BAE guilty but escapes court

5 February 2010

Campaign Against Arms Trade (CAAT) and The Corner House are shocked and angered by the decision of the Serious Fraud Office (SFO) to settle with BAE Systems. As a result of the settlement there will be no opportunity to discover the truth behind alleged bribery and corruption in the many BAE deals that were under investigation by the Serious Fraud Office.

While the acceptance of guilt in relation to Tanzania is welcome, the investigations related to other countries including South Africa and the Czech Republic were far more significant. SFO investigations of deals with several countries were continuing up until today, and only last week the SFO charged a former BAE agent with corruption in relation to deals with several European countries.

The SFO settlement was announced in conjunction with the US Department of Justice whose fine concerned BAE's deals with Saudi Arabia. While the combined fine is more significant, the UK penalty of £30 million is a tiny price for BAE to pay to see the end of the investigations that had been gathering evidence for years and were coming to a head.

Kaye Stearman, spokesperson for CAAT, says:

"CAAT is outraged and angry that the allegations about BAE will not be aired in a criminal court and that the Serious Fraud Office has accepted a plea bargain relating only to the smallest deal. After the Government stopped the SFO's inquiry into the company's Saudi deals, it was even more important the truth about its dealings in central and eastern Europe and Africa was made public. One day a former BAE agent appears in court charged with corruption, the next BAE is let off for an accounting misdemeanour."

Nicholas Hildyard for The Corner House says:

"Given BAE's admission of guilt today in the US concerning the Al-Yamamah contract, the UK should re-open its own Saudi Arabian investigation immediately. The company's admission obviously calls into question its repeated denials of any wrong doing. Far from drawing a line under the allegations, today’s announcement simply raises far more questions and creates yet further demands for justice."


In December 2006 the SFO dropped its corruption investigations into BAE's arms sales to Saudi Arabia, following pressure from BAE and the Saudi regime and a direct intervention from then Prime Minister Tony Blair. The decision was subject to severe criticism and prompted CAAT and The Corner House to launch a Judicial Review of the decision. In April 2008, the High Court ruled that the SFO Director had acted unlawfully by stopping the investigation - a decision subsequently overturned by the House of Lords.

The SFO began drawing up the legal papers for the recommended prosecution against BAE on 1 October 2009, following its six-year investigation into alleged bribery in BAE arms deals with several other countries (Chile, Czech Republic, Qatar, Romania, South Africa and Tanzania). BAE is alleged to have paid bribes, often in the form of commissions to "advisers" on the deals, to clinch the sales.

On 29 January 2010, the SFO charged Count Alfons Mensdorff-Pouilly with conspiracy to corrupt in connection with BAE's deals with eastern and central European governments including the Czech Republic, Hungary and Austria.

For further information or an interview please contact:
Kaye Stearman of CAAT, on 020 7281 0297 or 07990 673 232
or Nicholas Hildyard of The Corner House on 01258 473795

Page created 5 February 2010
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