Corruption is a Crime

From The Guardian:

People around the world believe that Britain has become a markedly more corrupt country, according to a league table published yesterday.

Britain has slipped down the rankings of a table compiled yearly by the group Transparency International, following political scandals and the government’s failure to prosecute over alleged bribery.

The table is compiled each year by the global anti-corruption group, from polls taken around the world. The results are used to assess how much corruption is perceived to exist among public officials and politicians in 180 countries.

Britain is now classed as the 16th cleanest country in the world, down from 12th in the previous year, and its worst performance since the league table was started in 1995…

The executive director of Transparency International, Chandrashekhar Krishan, said it was “probably no surprise” that Britain’s reputation had “significantly worsened”. He said: “Public confidence in political office has been eroded by the ‘cash-for-honours’ affair and the grudging exposures of MPs’ expenses.”

Britain, he added, had a “wretched and woeful record” in prosecuting business executives for paying bribes to foreign politicians and officials to win contracts.

He said this was epitomised by the government’s decision to drop the police investigation into allegations that BAE, Britain’s biggest arms company, paid bribes to Saudi royals.

The Law Lords have finally ruled on the Serious Fraud Office’s appeal against the High Court’s decision in April that the SFO acted unlawfully in ending its investigation into the Al-Yamamah arms deal.

The House of Lords has overturned that decision and declared that the director of the SFO acted lawfully and within his powers when he ended the inquiry.

On the fact of it, this is disappointing. But the real issue is not whether the SFO acted unlawfully - it’s the political pressure apparently put on the SFO by ministers, and the reasons behind the decision to drop the investigation. That’s why we’re continuing to campaign for an independent inquiry into how and why the Serious Fraud Office’s investigation was ended.

And there are some interesting comments from the Law Lords in this regard, as the BBC reports:

Baroness Hale said she would have liked to have been able to uphold the court’s decision that the SFO’s director acted unlawfully because it was “extremely distasteful that an independent public official should feel himself obliged to give way to threats of any sort”.
[...]
Lord Bingham, said the SFO director Robert Wardle “was confronted by an ugly and obviously unwelcome threat”.

The nature and source of those threats still need to be exposed.

The Guardian reports that US Department of Justice officials investigating bribery and corruption allegations in relation to the Al-Yamamah arms deal between BAE and Saudi Arabia have issued a subpoena to BAE’s business development director Alan Garwood:

Until last year, Garwood led a team of 600 civil servants at the Defence Export Service Organisation at the MoD, where he worked on projects including last year’s deal to sell Eurofighter Typhoons to Saudi Arabia. He was seconded to the MoD from BAE in 2002.

That secondment reinforces the suggestion that the relationship between the MoD and BAE is too close.

BAE chief executive Mike Turner and non-executive director Sir Nigel Rudd had already been issued with subpoenas.

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.”

The Leader of the Liberal Democrats, Nick Clegg MP, has written to Prime Minister Gordon Brown urging him to re-open the the Serious Fraud Office’s investigation into the Al-Yamamah arms deal and demanding a full inquiry into how it came to be dropped.

This follows yesterday’s ruling by the High Court that the SFO acted unlawfully when it suspended - under direction from the Labour Government - its investigation into the deal between BAE and Saudi Arabia.

Nick Clegg also calls on the Prime Minister to update Parliament on the progress of other investigations into alleged corruption by British companies, and on UK Government cooperation with the US Justice Department’s investigation into alleged bribery by BAE.

Here’s the letter in full:
Read the rest of this entry »

The BBC is reporting that the High Court has ruled that the Serious Fraud Office “acted unlawfully” in shutting down its inquiry into the BAE/Al-Yamamah arms deal. The court has criticised the director of the SFO for “failing to resist threat from government”.

The judicial review case was brought by Campaigns Against Arms Trade who had said the decision to drop the inquiry was illegal under international anti-bribery agreements.

According to the BBC’s coverage, the Labour Government was concerned that the SFO’s investigation would jeopardise a deal to sell Typhoon fighters to Saudi Arabia - an economic consideration rather than the “national security” argument the Government and the SFO claimed.

We hope the SFO will now resume its investigation, and you can back our campaign for an inquiry to how the SFO came to drop its inquiry by signing the petition on the right-hand side of the page.

As today’s Observer reports:

The UK government will this week face an unprecedented investigation by the powerful Organisation for Economic Co-operation and Development (OECD) over its failures to comply with international anti-corruption and bribery protocols.

Over three days, starting on Tuesday, officials from the Foreign and Home Offices and the Ministry of Justice, together with the Attorney-General, senior Serious Fraud Office and police figures will be interrogated by French, Canadian and other OECD anti-corruption experts.

The agenda, seen by The Observer, will focus on why the UK government has failed to pass a modern anti-corruption law despite promising to do so for the past 10 years, and the reasons behind Britain’s failure to mount successful prosecutions in this area.

The scale of the investigation, which is divided into 114 sessions, reveals the depth of international concern at the inadequacy of the UK’s bribery and corruption laws and will embarrass Prime Minister Gordon Brown. Among witnesses will be senior business figures from BP and mining giant Anglo-American as well as MPs from all parties.

The OECD probe is known as a ‘Phase Two’ examination - a procedure that, so far, only three countries, Ireland, Luxembourg and Japan, have been subjected to. The investigation will also question the reasons behind the government’s decision to order the SFO to stop its investigation into the al-Yamamah arms deal between the Saudi government and BAE. That decision is now the subject of a judicial review.

The investigation will also seek to clarify the role of the Attorney-General in serious corruption cases - at a time when the draft Constitutional Renewal Bill is proposing to enshrine in law the right of the Attorney-General to stop bribery investigations on national security grounds if he receives a certificate from the relevant Secretary of State.

It is understood that the Paris-based OECD has come under pressure from UK officials to water down its probe, but the scale of the investigation appears to indicate that the OECD, which, as the leading grouping of advanced industrial nations, sets international benchmarks on corruption issues, has not caved in.

The Government was accused in court yesterday of having rolled over in the face of threats from Saudi Arabia over the investigations into bribery and corruption allegations involving BAE Systems and arms deals with Saudi Arabia.

The comments came during a court hearing into the axing of the investigations:

Lord Justice Moses said the court had seen nothing to suggest that the government had done “anything other than roll over” in December 2006.

An attempt could have been made, he said, to get the threat to withdraw co-operation with the UK, including over security issues, lifted.

Liberal Democrat MP Vince Cable said:

These comments are seriously damaging to the Government’s credibility in its handling of this scandal. The Liberal Democrats alleged at the time that the Government had capitulated in the face of threats from Saudi Arabia which may or may not have had any substance. Today we have confirmation that this is exactly what happened.

Tony Blair’s role in the blocking of a criminal investigation into the Al Yamamah arms deal should be investigated by an independent inquiry, says newly elected Liberal Democrat leader Nick Clegg.

In a sign that he will continue the tough line taken by previous Liberal Democrat leaders, Mr Clegg responded to the publication of a letter from then Prime Minister Tony Blair to the Attorney General saying its contents confirmed his “very worst fears”.

As the BBC reports:

The letter from Mr Blair to Lord Goldsmith dated 8 December 2006 was released to the High Court during a case brought by two pressure groups who are challenging the legality of the decision to end investigations into BAE Systems’ dealings with Saudi Arabia.

It refers to “critical difficulties” that might have affected the major contract for new Typhoon military aircraft.

There was uproar when the Serious Fraud Office inquiry into the Al Yamamah contract from the 1980s was dropped, but Mr Blair insisted the decision was taken on security grounds.

Mr Clegg called for an independent inquiry into Mr Blair’s role and insisted that a National Audit Office report on the deal, which has never been made public, should be released.

He said: “Tony Blair must urgently explain what he thought he was up to by invoking the Typhoon contract as a reason to stop the SFO investigation.

“As his own attorney general, Lord Goldsmith, made clear to him between December 2005 and December 2006, commercial relations are an improper basis under international law to suspend a legal investigation.

“Knowing this, why did Tony Blair persist in pursuing a legally improper line of argument which could amount to an attempt to pervert the course of justice?”

Whilst the UK Government decided to axe Britain’s investigation into corruption allegations arrising from the Al Yamamah arms deal with Saudi Arabia, the Swiss are cooperating with the US’s own investigation:

Swiss prosecutors have also agreed to hand over financial records linked to the Saudi Royal family, according to a report by the Guardian newspaper. A US source told the paper “The investigators are confident they can get what they need from Switzerland. That’s where all the BAE arrangements were made”.

Read more in Arabian Business.