Corruption is a Crime

BAE Systems has being accused of paying hush money to two Australian airlines, the Daily Mail reports:

In a House of Lords debate, Lord Tyler pointed the finger at the defence company over a 14-year secret deal between British Aerospace Regional Aircraft, East West Airlines and Ansett Transport Industries.

The Liberal Democrat peer claimed a leaked document signed in 1993 shows BAE paid the airlines £329,000 to silence them about ‘the leak of toxic fumes into aircraft cabins’.

Lord Tyler’s questions and the Government’s responses are available on the TheyWorkForYou website here.

The Government has killed off the Corruption Bill without any debate in the House of Commons. The Bill aimed to tighten to rules on British companies operating abroad, and was necessary to meet treaty obligations to fight corruption and bribery.

The Corruption Bill was introduced by Lord Chidgey and passed successfully through all of its legislative stages in the House of Lords, but the deadline has now passed for it to be given time in the House of Commons.

David Heath MP, the Liberal Democrats’ Shadow Justice Minister, strongly criticised the Labour Government’s failure to allow the Bill to be debated.

“It is a constitutional outrage that a bill passed by one House has not been given a second of parliamentary time in the Commons. It shows a complete lack of respect for the upper house.

“This Bill would form a key part of what ought to be the British Government’s legal protections against corrupt practices. It incorporates changes which are not only necessary for Britain to comply with its international obligations but also covers areas which Hilary Benn, when he was responsible for anti-corruption measures, said were important and urgent.

“Not to proceed with anti-corruption legislation is part of an emerging picture which, taken with the shameful decision to discontinue investigating BAE’s Al Yamamah deal with Saudi Arabia, smacks of indifference at best or complicity at worst with dodgy dealing by British firms abroad.”

An intriguing tangent to the BAE/Al Yamamah arms deal affair has come to light.

The National Audit Office has revealed that its head, Comptroller and Auditor General Sir John Bourn, has run up significant expenses bills - paid for by the taxpayer - and has also received corporate hospitality from various sources.

One of these is BAE Systems, who paid for Sir John to attend the British Grand Prix during the summer. Sir John has previously refused to release the NAO’s own report into BAE’s Al Yamamah deal.

As a result of these revelations, Norman Baker MP, the Liberal Democrats’ Shadow Cabinet Office Minister, has called on Sir John to resign, saying:

“It is incredible that Sir John Bourn has seen fit to run up gigantic bills for largesse at the taxpayers’ expense.

“Even more serious is appearing to accept hospitality from companies such as BAE which compromises the independent and professional standing essential to someone in this post.

“The time has come for him to call it a day in the interests of good administration.”

“The City of London has become the number-one home for the fruits of corruption,” said Laurence Cockcroft, director of Transparency International UK on the publication of their latest index of corruption around the world.

As the New Statesman reports:

We may associate the word corruption with Russian oligarchs and African republics run by venal government officials, yet according to the watchdog, Transparency International, the world capital of dirty money is not Moscow or Mogadishu. It is London.

You can read the full story here.

Labour ministers are refusing to assist the Americans’ investigation into alleged corruption by BAE, the Guardian reports.

The newspaper claims that Home Secretary Jacqui Smith hasn’t approved a request for assistance made by the US authorities two months ago.

The formal request for assistance came from the US department of justice earlier in the summer, but Ms Smith has refused to pass it on to the Serious Fraud Office for processing in the normal way.

This is unusual behaviour towards a major ally, with whom legal cooperation is normally automatic. Last night, the Home Office said its failure to pass on the request was “not unprecedented”, but could not give any example of similar behaviour.

The SFO possesses important files on BAE gained from its own major inquiry into £1bn of payments to Prince Bandar of Saudi Arabia and other Swiss bank accounts linked to the Saudi royal family. But SFO investigators are not allowed to speak to US authorities until Home Office officials forward the paperwork.

The Government’s failure to assist the US inquiry has been condemned by Liberal Democrat MP Norman Lamb, who is quoted in the same story:

“There is no justification for delay. This information should be handed over immediately. Again, one is left with the suspicion that by refusing to cooperate, the government is more interested in securing arms deals than in the pursuit of justice.

“It makes a mockery of the government’s assertion that they are robustly tackling corruption.”

Read the full story here.

Liberal Democrat leader Ming Campbell put the Al Yamamah arms deal at the centre of his criticism of the Labour Government during his leader’s speech at the party’s Brighton Conference:

Our mission is to change the British political landscape, once and for all:

To throw open the doors of government and let the people in.

No more sleazy patronage, no more dodgy dossiers, no more abandoned investigations into secret arms deals – in fact, no more secret arms deals, full stop!

Read his full speech on the Liberal Democrat website.

The UK Government has failed to modernise and toughen anti-corruption laws. It withdrew its own Corruption Bill and hasn’t backed reforms proposed by Transparency International.

Writing in The Times, lawyer Jeremy Summers criticises the Government’s failures on corruption.

But Britain’s enforcement record, in sharp contrast, remains poor. Already reeling from the decision to halt the BAE Systems al-Yamamah investigation, it recently suffered another setback when the Government was forced to withdraw its Corruption Bill in a state of disarray.

Remarkably, the Government has also refused to support an alternative and far more workable Corruption Bill proposed by the leading international antibribery body, Transparency International (TI). Instead, it has asked the Law Commission to propose alternative legislation, with the effect that any new law is unlikely to be in force until 2009 at the earliest.

The UK’s anticorruption legislation, which has remained largely unchanged since 1916, was essentially formulated to deal with the then principal evil, corruption in public office. But the pace and international nature of commerce has changed dramatically and it is universally accepted that new legislation to tackle modern-day corruption is needed.

The article goes on to tell how the latest attempts to reform the law have stalled, concluding:

Many now argue persuasively that the perception of political interference in the al-Yamamah decision has greatly compromised the Government’s position on corruption.

The full ramifications of that decision remain to be seen, but in the interim the failure to bring in new legislation – even though a respected independent body has provided credible way forward – does the Government little credit.

Read the full article here.

Lynne Featherstone, the Liberal Democrats’ Shadow Internet Development Secretary, has written an article on Liberal Democrat Voice arguing that corruption in international arms deals should be taken as seriously as other crimes:

It’s the only area of crime (other than graffiti!) where - when campaigning against it - I’ve encountered a handful of people saying, “but it’s ok”.

Read the article here.

The Ministry of Defence has handed security passes to 38 BAE employees, giving them acccess to the MoD headquarters at will. The discovery was made by Liberal Democrat MP Norman Lamb, who criticised the arrangement.

“This demonstrates that there is far too close a relationship between the Ministry of Defence and BAE. This incestuous and potentially corrupting relationship must be brought to an end. BAE’s lobbying muscle helped to bring an end to a major corruption inquiry, which is totally unacceptable.”

The Guardian says that the ministry won’t reveal why the BAE staff were given the passes, or to whom they were given:

However, it is known that one has been held by BAE’s chief lobbyist, Julian Scopes. The pass gave him access to the top levels of the ministry, enabling him to lobby ministers and senior officials and promote BAE’s commercial interests.
[…]
It has also emerged that BAE staff have been given passes by two other Whitehall ministries in recent years - two from the trade department and one from the Foreign Office. Critics have claimed that BAE wields huge influence over the government through privileged access and lobbying. BAE has hired politicians, such as the former defence secretary Michael Portillo, and former officials including Charles Powell, Margaret Thatcher’s chief foreign affairs adviser. The company regularly gives jobs to former MoD officials - 33 in the last 18 months.

Read the full story of the Guardian site.

An international crisis is brewing between the United Kingdom and the United States over the US Department of Justice’s continuing investigation into the BAE. Today’s Guardian reports that the US has formally requested documents relating to the BAE/Al Yamamah investigation.

If British ministers defy the justice department, this could go on to endanger reciprocal cooperation and intelligence-sharing with the US. Britain depends far more heavily on Washington than it does on Saudi Arabia. One senior source close to the US department of justice told the Guardian: “Britain’s definition of national security might have to change under these circumstances.”

Ministers are likely to be challenged today in the Commons on whether they will seek to obstruct US investigators. The Liberal Democrats have scheduled another opposition day debate in an effort to smoke out the prime minister’s position. The Liberal Democrat deputy leader, Vince Cable, said: “Gordon Brown has made much fanfare about promising a more open approach to government, but if he was serious, he would find a way of opening the lid on the secrecy surrounding this murky deal.

“Allegations that the British government has been complicit in large-scale corruption are incredibly serious. It is profoundly unsatisfactory to invoke national security as the reason for this government’s refusal to pursue either legal action or parliamentary oversight.”

The full story - here - is well worth a read. Meanwhile, the Liberal Democrat Voice blog has asked How far will Brown go to protect BAE from corruption charges?