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BAE Systems
#1
Just business as usual as far as I can see.

BAE Systems around the world



Friday 2 October 2009
Czech Republic
Count Alfons Mensdorff-Pouilly had been BAE's secret middleman in the Czech Republic, Austria and Hungary since the early 90s. Prosecutors are understood to have questioned him about an £11m payment made to him by BAE to find out if the money was slipped to Czech politicians and officials. The count denies any wrongdoing.
The investigation revolves around a £400m Anglo-Swedish deal in 2004 in which the Czech Republic leased Gripen fighter planes. Jan Kavan, a former Czech foreign minister, told undercover reporters that "money changed hands" with politicians there. He named two BAE executives. Austrian prosecutors said they expect to bring charges against Mensdorff.
Romania
In 2003, the Romanians paid BAE £116m to refurbish and maintain two surplus British frigates. A Romanian admiral later said his country could have bought similar warships from the Dutch for less than half the price. The BAE deal had been organised by the British Ministry of Defence and financially supported by the UK government. The SFO investigated payments of £7m from BAE to a British middleman, Barry George. He is married to a Romanian with close connections to the former communist regime. When BAE sought financial support from the British government, the firm misled officials by saying that most of the £7m had gone to another agent, whom the firm refused to identify. The SFO found out that all the payments had in fact been funnelled to George. He and his wife denied any impropriety.
South Africa
In 1999 the ANC government spent £1.6bn buying fleets of Hawk and Gripen warplanes. The Hawk was said to be twice the price of an Italian competitor, but defence minister Joe Modise handed the contract to BAE.
Tony Blair had promoted the deal and it was given financial backing by the British government. A leaked SFO dossier alleged secret payments by BAE totalled more than £100m; it accused BAE of a corrupt relationship with Berkshire arms dealer John Bredenkamp, who, according to one former BAE executive, "suggested identifying the key decision-makers, with a view to 'financially incentivising them' to make the right decision". He has denied wrongdoing.
A seized memo referred to "third world procedures", said by the SFO to be a "veiled reference to the payment of bribes". The dossier also outlined millions of pounds paid to an aide to Modise, through secret offshore channels. SFO accused BAE of seeking to conceal the aide's involvement.
Tanzania
When what is an impoverished country took out a loan to buy a £28m military radar system in 2001, international bodies condemned the deal. BAE is alleged to have paid £9m in bribes to secure the contract.
Clare Short, then development minister, fought in cabinet to stop export approval. Tony Blair overruled her. Robin Cook, foreign secretary, remarked that BAE's chairman seemed to "have a key to the garden door of No 10".
A Tanzanian middleman, Sailesh Vithlani, is alleged to have been sent the payment to his Swiss account via a BAE front company registered in the British Virgin Islands. Investigators in Tanzania charged him with lying to them; he went on the run and is wanted by Interpol.
The only casualty so far has been Andrew Chenge, a Tanzanian minister forced to resign last year after the Guardian revealed that investigators had discovered more than £ 500,000 in his Jersey offshore accounts. He denied the money came from BAE, but does not dispute its existence.
http://www.guardian.co.uk/world/2009/oct...ems-global
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The head of the Serious Fraud Office signalled his intention today to prosecute the arms company BAE on corruption charges, an unprecedented move immediately supported by the former attorney general, Lord Goldsmith.
Goldsmith, who was in post when the SFO was forced to drop a previous investigation into the company, backed the tough stance of the agency's current director Richard Alderman, who made clear he would seek to prosecute unless the firm accepted heavy financial penalties for its behaviour in securing foreign weapons contracts.
Writing in the Guardian, Goldsmith, whose successor Lady Scotland would have to give the all-clear for a criminal trial, said the SFO's "carrot and stick" approach to BAE was the right one.
Alderman announced this morning that the SFO would prepare paperwork to submit to the attorney general, seeking formal consent to prosecute BAE.
This followed BAE's refusal to bow to his 30 September deadline for negotiating a plea agreement as an alternative to a full criminal trial on bribery-related charges.
Today's public statement was dramatic and unprecedented in a British legal context. But the small print left room for BAE to return to the negotiating table. An official request for consent will not be submitted to the attorney general for the three or four weeks it takes to get the paperwork in order, according to SFO sources. They say BAE, having tried and failed to call the SFO's bluff, could reopen settlement talks at any time.
It was widely reported today , and not disputed by either of the parties, that money was the main sticking point in prolonged private negotiations. BAE is not willing to pay in the region of £500m which the SFO is demanding as the penalty for what it claims are corrupt dealings in four countries: Tanzania, Czech Republic, South Africa and Romania.
The company was hoping to escape with payments described by one source as only "tens of millions". BAE shares fell 4% today , wiping almost £500m from the company's value.
Alderman's statement said the SFO "intends to seek the attorney general's consent to prosecute BAE Systems for offences relating to overseas corruption and will prepare its papers to be submitted to the attorney when the SFO considers it is ready to proceed. This follows the investigation carried out by the SFO into business activities of BAE Systems in Africa and eastern Europe."
BAE said: "The company notes the announcement by the UK's Serious Fraud Office (SFO) and continues to expend considerable effort seeking to resolve, at the earliest opportunity, the historical matters under investigation by the SFO.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." It said if a prosecution was launched, the company would "deal with any issues raised in those proceedings at the appropriate time and, if necessary, in court".
Throughout the six years that corruption investigations have been going on into BAE, the arms company has declined to respond publicly to any of the detailed allegations that have surfaced about its practices. The closest it has come is in accepting a report commissioned from a retired lord chief justice, Lord Woolf, which said BAE "did not in the past pay sufficient attention to ethical standards".
Alderman's move to prosecute was welcomed today by anti-corruption campaigners, many of whom had been critical in 2006 when Tony Blair, as prime minister, and Goldsmith, as his attorney general, forced the SFO to drop its biggest BAE investigation, into commissions paid on the £43bn al-Yamamah arms deal with Saudi Arabia. Chandrashekhar Krishnan, executive director of Transparency International UK, said: "We welcome this robust action by the SFO and now expect the attorney General to consent to a prosecution."It sends an important wider message to UK plc that bribery does not pay." Andrew Feinstein, a former South African MP who tried to investigate arms corruption allegations, said: "Justice will be served … by a court case."
http://www.guardian.co.uk/world/2009/oct...ud-office1
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Messages In This Thread
BAE Systems - by Magda Hassan - 05-10-2009, 12:37 PM
BAE Systems - by David Guyatt - 05-10-2009, 02:03 PM
BAE Systems - by David Guyatt - 06-02-2010, 05:06 PM
BAE Systems - by Jan Klimkowski - 06-02-2010, 05:57 PM
BAE Systems - by Magda Hassan - 04-10-2013, 02:10 PM

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