US to investigate BAE - confirmed
Over the last few weeks we’ve covered various stories suggesting that the United States’ Department of Justice would be launching an investigation into BAE Systems plc. The company itself has now confirmed this, the BBC reports. The inquiry will include its business dealings with Saudi Arabia.
BAE is facing allegations that it ran a multi-million pound slush fund to help it win a giant plane and military equipment order from Saudi Arabia.
BAE has always argued that it acted lawfully at all times.
The allegations of illegal payments by BAE date back to the 1980s and the £43bn ($85bn) al-Yamamah deal that supplied Saudi Arabia with Tornado jets and other military equipment.
Analysts said that the probe in the US could damage BAE’s business in North America.
The BBC business editor, Robert Peston, has blogged about the case this morning, noting that it will be “Gordon Brown’s first big diplomatic dilemma as prime minister.”
Why? Because the contract was between the British and Saudi governments, not between BAE and Saudi.
BAE was only the contractor.
So it will be a decision for the Ministry of Defence, not BAE, whether to disclose the details of the deal.
We will be watching with interest to see if Prime Minister Brown is any more open than Prime Minister Blair.
Posted in Al Yamamah, BAE, Gordon Brown, United States |
