Corruption is a Crime

Whilst the UK Government decided to axe Britain’s investigation into corruption allegations arrising from the Al Yamamah arms deal with Saudi Arabia, the Swiss are cooperating with the US’s own investigation:

Swiss prosecutors have also agreed to hand over financial records linked to the Saudi Royal family, according to a report by the Guardian newspaper. A US source told the paper “The investigators are confident they can get what they need from Switzerland. That’s where all the BAE arrangements were made”.

Read more in Arabian Business.

The New York Times reports:

As far back as July 2002, representatives from the State, Justice and Defense departments, as well as the C.I.A., sat down in Washington with senior British officials from the Ministry of Defense to complain about suspected bribery by BAE in Central Europe, the Persian Gulf and South Africa.

Sir Kevin Tebbit, then Britain’s permanent under secretary of the Ministry of Defense, rejected the suspicions as baseless. American officials who participated in the meeting later nicknamed him Sir Topham Hatt after a character in the Thomas the Tank Engine children’s series because of what they said was “his almost haughty disdain for the allegations of bribery involving BAE” and the manner in which he challenged them to detail evidence of wrongdoing…

American officials say they believe that the Hungarian and Czech governments were influenced by payments. They cite a C.I.A. briefing during which they were told that BAE paid millions of dollars to the major political parties in Hungary to win the contracts there.

Hat tip: Guido Fawkes.

From The Guardian:

US corruption investigators have gone behind the back of Downing Street to fly a British witness to Washington to testify about Saudi arms deals with the UK arms firm BAE Systems, the Guardian can disclose. In a hitherto secret move, Swiss federal prosecutors have also agreed to hand over to Washington financial records linked to the Saudi royal family.

The US is seeking - but has so far been refused - more than a million pages of documents seized from BAE, its bankers, Lloyds TSB, and the Ministry of Defence during an investigation by the Serious Fraud Office…

British ministers are refusing to grant a six-month-old official request from the US department of justice for mutual legal assistance, in defiance of the UK’s anti-bribery treaty obligations. This follows the suppression of Britain’s own Serious Fraud Office investigation, which was abandoned last year on the grounds that the inquiry might jeopardise national security.

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.”

Liberal Democrat MP John Pugh is demanding that a secret National Audit Office (NAO) report into the Al Yamamah arms deal is published.

His call follows revelations that Sir John Bourn, the NAO’s chief who resigned days ago, has received hospitality from BAE, the firm at the centre of bribery allegations over the Al Yamamah deal.

‘We will be looking to bring the deal back on to the agenda, as a result of Sir John Bourn’s departure and his conflict of interest issues,’ Liberal Democrat MP John Pugh said.

You can read more in Accountancy Age.

Following up yesterday’s story about Vince Cable’s boycott of the Saudi state visit, here’s a link to his article in The Independent in which he expands on his decision:

The British government should not have offered the accolade of a state visit to the head of a regime which is authoritarian and deeply corrupt. Our own Foreign Office has described Saudi Arabia, without hyperbole, as follows: “Women are subject to discrimination. Prisoners suffer maltreatment and torture. Capital punishment is imposed without adequate safeguards and often executed in a cruel way and in public. Amputations are imposed as corporal punishment … We also have concerns about freedom of expression, assembly and religion.” British expatriates have been tortured to extract false confessions of involvement in terrorism.
[...]
Trade, too, is beneficial but not at any price and not if it is lubricated by bribery and government subsidy. The massive Al Yamamah arms contract, spanning two decades, has left a deep stain on British public life. Conservative and Labour governments have been complicit in large-scale corruption. Our legal system has been compromised by a refusal, under Saudi pressure, to pursue fraud investigations. Parliament has been compromised by the suppression of a Public Accounts Committee inquiry, which could embarrass the Saudis – the only such report thus suppressed in the history of parliament.

Read the full article here.

Vince Cable MP, the Acting Leader of the Liberal Democrats, is to boycott the state visit of King Abdullah of Saudi Arabia to the United Kingdom. According to the BBC:

Mr Cable says he will not attend any of the planned ceremonial events - as would be normal for the leader of one of the main opposition parties.

Mr Cable told the BBC’s Today programme that by any assessment of Saudi Arabia, “the human rights record is appalling”.

He also cited the regime’s arms deal with the British firm BAE and the row over alleged corruption surrounding it.

The International Herald Tribune quotes from Vince Cable’s letter to the Saudi ambassador:

“I have introduced three debates in Parliament this year expressing serious concerns over the al-Yamamah contract and the corruption allegedly involved. I have, in my arguments, also been very critical of members of the Saudi royal family and the Saudi record on human rights, including its maltreatment of British citizens,” the letter said.

“In my opinion, it is quite wrong for the British government to have proposed a state visit at this time. Therefore, it would, I believe, be inappropriate for me to participate in a ceremonial state visit against this background.”

Read more from:

• The Herald
• The Guardian
• ITN
• ePolitix.com

A couple of weeks ago, we reported that Lib Dem MP Norman Baker had called for the resignation of Sir John Bourn, the head of the National Audit Office, after Sir John ran up significant expenses bills on public money and accepted hospitality from companies including BAE Systems.

It’s now been announced that Sir John will stand down, retiring in January. His decision has been welcomed by Norman Baker:

“Sir John Bourn has made the correct decision and he should be thanked for the work he has done. But the next incumbent cannot end up in a position where he embarrasses the National Audit Office through expenses claims and perceived conflicts of interest.”

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.”