BAE Systems, the largely overseas-based but UK-headquartered arms firm, has refused a peace deal with the Serious Fraud Office (SFO). British politicians will now have to decide whether to take the company to court for corrupt deals in Africa and Eastern Europe. But BAE wields colossal political influence in the UK; there's …
So what's the excuse this time?
There's no way that anyone will buy that S Africa, Tanzania (etc) can be positioned as key strategic allies in TWAT. So what will Brown etc use as the excuse for killing this bit of the case?
Assuming a change of govt next year, will the Cameroons be keener to knife their predecessors, or cosy up to their arms trade mates? I suspect the latter, so I'd expect a review of the case that happens to report some time shortly after the date for the election.
Not In The Public's Intrest'
Repeat after me. 'Not In The Public's Intrest'
Hello Gordo. Just lost your job as PrimeMinister. Well never worry we have a job for you here. What's the job. Director of Off World Affairs', Sorry On-World Affairs is alreay taken by Tony. What do you have to do? Well nothing except pay this large cheque into your bank account on a monthly basis.
SFO bribery by another name...
"we accuse you of paying bribes, so we want you to pay this bribe.. sorry fine to us to stop us taking you to court"...
I appreciate there is a world of jargon based difference, but whether a fine or a bribe, it amounts to the same thing on the P&L sheet.
Well said Lewis
As someone with a small (deferred) BAe pension sitting somewhere I'm in two minds as to what I'd like to see happen to them, but they are quite possibly a bunch of crooks & that should go to trial. They have certainly been screwing customers (including the MoD) for a very long time, with or without bribery & corruption.
As for the nonsense about BAe being trotted out by the BBC and others, it almost beggars belief. Shame that the two sides of the argument on World at One were presented by the Tory MP for a BAe constituency on the one hand & a lady opposed to the arms trade in general. Could have done with someone less biased pointing out that BAe are hardly British, nor are they a vital, or indeed a positive, contributor to the economy.
Just think how well other sectors of the economy might be doing if they had that level of support through the hard times.
I'm with BAE
This is what happens with these types of deals. Furthermore these deals were done outside of the UK, with foreign countries, so why should they be subject to UK law anyway?
I'd rather BAE paid a bit of a bribe and a bunch of British workers kept their jobs rather than them taking a nice moral high ground and going bust.
BAE had better take it like a man!
Because if we don't pretend do something the US is in the process of doing something and if they can do anything to enforce honest free international trade (there goes another keyboard!) BAE will be banned from any international trade.
Do they have an office in California?
Because then perhaps Harriet Harman can get back on her soap box and challenge Arnie to take them out.. you know such morally bankrupt behaviour and everything.
call them the cost of doing business.
@ I'm with BAE
As a UK company they are under the rule of UK law, and since when has "everyone's doing it" been a defence in law?
Moral high ground is everything in law, without it there is no law, and are you saying that the size of a company dictates how much they are under the rule of law?
I hope they get taken to the cleaners and everything comes out. The rule of law needs to be upheld, no matter what.
"Furthermore these deals were done outside of the UK, with foreign countries, so why should they be subject to UK law anyway?"
Bribery of foreign government officials by UK firms/citizens/others with a connection to the UK is an offence following the Anti-Terrorism, Crime and Security Act 2001. This in turn follows the UK's signing of the OECD Anti-Bribery Convention in 1998. And since then, it's done bugger all about it: http://www.oecd.org/document/8/0,3343,en_2649_34859_41515464_1_1_1_1,00.html In fact, the only country to have made any serious efforts to prosecute and prevent corruption of foreign officials is the US Department of Justice. Germany is far behind the US, and then everyone else is fair behind Germany. See Transparency International's Global Corruption Report and also their defence sector research for more: http://www.transparency.org/news_room/in_focus/2006/defence_sector
The issue is an important one for the UK which is why it should be subject to UK law: bribery of foreign officials is not just "a bit cheeky" or a tut-tut affair, it creates a serious risk to UK businesses, UK competitiveness and UK security interests. Every time a kickback is paid, it sustains a corrupt and repressive regime overseas that ignores the interests of ordinary people and creates exclusion and disharmony with the government; this isolation is exploited by extremists (of any description), which in turn endangers UK citizens/businesses/interests. Osama Bin Laden's (former?) appeal among the masses in the Middle East was partially the result of railing against corrupt and repressive regimes like Saudi Arabia: and any bribe paid by BAe to the Saudi government sustained that corruption and repression; and our previous failure to stop BAe doing that is now biting the UK in the arse.
"I'd rather BAE paid a bit of a bribe and a bunch of British workers kept their jobs rather than them taking a nice moral high ground and going bust."
It doesn't even work like that - the defence sector is a huge subsidy junkie in the UK and bribery always costs more than it was originally worth - speaking as someone who has investigated dozens of corrupt payments to foreign officials on behalf of a private/commercial employer, wherever there is bribery, there is also fraud against the company and tax evasion. It's not the nice moral high ground, it's enlightened self-interest.
Not to be picky...
But if 70% of the employees are overseas, that still leaves around 30,000 UK employees, which still does make them a significant employer really doesn't it.
The real problem is..
.. they were all bought on expenses.
Mine's the one with the roll of banknotes..
SFO are anti British
Just like the rest of the Labour party, this department seems determined to make sure British jobs are lost. Its a tough world and China and others are quite happy to pick up our lost trade.
I liked this quote:
As a result, BAE has been reluctant to go further than its admission last year that it "has not always met the highest ethical standards".
Surely 'Ethical Standards' in the arms industry are an oxymoron in the first place.
One correction for you there Lewis, the DSO do not have passes to the London Main Building as they now have to be booked in. Only people who actually work in the building can get in without being booked, even MoD people outside London do not have unfettered access. Access is indeed a priviledged thing!
Also do not be too quick to wish for the demise of DESO. The arms business is murky and the reason why DESO did a lot of the promotion of it was because otherwise those nasty defence ministers would do it and no one could question their nice dubious decision making. Remember Aitken and the subsequent Scott Enquiry? DESO was an organisation of two halves, the dodgy arms dealers and a few independent teams who did a pretty good job of checking and auditing them. Getting rid of this, just means the whole business has gone underground with no scrutiny. Those dratted campaigners, far from stopping this business, have just made it harder to stop it. That is what happens what politicians give in to dumb people!
Oh and yay for BAE being prosecuted. When does the SFO go after them for bribing- I mean influencing defence ministers and the head of the NAO?! ;)
The Real World
I have considerable experience of working abroad. In order to get contracts overseas it is almost mandatory to oil the wheels. Furthermore, it is often also necessary to have local representation to operate successfully in many of those countries. That is the nature of things.
By way of example, Britain lost (and has virtually never recovered) all it's trade with Malaysia after The Times reporter opened up 'The Arms for Aid' issue and accused Maggie's government of bribing the Malaysian Prime Minister etc. I worked in Malaysia shortly afterwards and the consensus of opinion that I encountered was that we (the British) were idiots for making an issue about this since it was considered a normal way of doing business.
Of course, if UK don't want the business, lets be righteous about it. No 'oil', no contracts.
The arms trade - well that's another story. A dirty business. As for the US, just opportunistic.
Bribery and Corruption are OK
if it keeps UK workers employed according to several of the posters above.
With principals or lack thereof anything can be justified it it means work for the workers in the right company and even more justified if the profits for the bosses is nice and big.
Yes, ok but..
I appreciate this is standard, stock Lewis Page article about BAES, and has some relevant comment.
However, I would like to read an article in which Lewis gives an alternative option for the UK to acquire and develop on-shore advanced, niche military technology that is not 'buy American'?
The reason why 'buy American' is not always (or indeed often) an option, and the reason for BAES' existence, however anachronistic to Lewis, is that BAES does supply some technology which we cannot buy from the US or anywhere else. Furthermore, for all their faults, BAE and its supply chain represent the best chance for the UK to retain and develop that capability in the future. Once gone, could it be recreated? Whatever rocks Lewis throws at it, BAE is an essentially well-run business, and if US companies or others could give more, that is probably because they are already better-funded, or they have economies of scale (again, from better funding). The UK MOD knows that it should not base its defence technology strategy on leveraging US government funds (it couldn't anyway).
Now, Lewis, how about that article?
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