Corruption is a Crime

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.”

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.

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.