Corruption is a Crime

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.

The Government’s decision to drop the inquiry into corruption around the Al Yamamah arms deal is facing new scrutiny from the courts after campaigners won a request for a judicial review.

Corner House Research and Campaign Against the Arms Trade won their request for a judicial review after the judges ruled that “the challenge cries out for a hearing” and raises “matters of concern and public importance”.

Liberal Democrat leader Vince Cable comments:

“I am delighted that this is going to get a full hearing in the High Court.

“It is in the public interest to fully investigate the circumstances surrounding the dropping of this important investigation.

“It appears that the judiciary is more open than the British Government.”

Local authority pension schemes are to review their investments into arms companies, based partly on how those companies win contracts. According to today’s Observer:

The Local Authority Pension Fund Forum (LAPFF), which represents 40 funds with invested assets totalling £70bn, is drawing up a series of questions to put to defence companies as it seeks to encourage responsible investment by pension funds.

Among the areas to be probed will be the conduct of companies in winning contracts, including the use of bribery. Both BAE and the government are at the centre of a political storm over the issue, following the abandonment of an investigation by the Serious Fraud Office into bribery connected to the £40bn al-Yamamah arms deal with Saudi Arabia in the Eighties and Nineties.

The group Campaign Against Arms Trade (CAAT) has used the Freedom of Information Act to find out how much local authority pension funds invest in BAE. They found that there is £311m invested in BAE across 75 local authority funds. West Yorkshire has the biggest investment, with nearly £28m, followed by the West Midlands, Strathclyde, Kent and Aberdeen.

The full story is here and the CAAT campaign is here.

Protesters from Campaign Against Arms Trade (CAAT) are demonstrating this morning outside the AGM of BAE Systems plc. CAAT owns “token shares” in the company which will also allow some of its representatives into the meeting itself. The protest will focus on the company’s activities, and in particular a demand for the SFO investigation into Al Yamamah to be reopened. CAAT believes that “the Government’s intervention [in closing down the investigation] sends a clear message that BAE Systems is above the law.”

Today’s AGM is also marked by Jeremy Warner’s business comment in The Independent:

Washington has already issued a formal protest and several Congressmen have demanded that a full explanation of US concerns be given before any more BAE-related arms deals are approved. That would presumably include the proposed $4.1bn purchase of Armor Holdings which yesterday’s share placing is intended partially to fund.
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However, it is plainly going to be a bit of a problem if the US takes the view that BAE broke the law in winning the Al Yamamah arms contract, and that the Brits are trying to hush it up in their own perceived commercial interest. BAE could find itself blacklisted not just from buying Armor, but potentially from all US arms deals.

Warner also suggests how BAE could proceed:

BAE’s broad-brush assurance that it did nothing wrong is frankly not good enough in the circumstances the company now finds itself in. Neither the public and now, more worryingly from the point of view of the shareholders, the US authorities, are likely to be convinced by it.

If BAE is so confident of its innocence, why doesn’t it order an independent inquiry, similar to what James Baker did for BP over the Texas City oil refinery blast, chaired by someone of unimpeachable integrity, whose findings would be published.

The Campaign Against the Arms Trade has taken legal action against BAE to find out how BAE got hold of confidential internal legal documents from the organisation.

It now turns out that BAE employed a former Conservative councillor to gather information on CAAT and it was he who passed on the confidential legal documents. The full story is in The Guardian.

The High Court has ruled that British Aerospace must reveal how it got hold of a confidential internal document from CAAT (Campaign Against Arms Trade) about CAAT’s application for a judicial review over the Al Yamamah arms deal. More details are on CAAT’s website.