BAE-Tanzania investigations
In 2001 BAE sold a £28million Watchman air traffic control system to Tanzania, one of the world's poorest countries. The sale was funded through a loan from Barclays Bank. The deal was backed by then Prime Minister Tony Blair, but opposed by his International Development Secretary Clare Short, who, though she had no evidence, said she did not think the contract "could have been made cleanly". In 2002 the International Civil Aviation Organisation said the system used dated technology and was not adequate for civil aviation. Norman Lamb MP, who compiled a dossier on the deal, said a modern system could have been provided for 10% of the cost.
The documents released as part of the December 2010 UK plea bargain hearing, see above, revealed what had happenned. In October 1999, an agreement was drawn up between two companies controlled by BAE and two under the control of BAE's Tanzanian agent Sailesh Vithlani - one called Marlin International Ltd and the other, the Envers Trading Corporation. Merlin was a Tanzanian company and under the agreement was to receive 1% of the contract price from BAE itself; Envers, based in Panama, received 30% of the contract price via Red Diamond. The total paid was approximately $12.4million.
An international arrest warrant was issued for Sailesh Vithlani in August 2007 and a criminal case has been filed in Tanzania charging him with perjury and lying under oath in connection with the radar deal. He is said to have been in Europe and reports say he was interrogated by the SFO in July 2009.
In April 2008, Andrew Chenge, Tanzania's Infrastructure Minister, who had been Attorney General at the time of the radar purchase, resigned following claims regarding £500,000 in a Jersey bank account. He does not dispute the money's existence, but denies it came from BAE. One report alleges that Sailesh Vithlani sent a copy of a legal opinion by Andrew Chenge to Barclays stating that the purchase would not make Tanzania ineligible for International Monetary Fund loans.
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