotiations on other outstanding cases broke down when BAE failed to meet SFOs September 30 midnight deadline to make a deal or face the courts.
Behind the scenes, there has been a high-stakes battle between BAE and SFO - the British agency entrusted with eradicating foreign bribery - to see if a US-style plea bargain could be quietly negotiated.
For the SFO, a key element of an acceptable settlement package is understood to be the payment of large financial penalties, possibly of more than 500 million pounds sterling in the case of a company the size of BAE.
Based on revenue last year, BAE Systems Plc is currently the worlds number two defence company behind US-based Lockheed Martin, and remains Europes largest defence conglomerate.
The company builds combat aircraft such as the Typhoon and the Tornado, as well as armoured combat vehicles, nuclear attack submarines and other military equipment.
The US Justice Department is understood to have also been running a parallel investigation into BAE Systems, which has a major US presence as an arms supplier to the Pentagon.
The Washington investigation has so far yielded no results, however.
