Transparency International rates the arms industry as one of the most corrupt business sectors, which is not surprising given that deals are often large, complex, shrouded in officially-sanctioned secrecy, and have a select few making the decision to buy.
Corruption is not just an add-on to the trade; it can be central to it, increasing spending on arms by giving decision-makers an incentive to purchase weapons.
Allegations of corruption are widespread. Occasionally there are convictions but, given the close relationship between government and industry, investigations are hard to start and even harder to bring to court.
In 2004, following compelling evidence in the media, the UK’s Serious Fraud Office (SFO) began investigating BAE deals with numerous countries including Saudi Arabia, South Africa, Tanzania and the Czech Republic. However, the pivotal Saudi strand was stopped in 2006 following political intervention by Tony Blair (which in turn resulted from pressure by the Saudi government and BAE). Eventually the SFO agreed only a plea bargain limited to “accounting irregularities” in a BAE contract with Tanzania.
Meanwhile, a US Department of Justice (DOJ) investigation into several of the cases continued. In 2010 BAE was sentenced “to pay a $400 million criminal fine, one of the largest criminal fines in the history of DOJ’s ongoing effort to combat overseas corruption in international business and enforce U.S. export control laws.”
- Joe Roeber, Parallel Markets: Corruption in the International Arms Trade, CAAT, February 2005
- See, for example, the Judge's sentencing remarks at Southwark Crown Court, 21 December 2010
- US Department of Justice, news release, 1 March 2010