FT.com / UK / Business - BAE pays $400m to end corruption case .
It's been reported this afternoon that:
The arms maker BAE Systems is to pay more than $400m in penalties to settle bribery allegations in a groundbreaking transatlantic settlement of Britain’s biggest and most politically contentious corporate corruption case.
The company will pay the vast bulk of the fines in the US, while it will hand over £30m in the UK and plead guilty to a minor Companies Act accounting record offence.
As the FT note:
The agreement is bound to provoke sharp debate — particularly in the UK — about whether BAE is being punished sufficiently, given the size and scope of the corruption allegations against it.
In a statement BAE said it regretted the incidents and accepted full responsibility for what it described as the “shortcomings”.
Some shortcomings, and the sad truth is nothing has been done to stop this by creating systemic change.
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It is a sad fact of life that any arms deal – mainly with non western countries – would not be possible without huge payments to the purchaser. Therefore what can BAE do? Do they refuse the deal and therefore put thousands of jobs at risk or do they accept that this is part of the practice of doing this type of business? I’m sure that there would be many more arms suppliers more than willing to step in and take the business should BAE refuse.
It’s sad, it’s corrupt but unfortunately it is part of this type of business. “Lord of War” with Nicholas Cage was a great film which exposed how this type of business is done.
Yes, this plea-bargaining is a shame: the fine is far smaller than should be expected. The settlement was a way to evade the full story being reported through the courts, and for the company executives implicated in the conspiracy to evade prosecution. I can’t understand why the settlement was accepted.
The UK law on bribery is very bad, the relevant OECD Convention essentially impotent. Hopefully the Bribery Bill might have some success: http://www.justice.gov.uk/publications/bribery-bill.htm
Nonetheless, an end to an epic story/ case that would just never end!
Best wishes,
Nizar
@Edward Pagan
Don’t sell arms
Simple really
And of massive value to society
Richard, I said pretty much that, but then got called an ‘naive and condecending Orientalist’!
In Saudi Arabia, so it’s said, their Royal Family is to be considered the embodiment of its people: ‘Government money is Al-Saud money, and vice versa. A payment to a Saudi prince is a payment to the Saudi government, and you’re being a naive and condescending Orientalist if you fail to recognize this system.’
Needless to say, this guy believes purchase of arms to be of essential value to any society.
To my shame, I have to confess that I worked on the BAE Systems project to supply an expensive long-range mobile military radar system, originally developed for the RAF overseas operations, to impoverished Tanzania as an air traffic control system (code name Buffalo).
I was extremely unhappy about this and asked the sales people to explain when we were all obliged to attend briefings in the radar systems dept. We were spun an entirely devious story about how Tanzania would be able to turn a profit on detecting civilian aircraft overflying the country – military radar do not have to rely on transponders which are used for air traffic control. Clare Short’s name was dragged through the mud. As a Labour Party conference delegate I offered to speak to her if they could give me an honest line.
I see that there were also nefarious dealings in Chile – money actually going to Pinochet – as I all along suspected when I worked on a similar radar system for Chile. It makes me sick to think of it.
Note also that the current South African president is suspect of receiving millions of dollars in bungs from BAE Systems at a time when no money could be found for retrovirals to alleviate the suffering of AIDS victims in SA. I have no inside knowledge of this, though.
There was a time when diversification was the buzzword and contracts were gained for non-military systems but these contracts were gradually hived off to separate businesses and eventually sold off.
I’m glad I no longer work for BAE Systems but unfortunately I am dependent now on my pension from them. When I later worked as a software contractor I turned down work on non-civilian applications. However, I had the luxury of not having to work by then and have no disdain for my former colleagues.
@Nizar
Let me assure you – you’re not naive at all
Wise is he who spots the emperor has no clothes
To my shame, I have to confess that I worked on the BAE Systems project to supply an expensive long-range mobile military radar system, originally developed for the RAF overseas operations, to impoverished Tanzania as an air traffic control system (code name Buffalo).
I was extremely unhappy about this and asked the sales people to explain when we were all obliged to attend briefings in the radar systems dept. We were spun an spurious story about how Tanzania would be able to turn a profit on detecting civilian aircraft overflying the country – military radar do not have to rely on transponders which are used for air traffic control. Clare Short’s name was dragged through the mud. As a Labour Party conference delegate I offered to speak to her if they could give me an honest line.
I see that there were also nefarious dealings in Chile – money actually going to Pinochet – as I all along suspected when I worked on a similar radar system for Chile. It makes me sick to think of it.
There was a time when diversification was the buzzword and contracts were gained for non-military systems but these contracts were gradually hived off to separate businesses and eventually sold off.
I’m glad I no longer work for BAE Systems but unfortunately I am dependent now on my pension from them. When I later worked as a software contractor I turned down work on non-civilian applications. However, I had the luxury of not having to work by then and have no disdain for my former colleagues.