The Radar Scandal: Investigation & Progress

[Game Theory]

Fraud Office inquiry into BAE Tanzania deal

· Commission of 29% may have been paid, police say
· Blair forced African arms deal past Clare Short

David Leigh
Monday November 13, 2006
The Guardian


BAE Systems is being investigated for suspected corruption over an arms deal with the heavily indebted African country of Tanzania, in which commissions of more than 29% may have been paid, Westminster sources confirmed last night.
Of all the company's international deals being investigated by the Serious Fraud Office (SFO), the Tanzanian deal is the most politically sensitive, although it was relatively small in cash terms. The £28m military air traffic control sale was pushed through the cabinet in 2001 by Tony Blair against the heated opposition of then-development minister Clare Short, who subsequently alleged corruption. Both the prime minister and BAE reassured critics at the time that the sale was above board.

Tanzania, one of the poorest countries in Africa, had no need for an expensive military system to handle its civilian air traffic, and was at the time asking for its debts to be cancelled.
Ms Short has confirmed that she was approached by the SFO some weeks ago, who told her it was investigating. It was reported last night that SFO investigators had also approached the Liberal-Democrat MP Norman Lamb, who has compiled a dossier on the affair.

Westminster sources say that the SFO and the Ministry of Defence police, who are conducting a joint investigation into BAE's deals around the world, believe that millions of pounds were paid into Swiss banks to cement the sale. One said: "I was told the SFO would not be surprised if commissions exceeded 29%". In previous cases, the SFO has identified agents close to the party in power in countries that have bought BAE weapons.

Ms Short's disenchantment with the government's invasion of Iraq led her to resign from the cabinet. Most recently, she has resigned the Labour whip, and is expected to leave parliament at the next election.

Last month, the SFO signalled the widening of its investigations to Africa when it raided the Windsor premises in Berkshire of John Bredenkamp, a Zimbabwe-based tycoon who acted as a agent for BAE in the sale by the Labour government of Hawk and Gripen warplanes worth £1.6bn to the ANC government in South Africa. He is also believed to have acted as a BAE agent in other African countries. The SFO investigations started three years ago following disclosures in the Guardian of corruption allegations against BAE, and began by inquiring into alleged "slush fund" payments to Saudi Arabia. Inquiries moved to Chile, Romania, South Africa and now Tanzania.

Last night the SFO said "We are looking at suspected corrupt acts ... For operational reasons we cannot assist in providing confidential information."

BAE declined to comment, other than to say: "We fully believe BAE Systems has done nothing wrong."





Special report
The arms trade

http://www.guardian.co.uk/armstrade/story/0,,1946486,00.html

 

[Mafuchila]

Zanaki, kama Rais itabidi abebwe na ndege kwenda Dodoma kwa sababu ya mashimo, vipi kuhusu wabunge 400, mawaziri 60 wakuu wa mikoa 28, wakuu wa wilaya zaidi ya 300 na wananchi kwa mamilioni ambao wanatumia barabara hiyo? binafsi nadhani hiyo pesa ya kununulia ndege ingekarabati barabara hiyo hivyo kila mtu akafaidika.

 

[Mafuchila]

Jasusi nadhani ni 20% kwani cabinet yake haikuwa kubwa sana hivyo mgao ulikuwa unamtosheleza kila mtu, tatizo kwenye cabinet hii ya watu 60 inabidi iwe zaidi ya 30% ili mgao utosheleze mahitaji.

 

[Kichuguu]

Kichuguu,
For Mkapa it was not 10%. It was 30%

Umepatia aisee, wanasema ilikuwa more than 29%.

 

[mTz]

Thanx Chief, hilo la L/Rover Defender niko gizani kabisa, unaweza kufafanua kidogo?

 

[Mafuchila]

Duhhh! Jasusi naona kama una dawa, manake ni 29% kamisheni! tumekwisha walahi!

 

[Jasusi]

Mafuchila,
Wewe unadhani yale Mahekalu angejengaje? Halafu nasikia alimwambia jamaa pale NY kuwa amehakikisha he is well taken care of (financially)

 

[Mafuchila]

Naona walikuwa na mjadala juzi, kuhusu fedha haramu...bila shaka waanzie na hizi hapa. Lakini katika hili ni simple tu, mtu ambaye ana hazina ya mabilioni na hawezi kuonyesha amelipa TRA kiasi gani ni wazi kuwa anahodhi pesa haramu na hili ni lazima lifanyiwe kazi kama kweli tunataka kusimama kwa miguu yetu wenyewe.

 

[Jasusi]

Mafuchila,
Nakubaliana na wewe. Lakini katika mazingira ya sasa nani atamfunga paka kengele? Wote ndani ya system ya CCM wana tabia ya kulindana. Matajiri Tanzania hawalipi kodi.

 

[William J. Malecela]

Wewe Jasusi,

Una maneno wewe, data nzito hizo!

 

[Chief]

Thanx Chief, hilo la L/Rover Defender niko gizani kabisa, unaweza kufafanua kidogo?

Mtz.
Kuna wingu kubwa la rushwa juu ya ununuzi wa hizo L/R. Nakumbuka mtu mmoja (Mkandara??) alitoa details enzi za BCS kuhusu hii issue kuwa hizo ni civilian version ya L/R ingawaje specs wakati wa kununua ilitakiwa ziwe military version. Kwa hiyo, tukalipa fedha nyingi ili tupate military version lakini tukaishia kupata civilian version. Aliyepost hizo info vile vile alitoa source ya info kutoka UK kwenyewe wakishangaa jinsi "tulivyoliwa". Source yenyewe nadhani ni jamaa kutoka UK organization moja ambayo inajihusisha na masuala ya majani ya chai au miwato huko kusini. Sikumbuki vizuri.

 

[mTz]

Asante Chief, ama kweli nchi inaliwa na wenye meno.

More info on BAE deal from ThisDay, jamaa walikula 29% damn!!!!

Military radar under probe. UK officers working on 'corruption' clues
LUCAS LIGANGA
Dar es Salaam

TANZANIA's chief detective Robert Manumba says he is making close watch over the BAE Systems, which is being investigated by his British counterparts on corruption charges involving some 28 UK million pounds worth of military in air traffic control imports, THISDAY can report.

It is said that the deal was sealed after commissions amounting to 19bn/- could have been paid to Tanzanian officials, equivalent to 29 per cent of the import value.

''I have just learnt of the reports (which appeared in British newspapers on Monday) and it is likely that the British investigators will come to Tanzania,'' Manumba said when reached by phone.

''During the course of the investigations there might be a local touch in which Tanzania could get involved,'' said CP Manumba. However, he added that since the investigations chiefly focused on corruption the main actors could be the Prevention of Corruption Bureau (PCB).

Senior PCB officials and the Minister for Defence and National Service, Prof. Juma Kapuya, were not readily available yesterday for comment.

London's Guardian reported on Monday that BAE Systems was being investigated for suspected corruption over an arms deal with the heavily indebted African country of Tanzania, in which commissions of more than 29 per cent may have been paid.

The paper quoted Westminster sources as confirming that of all the company's international deals being investigated by the Serious Fraud Office (SFO), the Tanzanian deal was the most politically sensitive, although it was relatively small in cash terms.

It said the military air traffic control sale was pushed through the cabinet by British Prime Minister Tony Blair against the heated opposition of then development minister Clare Short, who subsequently alleged corruption. Both Blair and BAE reassured critics at the time that the sale was above board.

The Guardian reported that Tanzania, one of the poorest countries in Africa, had no need for an expensive military system to handle its civilian air traffic, and was at the time asking for its debts to be cancelled.

The paper said that Ms Short had confirmed that she was approached by the SFO some weeks ago, who told her it was investigating the deal. SFO investigators had also approached the Liberal-Democrat Member of Parliament, Norman Lamb, who has compiled a dossier on the affair.

It said Westminster sources say the SFO and the Ministry of Defence police, who are conducting a joint investigation into BAE�s deals around the world, believe that millions of pounds were paid into Swiss banks to cement the sale.

Following the controversial deal in 2001, Tanzania defended its decision to buy a sophisticated air traffic control system which was at the centre of a row over UK aid policy.

Aid agencies accused the UK of wavering on its commitment to debt relief in Africa after it granted an export licence for the BAE Watchman system.

The World Bank claimed the system was too expensive and the cash would be better spent on education and health.
In a stinging report, the World Bank condemned the deal as waste of money.

But Tanzania hit back by claiming it needed the state-of-the-art radar system to ''maintain the integrity of its airspace.''

Retired president Benjamin Mkapa had defended his government's decision to buy the expensive air traffic control system saying the country desperately needed to boost safety at its airports.

Mr Mkapa had said the technology of the system which was being used by the country's airports was obsolete, and thus putting the lives of air travelers, including western tourists, at risk.

BAE Systems, formerly known as British Aerospace, is one of the world's top arms producers. It manufactures warplanes, avionics, submarines, surface ships, radar, electronics, and guided weapons systems, generating annual sales of �12 bn ($20 bn) in 130 countries.

The arms giant was formed as a nationalized British defence corporation in 1977, which was subsequently privatized in the early 1980s, and changed its name to BAE when British Aerospace merged with Marconi Electronic Systems in 1999.
http://www.thisday.co.tz/News/1022.html

 

[Mugongo Mugongo]

Huyo Claire Short si ndiye pia aliyepiga kelele sana kuhusu ununuaji wa ndege ya raisi,na akafanya ziara hapa.Serikali ikampakia kwenye gari kwenda Dodoma kujionea Bunge letu likifanya kazi,hio barabara ya Dodoma ilivyorusha 'nido' zake,akarudi Dar na kutetea uamuzi wa kununua ndege,kwamba anaelewa kwa nini raisi wa Tanzania anahitaji ndege mpya!

Hii ndiyo realy story;

Short defends personal jet for Tanzania's president

David Hencke, Westminster correspondent
Saturday July 27, 2002

Guardian

Clare Short, the international development secretary, yesterday defended the controversial purchase by Tanzania's president, Benjamin Mkapa, of a £15m personal jet, when Britain is giving £270m of aid to the country.
She also took a swipe at World Bank officials for "neo-colonialist attitudes" in raising questions about a deal "that had been openly disclosed to the Tanzanian parliament".

Ms Short saw no reason why the Tanzanian president should not have the use of a jet. "After all the Queen has her own jet and the prime minister has use of a jet."

She said the jet deal was different to the row over the £28m military air traffic control system ordered from BAE Systems which she had opposed and had been condemned by World Bank experts as using outdated technology and not being suitable for Tanzania's civil aviation needs.

Ms Short is known as "Mama Radar" in the Tanzanian tabloid press because of her strong opposition to the BAE deal which provoked a cabinet split between her and Tony Blair and Patricia Hewitt, the trade secretary, over granting an export licence for the military system.

The jet was ordered by the president just days before Clare Short visited Tanzania to agree the new aid deal and provoked a backlash among World Bank officials supervising Tanzania's shattered economy because they had not been informed about it.

Ms Short said: "The president basically decided that he needed a jet to replace his current plane, a Fokker jet which I am told is 24 years old, so he could get around the country. The jet will be used by him, the prime minister and other ministers.

"Tanzania's roads are hopeless and it is a long drive from Dar-es-Salaam to Dodoma where the national parliament is based.

"This deal is quite different to the military air traffic control deal with BAE Systems. It was openly disclosed to the Tanzanian parliament, unlike the other deal. There is no whiff of corruption about this purchase either."

Ms Short yesterday decided to speak publicly about the deal to the Guardian for the first time. Her comments follow an article in the paper on Monday and comment piece from Rod Liddle, the editor of BBC Radio 4's Today programme. Ms Short took exception to the article which she described as "virtually a racist attack on the Tanzanian president."

Ms Short praised Mr Mkapa for tackling poverty, health and education in the country - saying he has already succeeded in getting an extra million children into school.

However, her views were yesterday criticised by Norman Lamb, the Liberal Democrat deputy international development spokesman, who had raised the World Bank's concerns about the jet deal. "Tanzania still concealed this from the World Bank which is supervising its economy. Tanzania is receiving an enormous amount of aid so it must be transparent about everything it is doing and go through the proper processes."

 

[Zanaki]

Mugongox2 hiyo fixi iko wapi? Fafanua....kabla hajaja hapa alipinga kitendo cha kununua hio ndege,alibadilisha mawazo baada ya kuja hapa na kuona hali halisi.Yeye aliambiwa ni luxury tu,na pia serikali ya Tanzania inamiliki ndege mbili tayari...hali ya hizo ndege yeye hakuzijua mpaka alipokuja hapa.Soma magazeti ya bongo blaza,utaelewa tu!

 

[William J. Malecela]

Vijana this is very interesting, leteni data jamani!

 

[Game Theory]

wakati sie twapiga domo wazungu wameamua kuwa practical....



Disgust as UK government backs sale of military aviation equipment to Tanzania In December 2001 the UK government backed the sale of a new £28m ($40m) military air traffic control system to Tanzania, to be supported by the Export Credit Guarantee Department. The deal is between BAe Systems and the Tanzanian government.

It was opposed by many in the UK government - including Gordon Brown and Clare Short - who consider it a waste of money (Tanzania reportedly has only five military aircraft). This view is shared by the World Bank (FT, 14/12/1) who would like to see Tanzania purchase a civilian system at one-quarter of the cost (Report by the International Civil Aviation Organisation, commissioned by the World Bank). The news comes hard on the heels of the announcement (World Bank, 27/11/1) that Tanzania has reached Completion Point within the Highly Indebted Poor Country Initiative (HIPC) and will receive debt cancellation that is supposed to fund poverty reduction measures.

KEY FACTS

* One in four Tanzanians dies before the age of five (Oxfam).
* Half the population lacks access to clean water (The Guardian).
* The £28m cost of the system could pay for basic healthcare for 3.5m people.
* The military system costs the equivalent of half of one year's debt payment reduction ($77m).
* Leading industry journal Jane's Air Traffic Control say that the system is too expensive and cannot be used for civilian purposes (BBC World at One).

Many have criticised the sale as putting profits before people. Yet Tony Blair has singled out poverty reduction in Africa as being an overriding international concern.

Action

1) Please write to Tony Blair expressing your disgust with this decision (House of Commons, London SW1A 0AA) and send a copy to your MP.

2) The Secretary of State for Trade and Industry and the Foreign Secretary are due to appear before the Committee on Strategic Export Control in March. Please write to the Committee (if possible before 11 March) protesting at the government's decision and asking it to vigorously question the ministers about it. A model letter is available below for you - just copy and paste it into your word processor then add your name and address.



Mr Paul Evans,
Clerk to the Strategic Export Control Committee,
Committee Office,
House of Commons,
London SW1A 0AA.

4 March 2002

Dear Mr Evans,

I am writing to protest at the recent decision by the British Government to grant an export licence to BAe Systems for the sale of a $40m military air traffic control system to Tanzania.

The decision was announced little more than a month after Tanzania had reached completion point in the HIPC (Highly Indebted Poor Country) Initiative, thereby becoming eligible for debt relief that is supposed to fund poverty reduction measures.

The air traffic control system is inappropriate (Tanzania reportedly has only five military aircraft) and stands to eat up potentially two-thirds of one year's debt relief for the country. This is not the intended purpose of debt relief, and stands to put Tanzania's poverty reduction strategy in jeopardy.

I am not alone in my objections. The World Bank would like to see Tanzania purchase a civilian system at one quarter the cost (report by the International Civil Aviation Association, commissioned by the World Bank). Tanzanian Civil Society Organisations are equally opposed to this sale. A statement from the Tanzania Association of NGO's on 26 January 2002 reads:

"…We strongly condemn the decision by the UK Government to issue a license to BAe for the radar, an act that is inconsistent with their international aid, debt relief and sustainable development policies. It is most unfortunate that the progressive work of Gordon Brown and Clare Short in terms of promoting these noble objectives should be undermined by such an unwise deal. It is ironic that the UK gives budgetary support to Tanzania worth US$40 million a year, thus giving vital support for debt relief with one hand and taking it back with the other.

We Tanzanian Civil Society Organisations are convinced that the BAe radar is too expensive for Tanzania to afford, and that we do not have the military capacity to make good use of the equipment in question, if indeed it is a military system.

…We are thankful to the Bretton Woods Institutions for showing concern for the people of Tanzania by opposing the deal. We would like to see the demands for public interest scrutiny such as the radar extended to all major investment projects, including those financed by soft loans from the IFIs themselves.

We urge our government to forthwith suspend the deal to purchase the radar, pending a full public enquiry into the issues raised above.

…We urge Clare Short, U.K. Minister for Overseas Development, to instruct the Department for International Development (DfID) to withhold the budgeted $40million (£28 million) in budget support for the GoT for 2002/03 pending the results of the public enquiry into the deal."

I therefore request that when the Secretary of State for Trade and Industry and the Foreign Secretary appear before the Committee on Strategic Export Control later this month, they be subject to the most rigorous questioning over the government's motives in granting this export licence.

Yours sincerely,

 

[Aljazeera]

BAE's secret $12m payout in African deal


Middleman reveals covert cash for 'unnecessary' Tanzanian radar sale

David Leigh in Dar es Salaam and Rob Evans
Monday January 15, 2007
The Guardian

The UK's biggest arms supplier secretly paid a $12m commission into a Swiss account in a deal which led to Tanzania, one of the world's poorest countries, buying a controversial military radar system.

A Tanzanian middleman, who has a long-standing relationship with military and government figures, has admitted that the sum was covertly moved to a Swiss account by BAE Systems, which is under investigation by the Serious Fraud Office.

The back-door payment represented 30% of the contract value. The east African state had to borrow to finance the deal, which critics said was unnecessary and overpriced.

Tony Blair supported the 2002 sale but former cabinet minister Clare Short says she and the chancellor, Gordon Brown, opposed it.

The SFO, which was recently forced to abandon its investigation into commissions paid on a massive arms contract with Saudi Arabia, is now focusing its attention on Tanzania.

Yesterday's admissions by the Tanzanian middleman, Sailesh Vithlani, led Ms Short to call for BAE's prosecution if the allegations were proved. She said the prime minister had been personally responsible for forcing the licence for the Tanzania deal through the cabinet.

"No 10 insisted on letting this go ahead, when it stank," she said. "It was always obvious that this useless project was corrupt."

In Dar es Salaam, Mr Vithlani's business partner, Tanil Somaiya, told the Guardian that British police had already flown out to trace and interview both men as potential witnesses.

He said BAE had made two parallel arrangements with the middlemen. In the first, a conventional agency agreement was signed. Under this, 1% commission was to be paid if the $40m radar deal went through, to a Tanzania-registered firm, Merlin International Ltd.

Mr Vithlani was the majority shareholder in Merlin, Mr Somaiya said, while he had a small token interest himself. BAE paid $400,000 down this route in stage payments, Mr Somaiya said, as the radar equipment was delivered.

But under a second, more unusual agreement, BAE's secretly owned offshore company Red Diamond deposited another $12m, representing 30% of the contract price, in Switzerland. That money was under the personal control of Mr Vithlani, Mr Somaiya said, and this had been admitted to UK police.

When asked about the BAE money, Mr Vithlani told the Guardian he had made no disbursements from the Swiss cash to public officials "in Tanzania". Asked if he had disbursed any of the $12m to third parties outside of Tanzania, he declined to comment. "When the UK police travelled to Tanzania, we met them at their request and answered all their questions," he said.

Mr Vithlani acted as agent not only on the radar deal but also in the 2002 purchase from the US of a top-of-the-range Gulfstream official jet for the then Tanzanian president, Benjamin Mkapa, at a cost of more than $40m.

When asked if he would allow British police to inspect all the transactions on his Swiss account, he declined to comment.

In the secretive world of international arms deals, a commission of 1% to local agents would generally be regarded as legitimate. The government's export credit agency, the Export Credits Guarantee Department, has guidelines under which a "commission" of more than 5-10% is automatically regarded as questionable.

BAE System's payment of as much as 30%, coupled with the use of a Swiss bank account and apparent double sets of agency agreements, would normally arouse suspicions of possible bribery, investigators say.

Police sources in Tanzania said the agreement to use Mr Vithlani as an agent had been signed off by the then chairman of BAE, Sir Dick Evans.

Sir Dick, who has been at the centre of many of the arms deals under investigation, has already been interviewed by the Serious Fraud Office during their two-year inquiry.

BAE Systems were yesterday asked why they had made a 30% payment to Mr Vithlani's Swiss account. The company refused to answer, saying: "We will not be commenting on any point of substance. This cannot of course be taken as any kind of admission."

The SFO also refused to discuss their investigation. The president of Tanzania, Jakaya Kikwete, is due in London today to speak at a meeting with Hilary Benn, the international development secretary, on efforts to overcome corruption in Tanzania.

Later this week, the UK is expected to have to defend its actions over BAE at a meeting of the anti-bribery group of the OECD in Paris.

Norman Lamb, a Liberal Democrat frontbencher and critic of the deal, said: "It was obvious at the time that this deal did not stack up, but Blair still forced it through, against the better judgment of his colleagues. It was not as if he was not warned at the time."

 

[Kichuguu]

Hapa watu walikula hela bwana, tena kwa jasho la watanzania. Kupeleka pesa Uswis kwakupitia mlango wa nyuma ni suhuhda wa rushwa. Kwa vile bwana Vithlani ni mfanya biashara aliyekuwa registered Tanzania, alitakiwa alipwe kupitia account yake ya kitanzania ambayo ndiyo iko registered kwenye biashara zake. Ni kinyume cha sheria malipo ya kibishara kupitia account binafsi!

 

[Rev. Kishoka]

Tuliambiwa tunaona gere, sasa huyu mfanyabiashara aliyetuletea radar na ndege mkenge, ni nani rafiki zake pale Magogoni au Chimwaga? Tartibu siri zaanza fichuka!

 

[Mwawado]

Hawa watu si wanajulikana? Iko wapi PCB.Eeeh Mwalimu embu amka ili uone uliowaachia nchi wanavyotutenda,nakumbuka sana msemo wako wa "Rushwa ni adui mkubwa kuliko ugonjwa wa Ukoma".Heri yako uliyepumzika kwa amani wenzio tunaumia kwani Rushwa imeshika hatamu,na Ukoma umeenea maeneo yote!Hatujui tukimbilie wapi?