Corruption is a Crime

The Leader of the Liberal Democrats, Nick Clegg MP, has written to Prime Minister Gordon Brown urging him to re-open the the Serious Fraud Office’s investigation into the Al-Yamamah arms deal and demanding a full inquiry into how it came to be dropped.

This follows yesterday’s ruling by the High Court that the SFO acted unlawfully when it suspended - under direction from the Labour Government - its investigation into the deal between BAE and Saudi Arabia.

Nick Clegg also calls on the Prime Minister to update Parliament on the progress of other investigations into alleged corruption by British companies, and on UK Government cooperation with the US Justice Department’s investigation into alleged bribery by BAE.

Here’s the letter in full:
Read the rest of this entry »

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.

thisismoney.co.uk reports:

The ethics review into scandal-hit BAE Systems could be delayed for up to three months amid suspicions it will present a whitewash report into the activities of the controversial defence firm.

The probe into BAE’s business ethics by the independent committee, chaired by former chief justice Lord Woolf, is already almost a month overdue.And it appears Woolf - who has pocketed an estimated £500,000 in fees so far, all paid for by BAE - is in no hurry to get it finished. Sources have suggested his findings might not emerge until June.

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.

Bad news about Labour’s intentions is emerging from Government, where a constitutional reform bill is currently being drafted. As The Guardian reports:

Lady Scotland, the current attorney general, wants the draft constitutional reform bill, to be published shortly, to spell out a statutory power for the attorney to direct the Crown Prosecution Service or Serious Fraud Office to drop a prosecution on grounds of national security or international relations.

This would be at odds with signals sent out in response to the controversy over apparent conflicts of interest while Lord Goldsmith was in the role.

Last July Gordon Brown announced: “The role of the attorney general, which combines legal and ministerial functions, needs to change.” And in the Governance of Britain consultation paper, issued shortly after Brown took office as prime minister last summer, the government pledged to “renew the role of the attorney general to ensure that the office retains the public’s confidence”…

David Howarth, MP for Cambridge, reader in law at Cambridge University and the Lib Dem spokesman on justice, said: “There’s no way a minister should have power to direct over prosecutions, even in national security or international relations. It’s outrageous.

“I don’t mind the attorney general being a minister as long as that minister has no power over prosecutions at all.”

The Serious Fraud Office (SFO) is escalating its probe into alleged bribery and corruption at BAE Systems, with one line of investigation being a series of commission payments personally overseen by chief executive Mike Turner during the late 1980s.

You can read the full report in the Sunday Telegraph.

The Government was accused in court yesterday of having rolled over in the face of threats from Saudi Arabia over the investigations into bribery and corruption allegations involving BAE Systems and arms deals with Saudi Arabia.

The comments came during a court hearing into the axing of the investigations:

Lord Justice Moses said the court had seen nothing to suggest that the government had done “anything other than roll over” in December 2006.

An attempt could have been made, he said, to get the threat to withdraw co-operation with the UK, including over security issues, lifted.

Liberal Democrat MP Vince Cable said:

These comments are seriously damaging to the Government’s credibility in its handling of this scandal. The Liberal Democrats alleged at the time that the Government had capitulated in the face of threats from Saudi Arabia which may or may not have had any substance. Today we have confirmation that this is exactly what happened.

There are more questions over the UK’s commitment to fight corruption in international arms deals after long delays have stopped legal action against an MoD official:

A corrupt civil servant behind one of the biggest frauds in Whitehall history has managed to avoid paying anything towards a £1.5m confiscation order because the Crown Prosecution Service delayed enforcing it for 11 years, the Guardian has learned.

Gordon Foxley, who was head of defence procurement at the Ministry of Defence from 1981 to 1984, was given a four-year jail sentence in 1994 for taking bribes from foreign arms manufacturers. The trial judge ordered him to hand back £1.5m that had been used to buy his family eight properties. But the high court has now struck out a legal attempt by the CPS to enforce the order because the judge ruled a fair trial of the issues was impossible after such a long delay. (Source: The Guardian)

Tony Blair’s role in the blocking of a criminal investigation into the Al Yamamah arms deal should be investigated by an independent inquiry, says newly elected Liberal Democrat leader Nick Clegg.

In a sign that he will continue the tough line taken by previous Liberal Democrat leaders, Mr Clegg responded to the publication of a letter from then Prime Minister Tony Blair to the Attorney General saying its contents confirmed his “very worst fears”.

As the BBC reports:

The letter from Mr Blair to Lord Goldsmith dated 8 December 2006 was released to the High Court during a case brought by two pressure groups who are challenging the legality of the decision to end investigations into BAE Systems’ dealings with Saudi Arabia.

It refers to “critical difficulties” that might have affected the major contract for new Typhoon military aircraft.

There was uproar when the Serious Fraud Office inquiry into the Al Yamamah contract from the 1980s was dropped, but Mr Blair insisted the decision was taken on security grounds.

Mr Clegg called for an independent inquiry into Mr Blair’s role and insisted that a National Audit Office report on the deal, which has never been made public, should be released.

He said: “Tony Blair must urgently explain what he thought he was up to by invoking the Typhoon contract as a reason to stop the SFO investigation.

“As his own attorney general, Lord Goldsmith, made clear to him between December 2005 and December 2006, commercial relations are an improper basis under international law to suspend a legal investigation.

“Knowing this, why did Tony Blair persist in pursuing a legally improper line of argument which could amount to an attempt to pervert the course of justice?”

A new criminal investigation into allegations of corruption in arms deals is set to interview dozens of senior staff at BAE Systems.

The investigation will cover six separate arms deals which may have involved corrupt payments to middlemen.

As the Sunday Times reports:

Whitehall officials say dozens of senior BAE executives are to be interviewed in the next two months about alleged bribery involving more than £80m in secret commissions. The money is said to have been paid to middlemen involved in lucrative government arms contracts in South Africa, Tanzania, Romania and two other countries. The new SFO interviews come only a year after Tony Blair and Lord Goldsmith, then attorney-general, controversially halted a separate corruption probe into BAE’s arms dealings with Saudi Arabia.

The government stopped that inquiry after the Saudis threatened to end intelligence cooperation in the war on terror, provoking a wave of international criticism.

Among those to be interviewed under caution in the new investigation will be Sir Dick Evans, BAE’s former chairman, who is still a consultant with the company. Mike Turner, the outgoing chief executive, is also expected to face questions. Both men adamantly deny any knowledge of wrongdoing.

Read the full story here.