Corruption is a Crime

The Telegraph reports:

City grandee Sir Nigel Rudd, chairman of airports operator BAA and deputy chairman of Barclays Bank, was one of the two BAE Systems executives detained briefly last week by US officials investigating allegations of corruption by the UK defence company.

Sir Nigel, a non-executive director at BAE, was issued with a subpoena by investigators from the Department of Justice (DoJ) when he arrived at New York’s Newark Airport en route to a holiday in Florida. Yesterday, The Sunday Telegraph disclosed that Mike Turner, BAE’s chief executive, had been detained at an airport in Texas, where his laptop and Blackberry were seized.

The DoJ is investigating claims that BAE paid bribes in the 1980s and 1990s to win the £20bn Al Yamamah arms deal with Saudi Arabia. News of the detentions will further strain relations between Washington and London over the DoJ’s probe, as Sir Nigel has been at BAE less than two years and had nothing to do with the Saudi deal.

In 2006 Britain’s Serious Fraud Office controversially dropped its own investigation into Al Yamamah, and there have been claims Whitehall is dragging its feet over requests from the DoJ for information. The detentions may be a sign of the DoJ’s determination to raise the stakes, although one source said last night: “It could equally be a sign of frustration.” …

Liberal Democrat Treasury spokesman Vince Cable said yesterday reports of the detentions “illustrate that the investigation into alleged corruption over this arms deal is very far from closed.”

As the BBC reports:

A review into business practices at defence firm BAE Systems has called for tougher anti-bribery measures.

The study by Lord Woolf, former Lord Chief Justice of England and Wales, set out 23 recommendations for the firm.

Lord Woolf said the report provided a “route map” for BAE to ensure it was a leader for its ethical standards…

The BBC’s business editor Robert Peston says that the report’s finding, that in the past BAE did not pay sufficient attention to ethical standards in the way it conducted business, is an embarrassing admission.