Thursday, October 1, 2009

BAE Systems Take Two

The last Attorney-General, Lord Goldsmith, dropped the bribery prosecution against BAE Systems, the world's second largest weapons manufacturer. The reasoning was that it would be damaging to national security to proceed -- which, when translated, means that we'd upset the Saudis, the deal would be off, and we'd stop getting the cooperation / intelligence we so desperately needed from the Saudis. The (alleged) slush funds for Saudi princes were never to see the light of day.

The Serious Fraud Office has just asked the Attorney-General's office to prosecute BAE for various bribery offences related to arms deals in Tanzania and other parts of Africa. Leaving aside the moral aspect of the arms trade (or amoral, depending on your view), why on earth do BAE think they can get away with bribery? Or are they just idiots of the first water for not covering their tracks sufficiently?

For the patronising "that's just how they do business over there" apologists, the question is "why on earth do BAE keep getting caught? If everyone's doing it, and they're not getting caught, are BAE just incompetent?"


  1. Ah, well, "Here, my friend, is a little something just for you!"


    "And, now, is your company ready to sign the contract?"

    That, I am reasonably sure, is a bribe.

    On the other hand, if the Sue, Grabbit & Runne Charitable Foundation (registered in somewhere nice) makes a grant to a school for deprived girls in [select relevant foreign jurisdiction] and it just happens that the Head Mistress of the School is the wife of the Minister for Armament Purchases' Chief of Staff, is that really a prosecutable bribe, when the linkages were all verbal, and no one was daft enough to do any e-mailing?

  2. How about "new, very expensive but militarily useless warships to be built in an area where people voted labour" -- is that a bribe?

  3. Back-scratching and favours are nothing new in business, and kickbacks are nothing new either. Out and out bribery is a part of contemporary culture in some places -- Bystander did a post a while back about a chinese lady trying to cross his palm with silver when he signed some sort of application for her -- apparently she couldn't understand NOT bribing an official.

    And politicians are always building new hospitals and creating new jobs in marginal wards. Nothing new there either, unfortunately.

  4. I suspect that the Fact that BAE systems operates globally means that they are competing with companies that our laws don't apply to.

    Where do they stand if BAE bloke in Saudi offers a 'bribe' to one of their government guys without anything actually happening in the UK?

    As I understand it the problem with international law is that most of it isn't written yet?

  5. The British government should stop trying to enforce English law in foreign parts. If bribery happens overseas then it's their job to investigate it and their courts that should try it.

  6. Anon, this is the great problem with international criminal law -- jurisdiction. France, for example, will try its citizens for acts committed anywhere on the face of the Earth that would be crimes in France. Very useful for sex tourism offences, but not so helpful for complex areas of tax law / avoidance.

    England has not taken such a general approach, and instead has specific offences that may be committed in whole or in part overseas, and yet tried in England.

    Nationalist, the government isn't tring to enforce our law in foreign parts, they're trying to enforce our laws in our country. If you don't think there should be any element of extra-territorial jurisdiction whatsoever for the English courts, that's a different matter, and subject to political campaigning, etc. However, as things stand, the state IS enforcing english law.

  7. Readers should revisit episodes of "Yes Minister" to see how long this sort of thing has been going on.

  8. For the patronising "that's just how they do business over there" apologists, the question is "why on earth do BAE keep getting caught? If everyone's doing it, and they're not getting caught, are BAE just incompetent?"

    I suspect that part of the answer to this is that defence contractors are often seen as a national asset and major employers, and the authorities in other countries don't always care to look to closely at how their companies won a contract, just so long as they win it. Which was, of course, the approach taken here to the SFO's investigation into the Saudi deal.