Kwa nini?
The Radar Scandal: Investigation & Progress
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Kwa nini?
LazyDog
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- Apr 10, 2008
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Umma ndiyo utaamua!
MwanaFalsafa1
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Radar deal: UK company grilled on ethics
LIFE MUST GO ON: A young woman is pictured baking chapatis (pancakes) yesterday amidst the remains of the house she was living in - before it was destroyed by last week`s bomb blasts emanating from the nearby Mbagala Army Camp on the outskirts of Dar es Salaam.
THISDAY REPORTER
Dar es Salaam
BAE Systems, the UK company that sold the controversial military radar system to the Tanzanian government in 2002, faced questions from shareholders in Britain this week over its ethical performance, it has been disclosed.
Europes largest defence company has been linked to a number of dubious transactions, of which the military radar deal in Tanzania is just one.
The radar deal is currently the subject of a parallel investigation by both Britains Serious Fraud Office (SFO) and the Prevention and Combating of Corruption Bureau (PCCB) in Tanzania.
At BAE Systems annual meeting in London, the companys chairman Dick Olver found himself having to field difficult questions about ethics from investors and anti-arms industry campaigners.
He confirmed that the SFO is still investigating the companys arms sales to Tanzania, South Africa, the Czech Republic, and Romania.
The US Department of Justice also has an open investigation into BAE.
Olver, whose term as chairman is set to be extended until 2013, said BAE is making progress to improve its ethical standards, and is implementing recommendations made by Lord Woolf, the UKs former chief justice, in a report published last year.
Is it not a fact that BAEs biggest impact on Britain is to harm its international standing? queried Symon Hill, a shareholder and anti-arms industry campaigner.
Olvers reply: I believe all the actions we have taken support the men and women on the frontline, and they have a huge appreciation for what we do.
At the AGM, the companys remuneration report was also accepted, but by the lowest proportion of all the resolutions. About 90 per cent agreed to the remuneration package for executives, compared with an average 99 per cent approval of other measures.
On the other hand, BAE chief executive Ian King said trading this year has been in line with expectations.
He added that a recent review of defence expenditure by the US Department of Defence will not have a material impact on the companys earnings.
We are very aware of the difficult economic environment, but our long-term programmes give us a stable core for the future, King told shareholders.
BAE increased profits by 31 per cent to 1.9 billion pounds sterling last year, and revenues were up 18 per cent to �18.5 billion.
According to Olver, BAE is implementing a new code of ethics which means that, on occasion, BAE turns business away.
The SFO, in collaboration with the PCCB, is understood to be in the process of finalizing its investigation into the controversial $41m (approx. 52bn/-) radar deal.
In an exclusive communication with THISDAY, SFO officials recently confirmed that the radar deal investigation is going on in a number of key areas, including aspects related to Tanzania.
The communication thus dispelled lingering fears of a repeat of the situation in Kenya, where the SFO earlier this year discontinued its investigation into contracts secured with the Kenyan government by Anglo Leasing Finance and related businesses; an investigation that had been in progress since July 2007.
It was also reported earlier this year that the PCCB had concluded its own long-running investigation into the military radar transaction scandal, and was seeking formal consent from the office of the Director of Public Prosecutions (DPP) to proceed with related prosecutions.
SFO detectives have been investigating BAE Systems for suspected corruption in the radar deal, where commissions of more than 30 per cent of the deal are believed to have been secretly paid to certain Tanzanian government officials through a Swiss bank account.
Investigators from the SFO have already questioned a number of people in Tanzania who were involved in the suspect deal.
According to THISDAYs own findings so far, at least four prominent Tanzanian personalities have been earmarked by the SFO as the main targets of the ongoing investigation.
They include ex-attorney general Andrew Chenge, former Bank of Tanzania governor Dr Idris Rashidi, and prominent local businessmen Tanil Somaiya and Shailesh Vithlani. 

LIFE MUST GO ON: A young woman is pictured baking chapatis (pancakes) yesterday amidst the remains of the house she was living in - before it was destroyed by last week`s bomb blasts emanating from the nearby Mbagala Army Camp on the outskirts of Dar es Salaam.
THISDAY REPORTER
Dar es Salaam
BAE Systems, the UK company that sold the controversial military radar system to the Tanzanian government in 2002, faced questions from shareholders in Britain this week over its ethical performance, it has been disclosed.
Europes largest defence company has been linked to a number of dubious transactions, of which the military radar deal in Tanzania is just one.
The radar deal is currently the subject of a parallel investigation by both Britains Serious Fraud Office (SFO) and the Prevention and Combating of Corruption Bureau (PCCB) in Tanzania.
At BAE Systems annual meeting in London, the companys chairman Dick Olver found himself having to field difficult questions about ethics from investors and anti-arms industry campaigners.
He confirmed that the SFO is still investigating the companys arms sales to Tanzania, South Africa, the Czech Republic, and Romania.
The US Department of Justice also has an open investigation into BAE.
Olver, whose term as chairman is set to be extended until 2013, said BAE is making progress to improve its ethical standards, and is implementing recommendations made by Lord Woolf, the UKs former chief justice, in a report published last year.
Is it not a fact that BAEs biggest impact on Britain is to harm its international standing? queried Symon Hill, a shareholder and anti-arms industry campaigner.
Olvers reply: I believe all the actions we have taken support the men and women on the frontline, and they have a huge appreciation for what we do.
At the AGM, the companys remuneration report was also accepted, but by the lowest proportion of all the resolutions. About 90 per cent agreed to the remuneration package for executives, compared with an average 99 per cent approval of other measures.
On the other hand, BAE chief executive Ian King said trading this year has been in line with expectations.
He added that a recent review of defence expenditure by the US Department of Defence will not have a material impact on the companys earnings.
We are very aware of the difficult economic environment, but our long-term programmes give us a stable core for the future, King told shareholders.
BAE increased profits by 31 per cent to 1.9 billion pounds sterling last year, and revenues were up 18 per cent to �18.5 billion.
According to Olver, BAE is implementing a new code of ethics which means that, on occasion, BAE turns business away.
The SFO, in collaboration with the PCCB, is understood to be in the process of finalizing its investigation into the controversial $41m (approx. 52bn/-) radar deal.
In an exclusive communication with THISDAY, SFO officials recently confirmed that the radar deal investigation is going on in a number of key areas, including aspects related to Tanzania.
The communication thus dispelled lingering fears of a repeat of the situation in Kenya, where the SFO earlier this year discontinued its investigation into contracts secured with the Kenyan government by Anglo Leasing Finance and related businesses; an investigation that had been in progress since July 2007.
It was also reported earlier this year that the PCCB had concluded its own long-running investigation into the military radar transaction scandal, and was seeking formal consent from the office of the Director of Public Prosecutions (DPP) to proceed with related prosecutions.
SFO detectives have been investigating BAE Systems for suspected corruption in the radar deal, where commissions of more than 30 per cent of the deal are believed to have been secretly paid to certain Tanzanian government officials through a Swiss bank account.
Investigators from the SFO have already questioned a number of people in Tanzania who were involved in the suspect deal.
According to THISDAYs own findings so far, at least four prominent Tanzanian personalities have been earmarked by the SFO as the main targets of the ongoing investigation.
They include ex-attorney general Andrew Chenge, former Bank of Tanzania governor Dr Idris Rashidi, and prominent local businessmen Tanil Somaiya and Shailesh Vithlani. 

Radar scandal indictments: DPP: Still awaiting word from PCCB
THISDAY REPORTER
Dar es Salaam
WHILE the Prevention and Combating of Corruption Bureau (PCCB) says it has lined up at least five major corruption cases for prosecution by next month, it is yet to seek final consent from the office of the Director of Public Prosecutions (DPP) to prosecute the much-awaited military radar trial.
According to latest THISDAY findings, the governments anti-corruption watchdog has not re-submitted the radar case file to the DPPs office for fresh consent to prosecute, after being previously asked to further investigate the case.
The DPP himself, Eliezer Feleshi, confirmed this in an interview yesterday, and added: Before we give consent for prosecution, we are required to thoroughly review the evidence and approve the charges against the suspects.
We hope to get the (radar case) file back when they (PCCB) have properly completed their investigations, said Feleshi.
PCCB officials told THISDAY in February this year that the DPP had opted to withhold his mandatory consent for the prosecution of suspects implicated in the $41m (approx. 52bn/-) military radar transaction scandal.
The DPP instead directed the Bureau to further investigate the corruption allegations related to the case, and seek consent afresh after gathering sufficient evidence.
From the DPPs latest comments, it appears this has yet to be done.
At least four prominent local personalities have so far been named as the main targets of an ongoing international investigation into the 2002 transaction involving the supply of the radar to former president Benjamin Mkapas government by Britains BAE Systems.
Those being probed by the UKs Serious Fraud Office (SFO) include ex-attorney general Andrew Chenge, former Bank of Tanzania governor Dr Idris Rashidi, and prominent local businessmen Tanil Somaiya and Shailesh Vithlani.
The PCCB Director General, Dr Edward Hoseah, announced recently that his agency was in the process of finalizing five major corruption cases for prosecution by next month.
Hoseah said the upcoming trials all involve grand corruption, but declined to publicly cite the specific cases being lined up for trial.
Major corruption trials prosecuted by the PCCB so far include the Bank of Tanzania (BoT) external payment arrears (EPA) embezzlement scandal, the Alex Stewart Assayers gold auditing deal, and the alleged misappropriation of more than 2bn/- in public funds by Tanzanias former ambassador to Italy, Prof Costa Ricky Mahalu.
The recently prosecuted case involving the BoT Twin Towers project is another major corruption trial underway, although there is criticism that the PCCB has yet to indict the so-called big fish behind this particular scandal.
Moreover, the Bureau has also faced much criticism in the public domain for failing to prosecute high-profile suspects behind two companies heavily implicated in the EPA scandal, Kagoda Agriculture Limited and Malegesi Law Chambers.
Sources close to PCCB say the grand corruption investigations now being finalized include the dubious privatization of the formerly state-owned Kiwira coal mine; the Buzwagi gold mineral development agreement; other gold-related deals involving the central bank; and a number of other controversial government contracts.
THISDAY REPORTER
Dar es Salaam
WHILE the Prevention and Combating of Corruption Bureau (PCCB) says it has lined up at least five major corruption cases for prosecution by next month, it is yet to seek final consent from the office of the Director of Public Prosecutions (DPP) to prosecute the much-awaited military radar trial.
According to latest THISDAY findings, the governments anti-corruption watchdog has not re-submitted the radar case file to the DPPs office for fresh consent to prosecute, after being previously asked to further investigate the case.
The DPP himself, Eliezer Feleshi, confirmed this in an interview yesterday, and added: Before we give consent for prosecution, we are required to thoroughly review the evidence and approve the charges against the suspects.
We hope to get the (radar case) file back when they (PCCB) have properly completed their investigations, said Feleshi.
PCCB officials told THISDAY in February this year that the DPP had opted to withhold his mandatory consent for the prosecution of suspects implicated in the $41m (approx. 52bn/-) military radar transaction scandal.
The DPP instead directed the Bureau to further investigate the corruption allegations related to the case, and seek consent afresh after gathering sufficient evidence.
From the DPPs latest comments, it appears this has yet to be done.
At least four prominent local personalities have so far been named as the main targets of an ongoing international investigation into the 2002 transaction involving the supply of the radar to former president Benjamin Mkapas government by Britains BAE Systems.
Those being probed by the UKs Serious Fraud Office (SFO) include ex-attorney general Andrew Chenge, former Bank of Tanzania governor Dr Idris Rashidi, and prominent local businessmen Tanil Somaiya and Shailesh Vithlani.
The PCCB Director General, Dr Edward Hoseah, announced recently that his agency was in the process of finalizing five major corruption cases for prosecution by next month.
Hoseah said the upcoming trials all involve grand corruption, but declined to publicly cite the specific cases being lined up for trial.
Major corruption trials prosecuted by the PCCB so far include the Bank of Tanzania (BoT) external payment arrears (EPA) embezzlement scandal, the Alex Stewart Assayers gold auditing deal, and the alleged misappropriation of more than 2bn/- in public funds by Tanzanias former ambassador to Italy, Prof Costa Ricky Mahalu.
The recently prosecuted case involving the BoT Twin Towers project is another major corruption trial underway, although there is criticism that the PCCB has yet to indict the so-called big fish behind this particular scandal.
Moreover, the Bureau has also faced much criticism in the public domain for failing to prosecute high-profile suspects behind two companies heavily implicated in the EPA scandal, Kagoda Agriculture Limited and Malegesi Law Chambers.
Sources close to PCCB say the grand corruption investigations now being finalized include the dubious privatization of the formerly state-owned Kiwira coal mine; the Buzwagi gold mineral development agreement; other gold-related deals involving the central bank; and a number of other controversial government contracts.
BAK
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- Feb 11, 2007
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''We hope to get the (radar case) file back when they (PCCB) have properly completed their investigations,'' said Feleshi.
Moreover, the Bureau has also faced much criticism in the public domain for failing to prosecute high-profile suspects behind two companies heavily implicated in the EPA scandal, Kagoda Agriculture Limited and Malegesi Law Chambers.
Very important to note!
Moreover, the Bureau has also faced much criticism in the public domain for failing to prosecute high-profile suspects behind two companies heavily implicated in the EPA scandal, Kagoda Agriculture Limited and Malegesi Law Chambers.
Very important to note!
Invisible
Robot
- Feb 11, 2006
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WITH tomorrow being the deadline for BAE Systems to plead guilty and agree to a substantial fine over allegations of bribery and corruption in the 28 million pounds sterling (approx. 58bn/-) Tanzanian military radar deal, Britains Serious Fraud Office (SFO) has yet again vowed to tighten the screws on the arms manufacturer firm.
According to latest media reports from the UK, the SFO confirmed on Sunday that it is pushing forward with investigations against BAE Systems on the back of a landmark prosecution of another British company for overseas graft.
The SFO has already had occasion - on advice from the British government back in 2006 - to drop an investigation into alleged bribery by BAE of members of the Saudi Arabia establishment over a £43 billion arms deal.
In the 1985 Al-Yamamah deal, BAE supplied Tornado and Hawk jets and other equipment to the Saudi government.
An SFO spokesman said although there are no plans to reopen the Al-Yamamah case, other cases regarding BAE in relation to alleged bribery in Tanzania, South Africa and the Czech Republic are still being investigated.
These investigations remain ongoing. No proceedings or charges have been brought as yet, the spokesman said.
The SFO has just finished successfully prosecuting Mabey and Johnson Ltd, a steel bridging supplier from Twyford in the UK, which admitted to numerous offences of overseas corruption and breaching of United Nations sanctions committed between 1993-2001.
The charges related to the firms attempts to influence decision-makers on public contracts in Jamaica and Ghana, plus the breaching of UN sanctions in Iraq by bidding for contracts under the oil for food programme.
The SFO began its investigation into the Ghanaian and Jamaican cases last year after voluntary disclosure by the management of Mabey and Johnsons holding company. The Iraq charges resulted from an SFO investigation launched in 2007.
It has now come to light that the firm last Friday agreed to pay out £6.6 million in fines and reparations.
Commenting on the Mabey and Johnson Ltd prosecution, SFO director Richard Alderman was quoted as saying: "This is a landmark outcome - the first conviction in this country (Britain) of a company for overseas corruption and for breaking UN Iraq sanctions and, satisfyingly, achieved quickly."
The offences are serious ones, but the company has played its part positively by recognizing the unacceptability of those past business practices and by coming forward to report them.
Investigators have drawn parallels between the Mabey and Johnson Ltd case and BAE Systems alleged bribery and corruption involvement in the dubious 2002 radar sale deal with the third phase government of ex- president Benjamin Mkapa.
BAE has until midnight tomorrow (September 30) to plead guilty to the charges. A source close to the company said there was a 50-50 chance of it agreeing a plea bargain by the deadline. Failure to do so will mean a long criminal trial that would dent BAEs international reputation, regardless of the verdict.
While it is understood that no specific figure has been put to BAE relating to the size of fine it can expect, various sources say that figures ranging from £500m to £1 billion have been discussed inside the Serious Fraud Office.
It cannot be just in the millions. It would have to be significant, a source said.
Such a fine would be the largest in British criminal history.
The deal, being offered under a US-style plea bargain, would mean a guilty plea followed by a fine imposed by a judge. An element of the deal would involve deferred prosecution, under which BAE would agree to mend its ways, with a failure to do so probably leading to further criminal proceedings.
SFO director Alderman has said he is determined to pursue the case.
The Saudi inquiry was dropped in 2006 when the SFO director at the time, Robert Wardle, was persuaded by the UK government that to continue would mean upsetting the Saudis and damaging national security.
This provoked a storm of protest at home and abroad. Few paid much attention to the SFOs insistence that it would continue to investigate allegations involving other countries.
Apart from the Tanzanian radar deal, tomorrows ultimatum for BAE centres on an aborted sale of fighter aircraft to the Czechs worth more than £1 billion, and a deal worth £1.5 billion to sell fighter aircraft to South Africa.
Meanwhile, BAE Systems yesterday played down reports that the SFO had discussed fines of up to £1bn over an ongoing bribery charge.
"BAE Systems' view is that the interests of the company as well as all of its stakeholders, including the general public, are best served by allowing the ongoing investigations to run their course," a short statement from the defence manufacturer company read.
It added that it was working with regulators in their investigations, and urged a conclusion to the enquiries 'which, in the case of the SFO, are now in their sixth year'.
SFO investigations have already established that, in the case of the radar deal, BAE Systems secretly paid $12m to a Swiss bank account controlled by fugitive businessman Shailesh Vithlani, part of which was allegedly used to bribe senior Tanzanian government officials to approve the radar purchase.
Vithlani is currently one of four prominent Tanzanians so far identified by investigators as key suspects in the scandal. Others are former attorney general and government minister Andrew Chenge, ex-Bank of Tanzania governor Dr Idris Rashidi, and local businessman Tanil Somaiya, once a close business partner of Vithlani.
The Prevention and Combating of Corruption Bureau (PCCB) in Tanzania has been conducting its own investigation into the radar deal, and is understood to be close to prosecuting the much-publicized case.
Source: ThisDay
According to latest media reports from the UK, the SFO confirmed on Sunday that it is pushing forward with investigations against BAE Systems on the back of a landmark prosecution of another British company for overseas graft.
The SFO has already had occasion - on advice from the British government back in 2006 - to drop an investigation into alleged bribery by BAE of members of the Saudi Arabia establishment over a £43 billion arms deal.
In the 1985 Al-Yamamah deal, BAE supplied Tornado and Hawk jets and other equipment to the Saudi government.
An SFO spokesman said although there are no plans to reopen the Al-Yamamah case, other cases regarding BAE in relation to alleged bribery in Tanzania, South Africa and the Czech Republic are still being investigated.
These investigations remain ongoing. No proceedings or charges have been brought as yet, the spokesman said.
The SFO has just finished successfully prosecuting Mabey and Johnson Ltd, a steel bridging supplier from Twyford in the UK, which admitted to numerous offences of overseas corruption and breaching of United Nations sanctions committed between 1993-2001.
The charges related to the firms attempts to influence decision-makers on public contracts in Jamaica and Ghana, plus the breaching of UN sanctions in Iraq by bidding for contracts under the oil for food programme.
The SFO began its investigation into the Ghanaian and Jamaican cases last year after voluntary disclosure by the management of Mabey and Johnsons holding company. The Iraq charges resulted from an SFO investigation launched in 2007.
It has now come to light that the firm last Friday agreed to pay out £6.6 million in fines and reparations.
Commenting on the Mabey and Johnson Ltd prosecution, SFO director Richard Alderman was quoted as saying: "This is a landmark outcome - the first conviction in this country (Britain) of a company for overseas corruption and for breaking UN Iraq sanctions and, satisfyingly, achieved quickly."
The offences are serious ones, but the company has played its part positively by recognizing the unacceptability of those past business practices and by coming forward to report them.
Investigators have drawn parallels between the Mabey and Johnson Ltd case and BAE Systems alleged bribery and corruption involvement in the dubious 2002 radar sale deal with the third phase government of ex- president Benjamin Mkapa.
BAE has until midnight tomorrow (September 30) to plead guilty to the charges. A source close to the company said there was a 50-50 chance of it agreeing a plea bargain by the deadline. Failure to do so will mean a long criminal trial that would dent BAEs international reputation, regardless of the verdict.
While it is understood that no specific figure has been put to BAE relating to the size of fine it can expect, various sources say that figures ranging from £500m to £1 billion have been discussed inside the Serious Fraud Office.
It cannot be just in the millions. It would have to be significant, a source said.
Such a fine would be the largest in British criminal history.
The deal, being offered under a US-style plea bargain, would mean a guilty plea followed by a fine imposed by a judge. An element of the deal would involve deferred prosecution, under which BAE would agree to mend its ways, with a failure to do so probably leading to further criminal proceedings.
SFO director Alderman has said he is determined to pursue the case.
The Saudi inquiry was dropped in 2006 when the SFO director at the time, Robert Wardle, was persuaded by the UK government that to continue would mean upsetting the Saudis and damaging national security.
This provoked a storm of protest at home and abroad. Few paid much attention to the SFOs insistence that it would continue to investigate allegations involving other countries.
Apart from the Tanzanian radar deal, tomorrows ultimatum for BAE centres on an aborted sale of fighter aircraft to the Czechs worth more than £1 billion, and a deal worth £1.5 billion to sell fighter aircraft to South Africa.
Meanwhile, BAE Systems yesterday played down reports that the SFO had discussed fines of up to £1bn over an ongoing bribery charge.
"BAE Systems' view is that the interests of the company as well as all of its stakeholders, including the general public, are best served by allowing the ongoing investigations to run their course," a short statement from the defence manufacturer company read.
It added that it was working with regulators in their investigations, and urged a conclusion to the enquiries 'which, in the case of the SFO, are now in their sixth year'.
SFO investigations have already established that, in the case of the radar deal, BAE Systems secretly paid $12m to a Swiss bank account controlled by fugitive businessman Shailesh Vithlani, part of which was allegedly used to bribe senior Tanzanian government officials to approve the radar purchase.
Vithlani is currently one of four prominent Tanzanians so far identified by investigators as key suspects in the scandal. Others are former attorney general and government minister Andrew Chenge, ex-Bank of Tanzania governor Dr Idris Rashidi, and local businessman Tanil Somaiya, once a close business partner of Vithlani.
The Prevention and Combating of Corruption Bureau (PCCB) in Tanzania has been conducting its own investigation into the radar deal, and is understood to be close to prosecuting the much-publicized case.
Source: ThisDay
Fraud watchdog poised to decide on BAE bribery prosecution
• Arms giant given deadline to plead guilty in deal
• Company firmly denies all allegations of wrongdoing
By: David Leigh and Rob Evans
The Serious Fraud Office is expected imminently to announce whether it will take the politically momentous decision to seek to prosecute BAE over bribery allegations. The UK arms giant failed tonight to meet a deadline to settle the case or face the courts.
Sources close to the SFO said that the agency would decide what to do tomorrow or Friday. After months of fruitless negotiation, BAE had been given a deadline by the SFO to plead guilty in a negotiated plea deal which would at last draw a line under a six-year investigation into the company's behaviour.
Both sides were refusing to reveal their hand tonight in what appears to be a high-stakes poker game between Britain's biggest arms firm and the agency entrusted with eradicating foreign bribery.
Richard Alderman, the agency's director, has been widely reported as in a determined mood, and ready to see the company in court. His personal credibility and that of the SFO are on the line.
SFO sources said discussions were still going on privately between SFO case controllers and lawyers from Allen & Overy and Linklaters, who are both representing BAE in the negotiations. BAE sources carried on insisting they "did not recognise any deadline".
A capitulation by BAE this week would be a turnaround for the agency, whose reputation was damaged three years ago when it was forced by Tony Blair's government to halt its investigation into BAE's Saudi arms deals. A decision to prosecute would not be the end of the story. Alderman would have to gain the formal consent of Lady Scotland, the attorney general, to press charges. This power is due to be abolished, but still exists. Her decision could take weeks or longer, and history suggests she may be lobbied by BAE or by members of the cabinet.
The last attorney general faced with the prospect of prosecuting BAE was Lord Goldsmith. He helped to force a closedown of the SFO's Saudi investigation in 2006 after an effective lobbying operation by BAE. His behaviour caused controversy about the politicisation of the role of the government's supposedly independent chief law officer.
After the Saudi investigation was squashed, the SFO was allowed to continue investigating BAE's deals in four other countries: Tanzania, the Czech Republic, South Africa, and Romania. BAE has denied all wrongdoing.
If criminal charges are brought, they are likely to involve at least the cases in Tanzania and the Czech Republic, where sources say the most progress has been made. BAE was refusing to comment last night.
The SFO first took up the task of trying to investigate BAE after the company's network of secret offshore "slush funds" was disclosed by the Guardian in an award winning series of investigations by the newspaper.
The fraud agency's confidence that it could get results was increased last week when, in a legal first, the bridge construction firm Mabey & Johnson agreed a deal to plead guilty to corruption concerning foreign contracts. It paid more than £6m in penalities, replaced a number of directors and promised to turn over a new leaf. The deal included reparations to Ghana and other countries where it admitted bribes were paid to officials and politicians.
The Mabey deal was the first successful corruption prosecution of any size borught by a British government agency since laws were passed more than seven years ago, explicitly banning foreign bribery.
It was seen as a template that BAE could be prepared to follow, of confession followed by relative leniency. But BAE until now has insisted that it was prepared to "allow the ongoing investigations to take their course".
http://www.guardian.co.uk/world/2009/sep/30/sfo-to-decide-bae-case?CMP=AFCYAH
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Robot
- Feb 11, 2006
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- Arms giant given deadline to plead guilty in deal
- Company firmly denies all allegations of wrongdoing
The Serious Fraud Office is expected imminently to announce whether it will take the politically momentous decision to seek to prosecute BAE over bribery allegations. The UK arms giant failed tonight to meet a deadline to settle the case or face the courts.
Sources close to the SFO said that the agency would decide what to do tomorrow or Friday. After months of fruitless negotiation, BAE had been given a deadline by the SFO to plead guilty in a negotiated plea deal which would at last draw a line under a six-year investigation into the company's behaviour.
Both sides were refusing to reveal their hand tonight in what appears to be a high-stakes poker game between Britain's biggest arms firm and the agency entrusted with eradicating foreign bribery.
Richard Alderman, the agency's director, has been widely reported as in a determined mood, and ready to see the company in court. His personal credibility and that of the SFO are on the line.
SFO sources said discussions were still going on privately between SFO case controllers and lawyers from Allen & Overy and Linklaters, who are both representing BAE in the negotiations. BAE sources carried on insisting they "did not recognise any deadline".
A capitulation by BAE this week would be a turnaround for the agency, whose reputation was damaged three years ago when it was forced by Tony Blair's government to halt its investigation into BAE's Saudi arms deals. A decision to prosecute would not be the end of the story. Alderman would have to gain the formal consent of Lady Scotland, the attorney general, to press charges. This power is due to be abolished, but still exists. Her decision could take weeks or longer, and history suggests she may be lobbied by BAE or by members of the cabinet.
The last attorney general faced with the prospect of prosecuting BAE was Lord Goldsmith. He helped to force a closedown of the SFO's Saudi investigation in 2006 after an effective lobbying operation by BAE. His behaviour caused controversy about the politicisation of the role of the government's supposedly independent chief law officer.
After the Saudi investigation was squashed, the SFO was allowed to continue investigating BAE's deals in four other countries: Tanzania, the Czech Republic, South Africa, and Romania. BAE has denied all wrongdoing.
If criminal charges are brought, they are likely to involve at least the cases in Tanzania and the Czech Republic, where sources say the most progress has been made. BAE was refusing to comment last night.
The SFO first took up the task of trying to investigate BAE after the company's network of secret offshore "slush funds" was disclosed by the Guardian in an award winning series of investigations by the newspaper.
The fraud agency's confidence that it could get results was increased last week when, in a legal first, the bridge construction firm Mabey & Johnson agreed a deal to plead guilty to corruption concerning foreign contracts. It paid more than £6m in penalities, replaced a number of directors and promised to turn over a new leaf. The deal included reparations to Ghana and other countries where it admitted bribes were paid to officials and politicians.
The Mabey deal was the first successful corruption prosecution of any size borught by a British government agency since laws were passed more than seven years ago, explicitly banning foreign bribery.
It was seen as a template that BAE could be prepared to follow, of confession followed by relative leniency. But BAE until now has insisted that it was prepared to "allow the ongoing investigations to take their course".
Mpita Njia
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Hivi hapa kwetu kinafanyika chochote kuchunguza kashafa hiyo au tunawasubiri hao wazungu?
Bill
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Chochote watacholetewa ama kuamuliwa na SFO watapokea kwani hawawezi kufanya maamuzi binafsi. Ukizingatia suala lenyewe linagusa kuzuiliwa misaada inayowawezesha kujazia fedha walizoiba zinazotokana na pato la ndani
NgomaNzito
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- Jan 10, 2008
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Check jamaa(Vjcent&na yule mhindi) walikula 30% commision on sales, hili limewakamata kujinasua ngumu
'Alderman inherited four other "live" BAe cases, which continued to be investigated. These concern a secret 30% commission on sales of a military radar to Tanzania; alleged bribes behind a Czech deal to lease Anglo-Swedish Gripen warplanes; commissions paid on a sale of two obsolete frigates to Romania; and £100m in secret commissions in a £1.5bn weapons deal with South Africa'.
source: theguardian uk
'Alderman inherited four other "live" BAe cases, which continued to be investigated. These concern a secret 30% commission on sales of a military radar to Tanzania; alleged bribes behind a Czech deal to lease Anglo-Swedish Gripen warplanes; commissions paid on a sale of two obsolete frigates to Romania; and £100m in secret commissions in a £1.5bn weapons deal with South Africa'.
source: theguardian uk
Zitto
Former MP Kigoma Urban
- Mar 2, 2007
- 1,562
- 10,883
BAE Systems faces bribery charges
The SFO investigation refers to deals with a number of countries
UK defence giant BAE Systems faces corruption charges after the Serious Fraud Office said it would ask the Attorney General to prosecute the firm. The SFO has been in negotiations with BAE but the sides could not agree what the firm would admit or the fine due.
The case refers to allegations BAE paid bribes to win contracts from several nations in Africa and Eastern Europe.
BAE said it was still trying to resolve the case, but would deal with matters in court "if necessary".
"BAE Systems has 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 firm said.
However it admitted last year - after an independent investigation - it had not always met the highest ethical standards.
A separate investigation into BAE by the SFO was dropped in 2007 after it was decided that national security was at risk.
In that case, the SFO ended its investigation into a giant 1980s arms deal BAE secured from Saudi Arabia.
'Explosive investigation'
Whether you love or hate that BAE is a world leader in defence, it is the biggest manufacturer in the UK and is a significant part of the British economy
Robert Peston
BBC Business Editor
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/10/bae_cant_pay_would_like_to_pay.html The latest SFO investigations are into contracts BAE won from countries including Tanzania, the Czech Republic, Romania and South Africa.
The BBC understands that the SFO wanted to strike a deal that would involve BAE pleading guilty to charges of corruption and agreeing to pay a substantial sum in compensation - between £500m and £1bn - however no deal was done.
BBC business editor Robert Peston said the continuing probe was "the most explosive investigation into a British company that I have ever encountered".
He added that, while BAE would like to settle the case through a plea bargain, its management had a legal duty not to hand over cash or damage the reputation of the firm unless they were advised by their own lawyers that the SFO had an overwhelming case.
THE STORY SO FAR...
Allegations that BAE contracts have been won through bribery payments are not new.
The biggest probe focused on a £43bn contract to supply more than 100 fighter jets to Saudi Arabia. The deal began in 1985 but a National Audit Office investigation was suppressed in 1992.
The SFO launched an investigation in 2004 into the allegations - including BAE running a "slush fund" that offered sweeteners to Saudi royals and their intermediaries in return for lucrative contracts.
This was dropped two years later by Tony Blair after political pressure from the UK and Saudi Arabia. BAE always denied any wrongdoing.
In July 2008, BAE pledged to implement recommendations from an independent review into its conduct
Profile: BAE Systems
Criminal charges would be brought under the 2001 Prevention of Corruption Act, but conviction would be decided by a judge without needing a crown court trial in front of a jury.
A final decision on whether to proceed with criminal proceedings will have to be made by the Attorney General Baroness Scotland.
It will take several weeks to prepare the papers for the Attorney General - and it is possible that the sides could still reach an agreement in that time.
The firm is the UK's largest manufacturer - making everything from British Army kit to warships and planes. It has about 105,000 employees worldwide, including about 32,000 in the UK with customers in more than 100 countries.
'Long-term damage'
A year-long independent review of practices at BAE urged bosses to adopt stronger anti-bribery measures and a global ethical code of conduct.
The proposals were among 23 recommendations made by a committee headed by the former Lord Chief Justice, Lord Woolf.
"BAE either becomes an ethical company, which involves refusing to get involved in some contracts, or it does not become a fully ethical company reaching the gold standard that we have identified," Lord Woolf said when the report was published in May last year.
"There are contracts that are not worth having and that will do long-term damage to the company, and the company has to accept that."
The SFO investigation refers to deals with a number of countries
UK defence giant BAE Systems faces corruption charges after the Serious Fraud Office said it would ask the Attorney General to prosecute the firm. The SFO has been in negotiations with BAE but the sides could not agree what the firm would admit or the fine due.
The case refers to allegations BAE paid bribes to win contracts from several nations in Africa and Eastern Europe.
BAE said it was still trying to resolve the case, but would deal with matters in court "if necessary".
"BAE Systems has 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 firm said.
However it admitted last year - after an independent investigation - it had not always met the highest ethical standards.
A separate investigation into BAE by the SFO was dropped in 2007 after it was decided that national security was at risk.
In that case, the SFO ended its investigation into a giant 1980s arms deal BAE secured from Saudi Arabia.
'Explosive investigation'
Robert Peston
BBC Business Editor
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/10/bae_cant_pay_would_like_to_pay.html The latest SFO investigations are into contracts BAE won from countries including Tanzania, the Czech Republic, Romania and South Africa.
The BBC understands that the SFO wanted to strike a deal that would involve BAE pleading guilty to charges of corruption and agreeing to pay a substantial sum in compensation - between £500m and £1bn - however no deal was done.
BBC business editor Robert Peston said the continuing probe was "the most explosive investigation into a British company that I have ever encountered".
He added that, while BAE would like to settle the case through a plea bargain, its management had a legal duty not to hand over cash or damage the reputation of the firm unless they were advised by their own lawyers that the SFO had an overwhelming case.
Allegations that BAE contracts have been won through bribery payments are not new.
The biggest probe focused on a £43bn contract to supply more than 100 fighter jets to Saudi Arabia. The deal began in 1985 but a National Audit Office investigation was suppressed in 1992.
The SFO launched an investigation in 2004 into the allegations - including BAE running a "slush fund" that offered sweeteners to Saudi royals and their intermediaries in return for lucrative contracts.
This was dropped two years later by Tony Blair after political pressure from the UK and Saudi Arabia. BAE always denied any wrongdoing.
In July 2008, BAE pledged to implement recommendations from an independent review into its conduct
Profile: BAE Systems
Criminal charges would be brought under the 2001 Prevention of Corruption Act, but conviction would be decided by a judge without needing a crown court trial in front of a jury.
A final decision on whether to proceed with criminal proceedings will have to be made by the Attorney General Baroness Scotland.
It will take several weeks to prepare the papers for the Attorney General - and it is possible that the sides could still reach an agreement in that time.
The firm is the UK's largest manufacturer - making everything from British Army kit to warships and planes. It has about 105,000 employees worldwide, including about 32,000 in the UK with customers in more than 100 countries.
'Long-term damage'
A year-long independent review of practices at BAE urged bosses to adopt stronger anti-bribery measures and a global ethical code of conduct.
The proposals were among 23 recommendations made by a committee headed by the former Lord Chief Justice, Lord Woolf.
"BAE either becomes an ethical company, which involves refusing to get involved in some contracts, or it does not become a fully ethical company reaching the gold standard that we have identified," Lord Woolf said when the report was published in May last year.
"There are contracts that are not worth having and that will do long-term damage to the company, and the company has to accept that."
Invisible
Robot
- Feb 11, 2006
- 9,075
- 7,878
BAE: The Tanzanian connection
BAe, Europe's biggest defence company, manufactures the Typhoon fighter
By Andrew Hosken
The Serious Fraud Office (SFO) says it will begin what promises to be the biggest corporate corruption prosecution in British legal history.
It is asking the Attorney General for the go-ahead to prosecute BAE for bribery under the 2001 Prevention of Corruption (Amendment) Act.
One of the four countries involved in the alleged corrupt deals is Tanzania.
Though far from the largest deal, it looks certain to cause the biggest heartache in Downing Street.
In 2001, Tanzania, one of the world's poorest countries, decided to purchase a military air traffic control system from BAE. Clare Short, then secretary of state for international development, says she was horrified by the move and was convinced it was a corrupt deal.
"I was really shocked by the behaviour of British Aerospace and the collusion of all these government departments in such a gross and disgraceful project," she told me.
"Even when I got all the information and took it to the highest levels of the government, I still couldn't stop it."
'Grubby'
Ms Short says that a number of factors convinced her that this was a corrupt deal. She says that the deal had been proposed 10 years earlier but had been blocked by intervention by the World Bank and the UK's Overseas Development Administration, the precursor to the Department for International Development.
"Then it came back as half a project. The thing was so grubby from beginning to end and, of course, it was so old that the technology was overtaken. Tanzania didn't have military aircraft. It needed civil air traffic control improvement in order to improve its tourist industry."
But Clare Short was far from alone in expressing deep concern about the BAE-Tanzania deal. In October 2001, a report by the International Civil Aviation Organisation, a part of the United Nations, said:
"The system as contracted is primarily a military system and can provide limited support to civil air traffic control purposes. The purchase of additional equipment… would be required to render it useful for civil air traffic control. However, if it is to be used primarily for civil air traffic control purposes, the proposed system is not adequate and too expensive."
Clare Short says tha Tanzanian deal was "a disgraceful project"
At the same time in 2001, Clare Short had agreed a £35m aid package for Tanzania to help provide more children with education but saw virtually the whole sum being effectively gobbled up in the air traffic control system deal.
She opposed the deal in cabinet, a row which soon became public, but claims that in December 2001 one person above all insisted the necessary export licence be given: Tony Blair.
"Tony was absolutely dedicated to all arms sales proposals," she says. "Whenever British Aerospace wanted anything, he supported them 100%. He didn't seem to understand that there are matters of principle concerned. He had also been duped and bought the argument that it's always good for the British economy, which is absolutely not so."
In 2006 Tony Blair made one of the most controversial decisions of his premiership, helping to force the closure of an inquiry by the Serious Fraud Office into allegations that British Aerospace had paid bribes to win a lucrative arms contract with Saudi Arabia.
"I stick by that," he said six months later, "and the idea frankly that such an investigation could be conducted without doing damage to our relationship is cloud cuckoo land."
Six-year inquiry
In January 2007, Clare Short's concerns appeared to have been confirmed when it was reported that $12m (£7.5m) had been paid into the Swiss bank account of a middle man involved in the Tanzanian deal by a BAE subsidiary, Red Diamond.
The payment amounted to approximately a third of the value of the contract and the middle man concerned was described as an agent. BAE has refused to discuss the matter.
Following the cabinet dispute in late 2001, John Prescott, the then deputy prime minister, was asked to chair an ad-hoc committee to analyse the deal and whether an export licence should be given. Initially, Clare Short had hoped for support from the then chancellor.
"I talked to everybody individually and he [Gordon Brown] said he would back me. But then, when it came to the meetings convened by John Prescott, he sent a junior minister and didn't stand. The press was briefed that Gordon was supporting me but, when it came to the crunch, he didn't make an issue of it with Tony."
For the past eight years Norman Lamb, the Liberal Democrat MP for North Norfolk and the party's former spokesman on international development, has been investigating what he calls a "morally indefensible" deal.
"It's outrageous that it's gone on for so many years. We had the inquiry launched by BAE Systems, in the name of Lord Woolf, which was a complete whitewash. What we need is decisive action by the SFO, to make it clear that that culture is no longer acceptable. I also believe we also need a public inquiry into how this export licence was allowed to be granted."
Decisive action is now what the SFO is determined to take, following the failure to reach a deal this week. The SFO thinks the company has turned over a new leaf and is disappointed the company has not so far agreed to draw a line under the affair by pleading guilty and agreeing to pay a significant sum in compensation.
A spokesman for BAE says the company has cooperated with regulators to help conclude an inquiry now in its sixth year, but it clearly looks likely to contest corruption charges.
Subject to agreement by the attorney general, a sensational and protracted criminal trial involving the UK's and Europe's biggest defence contractor seems likely.
Source: BBC
BAe, Europe's biggest defence company, manufactures the Typhoon fighter
By Andrew Hosken
The Serious Fraud Office (SFO) says it will begin what promises to be the biggest corporate corruption prosecution in British legal history.
It is asking the Attorney General for the go-ahead to prosecute BAE for bribery under the 2001 Prevention of Corruption (Amendment) Act.
One of the four countries involved in the alleged corrupt deals is Tanzania.
Though far from the largest deal, it looks certain to cause the biggest heartache in Downing Street.
In 2001, Tanzania, one of the world's poorest countries, decided to purchase a military air traffic control system from BAE. Clare Short, then secretary of state for international development, says she was horrified by the move and was convinced it was a corrupt deal.
"I was really shocked by the behaviour of British Aerospace and the collusion of all these government departments in such a gross and disgraceful project," she told me.
"Even when I got all the information and took it to the highest levels of the government, I still couldn't stop it."
'Grubby'
Ms Short says that a number of factors convinced her that this was a corrupt deal. She says that the deal had been proposed 10 years earlier but had been blocked by intervention by the World Bank and the UK's Overseas Development Administration, the precursor to the Department for International Development.
"Then it came back as half a project. The thing was so grubby from beginning to end and, of course, it was so old that the technology was overtaken. Tanzania didn't have military aircraft. It needed civil air traffic control improvement in order to improve its tourist industry."
But Clare Short was far from alone in expressing deep concern about the BAE-Tanzania deal. In October 2001, a report by the International Civil Aviation Organisation, a part of the United Nations, said:
"The system as contracted is primarily a military system and can provide limited support to civil air traffic control purposes. The purchase of additional equipment… would be required to render it useful for civil air traffic control. However, if it is to be used primarily for civil air traffic control purposes, the proposed system is not adequate and too expensive."
Clare Short says tha Tanzanian deal was "a disgraceful project"
At the same time in 2001, Clare Short had agreed a £35m aid package for Tanzania to help provide more children with education but saw virtually the whole sum being effectively gobbled up in the air traffic control system deal.
She opposed the deal in cabinet, a row which soon became public, but claims that in December 2001 one person above all insisted the necessary export licence be given: Tony Blair.
"Tony was absolutely dedicated to all arms sales proposals," she says. "Whenever British Aerospace wanted anything, he supported them 100%. He didn't seem to understand that there are matters of principle concerned. He had also been duped and bought the argument that it's always good for the British economy, which is absolutely not so."
In 2006 Tony Blair made one of the most controversial decisions of his premiership, helping to force the closure of an inquiry by the Serious Fraud Office into allegations that British Aerospace had paid bribes to win a lucrative arms contract with Saudi Arabia.
"I stick by that," he said six months later, "and the idea frankly that such an investigation could be conducted without doing damage to our relationship is cloud cuckoo land."
Six-year inquiry
In January 2007, Clare Short's concerns appeared to have been confirmed when it was reported that $12m (£7.5m) had been paid into the Swiss bank account of a middle man involved in the Tanzanian deal by a BAE subsidiary, Red Diamond.
The payment amounted to approximately a third of the value of the contract and the middle man concerned was described as an agent. BAE has refused to discuss the matter.
Following the cabinet dispute in late 2001, John Prescott, the then deputy prime minister, was asked to chair an ad-hoc committee to analyse the deal and whether an export licence should be given. Initially, Clare Short had hoped for support from the then chancellor.
"I talked to everybody individually and he [Gordon Brown] said he would back me. But then, when it came to the meetings convened by John Prescott, he sent a junior minister and didn't stand. The press was briefed that Gordon was supporting me but, when it came to the crunch, he didn't make an issue of it with Tony."
For the past eight years Norman Lamb, the Liberal Democrat MP for North Norfolk and the party's former spokesman on international development, has been investigating what he calls a "morally indefensible" deal.
"It's outrageous that it's gone on for so many years. We had the inquiry launched by BAE Systems, in the name of Lord Woolf, which was a complete whitewash. What we need is decisive action by the SFO, to make it clear that that culture is no longer acceptable. I also believe we also need a public inquiry into how this export licence was allowed to be granted."
Decisive action is now what the SFO is determined to take, following the failure to reach a deal this week. The SFO thinks the company has turned over a new leaf and is disappointed the company has not so far agreed to draw a line under the affair by pleading guilty and agreeing to pay a significant sum in compensation.
A spokesman for BAE says the company has cooperated with regulators to help conclude an inquiry now in its sixth year, but it clearly looks likely to contest corruption charges.
Subject to agreement by the attorney general, a sensational and protracted criminal trial involving the UK's and Europe's biggest defence contractor seems likely.
Source: BBC
Lekanjobe Kubinika
JF-Expert Member
- Dec 6, 2006
- 3,020
- 577
Tutayasikia mengi tunapoelekea uchaguzi mkuu Tanzania. Ukishapita uchaguzi na hizi nyimbo zitapita sawia. Yalisemwa wakati kama huu zamani, JK alipoingia na mambo haya yakaimbwaimbwa halafu njwiiiii!
Leka
Leka
kikaango
Member
- Sep 2, 2009
- 18
- 0
Wee kwanini useme chadema na c cuf? Ukitoa maoni usijipendelee waache wachangiaji wakupendelee
Invisible
Robot
- Feb 11, 2006
- 9,075
- 7,878
Mkuu hapa JK hahusiki na wala serikali yetu huenda haijishughulishi na hili... Hapa ni serikali ya Uingereza imesimama kidete kuondoa uozo huu... Kesi ipo UK na si Tanzania, kina Chenge walifuatwa na wakatoa ushirikiano wao, sasa kama kutakuwa na mashtaka dhidi yao LEO tutajua!
BAE said in a statement on Thursday that it continued to attempt to resolve the matters under investigation with the SFO but that it would be prepared to defend itself in court if an agreement could not be reached. The company has repeatedly denied allegations that it paid hundreds of millions of pounds of bribes to win business in Saudi Arabia, Tanzania, South Africa, Romania and other countries.
LONDON, England -- Corruption investigators are to press for criminal charges over BAE Systems' arms deals, setting the stage for a showdown in Britain's most politically-charged corporate corruption case.
The Serious Fraud Office said on Thursday it was seeking consent to prosecute from Baroness Scotland, attorney-general, after the failure of efforts to persuade the British company to accept a conviction and fine running into hundreds of millions of pounds.
The decision throws a hugely controversial case back into the political arena and threatens BAE with big financial penalties and the prospect of being barred from bidding for lucrative international public works contracts.
The SFO's two line statement said it was preparing papers for the attorney-general relating to a prosecution of BAE for overseas corruption. The charges were linked to an investigation into the company's dealings in Africa and eastern Europe.
Lady Scotland -- the UK government's senior law officer -- will have to decide whether to press ahead with a prosecution in a case that has been hugely controversial since Tony Blair, former prime minister, intervened in 2006 after pressure from Saudi Arabia to stop a probe into the £43bn Al-Yamamah deal under which Riyadh bought aircraft and other defence equipment from Britain.
BAE said in a statement on Thursday that it continued to attempt to resolve the matters under investigation with the SFO but that it would be prepared to defend itself in court if an agreement could not be reached. The company has repeatedly denied allegations that it paid hundreds of millions of pounds of bribes to win business in Saudi Arabia, Tanzania, South Africa, Romania and other countries.
BAE shares fell more than 5 per cent to 329.9p on Thursday as investors worried about the implications of a possible trial on the company's business orders.
The SFO had wanted a deal in which the company would plead guilty to limited corruption charges in exchange for more lenient treatment, said insiders.
A similar agreement between prosecutors and construction group Mabey & Johnson, the first of its kind in Britain, resulted last week in the company paying out about £6.5m in fines, compensation, costs and reparations.
A guilty plea could have severe consequences for BAE reputationally and commercially, with the possibility that it could be blacklisted from publicly funded projects in the US, European Union and elsewhere.
The company is also under investigation by the US Department of Justice and other national authorities. But there were no immediate signs that the SFO was co-ordinating its decision on prosecution with similar announcements elsewhere.
The stakes are high, too, for the SFO, which is under pressure to improve its record on tackling corporate corruption and deliver results from the BAE probe after investigating the company for more than five years.
BAE has previously denied bribery and said it is co-operating with the authorities as part of a policy of "allowing the ongoing investigations to run their course".
The SFO's probe has also examined possible corruption cases against individual BAE managers and agents, although these would not be covered in either the proposed plea deal or a contested prosecution against the company.
Source: http://edition.cnn.com/2009/BUSINESS/10/01/uk.bae.investigation.ft/index.html
UK investigators to press for BAE fraud charges
LONDON, England -- Corruption investigators are to press for criminal charges over BAE Systems' arms deals, setting the stage for a showdown in Britain's most politically-charged corporate corruption case.
The Serious Fraud Office said on Thursday it was seeking consent to prosecute from Baroness Scotland, attorney-general, after the failure of efforts to persuade the British company to accept a conviction and fine running into hundreds of millions of pounds.
The decision throws a hugely controversial case back into the political arena and threatens BAE with big financial penalties and the prospect of being barred from bidding for lucrative international public works contracts.
The SFO's two line statement said it was preparing papers for the attorney-general relating to a prosecution of BAE for overseas corruption. The charges were linked to an investigation into the company's dealings in Africa and eastern Europe.
Lady Scotland -- the UK government's senior law officer -- will have to decide whether to press ahead with a prosecution in a case that has been hugely controversial since Tony Blair, former prime minister, intervened in 2006 after pressure from Saudi Arabia to stop a probe into the £43bn Al-Yamamah deal under which Riyadh bought aircraft and other defence equipment from Britain.
BAE said in a statement on Thursday that it continued to attempt to resolve the matters under investigation with the SFO but that it would be prepared to defend itself in court if an agreement could not be reached. The company has repeatedly denied allegations that it paid hundreds of millions of pounds of bribes to win business in Saudi Arabia, Tanzania, South Africa, Romania and other countries.
BAE shares fell more than 5 per cent to 329.9p on Thursday as investors worried about the implications of a possible trial on the company's business orders.
The SFO had wanted a deal in which the company would plead guilty to limited corruption charges in exchange for more lenient treatment, said insiders.
A similar agreement between prosecutors and construction group Mabey & Johnson, the first of its kind in Britain, resulted last week in the company paying out about £6.5m in fines, compensation, costs and reparations.
A guilty plea could have severe consequences for BAE reputationally and commercially, with the possibility that it could be blacklisted from publicly funded projects in the US, European Union and elsewhere.
The company is also under investigation by the US Department of Justice and other national authorities. But there were no immediate signs that the SFO was co-ordinating its decision on prosecution with similar announcements elsewhere.
The stakes are high, too, for the SFO, which is under pressure to improve its record on tackling corporate corruption and deliver results from the BAE probe after investigating the company for more than five years.
BAE has previously denied bribery and said it is co-operating with the authorities as part of a policy of "allowing the ongoing investigations to run their course".
The SFO's probe has also examined possible corruption cases against individual BAE managers and agents, although these would not be covered in either the proposed plea deal or a contested prosecution against the company.
Source: http://edition.cnn.com/2009/BUSINESS/10/01/uk.bae.investigation.ft/index.html
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