Corruption is a Crime

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 Leader of the Liberal Democrats has labelled Lord Goldsmith, the Attorney General, as “politically inept” over the information given to the OECD regarding BAE Systems.

Responding to a letter he received today from Lord Goldsmith, Ming Campbell said:

“These events get curiouser and curiouser.

“Major decisions involving relevant information to the OECD were taken by officials and not by those with direct ministerial responsibility.

“The plain unvarnished truth is that Britain did not reveal significant information to the OECD. Not only was this a lack of candour but it was politically inept since the information was bound to come out eventually.

“These events make yet another powerful case for transparency and more effective scrutiny by Parliament. It will be an irony if the United States Congress gets more information into the public domain than Parliament.”

Tackled at Prime Minister’s Questions today about BAE/Al Yamamah, Tony Blair took responsiblity on behalf of his whole Government.

According to the Guardian:

After being asked at prime minister’s questions about the £43bn arms deal between BAE Systems and Saudi Arabia by the Liberal Democrat leader, Sir Menzies Campbell, Mr Blair said: “If you want to blame anyone for this, blame me. I am perfectly happy to take responsibility for it.”

Sir Menzies had asked which minister was responsible for withholding information from the world’s anti-corruption watchdog, the Organisation for Economic Cooperation and Development, about secret payments to Prince Bandar of Saudi Arabia.

We note that Tony Blair will be Prime Minister for just two more weeks.

The Corruption Bill, introduced by Liberal Democrat peer Lord Chidgey, reaches its Third Reading in the House of Lords this afternoon. The Bill aims to tighten the laws on British companies operating abroad. The current rules have been criticised by the OECD.

Following press allegations that BAE paid up to £1bn in bribes to a member of the Saudi Arabian royal family, Lord Chidgey called on the Government to back his Bill.

“Recent revelations makes it even more important that this Bill becomes law. I strongly urge the Government to back this important piece of legislation.

“The debacle surrounding the Al Yamamah investigation shows that something must be done to restore faith in the British justice system urgently.

“The UK must fulfil its international obligations to tackle corruption properly.

“Britain has become a laughing stock within the OECD and the reputation of British companies operating abroad has been severely tarnished.”

A couple of months ago, we reported a Guardian story which claimed that the UK was moving against Mark Pieth, the chair of the anti-corruption watchdog of the Organisation for Economic Cooperation and Development (OECD).

According to today’s edition of The Independent, senior employees of the OECD have accused the UK of leading a “dirty tricks” campaign against them.

One senior figure said it was “absolutely clear” that the OECD was being smeared. The smears are alleged to range from seeking to remove officials from their posts, undermining them with representatives of other countries and helping to circulate damaging information about staff linked to the inquiry.

Professor Mark Pieth, a Swiss legal expert closely involved in the OECD decision to investigate, is said to be among those being briefed against. Some suspect British diplomats were involved. “The dirty tricks boys were all at work,” said a senior OECD figure who asked not to be named. “There was a lot of pressure on a lot of people. But what we have tried to do is maintain the independence institutionally. The institution won’t give up.”

The story also reports the OECD’s reaction to last week’s revelations of payments to Prince Bandar bin Sultan:

Sources at the OECD say they believe full details of the payments were withheld, and a campaign to undermine them and pressure them to drop their inquiry was set in train by Britain.

The full story is on the Independent’s website.

The Financial Times reports today that the United States made a “formal diplomatic protest to the British government” over the decision to abandon the Serious Fraud Office’s investigation into BAE’s export sales to Saudi Arabia.

Diplomatic insiders told the Financial Times that Washington said the British decision put the Blair government in breach of both the spirit and the letter of the OECD anti-corruption convention that requires member states to have a “level playing field” in which to conduct commercial relations.

The Labour Government have repeatedly cited national security implications as the justification for ending the investigation. According the the FT:

The US said this was in sharp contrast to the 1977 US law, the Foreign Corrupt Practices Act, which was behind US-led moves during the 1990s to secure international agreement on the OECD convention. “What we are really asking is how do we protect the integrity of the [anti-corruption] convention,” said a US official. Washington wants Britain to give a full explanation of its decisions at the OECD.

The full story is on ft.com whilst Ming Campbell’s reaction is on the Liberal Democrat website.

That’s the headline on the front page of today’s Guardian:

The UK is covertly trying to oust the head of the world’s main anti-bribery watchdog to prevent criticism of ministers and Britain’s biggest arms company, BAE, the Guardian has learned.

The effort to remove Mark Pieth comes as his organisation has stepped up its investigation into the British government’s decision to kill off a major inquiry into allegations that BAE paid massive bribes to land Saudi arms deals.

British diplomats are seeking to remove Professor Pieth, a Swiss legal expert who chairs the anti-corruption watchdog of the Organisation for Economic Cooperation and Development (OECD), claiming he is too outspoken.

The full story is on the Guardian website.

From today’s Guardian:

The government faces more international criticism this week over its decision to halt the Serious Fraud Office investigation into allegedly corrupt Saudi arms deals. The world’s leading anti-bribery watchdog yesterday began secret talks at a three-day meeting to decide whether to punish Britain over the controversial decision.

You can read the full story here.