Corruption is a Crime

Vince Cable, the Deputy Leader of the Liberal Democrats, has written an article for Comment Is Free calling for an inquiry into the Al Yamamah affair as a step towards cleaning up such international deals.

I still find it difficult to get my head round the idea that, until December, one agency of government (the Serious Fraud Office) was investigating what it believed could be crimes, leading to prosecutions, while another arm of government was cheerfully helping the suspected felons. Since there are six other bribery cases still being investigated by the SFO in relation to the BAE contracts with South Africa, Tanzania, the Czech Republic, Qatar, Chile and Romania, the obvious question is whether the government has been, or is, actively involved in facilitating payments there as well.
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These issues are, on one level, legal and technical, but at another, moral and political. So far, the government has shown itself utterly impervious to political embarrassment. The prime minister happily signed up to a G8 communique condemning corruption, and British minsters and ambassadors go round the world lecturing (Africans, in particular) on the virtues of honest and transparent government procurement.

Read the full article here. Vince’s article from last week - “Today’s allegations about secret payments to a Saudi prince mean that the government must come clean about its role in the BAE arms deals” - is here.

Liberal Democrat Leader Ming Campbell has demanded a statement from the Prime Minister following an investigation by the BBC’s Panorama. The programme found evidence that BAE has secretly paid £1bn to Prince Bandar of Saudi Arabia in connection with Britain’s biggest ever weapons contract, known as the Al Yamamah deal. The payments were made with the full knowledge and authorisation of Ministry of Defence.

Campbell said:

“When I questioned the Prime Minister about this issue in the House of Commons, he took full responsibility for the decision to discontinue the investigation into BAE. In light of BBC’s allegations, the Prime Minister must make a full and detailed statement to the House of Commons.”

The Liberal Democrats’ Deputy Leader, Vince Cable, has called for a parliamentary inquiry. He said:

“If it is indeed true that the British Government has been complicit in enormous under the counter payments to Prince Bandar there must be a full investigation by Parliament, and the Public Accounts Committee must be reconvened to pursue the al Yamamah investigation. My colleagues and I will not rest until there is proper ministerial accountability for what appears to be totally unacceptable conduct which completely undermines anti-corruption legislation.”

The Panorama edition on Al Yamamah will be broadcast on Monday 11 June at 8.30pm on BBC One.

A new BBC investigation has found evidence that the Ministry of Defence had full knowledge of secret payments running into hundreds of millions of pounds made by BAE to a Saudi Arabian prince:

BAE Systems made regular payments of hundreds of millions of pounds to Prince Bandar bin Sultan for more than a decade … Up to £120m a year was sent by BAE from the UK into two Saudi embassy accounts in Washington for more than a decade. The BBC’s Panorama programme has established that these accounts were actually a conduit to Prince Bandar, the architect of the 1980s Al Yamamah deal to sell warplanes to Saudi.

Liberal Democrat MP Vince Cable has called for an urgent inquiry into these revelations:

It increasingly looks as if the motives behind the decision to pull the SFO inquiry were less to do with UK national interests but more to do with the personal interests of one of two powerful Saudi ministers … Tony Blair’s claims that the government has been motivated by national security considerations look increasingly hollow.

Following confirmation that the US Department of Justice has been discussing BAE Systems plc with the Serious Fraud Office, Vince Cable MP, the Liberal Democrat Deputy Leader, has called for transparency in the Government’s dealing with the company.

“It is highly significant that the Americans are sniffing around this inquiry, particularly as we know the US Government has protested to the British Government about its unwillingness to prosecute.

“If it is true that the Department of Justice are taking seriously suggestions that offences may have been committed in American jurisdiction, then this could be a major escalation. It would also put BAE Systems in some jeopardy, since a third of its defence sales are to the US and it envisages major expansion there.

“With all these rumours swilling around it becomes all the more important that the British Government should be completely transparent in its dealings with the company. If there has been any bribery or corruption in relation to Saudi Arabia and other contracts, it must be pursued.

“It is simply not sustainable for some companies to be required to clean up their acts, while another enjoys more favorable treatment.”

The Guardian reports today that prosecutors from the Sweden, Austria and the Czech Republic will meet with representatives of the UK’s Serious Fraud Office in The Hague next week “to co-ordinate their corruption investigations into BAE.”

The meeting of prosecutors will take place under the aegis of an EU body called Eurojust, set up in 2003 to fight organised crime. Law enforcement sources said the prosecutors expected to share information and decide which countries were best placed to bring any charges.

The newspaper also reports that Liberal Democrat Deputy Leader Vince Cable has been keeping up the pressure on the Labour Government:

Vince Cable, the Liberal Democrat deputy leader, this week renewed his attack on the UK government for blocking the SFO’s Saudi investigation. In an adjournment debate on Tuesday night, he accused BAE of passing secret funds through an undeclared British Virgin Islands company and asked: “Is that compatible with the Treasury’s rules about money laundering?”

He also demanded that the UK express confidence in Mark Pieth, head of the OECD’s anti-bribery watchdog, which is reviewing claims that Britain broke an international treaty by halting the Saudi investigation in order to protect its relations with the Saudi ruling family.

The full story is here.

Today’s Times carries the continuing story of the United States’ interest in the allegations of bribery against BAE Systems plc.

The US Department of Justice (DoJ) is in talks to establish whether it can launch a formal inquiry into alleged bribery and corruption in BAE Systems, The Times has learnt.

The newspaper reports that the inquiry would be similar to that dropped by the Serious Fraud Office at the end of last year and would focus on payments alleged to have been made by the Red Diamond company, which The Times suggests is a subsidiary of BAE.

Vince Cable, the Deputy Leader of the Liberal Democrats, told the Commons last night that the allegations of corruption against BAE were damaging the reputation of Britain overseas. He also asked what help the UK authorities were giving to the DoJ and what the Department of Trade and Industry was doing to investigate Red Diamond and its links to BAE. Dr Cable said yesterday: “How can we allow an operation like Red Diamond to be hidden offshore, given the concerns about money laundering and corrupt practices?”

Full story here.

Anti-corruption investigators are to be sent to the UK to dig into why the Labour Government axed the investigation into allegations of corruption by British Aerospace in the Al Yamamah arms deal.

In what will be a major embarrassment to Labour’s claims to be tough on crime, the OECD has decided it needs to send a team to make on-site inquiries into Labour’s highly controversial decision.

The OECD says it has “serious concerns” over the case and that legal changes are required to bring Britain’s anti-corruption measures up to scratch. The Liberal Democrats have been pushing for a full independent inquiry into why the charges were dropped - and you can sign our petition on the right to add your voice to the campaign.

The Associated Press has more on the story as does the OECD’s own website.

UPDATE: Lib Dem MP Vince Cable says:

This news is particularly significant as it represents the views of other western governments, all of whom are trying to implement anti-bribery legislation. These countries clearly believe their attempts to tackle bribery are being undermined by the refusal of the British Government to pursue a prosecution.

Although the criminal investigation into BAE has been dropped in the UK, BAE may still face prosecution in the US. If people or firms in the US were involved in any backhanders, then they could be open to prosecution in the US - regardless of what the British government has done.

Lib Dem Deputy Leader Vince Cable MP recently asked the UK government about the US link and got a limited but intriguing answer.

Vince Cable, Deputy Leader of the Liberal Democrats, has criticised BAE’s £1.2 billion profits as “utterly artificial”.

“The company’s profits depend on major, UK government-supported, export contracts around which there are unresolved allegations of corrupt commission payouts and pending prosecutions, or on favoured contracts for government procurement.”

Vince lead the recent Liberal Democrat opposition debate in the House of Commons, where he criticised the ending of the Serious Fraud Office investigation into the Al-Yamamah deal with Saudi Arabia. He went on to criticise the Government’s closeness to BAE:

“The government itself is hopelessly compromised by mutual backscratching with the company, over both domestic contracts and the defence sales sector.

“Despite BAE’s poor record of cost overruns and delays on defence projects, the government continues to distort its policy priorities, pushing through the Trident renewal decision years ahead of a timetable dictated by security considerations, partly in order to meet BAE’s commercial priorities.”